Jim Cramer, host of Mad Money, emphasized the ongoing significance of fossil fuels in supporting technological advancements, even as investments in renewable energy continue to increase. He stated:
“This is not just a grudge match between the old and the new, a battle of electric vehicles versus internal combustion. The truth is, fossil fuels are essential for a lot more than vehicles, like it or not.”
READ ALSO Jim Cramer is Talking About These 12 Stocks and Jim Cramer’s Latest Stock Picks
Cramer highlighted the growing energy demands of major tech companies, noting that the data centers they are constructing consume vast amounts of electricity. While these tech giants are making substantial investments in nuclear energy, he pointed out that this power source is unlikely to significantly impact data centers for at least another decade due to the complexities of building nuclear facilities and community resistance to having them nearby.
“If we need more energy, we’re going to get it from what comes out of the ground … fossil fuels that will power the data center, specifically natural gas… You may be reluctant to invest in it, you might think who cares, but you need to know how vital all of this fossil fuel technology is to the growth of the Magnificent Seven.”
Cramer also reflected on the shift in the U.S. energy landscape, recalling how the nation was once heavily reliant on OPEC for oil imports just two decades ago. Today, he pointed out, the U.S. produces over 13 million barrels per day, making it the largest oil producer globally and a net exporter. He mentioned the Permian Basin’s unexpected resilience, continually producing despite earlier predictions of depletion.
Cramer noted that the decline of OPEC has transformed the geopolitical landscape. He referenced the 1973 oil crisis, triggered by OPEC’s retaliation against U.S. support for Israel, which led to stagflation and economic turmoil. In contrast, he pointed out that despite Israel’s current conflict, the U.S. economy is not experiencing stagflation or recession, resulting instead in a bull market. He attributed this stability to the industry, saying:
“… This industry that spent billions upon billions of dollars to try to be as low carbon as possible is the reason why oil prices have actually come down during this period. They’ve gotten so much production that OPEC is now powerless.”
Turning his attention to the broader oil industry, Cramer explored the role of oil service companies that facilitate production, including offshore drillers. He recalled becoming optimistic about oil service stocks earlier in the year, anticipating higher energy prices but admitted that this expectation did not materialize due to economic concerns dampening oil and gas markets. Despite current investor reluctance toward oil service stocks, Cramer suggested that sentiment could shift over time, especially because of the Federal Reserve’s recent rate cutting.
“Now that the FED is our friend and more rate cuts are on the table, that’s good news for the industry. I am not worried about the election either. If Trump wins, maybe we’re back to that “drill baby drill” thing. If Harris wins, we get exactly what we’ve had the last four years. Not ideal for the industry but it’s still led to record oil and gas production here in the United States.”
Jim Cramer on Tesla and Other Stocks
Our Methodology
For this article, we compiled a list of 14 stocks that were discussed by Jim Cramer during his episodes of Mad Money on October 23 and 24. 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).
Jim Cramer on Tesla and Other Stocks
14. Blue Bird Corporation (NASDAQ:BLBD)
Number of Hedge Fund Holders: 24
When a caller asked Cramer about Blue Bird Corporation (NASDAQ:BLBD), he said that he had not observed growth in the company.
“Well, it doesn’t have something for me. I’m sorry, I just don’t see the growth. I like growth, doesn’t have it. I say we stay away.”
Blue Bird (NASDAQ:BLBD) manufactures a range of school buses, including low and zero-emission models that transport about 25 million students daily, with over 20,000 eco-friendly buses in operation, powered by propane, natural gas, and electricity.
It should be noted that the company reported record fiscal 2024 results on October 25 with 9,000 buses sold, a 6% increase over last year, generating $1.35 billion in net sales. Electric vehicle sales hit a new high at 704 units, up 29% from last year. The company’s backlog rose to over 4,800 units valued at $735 million, with EV orders making up nearly 630 units, largely boosted by the EPA’s Clean School Bus program.
However, Roth MKM analyst Craig Irwin noted that the electric bus deliveries were lower, despite revenue exceeding the estimates as reported by The Fly on October 25. Increased sales of combustion buses offset the difference. Roth expects EPA funding delays to affect electric bus deliveries in fiscal 2025, with guidance likely indicating stronger sales later in the year. The analyst lowered Blue Bird’s (NASDAQ:BLBD) price target from $48 to $41 and maintained a Neutral rating.
13. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Fund Holders: 26
Talking about ZIM Integrated Shipping Services Ltd. (NYSE:ZIM), Cramer remarked that he has faced monetary losses because of the shipping stock.
“A lot of people feel that it’s Zim’s time. I’m much more on the fence because historically, I’ve lost a lot more money than I made in the shipping stock so I say stay away.”
ZIM (NYSE:ZIM) offers container shipping and related services both in Israel and on a global scale. On October 23, Barclays analyst Marco Limite raised the price target on the stock to $13.90 from $12.30 and kept an Underweight rating. This change showed updates to third-quarter and 2024 forecasts, indicating that the guidance increase has been largely priced in. The firm noted a continued negative outlook for the sector overall.
As of June 30, 2024, ZIM’s (NYSE:ZIM) total cash position, which includes cash, cash equivalents, and investments in various financial instruments, fell by $351 million, decreasing from $2.69 billion at the end of December 2023 to $2.34 billion. The company reported capital expenditures of $66 million for the second quarter of 2024, a rise from the $26 million spent during the same period in 2023. Additionally, its net debt position grew to $3.25 billion by the end of June 2024, up from $2.31 billion at the close of the previous year, showing an increase of $936 million.
However, the company has raised its full-year guidance for 2024, projecting Adjusted EBITDA in the range of $2.6 billion to $3.0 billion, and Adjusted EBIT between $1.45 billion and $1.85 billion.
12. Noble Corporation plc (NYSE:NE)
Number of Hedge Fund Holders: 38
During Mad Money’s episode, Cramer mentioned Noble Corporation plc (NYSE:NE) and said:
“We hardly ever talk about the smaller offshore operators like… Noble because they never fully recovered from the fracking revolution.”
Noble Corporation (NYSE:NE) is a prominent offshore drilling contractor serving the global oil and gas industry. The company offers contract drilling services through its fleet of mobile offshore drilling units, which includes various types of drilling rigs, such as floaters and jack-ups. The company has been focused on solidifying its position in the market, becoming the largest offshore driller by market value following its acquisitions of Diamond Offshore Drilling Inc. and Maersk Drilling, according to Bloomberg.
In September, Noble Corporation (NYSE:NE) completed the acquisition of Diamond Offshore Drilling, further strengthening its standing in the industry. The transaction resulted in the creation of the largest fleet of seventh-generation dual-BOP drillships, significantly advancing the company’s capabilities.
The acquisition also contributed approximately $2 billion to the company’s backlog. An updated fleet status report was published, which noted the integration of the Diamond rigs, along with the addition of 4.8 rig years of backlog recently secured under a Commercial Enabling Agreement with ExxonMobil. The agreement pertains to four drillships currently operating offshore Guyana, bringing the company’s total backlog to an impressive $6.7 billion.
On October 23, Barclays analyst Eddie Kim lowered the price target on the stock to $48 from $54 and maintained an Overweight rating. The firm expects that 2025 will pose difficulties for offshore drillers due to a “demand air pocket” in relation to the number of rigs coming off contract. As a result, it has adjusted the day rate and contracting expectations, along with price targets for the group.
11. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 41
Cramer called Halliburton Company (NYSE:HAL) one of the “largest pure-play drillers” while mentioning that the stock has had a bad year and was down 20%. He further said:
“With Wall Street expecting nearly 9% earnings growth, Halliburton is even more of a bargain trading at eight times next year’s earnings estimates even though it’s also expected to put up 9% growth in 2025. However, those valuations are only attractive if SLB and Halliburton can make the numbers. Otherwise, their stocks’ going to stay in the doghouse.”
Cramer went on to say:
“Now, the other major oil service company, Halliburton reports in two weeks, November 7. This stock has lagged SLB this year because Hal’s more levered to the North American market rather than the international markets that are doing better. We’ll see what Hal has to say in a fortnight, but if the outlook that SLB just gave us is correct, low growth for international, no growth or declines from North America then Hal should be in worse shape than SLB. Even though Halliburton remains an excellent operator, it’s just the wrong business mix for the current environment.”
Halliburton (NYSE:HAL) is a major provider of products and services in the global energy sector, specializing in production enhancement, cementing solutions, and comprehensive drilling support. For the second quarter, the company reported total revenues of $5.8 billion, with an operating margin of 18%. During the earnings call, CEO Jeffrey Allen Miller expressed optimism about steady growth for the company throughout the remainder of 2024.
Management highlighted strong demand for the company’s services in international markets, noting high activity levels and equipment shortages across all major basins. The environment supports expectations of approximately 10% revenue growth for the international business for the full year.
