We recently compiled a list of the Jim Cramer is Talking About These 12 Stocks. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other stocks Jim Cramer is currently talking about.
On Tuesday, Jim Cramer, the host of Mad Money, analyzed the day’s market activity, shedding light on why some Big Tech stocks gained traction while others struggled. He pointed out that investors are increasingly concerned about the broader economic effects of rising bond yields. Cramer began by questioning how a day could unfold where recent market leaders lose their momentum, prompting money managers to shift back to established favorites like Big Tech.
Cramer acknowledged his growing worry about the bond market, noting that since the Federal Reserve cut rates last month, bond prices have plummeted.
“… Ever since the Fed cut rates last month, right, bond prices have plunged. Bond yields, meaning longer-term interest rates, have soared. Not supposed to happen. But when it does happen, money managers reach for the companies that simply aren’t impacted by the change in the 10-year, the 20-year, or the 30-year US Treasurys.”
Cramer likened Wall Street to Chinatown, suggesting that sometimes, it defies easy understanding. He remarked that people seem to abandon the market’s recent winners in a snap as if discarding hot fries. He then explained that the day’s disappointing earnings reports created confusion, as they didn’t align with the prevailing narrative of strong employment alongside rate cuts.
“See, this morning we got a series of earnings reports that just didn’t add up. They didn’t fit the thesis. They were disappointing. They don’t jive with a rather benign moment when we have the Fed cutting rates, yet employment remains strong. When we get these problematic quarters, several in one day, I might add, money managers default back to the tried and true growth stories that we all know and love. Yes, Titans of Tech. You know what? These managers can’t help themselves. They feel they have to rotate out of what was hot at one point and into something else that’s not that impacted by the big rate-cut cycle.”
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He addressed the “alleged earnings disappointment,” clarifying that he chose the term “alleged” because he holds these companies in high regard and does not want to undermine their reputations. Cramer stated that when the 10-year Treasury yields rise, money flows back to these tech giants. He noted that on days like Tuesday, large investors often become apprehensive about cyclical stocks, with concerns about various sectors like aerospace, home building, and even auto parts.
He reassured viewers that this phenomenon is familiar; it has been a recurring theme for over a decade. Cramer suggested that money could just as easily rotate back to previous favorites, but it might take a day or two for that to happen, which shows the volatility of the current market environment.
Concluding, Cramer noted that Big Tech experienced a significant resurgence. He remarked:
“But the bottom line, Big Tech made a big comeback today because of the bond market, not anything to do with the stocks themselves. So, keep in mind that the pause in the rally is temporary, even as you should still own some of the Magnificent Seven for diversification.”
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 22. 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 wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Cramer mentioned that Apple Inc.’s (NASDAQ:AAPL) stock did not see highs that some of its peers did. He also commented on the latest news about iPhone sales. He said:
“See today we’ve got some negative news about iPhone sales. Not enough to make me wanna sell, but enough to ding the stock. And that wasn’t just analyst reports, you also got a number from Verizon that didn’t jive with the thesis that Apple iPhones are selling well… I would own, not trade Apple.”
Apple (NASDAQ:AAPL), widely recognized for its groundbreaking iPhone, has solidified its reputation as one of the most respected companies in history. Currently, the company is approaching a crucial upgrade cycle, largely driven by innovations in artificial intelligence. However, recent market reactions indicate some caution. Following the third-quarter results from Verizon, the company’s shares experienced a decline.
Analyst Craig Moffett from MoffettNathanson highlighted Verizon’s low upgrade rate of 3.0% for retail postpaid connections, a drop from 3.4% in the same quarter the previous year when the last iPhone was launched.
Moffett pointed out that with only two weeks of iPhone 16 sales included in Verizon’s Q3 data, it is premature to conclude that the upcoming Apple cycle will be smaller than last year. Nonetheless, he noted that this was not an encouraging start. In a similar vein, AT&T CEO John Stankey remarked during his company’s earnings call that initial iPhone sales figures were slightly down compared to the previous year.
On October 23, according to TipRanks, industry analyst Ming-Chi Kuo reported that recent surveys revealed Apple (NASDAQ:AAPL) has reduced its orders for the iPhone 16 by approximately 10 million units for the fourth quarter of 2024 through the first half of 2025. Most of these reductions affected the non-Pro models, leading to a new production estimate of 84 million units for the second half of 2024, down from around 88 million.
Consequently, total iPhone production forecasts for the upcoming quarters have also been adjusted, now projected at about 80 million, 45 million, and 39 million for the fourth quarter of 2024, the first quarter of 2025, and the second quarter of 2025, respectively. While some investors are hopeful that advancements in Apple Intelligence could significantly increase iPhone shipments in the near future, Kuo believes that the recent order reductions indicate such optimistic expectations may not be realized in the immediate future.
Overall AAPL ranks 5th on our list of the stocks Jim Cramer is currently talking about. While we acknowledge the potential of AAPL 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 AAPL 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.