We recently compiled a list of the Jim Cramer’s Lightning Round: 7 Stocks to Watch. In this article, we are going to take a look at where Red Cat Holdings, Inc. (NASDAQ:RCAT) stands against the other stocks featured in Jim Cramer’s Lightning Round.
Jim Cramer, the host of Mad Money, recently offered his views on several key topics, including Big Tech stocks and cryptocurrency. On the subject of Big Tech, Cramer advised investors not to write off the mega-cap companies, especially after some of them saw gains toward the end of November, following declines. He stressed that moments like these serve as a reminder of what happens when people lose faith in these companies. Cramer explained:
“Remember it because it’s a textbook reminder of what happens when you decide the mega capitalization stocks are done, when you think that they’re written off. The moment you give up on them, what happens? They come roaring back.”
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Cramer also reiterated his long-standing support for cryptocurrency, framing it as a potential hedge against the government’s growing deficit and the risk of inflation. While acknowledging that there is no clear evidence yet that crypto can effectively shield against economic challenges, he suggested that it remains a plausible option for many investors.
“I’ve liked crypto for a very long time, mostly because I know there’s a huge constituency of investors who want to buy something that can protect them from our government’s busted budget.”
He added that, although crypto’s ability to offer protection is unproven, “sometimes that’s all you need in this business.” Reflecting on the country’s fiscal outlook, Cramer expressed hope that the U.S. economy might eventually grow its way out of the deficit through higher tax receipts. However, he fears that political gridlock, particularly during debt ceiling debates, could lead to drastic measures, such as the government buying back treasury bonds at a discount.
Cramer also expressed disappointment in both the Obama and Trump administrations for failing to issue long-term, 50-year treasury bonds during periods of ultra-low interest rates. He described this decision as a missed opportunity that would have saved the government substantial amounts of money. Instead, Cramer noted that the government now finds itself issuing short-term debt at much higher rates, which he deemed a mistake.
“These days, I still have some gold as a hedge, but because it can be easily confiscated… I think Bitcoin, Ethereum, maybe even some other cryptocurrencies deserve a spot in your portfolio too. Maybe one day, if the deficit gets under control, I’ll change my tune. But anyone who’s followed me for more than 10 minutes knows that I’m a huge skeptic about our government’s ability to balance the budget.”
“It’s not that we don’t know how to solve the problem, it’s that legislators lack the political will to do things that are unpopular,” he explained. He pointed out that balancing the budget requires difficult choices, such as raising taxes or cutting spending, but most politicians prefer to delay action, leaving tough decisions to future administrations. Given this outlook, Cramer continues to hold cryptocurrency as a safeguard against national debt concerns, acknowledging that while he hopes the deficit issue will be resolved, he remains doubtful it will happen during his lifetime.
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during a recent episode of Mad Money. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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 military drone hovering in the sky, demonstrating the AI capabilities of the company.
Red Cat Holdings, Inc. (NASDAQ:RCAT)
Number of Hedge Fund Holders: 7
Cramer highlighted how Red Cat Holdings, Inc. (NASDAQ:RCAT) stock went up significantly in November and said:
“Yeah… look, they have a business. Red Cat has a business, however, the stock just went up 850%. I am willing to pass on an 850 percenter. I don’t want to bet that it’s going to go up a thousand percent. It’s just not my style.”
Red Cat (NASDAQ:RCAT) provides products, services, and solutions for the drone industry in the U.S., including integrated robotic hardware and software for situational awareness and intelligence, as well as the Teal 2 unmanned aircraft system for military and public safety applications. As of the first quarter of fiscal 2025, the company reported a record backlog of $13 million, reflecting strong demand for its products and services.
The company also reported significant year-over-year growth, supported by a solid pipeline and backlog. For the upcoming 2025 calendar year, the company has provided guidance indicating revenue expectations in the range of $50 to $55 million, continuing its growth trajectory. This forecast excluded any contributions from the Short Range Reconnaissance (SRR) program or other NATO-related programs of record.
In a significant development, Red Cat (NASDAQ:RCAT) recently announced that it was selected as the winner of the U.S. Army’s SRR Program of Record. George Matus, Chief Technology Officer at Red Cat, emphasized that the company’s primary focus is now on ramping up production for the next-generation system, which has been introduced as the Black Widow and WEB.
Overall RCAT ranks 7th on our list of the stocks featured in Jim Cramer’s Lightning Round. While we acknowledge the potential of RCAT 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 RCAT 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.