We recently compiled a list of the 10 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Applied Materials, Inc. (NASDAQ:AMAT) stands against the other stocks on Jim Cramer’s radar.
Jim Cramer, the host of Mad Money, recently shared his outlook for Wall Street, focusing on earnings reports. On Friday, he highlighted how the S&P 500 surged toward 6,000 in almost a straight line, a remarkable rally driven by overwhelming buying and a lack of selling. Cramer noted the market’s performance, pointing out that the Dow rose by 260 points, the S&P gained 0.38%, and the Nasdaq advanced 0.09%, with all major indices closing at new record highs.
He described Friday as another impressive session, adding that it marked a historic moment. Cramer reiterated his point, stating:
“This is ladies and gentlemen, a historic move we are witnessing, fueled by an election where voters chose a candidate who is pro-growth, pro-higher stock prices, pro-lower interest rates, and pro-lower taxes… Trump is the most explicitly pro-stock market president in history.”
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Cramer went on to say that now that Trump has won, the benefits are clear across many sectors. He cited tech, oil, pharmaceuticals, consumer goods, and financials as prime examples of sectors seeing strong performance. He emphasized that these gains were driven by money managers who feared missing out on the market’s upward trajectory and were unwilling to sell, knowing they might not have enough stocks in their portfolios. Cramer also predicted that we would soon witness a surge in mergers and acquisitions.
“At the same time, we’re about to see a wave of takeovers as the antitrust regulators will stop trying to block every deal under the sun because a new broom is gonna sweep clean.”
Cramer stressed the importance of looking at the market on a sector-by-sector basis. He noted that the tech sector had taken a breather on Friday. In the coming days, he suggested that retailers might surge, followed by financials and then industrials. He described this cycle of sector rotations as part of an “incredibly bullish, virtuous circle” of market gains. While Cramer acknowledged that stocks had performed well under President Biden, he pointed out that Biden didn’t seem to place much importance on the stock market during his tenure.
“For him, it was an abstraction,” Cramer remarked, adding that this stance was changing with the current administration. In conclusion, Cramer made it clear that stocks were about to have a true champion in the White House once again.
“Stocks are about to have a champion in the White House again, even if you might think they aren’t worthy of a presidential supporter. I say get used to it, even though the buying’s started already, because we got a lot more room to run.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 8 and listed the stocks in the order that Cramer mentioned them.
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 technician in a clean room assembling a semiconductor chip using a microscope.
Applied Materials, Inc. (NASDAQ:AMAT)
Cramer mentioned that the semiconductor stocks have recently suffered because of the ASML debacle and expressed hope that Applied Materials, Inc.’s (NASDAQ:AMAT) earnings will change the narrative.
“Thursday after the close, we have results from Applied Materials, AMAT… They’re considered to be the dean of the semiconductor capital equipment industry… Now, I think this group’s been falsely accused of weak demand because of… ASML, which did a real horrible job explaining its story. Hopefully, Applied Materials can clear things up when it reports. The semis have been weak of late… maybe Applied Materials can change that dynamic.”
Applied Materials (NASDAQ:AMAT) provides manufacturing equipment, services, and software to the semiconductor, display, and related industries, offering solutions to improve performance and productivity in chip fabrication, display technologies, and related applications. In October, it experienced a dip in stock price, which was largely attributed to the disappointing quarterly report from ASML, another key player in the semiconductor equipment market.
This news prompted concerns across the market about a potential slowdown in the semiconductor equipment sector, and as a result, Applied Materials saw its stock decline on the same day. However, it is important to note that this decline was driven by broader market sentiment. On November 12, Stifel lowered the price target on Applied Materials (NASDAQ:AMAT) to $250 from $270 and maintained a Buy rating.
Ahead of the company’s fiscal Q4 report, which is set to be released on November 14, Stifel kept its near-term estimates unchanged, expecting the company’s Q4 results and Q1 guidance to meet or modestly exceed both the firm’s and consensus estimates. However, as the company approaches 2025, there is growing attention on the outlook for its revenue from China. Stifel also adjusted its forecasts for calendar year 2025, lowering estimates that were initially based on a higher expectation for wafer fab equipment (WFE) growth.
Overall AMAT ranks 9th on our list of the stocks on Jim Cramer’s radar. While we acknowledge the potential of AMAT 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 AMAT 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.