We recently published a list of Jim Cramer Recently Shed Light on These 9 Stocks. In this article, we are going to take a look at where GE Vernova Inc. (NYSE:GEV) stands against other stocks that Jim Cramer recently highlighted.
Jim Cramer, host of Mad Money, recently discussed a possible looming energy crisis in the U.S. that has taken many by surprise. He warned that if the country doesn’t act swiftly, it will soon be overwhelmed by an energy shortfall. According to Cramer, we need to tap into every available energy source including natural gas, wind, geothermal, and hydroelectric power. However, he stressed that the most critical energy source right now is nuclear power. He added:
“Crisis comes down to the fact that we had no real industrial growth in this country for decades so we haven’t had to build much energy infrastructure. Now all of a sudden these data centers start coming online like the ones that will be part of Stargate, the Oracle, SoftBank, OpenAI project… And these data centers consume insane amounts of electricity. It’s a level of demand that nobody saw coming. So after years where we spent more time decommissioning power plants and building new ones, we suddenly gotta go back into growth mode.”
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Cramer went on to discuss an energy source that many are reluctant to consider: coal. While it may seem counterintuitive, he argued that coal could make a comeback in the U.S. energy mix.
“When the president gave his inaugural address on Monday, he declared a national emergency aiming to produce more domestic fossil fuels, including coal. Once the mainstay utility fuel, coal has been phased out year after year after year because it is terrible for the environment. 10 years ago, coal-based fuel was responsible [for] about 33% of electricity. Now it’s fallen to 15%.”
Yet, with the push to decommission nuclear plants, and the rising cost of natural gas, Cramer suggested that coal might need to be reintegrated into the energy mix. He argued that, despite the environmental drawbacks, the demand for power is now so great that coal’s long decline could be nearing its end.
“Under this president, coal could have… a renaissance. Sure, coal’s time has come and gone, but it will come again because the data center inspired energy crisis really is so pressing that there’s not really a choice anymore. Yes, the demand is that great, [and] we so foolishly mothballed good nuke plants that it wouldn’t surprise me if coal’s long decline may have finally run its course.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on January 22. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, 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).
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GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
Cramer has been adulating GE Vernova Inc. (NYSE:GEV) for a while now. During the episode, he commented:
“… GE Vernova is pulling forward, plans to reopen nuclear plants at considerable costs. You’ve heard about the reopening of one of the Three Mile Island reactors. Now there’s talk about finishing two nuclear plants in South Carolina that were stopped because of hideous cost overruns. These plants, initiated in 2008, were so hard to build in 2017, they just kind of threw up their hands and gave up. Now Santee Cooper is soliciting bids due in May to rebuild these state-owned plants, a fortune, maybe they get it, but nukes are still pie in the sky people.”
GE Vernova (NYSE:GEV) is an energy company that offers products and services for the generation, transmission, and storage of electricity around the world. Recently discussing the outlook for nuclear plant construction in the U.S., Cramer noted that while the company is a key player in the industry, it is much more cautious than the promoters pushing for nuclear energy. However, Cramer enthusiastically noted during an episode of Squawk on the Street:
“And he (CEO Scott Strazik) goes, okay, you see [inaudible] five gigawatts of nuclear power in the US between existing facilities and restarting existing fleets of approximately sixty-five plants. Five gigawatts would power approximately four million US homes. They’re talking about South Carolina, they’re talking about doing a Diablo Canyon. They’re going to Japan! Where Japan is recommissioning after Fukushima. To London. It is a nuclear renaissance and it is now…. [on South Carolina] And that’s going to be them. They have the capability of bringing these back online. And it’s cause of the data centers. This is a real good story.”
Overall, GEV ranks 1st on our list of stocks that Jim Cramer recently highlighted. While we acknowledge the potential of GEV 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 time frame. If you are looking for an AI stock that is more promising than GEV 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.