On Wednesday, Mad Money host Jim Cramer weighed in on how companies are grappling with the challenge of issuing guidance during the earnings season.
“So far this earnings season, the great dilemma is how the heck are you supposed to deal with your guidance? How do you come up with a forecast when you got no idea what the future’s going to look like? I don’t have it. You don’t have it. They don’t have it.”
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Cramer pointed to a series of recent developments that have added to the uncertainty. Among the most disruptive, he said, is the sudden rollout of a sweeping tariff policy, which includes a 10% base tariff on all imported goods. It has triggered retaliatory measures from several trading partners. Cramer mentioned that China has stopped accepting deliveries of Boeing aircraft. On top of that, he noted a noticeable decline in international tourism. “The whole thing’s a bit of a mess,” he said. He added:
“So aside from purely domestic companies with little economic sensitivity, how on earth can executives give you any kind of forecast for 2025 here? Coming into earnings season, I figured most of them would just simply pull their outlooks. I mean, who could blame them?”
As the earnings season is underway, however, Cramer said he is seeing a variety of responses. Some companies, especially the major banks, are opting to reiterate their full-year outlooks. But he noted that these institutions generally do not issue detailed guidance on metrics like revenue or earnings per share in the first place. Meanwhile, several companies have managed to surpass Wall Street’s expectations for the quarter, only to stick with previously issued full-year forecasts.
“But here’s the bottom line: With earnings season in full swing, I’m surprised more companies haven’t pulled their full year forecast like Delta. The most common strategy that’s been seen so far is beat and maintain from a handful of companies like the banks and a couple of healthcare companies holding up so far.”
Our Methodology
For this article, we compiled a list of 6 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on April 16. We listed the stocks in ascending order of their hedge fund sentiment 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).
Jim Cramer Put These 6 Stocks Under the Microscope
6. FS KKR Capital Corp. (NYSE:FSK)
Number of Hedge Fund Holders: 9
When a caller inquired about FS KKR Capital Corp. (NYSE:FSK), Cramer said:
“This is a business development company, and those have high yields, and I don’t want to trust them because they take so much leverage, and they do all the things that we don’t do when it comes to Mad Money.”
FS KKR Capital (NYSE:FSK) focuses on providing tailored credit solutions by investing mainly in senior secured debt and some subordinated debt of private middle market companies. In November 2024, when Cramer was asked about the company during a lightning round, he commented:
“Okay, so this is what’s known as a business development company. It has a very big yield, but I do think that over time you’re going to wish that you did start peeling some off. That’s what I want you to do.”
5. American Financial Group, Inc. (NYSE:AFG)
Number of Hedge Fund Holders: 21
When a caller asked Cramer about American Financial Group, Inc. (NYSE:AFG), he said, “Oh, you know what? To the Lindner family, I’ve always liked that stock.”
American Financial Group (NYSE:AFG) offers a range of specialty insurance products, including coverage for transportation, property, casualty, and financial risks. For 2025, the company expects a 5% rise in net written premiums, building on the $7.1 billion reported the previous year.
It is targeting a combined ratio of roughly 92.5% and expects a reinvestment rate near 5.75%. American Financial Group (NYSE:AFG) also expects an annual return of about 8% from its $2.7 billion alternative investment portfolio. Based on these assumptions, the company projects core net operating earnings per share of approximately $10.50 and a core operating return on equity, excluding AOCI, of around 18%.
4. NXP Semiconductors N.V. (NASDAQ:NXPI)
Number of Hedge Fund Holders: 44
A caller asked Cramer’s thoughts on NXP Semiconductors N.V. (NASDAQ:NXPI) and he replied:
“NXP, it’s a semiconductor company. It’s closely connected with autos, which means it’s a semiconductor company that I do not want to own.”
