We recently published a list of 10 Stocks Jim Cramer is Talking About. In this article, we are going to take a look at where Advanced Micro Devices Inc. (NASDAQ:AMD) stands against other stocks Jim Cramer is talking about.
On a recent episode of Mad Money, Jim Cramer suggests that perhaps we are misjudging the retail sector. He argues that the debate over whether consumers are sick, well, frugal, or stressed might be misguided. According to Cramer, consumer behavior doesn’t shift dramatically overnight; people don’t suddenly change from being sick to well within a single quarter. As we look ahead to the Fed’s discussion at Jackson Hole on Friday, with the market averages rising by 56 points and the S&P 500 increasing by 42%, it’s clear we need to reassess our views on the consumer’s state.
“Maybe we’re looking at retail all wrong. Perhaps this whole discussion about whether the consumer is sick, well, frugal, or stressed is just a big pile of manure. The consumer doesn’t change their behavior overnight; they don’t get sick and then recover within a single quarter. As we consider what the Fed will discuss on Friday at Jackson Hole, with the averages inching up 56 points and the S&P 500 advancing 42%, we need to rethink the great debate about the state of the consumer.”
Jim Cramer points out that understanding consumer behavior is crucial for predicting when the Fed might cut interest rates. He explains that the Fed needs to lower rates before the economy worsens to the point of needing urgent intervention. However, the Fed can’t act if the economy is performing well.
“This debate is central to what the market needs to see for rate cuts. We first need to understand that the Fed has to start cutting interest rates before the economy deteriorates to a point where they need to scramble to fix things. However, they can’t act if the economy is doing fine. The aggregate retail sales data is inconclusive, so we often try to extrapolate from individual retailers. Taken together, these retailers seem to suggest that the consumer is fickle and perhaps tapped out.”
Jim Cramer argues that the current debate about consumer behavior might be misguided. He believes that consumers are not as fickle as some suggest. Instead, they are shopping at stores led by successful retail CEOs like Ron Vachris, Doug McMillon, Ernie Herman, and Brian Cornell.
“Tonight, I’m arguing that the consumer is not fickle at all. People are shopping, and they’re shopping at places where great retail CEOs are making a difference, like Ron Vachris at Costco, Doug McMillon at Walmart, Ernie Herman at TJX, and Brian Cornell at Target. These are the places people are choosing to shop. The consumer isn’t frugal or tight-fisted; they’re simply shopping where they prefer, and these outstanding merchants are drawing them in.”
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close up of a complex looking PCB board with several intergrated semiconductor parts.
Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 108
Jim Cramer recommended buying more Advanced Micro Devices Inc. (NASDAQ:AMD), noting its steady upward trend this week. He praised Lisa Su for a successful acquisition and highlighted Advanced Micro Devices Inc. (NASDAQ:AMD)’s excellent products, particularly for accelerated computing and AI.
“I think you can buy more. AMD has been on a steady upward trend this week, and Lisa Su made a great acquisition. Her products, especially for accelerated computing, are terrific. Yes, for AI and generative AI, they are outstanding. Buy more AMD, just as we’ve been doing for the club.”
Advanced Micro Devices Inc. (NASDAQ:AMD) is a strong investment due to its leading role in high-performance computing and graphics. Advanced Micro Devices Inc. (NASDAQ:AMD)’s Ryzen processors, EPYC server chips, and Radeon GPUs have successfully competed against Intel Corporation (NASDAQ:INTC) and NVIDIA Corporation (NASDAQ:NVDA). Advanced Micro Devices Inc. (NASDAQ:AMD)’s advancements in its Zen architecture and use of 5nm process technology boost its performance and efficiency, positioning it for ongoing success.
Advanced Micro Devices Inc. (NASDAQ:AMD) has been steadily gaining market share in both CPUs and GPUs, with its products being popular among consumers, enterprises, and cloud providers. In fiscal year 2023, Advanced Micro Devices Inc. (NASDAQ:AMD) achieved $23.6 billion in revenue, a 21% increase from the previous year, driven by improved gross margins and strong cash flow.
Advanced Micro Devices Inc. (NASDAQ:AMD) is well-positioned to benefit from the rising demand for data center and AI solutions, especially with its EPYC processors and the recent acquisition of Xilinx, which adds field-programmable gate arrays (FPGAs) and adaptive computing to its portfolio. Strategic partnerships with major tech firms and their resilience against competitors further enhance Advanced Micro Devices Inc. (NASDAQ:AMD)’s growth prospects.
Overall AMD ranks 1st on our list of stocks Jim Cramer is talking about. While we acknowledge the potential of AMD as an investment, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
