We recently published a list of Jim Cramer is Talking About These 10 Stocks. In this article, we are going to take a look at where Alibaba Group Holding Limited (NYSE:BABA) stands against other stocks that Jim Cramer is talking about.
Jim Cramer in a latest program on CNBC discussed the reasons behind the recent market declines after the ISM Services Index data. Cramer said many are still expecting more rate cuts from the Federal Reserve soon but they are wrong.
“This survey showed surprising strength, so much strength that it makes you think that the FED might not give us more rate cuts anytime soon. Right now, a ton of investors believe that the FED needs to push through a bunch of rate cuts in order to revive the economy. Lots of those bulls are counting on those cuts. That seems wrong today. They were rocked to the core because not only have they been wrong, but they’re starting to question the FED’s credibility. They know nothing,” Cramer said.
Cramer said he was “mystified” by the Fed’s rate cuts amid strong economic data.
“These traders are wondering why the heck the FED cut short rates by 50 basis points September then give another 25 in November another 25 in December what the heck did they see that made them so aggressive judging by the data. Nothing. The credibility issue, if you claim you’re data dependent, and the data is strong then why the heck are you cutting so aggressively.”
Cramer at the time said the latest nonfarm payrolls report would be one of the most important indicators of the economy and it would set the “dialog” in the coming days. Sure it will. The latest jobs data showed unemployment fell and job additions crushed Wall Street expectations. Many now believe the Fed is set to put brakes on rate cuts.
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For this article, we picked 10 stocks Cramer recently talked 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).
An e-commerce platform displaying a wide range of products to customers online.
Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Investors: 115
A questioner recently asked Jim Cramer his thoughts on JD.com. Cramer recommended the investor to stay away from JD and instead buy Alibaba Group Holding Limited (NYSE:BABA).
“JD.com, oh man, you know, like I like, I’ll go for Alibaba, but it’s too much of a stretch for me. Do JD.com, you’re 18. I don’t want you to fall behind the all. Let’s move into, let’s do Baba if you want to own China, that one is not good enough for you.”
Conventum – Alluvium Global Fund stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2024 investor letter:
“On 24 September the People’s Bank of China unveiled a massive three part stimulus package involving: (1) slashing the amount of cash banks need to hold in reserve and lowering the main policy interest rate; (2) cutting mortgage rates on existing home loans by 0.5% and reducing down payment requirements for second homes from 25% to 15%; and (3) supporting equity markets by a USD 114b lending pool to encourage companies to buy back shares and non-bank financial institutions to buy local equities (which may be expanded by the same amount two more times)5 . We are flabbergasted. But we shouldn’t be. After all, these types of arrangements have been all too common over the last 15 years. The local equity markets responded with gusto, and for the last week of the quarter the CSI 300 Index (Shanghai and Shenzen listed companies) was up 25.1%. Alibaba Group Holding Limited (NYSE:BABA) was not lost in all this, and returned 26.8% over that one week period. But Alibaba had already performed well so during the whole September quarter it was up a staggering 56.0%. As a result, Alibaba is no longer the cheap stock it once was. It now trades at a premium to our valuation – a valuation which admittedly had been progressively reduced over our holding period as a result of deteriorating business fundamentals. As a result of Alibaba’s significant outperformance, by the end of the quarter it had reached 3.7% of the Fund. We are weighing up our options here, considering the relative risk.”
Overall, BABA ranks 3th on our list of stocks that Jim Cramer is talking about. While we acknowledge the potential of BABA, 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 BABA 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.
