We recently published a list of Jim Cramer’s Latest Thoughts on the Magnificent Seven. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other magnificent stocks in Jim Cramer’s list.
On Monday, Jim Cramer, host of Mad Money, took a closer look at the current status of the Magnificent Seven stocks, offering insight into both their market positioning and how the White House’s stance seems to be shifting.
“First, I can’t be sure that Trump has changed, but I do believe that he’s never lost sight of the markets and he watches the business channels.”
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Cramer emphasized that his analysis is not political, rather, it is a “clear-eyed” assessment of what the president aims to achieve. According to Cramer, Trump is pushing for more jobs and manufacturing within the U.S., even if it means sacrificing access to cheap goods from overseas. Turning his attention to the Magnificent Seven stocks, Cramer said:
“Everybody knows the Magnificent Seven is not so magnificent anymore… But as I said over and over again, you simply can’t count these stocks out.”
He explained that these stocks still hold significant value despite their significant drops from their peak highs. For Cramer, these companies are not to be dismissed lightly. He mentioned that six of them are part of his Charitable Trust, making them especially relevant to his analysis. He noted that some serious damage had been done to the group.
As Cramer continued his commentary, he pointed out that analyst sentiment toward the Magnificent Seven has become more positive after a year of skepticism. However, he highlighted that only Amazon and Nvidia have truly favorable setups at the moment. For the others, it remains to be seen what the future holds. Regardless of their uncertain outlooks, Cramer noted one important factor common to all these companies: as their stock prices fall, they actually become more affordable.
“Their stocks actually truly do get cheaper as they go lower, and that’s more than I can say for many others that have held up well during this exceedingly difficult period.”
Our Methodology
For this article, we compiled a list of stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 24. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Cramer said that he would be a buyer of Amazon.com, Inc. (NASDAQ:AMZN) and discussed:
“Next is Amazon. I think Amazon’s doing well with both of them, its Web Services business and the Prime offerings. There’s no sign whatsoever its retail share… is tapering off. Its ad business has become a favorite of the big ad buyers along with YouTube and Google. Lots of the big non-tech titans run their websites on Amazon Web Services…. Call me a buyer.”
Amazon (NASDAQ:AMZN) has positioned itself as a leading force in the global tech sector, offering a wide range of services that include e-commerce, advertising, and subscription-based products. Burke Wealth Management stated the following regarding the company in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Whereas most of the discussion around Amazon focuses on trends in its AWS business, our focus has been on the progression of margins in its retail business. Happily, both units appear to be on the upswing which drove strong fourth quarter share price performance. In AWS, Q3 sales growth was a solid 19% and the run rate of the business is now $110B. Equally encouraging is that margins were 38%, marking the third consecutive quarter that AWS operating margins were in the 36%-38% range after spending the last two years in the 28% range. This margin gain is being driven by demand for higher value applications as well a benefit from extended life usage across its data center architecture. On the retail front, the margin story remained in full force with North American margins reaching 5.9% in the third quarter and International margins delivering positive results (+3.6%) for the third straight quarter after 10 straight quarters in negative territory. CEO Andy Jassey has pointed out that Amazon’s efforts to reconfigure its distribution network from a centralized to a regional network has yielded productivity gains and that he sees no reason why retail margins in North America can’t meet or exceed previous record levels. We think a consistent run towards the high-single-digit range is likely. International retail sustaining profitability would be an added bonus and this great white whale finally seems within our grasp as Amazon reaches critical mass across numerous large international markets.”
Overall, AMZN ranks 2nd on our list of magnificent stocks in Jim Cramer’s list. While we acknowledge the potential of AMZN 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 AMZN 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.