We recently published an article titled Jim Cramer Discussed 10 Stocks That Can Do Well in December.In this article, we are going to take a look at where Tesla, Inc. (NASDAQ:TSLA) stands against the other stocks that can do well in December according to Jim Cramer.
Jim Cramer, the host of Mad Money, recently shared a list of ten stocks he believes will perform well in December. He pointed out that stocks that do well in November tend to continue their strong performance into the final month of the year.
Cramer explained that the beginning of a new month brings attention to the previous month’s performance, and with that, a significant influx of money flows into the market. This money, he said, tends to validate the moves of the largest stocks, creating a cycle where money is immediately put to work, often benefiting the Magnificent Seven.
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Cramer also highlighted a common pattern at the end of the year, noting that people tend to make contributions to their retirement accounts when the year is going well. He emphasized that this trend is already visible in the market. When asked why a strong November often translates into a positive December, Cramer pointed to the mechanics of money management. He said that this pattern isn’t new for him, elaborating:
“Before I started my Charitable Trust more than two decades ago, I ran a hedge fund. I was always looking for an edge, and one of the most reliable patterns I found is that, when December rolls around, you mimic the biggest winners of November.”
Cramer recalled how, during his hedge fund days, he would focus on the top-performing stocks of November, buying heavily into those picks and letting them continue to perform through the end of the year. He remarked that this approach has proven to be successful year after year.
In addition to the stocks he recommended, Cramer also noted a category of stocks tied to travel. He mentioned that travel-related industries, including airlines and cruise ships, were particularly strong in November and could continue to show promise in December.
“Now, there are other[s] underneath this list, ones that involve traveling. To me, that means you could buy anything connected to travel, including the airlines… Cruise ships work… But the bottom line: If you want to know what I think could do best in the month of December, or simply what worked best in the month of November, so now you got your marching orders and I say (buy, buy, buy).”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during a recent episode of Mad Money on December 2. 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).
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Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Cramer once again highlighted how Tesla, Inc. (NASDAQ:TSLA) stands to benefit from Musk’s position under the new administration.
“How about Tesla? What can I say that hasn’t already been said, right? I mean, right now, Elon Musk may be the second most important man in America. He may be the most important man in America for all I know, as long as he stays tight with Trump. Sure, Tesla issued a new software update today, and some people actually talked about that, but everyone knew it was coming. People have been buying this one because they realized that Musk has the President-Elect’s ear, and his loyalty will likely be returned with good news for Tesla, especially the self-driving business. To me, it seems very transactional. Duh.”
Tesla (NASDAQ:TSLA) has seen a significant rise in its stock price following the U.S. presidential election, driven by both financial growth and its CEO’s relationship with President-Elect Donald Trump. This was further amplified when the President-elect appointed Elon Musk to a new role focused on improving government efficiency.
The stock surged again after reports that Trump’s transition team would prioritize creating federal regulations for self-driving vehicles, a key area for the company. Current federal laws limit the deployment of fully autonomous cars, but Musk has said that he supports changes that could benefit the company’s ambitions in this sector.
The company continues to make strides in this area. Recently, Ashok Elluswamy, Tesla’s (NASDAQ:TSLA) vice president of AI software, shared on X (formerly Twitter) that the company has begun rolling out version 13 of its Full Self-Driving (FSD) software to customers.
This update is designed to advance every aspect of the driving network, making Tesla vehicles a step closer to achieving full autonomy. According to the company, the new version of FSD is a crucial component in turning the millions of Tesla cars on the road into truly self-driving vehicles.
Overall TSLA ranks 1st on our list of the stocks that will do well in December according to Jim Cramer. While we acknowledge the potential of TSLA 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 TSLA 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.
