We recently compiled a list of the Jim Cramer Discussed These 11 Stocks Recently. In this article, we are going to take a look at where Rivian Automotive, Inc. (NASDAQ:RIVN) stands against the other stocks.
Jim Cramer, the host of Mad Money, cautioned viewers on Wednesday about the risks of blindly following the crowd in the stock market. He emphasized that it is essential to avoid expecting the same outcome as everyone else, as there is a significant chance things will not play out as expected. This, he explained, is because many expectations are often already “priced in” to the market.
“… And that’s why you need to be extra wary of the IPO cycle. Let’s go over this. We’ve seen the pattern over and over again. We get this deluge of new deals, at first, many of them explode higher, but at the same time they’re flooding the market with new stock supply and that supply ultimately drags us down. I’ve said it a million times, the stock market is like any other market. It’s all about supply and demand.”
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When supply increases too rapidly, prices are likely to fall. He stressed that the enthusiasm surrounding IPOs, particularly when they make early investors substantial profits, creates an environment of palpable excitement. Cramer noted that when interest in these IPOs wanes, that initial exuberance quickly turns to frustration, which can cause broader market declines, not just in IPOs but across the board.
Such a cycle, Cramer noted, is nothing new. He pointed to 2020 and 2021 as prime examples of how a flood of IPOs and SPAC mergers, fueled by stimulus checks, led many people to invest in trendy stocks. He added:
“2020, we also had a ton of electric vehicle and charging station-related IPOs and SPAC mergers. At first, these stocks were unstoppable, although most of that was because this was a period of high-risk speculation where people were willing to give anything with the right buzzwords.”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 12. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, 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).
A state-of-the-art electric vehicle charging at a station at a suburban mall.
Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: 31
Rivian Automotive, Inc. (NASDAQ:RIVN) designs, develops, and manufactures electric vehicles, including pickup trucks and SUVs, and provides a range of consumer services such as financing, insurance, maintenance, and charging solutions. It also operates a fast-charging network, offers fleet management services, and partners with Amazon on electric delivery vans.
Cramer mentioned the company and said:
“And look, QuantumScape’s hardly alone, don’t mean to pick on it. All sorts of electric vehicle plays that came public during the IPO frenzy of ‘20 and ‘21 got crushed. Rivian although ended up coming back.”
In October 2024, during Cramer’s Mad Dash, Cramer mentioned Rivian Automotive, Inc. (NASDAQ:RIVN)’s announcement of a shortage of a shared component on the R1 and RCV platforms and commented:
“The reason I thought that was interesting was because they were going to do 50,000, maybe 52,000. Looks like they’re going to do 47,000, 49,000. It doesn’t sound like it’s a demand problem. It sounds like it’s a part problem. The reason I point that out is because the demand problem at Ford is bad… EVs everywhere are under this turmoil…
I want to believe that Rivian Automotive, Inc. (NASDAQ:RIVN) is right, because I think Rivian is terrific… I want to believe that they’re right that it’s a part, not demand, but I don’t know… This sector away from Tesla is just sheer hell right now… I need more information because nobody else has a supply problem. One of the things I thought was great is that, one thing that’s gone is that whole supply problem issue with the semis. Maybe this is another part, but these guys are not in a position to miss. They’re just not… I don’t know. It doesn’t seem like a good shift in the EV game.”
Overall RIVN ranks 8th on our list of the stocks Jim Cramer discussed recently. While we acknowledge the potential of RIVN 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 RIVN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article was originally published at Insider Monkey.