NXP Semiconductors (NASDAQ:NXPI) develops a wide range of semiconductor products and its offerings include processors, wireless solutions, sensors, and security controllers. On April 17, Stifel reduced its price target on NXPI to $170 from $210 and kept a Hold rating on the stock.
The firm pointed to the effects of tariffs, including indirect ones, as a reason for its cautious stance going into the Q1 earnings season. It expects results for the March quarter to be mostly stable but sees the outlook for June as weaker. The analyst mentioned that no matter how tariffs eventually play out in terms of scale or length, the chances of the semiconductor sector moving into a cyclical decline have gone up significantly.
3. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 45
In light of tariffs, a caller asked if there is a chance that companies like Ford Motor Company (NYSE:F) might increase exports, which might lead to an increase in its revenue and stock price. In response, Cramer said:
“No, not a chance. Hey, they gotta make the garages bigger in Europe. I’ve been thinking about that. Now listen to me on this, okay, Ford is epoxied to 9.40 cents. You can’t pull that thing off at 9.40.”
Ford (NYSE:F) is engaged in designing, building, and servicing different types of vehicles, including trucks, cars, vans, SUVs, and luxury models under the Lincoln brand. Last week on Squawk on the Street, Cramer commented:
[Talking about an analyst downgrade] “Okay, so there’s a piece out this morning which really captures the zeitgeist of manufacturing. Ford, and it’s Bernstein, and they’re going to a sell, and they’re talking about tariffs, they’re talking about decline. Obviously, we’re going to be talking about a recession and how they do in a recession. And what it basically says is, wow, you know what, I know why this stock sells at four times earnings. And it’s a value trap. And I think it’s a most unfortunate, because Ford makes the 150 here. It’s a great product. They do assemble. We were all told, major companies like Ford were told to do some assembling here. Ford played by the rules. And because they played by the rules, they’re going to be shredded. And I think there’s a notion of, well, is that deserving? And that maybe deserves has nothing to do with it. […] I don’t like Ford. I don’t like Ford because of the warranty issue.”
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 96
Noting the stock’s recent decline, a caller asked if Advanced Micro Devices, Inc. (NASDAQ:AMD) is suitable for a short-term trade. Here’s what Cramer said in response:
“No, no, no. You know, I think the world of Lisa Su, but we are going to try to limit, as I said in the club, we are going to try to limit our exposure to what I regard as being a charnel house, a semiconductor charnel house.”
Advanced Micro Devices (NASDAQ:AMD) is a well-known tech company that creates and supplies microprocessors, graphics cards, chipsets, and embedded processors. During March 24’s episode, Cramer remarked:
“Yeah, I, look, AMD is getting some business from, I understand that they’re getting some business from Jack Ma in China. The stock is not expensive. I don’t mind you buying it. I do prefer, I do prefer Nvidia though.”
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Inquiring about Tesla, Inc. (NASDAQ:TSLA), a caller asked if Cramer thought that all the bad news was priced in. He replied:
“Do I think all the bad news is already priced in? What a great question. You know what? I’ll tell you that with the stock down 40%, when this stock’s down 50%, that’s when I feel, because that’s at the level where people just say, I’ve had it. So let’s take a, you know, a little bit more, little bit more pain and then some gain there.”
Tesla, Inc. (NASDAQ:TSLA) designs, builds, and sells electric cars and energy products. The company offers different services that include selling vehicles, offering financing plans, and providing solar power systems and energy storage solutions. ClearBridge Investments stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter:
“Our active underweight to the Magnificent Seven added more than 100 basis points to relative returns for the quarter, with underweights to EV maker Tesla, Inc. (NASDAQ:TSLA) and Google parent Alphabet being among the largest relative contributors. We added to both positions, taking advantage of what we view as short-term weakness as Alphabet missed high expectations for cloud revenue growth in its latest quarter, while Tesla worked through negative sentiment over CEO Elon Musk’s role in the Trump administration.”
While we acknowledge the potential of Tesla, Inc. (NASDAQ: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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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