We recently compiled a list of the Jim Cramer’s Lightning Round: 7 Stocks Under the Spotlight. In this article, we are going to take a look at where Alaska Air Group, Inc. (NYSE:ALK) stands against the other stocks featured in Jim Cramer’s Lightning Round.
Jim Cramer, the host of Mad Money, offered his insights into the market’s recent performance, highlighting why the tech-heavy Nasdaq failed to make a strong rebound. He pointed to a unique combination of factors contributing to the setback: the influence of the U.S. government and the actions of Mark Zuckerberg. Cramer drew a parallel between the tech sector and the pharmaceutical industry, which similarly faces increasing scrutiny and restrictions from federal authorities.
After attending the JPMorgan Healthcare Conference, Cramer expressed his optimism about the future of medicine. Despite the promising developments in the healthcare space, he pointed out that the U.S. government doesn’t appear to be particularly favorable toward executives in the industry, who are investing heavily in research and development. He noted that while these companies are spending billions on R&D, they still find themselves under fire, with the Biden administration targeting major drugs as part of the Inflation Reduction Act.
“We are in some weird moment where the two best industries we have are in the crosshairs of the federal government with Mark Zuckerberg aiding and abetting the prosecution. The drug companies managed to rally today because we heard their side of the story. But tech, the tag team of the government and Meta may have been too much for everyone. At the end of the day though, buyers finally came in to find bargains in the semis and software and the drug stocks, only the drug stocks finished in the green.”
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“At the same time, I sure didn’t like what I saw when I watched the Joe Rogan Experience this weekend when a very unfettered Mark Zuckerberg… took some shots, I would say cheap shots, I mean just terrible, at Apple that made me want to throw a yellow flag 15 yards on sportsmanlike conduct.”
What bothered Cramer even more, however, was the U.S. government’s increasing intervention in the semiconductor industry, which he felt undermined the efforts of experts like Jensen Huang. Over the weekend, new restrictions were put in place that limited the number of GPUs companies could sell, further complicating the situation for the tech sector.
“The bottom line: Are the charges against these two industries just glancing blows? Nah, this was just one day where the bond market didn’t crush every stock.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 13. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in 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 commercial passenger jet in the sky, performing its daily flight duties.
Alaska Air Group, Inc. (NYSE:ALK)
Number of Hedge Fund Holders: 28
Cramer advised to stay with Alaska Air Group, Inc. (NYSE:ALK) and said, “They are so good, this is their moment. I think you have a total winner, I would stick with it.”
Alaska Air (NYSE:ALK) runs airline services, providing scheduled air travel for both passengers and cargo using Boeing jet aircraft. In April 2022, Cramer commented on the company and said:
“There’s always a bull market somewhere and right now it’s flying at 30,000 feet high. My favorites are the two most profitable, that’s [Delta Air Lines] and [Alaska Air Group].”
However, he pointed out that this high level of recognition makes it difficult for the company to exceed expectations, which in turn impacts its ability to generate significant upside surprises. As a result, Cramer observed that the stock actually declined slightly from the price it was trading at at that time. Since April 2022, the stock is up over 22%.
Overall ALK ranks 5th on our list of the stocks featured in Jim Cramer’s Lightning Round. While we acknowledge the potential of ALK as an investment, our conviction lies in the belief that 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 ALK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.