However, the outlook for North America presents a different picture, as management anticipates a decline in revenues between 6% and 8% compared to the previous year due to reduced activity levels. Looking ahead to the third quarter, Halliburton’s (NYSE:HAL) Completion and Production division is expected to experience a sequential revenue decrease of 1% to 3%, with margins projected to drop by 75 to 125 basis points. In contrast, the Drilling and Evaluation division is forecasted to see a sequential revenue increase of 2% to 4%, accompanied by a rise in margins ranging from 25 to 75 basis points.
10. Baker Hughes Company (NASDAQ:BKR)
Number of Hedge Fund Holders: 41
Cramer noted that Baker Hughes Company (NASDAQ:BKR) stock has increased by almost 8% in the year, which is an improvement, but it still significantly trails behind the overall market. Here’s what he had to say:
“Well, this one’s a shocker. I’ve steered you away from this one in the past ‘cause I saw Baker Hughes as an inferior operator compared to SLB or Halliburton but maybe, maybe it’s time to rethink that stance. This stock’s been performing quite well since former parent company GE sold off its remaining stake in the business, it was back in 2022.
While SLB and Halliburton put in a relative peak last fall and have been falling steadily, since Baker Hughes has managed to keep grinding higher, you have to wonder how did they do that. Simple, unlike SLB and Halliburton, Baker Hughes is not a pure play oil service company. That’s only 60% of the business, the other 40% comes from their industrial and energy technology division which has lots of high-tech energy related products, including natural gas equipment and clean energy.
While the oil service business grew at a 3% rate in the first 9 months of the year, not great, the industrial and energy technology segment was up nearly 20%, that is great. On Tuesday night, Baker Hughes reported and though they had a very big revenue miss, their earnings still came in 6 cents better than expected. Just keep in mind that Baker Hughes is not winning because it’s a better oil service company than SLB or Halliburton, it’s winning because it’s less of an oil service company at a time when that business has just been treading water.”
Baker Hughes (NASDAQ:BKR) offers a wide range of technologies and services to the global energy and industrial sectors. The company designs and manufactures products for various oilfield operations, including exploration, production, and decommissioning, while also providing equipment and solutions for gas technology and energy applications.
In its third-quarter earnings report released on October 22, Baker Hughes (NASDAQ:BKR) highlighted an increase in revenue, largely attributed to its Industrial & Energy Technology (IET) segment. The company secured orders totaling $6.7 billion, which included $2.9 billion from the IET segment, marking the eighth consecutive quarter where orders reached or exceeded this level. Adjusted EBITDA for the quarter was reported at $1,208 million, which was a 23% increase year-over-year, while free cash flow reached $754 million.
9. Transocean Ltd. (NYSE:RIG)
Number of Hedge Fund Holders: 42
Transocean Ltd. (NYSE:RIG) was recently discussed by Jim Cramer during his episode of Mad Money. Here’s what he had to say about the company:
“We hardly ever talk about the smaller offshore operators like Transocean, symbol RIG, I always love that… Transocean has lost money for the past 7 years. Its stock has plunged from $30 a decade ago to just below $4… in 2020 when oil prices collapsed at the beginning of the pandemic. Every major offshore driller except for Transocean went bankrupt but the stock rebounded dramatically from those lows before peaking at eight bucks and changed in the summer of last year. Since then it’s pulled back along with energy prices.”
Cramer highlighted the company’s two impressive eighth-generation drillships that are operational in the Gulf of Mexico. He called them “technological marvels”. Cramer went on to say:
“Second, Transocean’s in the news. Last night, Bloomberg reported that the company’s exploring a merger with smaller rival, Seadrill. I don’t really have much of an opinion on the potential deal but it signifies more confidence in the offshore space than I’ve seen in over a decade. By the way, of course, the industry needs consolidation. Honestly, this group has been so bad for so long that it’s tough to recommend them here but if you strongly believe that the price of oil’s headed higher next year or the year after then Transocean is a winner. Personally, though, I don’t want to bet on that.”
Transocean (NYSE:RIG) offers offshore contract drilling services for oil and gas wells globally, operating a fleet of mobile offshore drilling units, including ultra-deepwater and harsh environment floaters. The company provides rigs, equipment, and crews to integrated and independent energy companies, as well as government-owned energy companies.
