We recently published a list of Jim Cramer’s Top 10 Stock Picks for June. Since Apple Inc (NASDAQ:AAPL) ranks higher in the list, the stock deserves a deeper look. But first, let’s see what Cramer was talking about during his programs earlier this week.
Jim Cramer in a latest program lamented over Salesforce’s latest declines following the company’s weak Q1 results and guidance cut. Cramer said he’s been “championing” Salesforce ever since the company went public since he’s used the Cloud software company’s product when he started Street.com. Cramer said Salesforce has been one of the most “distinguished” members of the enterprise software industry. Cramer identified competition as one of the biggest threats to Salesforce, since he believes every other “young person” coming out of the school majoring in computer science knows if you want to make money you should make or sell software for the enterprise world.
The generative artificial intelligence revolution is jolting the SaaS world to its core, according to Cramer, as companies begin to explore the power of AI and question whether they should keep paying for SaaS subscriptions or hire more people when AI-based tools can do similar jobs in a more efficient way.
Cramer’s NVDA Thesis Still Holds?
Jim Cramer, however, said that companies that are making AI transition easier for companies are in “ascendancy.” He thinks a personal computer equipped with NVIDIA Corp (NASDAQ:NVDA) Blackwell Platform could make “vast swaths of workforce obsolete.” Cramer has been recommending NVIDIA Corp (NASDAQ:NVDA) over the past several months, and in his latest programs he yet again urged investors to buy and hold the stock. However, valuations concerns around NVIDIA Corp (NASDAQ:NVDA) are increasing. NVDA bears believe the Wall Street’s EPS estimate for NVDA for two years from now, which is close to $40 (latest quarterly EPS was $5.98), would only hold if Cloud and software companies continue to buy Nvidia chips at a rate that we are seeing today. Since major Cloud companies are “front-loading” chips amid competition and data center boom, it’s highly unlikely Nvidia continues to see this high sales and income growth in the long term.
Our latest research unlocked many AI-related stocks trading at attractive valuations. If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Methodology
For this article we watched several latest programs of Jim Cramer aired over the past two weeks and picked 10 stocks he’s recommending investors to buy. With each stock we have mentioned the number of hedge fund investors having stakes in the company. 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).
Apple Inc (NASDAQ:AAPL)
Number of Hedge Fund Investors: 150
A caller highlighted in Jim Cramer’s latest show that Apple Inc (NASDAQ:AAPL) stock recently shot up after latest data from China showed a rebound in iPhone sales. Data from the China Academy of Information and Communications Technology (CAICT) shows that iPhone shipments in April surged 52% to 3.489 million units, driven by discounts Apple Inc (NASDAQ:AAPL) is offering to lure back customers. Cramer said the stock jumped on the news but pared back gains. Cramer thinks Apple Inc (NASDAQ:AAPL) “is a buy here” and reiterated his age-old mantra:
“I want you to own it, not trade it.”
Investors are also looking over their shoulders for any major AI announcement by Apple Inc (NASDAQ:AAPL), especially during the upcoming Developers Conference. Bank of America recently reiterated an Outperform rating on Apple Inc (NASDAQ:AAPL). BofA’s Wamsi Mohan, who has a $230 price target on Apple Inc (NASDAQ:AAPL), is expecting AI-phone related announcements in the Developers Conference.
Hedge fund sentiment around Apple Inc (NASDAQ:AAPL) shot up in the first quarter, with 150 hedge funds ending the period with Apple Inc (NASDAQ:AAPL) shares in their portfolios, up from 131 funds in the previous quarter.
Aristotle Atlantic Focus Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) in its first quarter 2024 investor letter:
“Apple Inc. (NASDAQ:AAPL) contributed to portfolio performance in the first quarter due to the strategy’s underweight relative to the benchmark. Investors continue to be concerned about weak handset sales globally, as well as declining market share and competitive dynamics in the Chinese market, as Huawei has returned to the market with a more competitive premium-priced handset. Apple has yet to demonstrate a competitive AI product, which could present further competitive headwinds for the company.”
Apple Inc (NASDAQ:AAPL) ranks 1st in Insider Monkey’s list of the Jim Cramer’s 10 Stock Picks Heading Into June.
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
