We recently published a list of Jim Cramer’s Latest Calls Before 2025 Begins: Top 10 Stocks. In this article, we are going to take a look at where Palantir Technologies Inc (NASDAQ:PLTR) stands against other stocks in Jim Cramer’s latest calls before 2025 begins.
Jim Cramer in a latest program talked about the market reaction to the Federal Reserve’s latest rate cut and its guidance that suggested fewer rate cuts moving ahead.
“I guess you could say the baby got thrown out with the bathwater. It was truly hideous, a little unexpected, and yes, wicked. Even though the market’s barely oversold, we may not get that quick snapback we normally expect in a deeply oversold market,” Cramer said.
Jim Cramer said Jerome Powell’s comments and tone were “stern” and his conference call “confounded” investors. Cramer said inflation has not come down enough and that has made the Fed’s job difficult.
Cramer then talked about different sectors and companies that need rate cuts amid a slowdown.
“I really wish the Fed hadn’t been so defensive about the need to cut rates going forward. A slower approach would have been much better. If they had explicitly taken a wait-and-see approach before this meeting, we’d be in a better position. This time, they telegraphed the wrong thing, hence today’s meltdown. However, if the weaker part of the economy deteriorates further or inflation comes down, the Fed still has room to cut. Here’s the bottom line: a previously data-dependent Fed chose not to be data-dependent today with its pronouncements, and that’s what drove the market down. This happened despite the quarter-point rate cut—something that’s typically good news for stocks—but it turned out to be the very opposite.”
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For this article, we watched some latest programs of Jim Cramer and picked 11 stocks he is talking about. With each company, we have mentioned the number of hedge fund investors. 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).
Palantir Technologies Inc (NASDAQ:PLTR)
Number of Hedge Fund Investors: 43
Jim Cramer in a latest program analyzed why Wall Street missed the Palantir Technologies Inc (NASDAQ:PLTR) rally and how the company defies conventional valuation models.
“It has a tremendous business model that could change the entire Defense Department budget, but in some ways, Palantir is a renegade company playing by its own rules. Like AMC, the theater chain, the CEO actually caters not to Wall Street but to Main Street individual investors.
The difference is that when it comes to enterprise software, you don’t use price-earnings models. You use this difficult-to-understand Rule of 40, where you add the revenue growth rate to the earnings before interest and margin. If the sum is above 40, then you’ve got a winner. Most companies that are losing money can’t reach that number, but some can if they have incredible revenue growth.
Palantir Technologies Inc (NASDAQ:PLTR) appeared to be losing money hand over fist, but it passed the Rule of 40 test with flying colors. Since then, the growth’s been accelerating rapidly, and the profits are exploding. It’s among the fastest growers in the entire industry—top of the Rule of 40-plus. Like Tesla, Palantir is tight with Trump,” Cramer said.
So why didn’t we see it? Because the CEO was too brash and the actual business too opaque. By nature, what they do is secretive.”
What makes Palantir Technologies Inc (NYSE:PLTR) one of the top AI stocks? Its technologies are actually solving the problems of businesses. Palantir’s data technology Ontology is solving the famous hallucination problem for AI systems, thanks to the company’s years of experience with military and defense systems. Earlier this year at an event with customers, Palantir Technologies Inc (NYSE:PLTR) shared some specifics on how its customers are being able to reduce costs and increase profits due to its artificial intelligence platform (AIP) that was launched about a year ago.
Airbus accelerated A350 production by 33%, BP reduced costs per barrel by 60%, and Jacobs Connect cut power usage by 30%. Panasonic decreased waste by 12%, ESI Group sped up ERP harmonization by 70%, and PG&E reduced transformer ignitions by 65%. Eaton boosted productivity by 25%, while Tyson Foods achieved $200 million in cost savings.
Fidelity Growth Strategies Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q3 2024 investor letter:
“Untimely ownership of Palantir Technologies Inc. (NASDAQ:PLTR) (+47%) also hurt the fund’s relative result. This software and services firm, which operates in both government and commercial segments, saw strong growth during the quarter, largely driven by its “AIP” – or Artificial Intelligence Platform – offering. In early August, the company reported Q2 financial results that mostly met somewhat lofty expectations. We established a sizable holding in Palantir Technologies during the quarter, and at quarter end it was the second-largest position and a slight overweight.”
Overall, PLTR ranks 8th on our list of Jim Cramer’s latest calls before 2025 begins. While we acknowledge the potential of PLTR, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR 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.