On October 23, Bloomberg reported that Transocean (NYSE:RIG) has been engaged in discussions regarding a potential merger with rival offshore drilling contractor Seadrill Ltd. As oil explorers increasingly turn to offshore resources, these talks come at a time when the industry is experiencing renewed activity. Although conversations are ongoing about the possible structure of this merger, no final decision has been reached, and both companies may choose to continue operating independently.
8. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 42
Cramer commented on the beaten-down stock of Enphase Energy, Inc. (NASDAQ:ENPH), saying:
“Enphase has just been clobbered already… It was clobbered because Europe cut back the subsidies… They surprised everybody. They should have communicated that. I don’t want you to sell it all the way down here.”
Enphase Energy (NASDAQ:ENPH) is engaged in designing, developing, manufacturing, and selling energy solutions for the solar photovoltaic sector. The company shared its third-quarter financial results on October 22, revealing significant declines in both revenue and net income. Revenue reached $380.9 million, an increase from $303.5 million in the second quarter of 2024 but showing a significant drop of 31% compared to the same period last year.
U.S. revenue increased by around 43% from the previous quarter, fueled by stabilized inventory levels among distributors and a rise in product shipments. However, challenges in the European market contributed to a 15% sequential decline in revenue, highlighting issues such as regional slowdowns and regulatory uncertainties, particularly in the Netherlands. Despite these setbacks, the company demonstrated strong financial health with a free cash flow of $161.6 million and total liquidity of $1.77 billion, ensuring a stable financial position moving forward.
For the fourth quarter of 2024, Enphase Energy (NASDAQ:ENPH) expects revenue to fall between $360 million and $400 million, which is slightly lower than the previous quarter’s midpoint. Additionally, the company anticipates a GAAP gross margin in the range of 47% to 50%.
7. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 46
When a caller mentioned The Kroger Co.’s (NYSE:KR) merger, Cramer said:
“With Albertsons, I think it’s better because they gotta go up against Costco and Walmart and Amazon. Without it, they still do well but frankly… Look, this administration, I think they’ll hold this deal up from now until, I don’t know, this thing’s tapped out.”
Kroger (NYSE:KR) is a prominent food and drug retailer in the United States, operating a diverse range of store formats, including combination food and drug stores, multi-department stores, marketplace locations, and price impact warehouses. In October 2022, the company announced plans to merge with Albertsons, another leading grocery chain in the U.S. Valued at $24.6 billion, this merger seeks to improve pricing power by increasing leverage with suppliers and allowing the two companies to consolidate their store brands.
The merger is likely to strengthen their ability to compete against larger rivals in the grocery market. However, the proposal has faced scrutiny from antitrust regulators, who express concerns that the merger could reduce competition, potentially leading to higher prices and diminished quality of service, as well as lower wages and benefits for workers.
To address these regulatory concerns, Kroger (NYSE:KR) and Albertsons have agreed to divest 579 overlapping stores if the merger is approved. C&S Wholesale Grocers, a supplier to independent supermarkets based in New Hampshire, would acquire these stores. However, the legal proceedings are still ongoing.
6. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 64
Cramer, while visiting Chevron Corporation’s (NYSE:CVX) Anchor floating production unit (FPU), called the company big. He also remarked:
“CEO Mike Wirth… did not spend more than $5 billion on this thing [FPU] because fossil fuel powered cars will be a niche business.”
During the interview with Cramer, Mike Wirth, CEO, emphasized that the demand for electricity in the U.S. will keep rising, highlighting the necessity for various energy sources, including wind, solar, and natural gas. He also mentioned that despite the increasing popularity of electric vehicles, combustion engines continue to play a vital role and are still being produced in large quantities.
Cramer also mentioned that the company stagnates “because it’s hostage to oil and gas prices”. He went on to talk about the celebration of American ingenuity and said:
“… and it’s pretty darn hard to find a better example of that than Anchor, the gigantic floating oil platform in the Gulf of Mexico that I’m standing on right now… Anchor, this production unit that’ll be producing 75,000 barrels a day for years or even decades, given that there [is] more than 400 million barrels of oil beneath my feet… More important, it can maintain pressures of 20,000 pounds per square inch, which could unlock all sorts of offshore oil sites that were pretty much previously inaccessible.”
Chevron (NYSE:CVX) operates in the energy and chemicals sector both in the United States and internationally. The company focuses on the exploration, production, and transportation of crude oil and natural gas, as well as refining crude oil into various petroleum products and manufacturing renewable fuels and petrochemicals.
