We recently compiled a list of the Jim Cramer on the Magnificent Seven Stocks Plus Netflix. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other magnificent stocks in Jim Cramer’s list.
On Monday, Jim Cramer, host of Mad Money, discussed the ongoing success of major technology stocks, particularly the Magnificent Seven. He noted that these companies are proving their resilience in the market, no matter the circumstances, likening their performance to having a unique “Poltergeist 2 magic.”
Cramer pointed out that this latest rally for the Magnificent Seven differs from previous ones, as it is not merely a zero-sum game where gains for one group come at the expense of another. Instead, other sectors are also thriving, likely due to the influx of capital into the market.
“Unlike previous Mag 7 rallies, this one’s definitely not a zero-sum equation where the rest of the market does nothing. Other groups can roar, too, in this market, perhaps because there’s just a lot of money going around.”
He noted that the Federal Reserve’s rate cuts mean that cash is losing value, creating an environment ripe for growth. He mentioned that the staying power of the Magnificent Seven is truly unbelievable.
“We know these stocks will once again be hit by endless worries, giving you more opportunities to buy and more weakness before they snap right back and start climbing all over again.”
Cramer highlighted that this week marks the beginning of a crucial four-week earnings season, emphasizing that these quarterly reports hold significant weight for investors and the broader stock market. He acknowledged the current climate of anxiety, especially following the market’s impressive rally. He added:
“Why stress about how quickly the Fed will cut rates, Oh? God, I’m sick of that. What matters is they’re giving vast swaths of the economy a big boost and I doubt they’ll stop anytime soon.”
Cramer also observed that investors often gravitate toward underdogs in the market, suggesting that banks could be the next promising sector. In addition to banks, Cramer also mentioned the potential in pharmaceutical stocks, suggesting that investors might want to consider major players in that sector as well.
Our Methodology
For this article, we compiled a list of stocks that were discussed by Cramer during his episode of Mad Money on October 14. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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 customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Cramer thinks that Amazon.com, Inc. (NASDAQ:AMZN) has various growth avenues, especially AWS. He said:
“Amazon’s easy. It got hammered down from $187 to $161 after that last quarter, but it’s back above $187 now. I think the company simply has too many levers, including the incredible growth for the Amazon Web Services, which [can] take it back, I think, to its $200 high.”
Amazon (NASDAQ:AMZN) is one of the most famous global technology companies and it specializes in online retail, advertising, and subscription services. A significant aspect of its operations is its cloud computing division, Amazon Web Services (AWS), which has emerged as a crucial source of operating profit. Over the past year, AWS has seen accelerating sales growth, reflecting a broader trend as businesses increasingly migrate their data systems to the cloud.
The transition is particularly relevant as companies seek to leverage artificial intelligence tools, presenting substantial opportunities for Amazon’s future expansion. In the second quarter, AWS reported sales of $26.3 billion, marking a 19% increase compared to the previous year. Alongside its cloud segment, the company has also identified advertising as a key growth area. In the same quarter, revenue from advertising services rose by 20% year-over-year, slightly outpacing the growth experienced by AWS.
Recently, on October 10, Amazon (NASDAQ:AMZN) revealed that its Prime Big Deal Days event set new records for October shopping events. This year, a greater number of Prime members participated compared to the previous year, taking advantage of early holiday promotions. The two-day event kicked off the holiday shopping season with record sales, surpassing all previous October events in terms of items sold.
Overall AMZN ranks 1st on Jim Cramer’s list of magnificent stocks. 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.