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 Workday, Inc. (NASDAQ:WDAY) 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 group of finance professionals analyzing market trends on their computer screens.
Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 89
Cramer is of the opinion that Workday, Inc. (NASDAQ:WDAY) will witness a downside if it reports softer sales.
“After the close, we hear from Workday. That’s an enterprise software company that got downgraded this week because of the possibility of softer sales. The enterprise software group is really at the heart of this market’s weakness. If the sales are soft, I expect much more downside.”
Workday (NASDAQ:WDAY) provides cloud-based enterprise software that assists organizations in managing financial, human resources, spending, planning, and supply chain functions, along with tools for analytics, reporting, and custom application development.
Polen Capital stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q3 2024 investor letter:
“We added to several existing positions in the quarter including Adobe, Workday, Inc. (NASDAQ:WDAY), Shopify, MSCI, and Paycom Software. Workday is still growing revenue at a mid-to-high-teens rate, but in recent years, slower macroeconomic growth has made closing deals more challenging. Amidst a pullback, we increased our position as we found the valuation attractive for a well-positioned, recurring revenue business with still strong growth potential. The company also recently stated publicly that it will be focused on expanding profit margins meaningfully over the next five years—something we have expected and are pleased to see.”
Overall WDAY ranks 9th on our list of the stocks Jim Cramer recently talked about. While we acknowledge the potential of WDAY 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 WDAY 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 was originally published at Insider Monkey.