Chevron (NYSE:CVX) has strategically positioned itself to navigate various market conditions, including potential downturns. Its stress test showed that it can sustain its operations even if the price of Brent crude oil averages $50 from 2025 to 2027. Even in such a scenario, the company will be able to generate sufficient cash flow to support a capital program that emphasizes high-return projects, alongside a steadily increasing dividend, which has been a consistent feature for over thirty years.
Additionally, a key area of focus for the company is the Permian Basin, a region known for its rich oil reserves. The company aims for substantial production growth in this area, setting a target of nearly 4 million barrels of oil equivalent per day by 2027.
5. The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 66
When a caller asked about The Cigna Group (NYSE:CI), Cramer said, “Cigna is very well run. It’s very pro-shareholder. I like Cigna. It’s two thumbs up.”
Cigna (NYSE:CI) operates as a comprehensive provider of insurance and related services across the United States. The company specializes in delivering coordinated health services, including pharmacy benefits and care management, alongside a variety of medical, pharmacy, behavioral health, and dental products. Recently, Bloomberg has reported that discussions have emerged regarding a potential merger between the company and Humana, another major player in the health insurance market.
In a separate development, the company announced a cash dividend of $1.40 per share, which will be payable on December 19, to shareholders of record by December 4. As of October 25, the stock has a dividend yield of 1.76%.
During the second quarter earnings call, Cigna (NYSE:CI) management expressed confidence in the long-term growth prospects, highlighting expectations for average annual adjusted earnings per share growth of 10% to 14%. Additionally, the company forecasts generating a cumulative operating cash flow of $60 billion over the next five years while continuing to invest significantly to benefit shareholders.
With ongoing positive performance in its Evernorth and Cigna Healthcare divisions, management reaffirmed its expectation for consolidated adjusted income from operations to reach at least $8.065 billion or $28.40 per share for the full year 2024.
4. Schlumberger Limited (NYSE:SLB)
Number of Hedge Fund Holders: 67
Schlumberger Limited (NYSE:SLB) was discussed by Cramer during the October 24 episode of Mad Money. Talking about the stock’s performance, he said:
“So far, it’s been a pretty bad year for SLB and Halliburton, the two largest pure-play drillers, both down over 20%… SLB sells for 11 times next year’s earnings estimate. I can’t remember when it was that cheap before… However, those valuations are only attractive if SLB and Halliburton can make the numbers. Otherwise, their stocks’ going to stay in the doghouse.”
Cramer went on to discuss the company’s latest earnings report. Here’s what he said:
“Even though I like the results, the stock still dropped 5% in response, still hasn’t recovered. SLB posted a small revenue miss, paired with a 1 cent earnings beat, off an 88 cent basis… Their cash flow numbers came in much much much higher than expected but management’s commentary about SLB’s outlook for the future… was more mixed. SLB CEO Olivier Le Peuch gave a nuanced update on the industry with some worries about short-cycle oil investment as well as a bunch of positives like significant investments, natural gas production, and some encouraging comments about deepwater drilling projects.
Well, SLB doesn’t give much in the way of formal guidance. Management’s not sounding real super confident about the fourth quarter and for 2025, they’re talking about upstream spending in international market growing by low to mid-single digits. North America’s spending looks to be flat to slightly down. Overall, I think SLB continues to do fine but after communicating a mixed outlook, going forward, I wouldn’t expect Wall Street to give them the benefit of the doubt until we started seeing more signs of an upturn in the global economy.”
Schlumberger (NYSE:SLB) is a provider of technology and services within the global energy sector, focusing on various aspects of field development, hydrocarbon extraction, and carbon management. During the third-quarter earnings call, CEO Olivier Le Peuch highlighted the pressures currently faced by commodity prices, primarily due to concerns over an oversupplied market. This situation stems from increased output by non-OPEC+ producers, uncertainties surrounding OPEC+ supply decisions, reduced demand from China, and slower economic growth in the United States and Europe.
Despite these challenging market dynamics, Schlumberger (NYSE:SLB) management maintains confidence in the long-term fundamentals of the oil and gas industry. In North America, however, management does not anticipate a rebound in activity levels in the near future. Overall, the company expects these trends to contribute to a sustained level of global upstream investment in the coming years.
3. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 85
Cramer discussed Tesla, Inc.’s (NASDAQ:TSLA) recent rally and how it was well-deserved. Here’s what Mad Money’s host had to say:
“Now, we know that today belongs to Elon Musk. The man told a story last night that he should have told when he had that Robotaxi meeting earlier this month. He talked about how his new electric vehicles were ready to go live and that Tesla would self-drive and be much more profitable than people think… Tesla deserved that rally because it never should have been down so much in the first place… We know that Musk’s Tesla still represents the future and his stock’s about to take off.”
Tesla (NASDAQ:TSLA) is a key player in the electric vehicle sector. On October 24, according to Reuters, the company experienced a significant surge in its stock value, closing up nearly 22% in a single day, the largest gain seen in over ten years. The spike followed CEO Elon Musk’s optimistic outlook on sales growth, where he projected a 20% to 30% increase in the coming year.
Musk also announced plans to introduce a more affordable vehicle by the first half of 2025, highlighting ongoing efforts to reduce production costs that contributed to improved profit margins in the third quarter.
Tesla (NASDAQ:TSLA) stock increase not only marked the most substantial rise since May 2013 but also helped restore some of its market value, adding approximately $150 billion as per the Reuters article. Investors appeared reassured by Musk’s commitment to the company’s core business of electric vehicle sales, despite recent distractions posed by ventures like the newly introduced robotaxi. Musk’s focus centered on the company’s vision for an autonomous future, mentioning plans for a public ride-hailing service expected to launch next year in Texas and California.
2. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 92
Cramer shed light on GE Vernova Inc.’s (NYSE:GEV) recent earnings report and emphasized the importance and need for fossil-based fuel.
“When you study GE Vernova’s fantastic quarter and it was, and you read between the lines, the numbers that shine were certainly not nuclear, definitely not wind. No, the strength came from electrification and the power of natural gas. You may be reluctant to invest in it. You might think who cares but you need to know how vital all this fossil fuel technology is to the growth of Magnificent 7. Because of these data centers, because NVIDIA’s chips burn so darn hot, and they use an insane amount of electricity, we simply need more fuel fossil-based fuel.”
GE Vernova (NYSE:GEV) operates in the energy sector, focusing on a range of solutions related to electricity generation, transfer, orchestration, conversion, and storage. On October 23, it shared its third-quarter results, highlighting significant growth in orders and revenues. During this period, the company secured orders totaling $9.4 billion, marking a 17% increase on an organic basis.
This growth was primarily fueled by a 28% rise in services, with all segments showing strength, complemented by equipment growth in Power and Electrification. Revenue for the quarter reached $8.9 billion, an 8% increase. The financial performance showed expanding margins in the Power, Electrification, and Onshore Wind segments, although these gains were somewhat offset by contract losses in Offshore Wind. Its cash flow saw a substantial improvement, increasing by approximately $0.9 billion.
Focusing on GE Vernova’s (NYSE:GEV) Electrification segment, orders amounted to $2.5 billion, also up 17% organically, driven by heightened demand for grid equipment and services. Revenue for this segment reached $1.9 billion, a 22% growth fueled by contributions from Grid Solutions and Power Conversion. The Power segment’s orders reached $5.2 billion, a 34% organic increase, while revenues totaled $4.2 billion, marking an 8% rise, driven by increased demand for Gas Power services and equipment.
1. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 130
Cramer expressed enthusiasm about Broadcom Inc. (NASDAQ:AVGO) and said, “Buy. Charitable Trust name, doing incredibly well… I like Broadcom, I like Hock Tan.”
Broadcom (NASDAQ:AVGO) specializes in the design, development, and supply of semiconductor devices, building on a strong foundation in semiconductor innovation. In the third quarter, the company reported total revenue of $13.1 billion, marking a significant increase of 47% from the same period last year. A contributor to this growth has been the surge in demand for artificial intelligence products and services, which brought in $3.1 billion during the quarter.
Broadcom (NASDAQ:AVGO) expects that AI will become a key driver of growth moving forward, projecting $3.5 billion in AI revenue for the upcoming fourth quarter. The company has found considerable success in providing custom AI accelerators, specialized chips designed to handle AI workloads, to major hyperscale customers such as Microsoft, Amazon, and Alphabet. In the third quarter, sales of these AI accelerators skyrocketed, increasing by three and a half times compared to the previous year.
On October 14, Mizuho raised the price target on the stock to $220 from $190 and maintained an Outperform rating. The firm forecasts tailwinds in artificial intelligence, custom silicon, and networking through 2025 and 2026.
While we acknowledge the potential of Broadcom Inc. (NASDAQ:AVGO) 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 AVGO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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