We recently published an article titled Jim Cramer’s Game Plan: 17 Stocks in Focus. In this article, we are going to take a look at where Snowflake Inc. (NYSE:SNOW) stands against the other stocks.
On Friday, Jim Cramer, the host of Mad Money, took time to guide investors through this week’s events on Wall Street, drawing attention to earnings reports from various companies, including major players in the tech sector. He also acknowledged the market’s downturn over the past few days, noting the impact of recent developments on investor sentiment.
Cramer specifically pointed out that investors should watch the new home sales report due out this Wednesday. He explained that the housing market has taken a significant hit recently, largely due to a mix of severe weather conditions and, more critically, high mortgage rates. The surge in interest rates has been particularly damaging to homebuilders.
“We need a pickup to verify that housing isn’t just falling off a cliff at this point. I’m actually not hopeful.”
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Looking ahead to Thursday, Cramer noted that the first gross domestic product reading of the week would be released, and he expects it to reflect strong performance. He attributed the anticipated strength to a business climate that gained momentum following the election, when many investors began to believe that President Trump’s policies would be more favorable for business than those of his predecessor, President Biden.
On Friday, Cramer also pointed out a noteworthy trend: interest rates had declined, a pattern that had persisted throughout the week. This, according to Cramer, raised the possibility that the upcoming GDP report could be the final strong one before the market adjusts to the changing economic environment. While Cramer clarified that he was not making any definitive predictions, he emphasized that these market movements were indicative of what the market was signaling.
“So let me give you the bottom line: Out of nowhere, the momentum stocks had a hideous downturn today. It’s hurt many aggressive growth investors. Can this pullback finally run its course? I hope so.”
Our Methodology
For this article, we compiled a list of 17 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 21. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.
Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 85
Cramer highlighted that Snowflake Inc. (NYSE:SNOW) has transformed into an advisor for companies looking to learn the usage of AI.
“Then there’s Snowflake, the rent-the-cloud play that’s become far more than that. Really it’s a real advisor to those who wanna learn more about how to use artificial intelligence in the business.”
Snowflake (NYSE:SNOW) offers a cloud-based data platform that helps organizations consolidate data, gain insights, build data-driven applications, and apply AI to address business challenges.
Baron Funds stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
Overall SNOW ranks 13th on our list of the stocks Jim Cramer recently talked about. While we acknowledge the potential of SNOW 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 SNOW 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 was originally published at Insider Monkey.
