We recently published a list of Jim Cramer’s Latest Calls: Top 10 Stocks. In this article, we are going to take a look at where Chipotle Mexican Grill, Inc. (NYSE:CMG) stands against other best mid cap growth stocks that Jim Cramer discusses.
Jim Cramer in a recent program on CNBC discussed the massive tech sell-off on the back of a new AI LLM model from Chinese startup DeepSeek. Cramer was frank and honest about the level of confusion in the market and said he does not know the implications of the new model on US tech stocks given the lack of data and specifics. He thought out loud about the factors that can weigh on US companies after the breakthrough achieved by DeepSeek:
“There could be some serious buyer’s remorse now. Maybe all the spending going to (Jensen Huang’s company) was needless overpay. Maybe the gigantic number of data centers being built, which are a huge driver of growth in our country, simply aren’t needed. Maybe all the cooling process expenses are a big mistake. Maybe the rush to reopen old nuclear plants, put up more renewable generation, and even bring back coal is totally unnecessary. Today, the air went out of every one of these balloons.”
Cramer said he’d be looking out to know how many chips DeepSeek required to reach this software breakthrough to gauge the impact on demand for US AI chip companies. He said stocks could either rebound from all of this or continue to slide:
“And whether numbers now have to come down because there will be a freeze in spending as clients reassess those multi-billion dollar orders. Maybe it’ll be like the pause in the internet build-out of 2000 that turned out not to be a pause at all, but a collapse.”
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For this article, we picked 10 stocks Jim Cramer recently talked about in his programs on CNBC. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Investors: 69
Jim Cramer was recently asked about Chipotle Mexican Grill, Inc. (NYSE:CMG). Cramer recommended investors buy and hold the stock.
“Somebody came out today and said they think the growth rate for next year won’t be that high. That was a devastating call, and what did the stock do? It went up anyway. My take is this: I think Scott Boatwright is doing a good job. I have no desire to trade Chipotle Mexican Grill, Inc. (NYSE:CMG)—that’s been a sucker’s game. Let’s just own it. If it comes down, we’ll buy a little more. That’s the Chipotle story—it’s not a trade; it’s an investment.”
Chipotle has offered strong guidance for FY2025, projecting 315 to 345 new company-operated restaurant openings. The company has also sustained its high single-digit growth trend while maintaining a strong balance sheet. Its cash position stands at $698.54M (down 13.3% QoQ, up 15.9% YoY) with no significant debt.
ClearBridge Growth Strategy stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q4 2024 investor letter:
“We also initiated a position in fast casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG). The recent pullback in shares related to a moderation in industry-wide restaurant sales and CEO Brian Niccol’s August departure created an attractive entry point into a company with industry-leading unit economics in a still underpenetrated market. Chipotle plans to double its store footprint over time while executing initiatives to increase volume growth through technology enhancements, reduced mobile order friction and higher production during peak hours. Better throughput, technological integration and improved mix should help to drive continued margin expansion. Chipotle further diversifies the portfolio, adding to consumer discretionary where we have historically had less exposure.”
Overall, CMG ranks 5th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of CMG as investment, 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 CMG 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.