We recently published an article titled Was Jim Cramer Right About These 12 Stocks? In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other stocks.
Back then, Cramer was focused on the impact of future rate cuts and how different stocks would react. He argued that the market had become simple:
“Stocks that benefit from rate cuts get bought. Stocks that don’t benefit get sold.”
At that time, Cramer pointed to McDonald’s as an example of a rate-cut winner, despite the company having weak earnings at the time, saying:
“This market doesn’t care that it’s doing badly. It just treats the Golden Arches as a rate-cut winner.”
Meanwhile, he appeared rather bearish around big tech at the time. He warned against buying the “Magnificent 7”, saying that while they had thrived despite rate hikes, they wouldn’t necessarily benefit as rates came down. Here’s how he put it back then:
“For years now, the market has been rallying on companies that don’t need to borrow money, that don’t need rate cuts. But the flip side is that they won’t really benefit as rates come down.”
Tech stocks were under pressure at that time, and Cramer saw no short-term relief:
“For tech, the watchword is three words my staff loves to say: get out now.”
Cramer expressed some interesting opinions in that particular show. Let’s see how each prediction unfolded 7 months later.
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Jim Cramer during the episode of Mad Money on July 30, 2024. We then calculated their performance from July 30th, 2024, market close to February 14th, 2025, market close. We have also included the hedge fund sentiment for the stocks, which we sourced from Insider Monkey’s Q3 2024 database of over 900 hedge funds. The stocks are listed in the order that Cramer mentioned them.
Note: This article covers Jim Cramer’s commentary from July 30, 2024, and does not account for any changes in his opinions regarding the stocks mentioned. Therefore, the commentary should not be mistaken for his latest opinions on any of the stocks that are mentioned.
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 close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Investors: 217
At the time, Cramer was watching NVIDIA Corporation (NASDAQ:NVDA) struggle, not because of business fundamentals, but due to the market rotation. He opened with the following:
“Nvidia is doing amazing things with generative AI and accelerated computing—two of the biggest trends of our day. But that’s not enough right now. Wall Street’s become a lot less willing to pay up for growth stocks.”
Cramer emphasized the selling pressure that the stock was seeing on the date the show aired, joking:
“Thank heavens they ring a bell at the close because then it can stop going down.”
However, Cramer saw that decline as a buying opportunity, saying:
“Right now, the Street expects NVIDIA Corporation (NASDAQ:NVDA) to earn $3.59 per share next year. But if this is like the Nvidia we’ve seen in the last decade, they could earn $4.59 per share. That would mean a stock selling at less than 23 times earnings. I am not selling the greatest growth stock of our generation at 23 times earnings.”
While rate-cut beneficiaries were winning, according to his view of the market at the time, Cramer believed Nvidia’s time would come again, suggesting that investors should stick with the company, even if there was short-term pain:
“At some point, a stock like Nvidia gets so cheap, so darn cheap, that the selling will stop. Unless you think NVIDIA Corporation (NASDAQ:NVDA) is General Custer, you should come out ahead.”
However, it looks like the selling did not only stop, but it overwhelmingly turned into buying, as NVIDIA Corporation (NASDAQ:NVDA) stock has surged by 34% since.
Overall NVDA ranks 12th on our list of the stocks Jim Cramer recently discussed. While we acknowledge the potential of NVDA 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
