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).
10. GE Vernova Inc (NYSE:GEV)
Number of Hedge Fund Investors: 18
Jim Cramer was recently asked about his thoughts on nuclear technology company Oklo Inc during a latest program on CNBC. Cramer pitched GE Vernova Inc (NYSE:GEV) as a better stock for investors in response.
“I’m doing..GE Vernova. That’s the way to play these things. That’s the best one.”
Jim Cramer said that GE Vernova Inc (NYSE:GEV) is “good at it” since GE Vernova Inc (NYSE:GEV) has a “small form reactor” and he thinks GE Vernova Inc (NYSE:GEV) will “make good of that.”
Of the 919 hedge funds in Insider Monkey’s database, 18 hedge funds reported owning stakes in GE Vernova Inc (NYSE:GEV), which completed its spin-off from General Electric and started trading independently in April.
Morgan Stanley recently started covering GE Vernova Inc (NYSE:GEV) at an Equal Weight rating and $167 price target, saying the stock is positioned well to benefit from “secular tailwinds.” Morgan Stanley also expects improved profitability and cash flows at GE Vernova Inc (NYSE:GEV) thanks to operating efficiencies. However, the investment firm thinks the stock is trading at a premium price.
9. T Rowe Price Group Inc (NASDAQ:TROW)
Number of Hedge Fund Investors: 24
Jim Cramer thinks T Rowe Price Group Inc (NASDAQ:TROW) is a “such a bargain” at the current levels. He also praised T Rowe Price Group Inc’s (NASDAQ:TROW) 4% dividend yield, and said T Rowe Price Group Inc (NASDAQ:TROW) has done “so many good things for so many investors.”
“I’d love to join you on this… it’s a great idea,” Cramer said.
The Baltimore, Maryland-based asset management company’s shares have gained about 7% so far this year.
As of the end of the first quarter of 2024, 24 hedge funds reported owning stakes in T Rowe Price Group Inc (NASDAQ:TROW). The most significant stake in T Rowe Price Group Inc (NASDAQ:TROW) is owned by Ken Griffin’s Citadel Investment Group which owns a $341 million stake in T Rowe Price Group Inc (NASDAQ:TROW).
8. Axcelis Technologies Inc (NASDAQ:ACLS)
Number of Hedge Fund Investors: 25
Massachusetts-based Axcelis Technologies Inc (NASDAQ:ACLS) makes Ion implant tools using by semiconductor manufacturing companies to develop wafers and for altering their material properties. While semiconductor stocks are gaining ground amid a rising demand fueled by AI, Axcelis Technologies Inc (NASDAQ:ACLS) has lost about 8% so far this year. Jim Cramer said in a latest program that Axcelis Technologies Inc (NASDAQ:ACLS) is a “very good semiconductor” company that’s “left behind.”
“I find that very interesting,” Cramer said of Axcelis Technologies Inc (NASDAQ:ACLS).
Earlier this month, Axcelis Technologies Inc (NASDAQ:ACLS) reported Q1 results, beating estimates on both EPS and revenue. GAAP EPS in the period came in at $1.57, surpassing estimates by $0.33. Revenue fell 0.6% year over year to $252.37 million, beating estimates by $9.76 million.
Analysts believe Axcelis Technologies Inc’s (NASDAQ:ACLS) efforts to increase exposure to the Silicon Carbide (SiC) market would cut its reliance on Ion implant tools. SiC has growth catalysts thanks to the EV market. Axcelis Technologies Inc (NASDAQ:ACLS) has a P/E of 15, which makes it an undervalued play when compared to industry peers.
7. DICK’S Sporting Goods Inc (NYSE:DKS)
Number of Hedge Fund Investors: 28
Jim Cramer was asked about Topgolf Callaway Brands Corp during his program earlier this week. Cramer said he’s “decided” to “play it” with DICK’S Sporting Goods Inc (NYSE:DKS).
“Dick’s has got golf, Dick’s is better run. I am going with Dick’s.”
28 hedge funds in Insider Monkey’s database of 919 hedge funds agree with Cramer, as they held DICK’S Sporting Goods Inc (NYSE:DKS) stock in their portfolios heading into the second quarter of 2024.
DICK’S Sporting Goods Inc (NYSE:DKS) shares recently jumped after DICK’S Sporting Goods Inc (NYSE:DKS) posted strong Q1 results and upped its full-year guidance. In the March quarter DICK’S Sporting Goods Inc (NYSE:DKS) consolidated same-store sales jumped 5.3%, crushing past the consensus growth estimate of 2.5%. Total revenue in the quarter increased by 6.3% to $3.02 billion, beating the Wall Street consensus of $2.94 billion.
6. Moderna Inc (NASDAQ:MRNA)
Number of Hedge Fund Investors: 32
When asked about Moderna Inc (NASDAQ:MRNA) in a latest program, Cramer hit the buy button on the stock and said he still thinks “Bancel has it,” referring to Moderna CEO Stéphane Bancel. Cramer said he’s not “backing away” even at the current levels ($155). Moderna Inc (NASDAQ:MRNA) shares have gained about 18% over the past one year. Cramer has been recommending Moderna Inc (NASDAQ:MRNA) over the past several months. Earlier this month, Cramer said that he’s a “believer” in the stock and he never “backed away” from his thesis on the stock. Cramer said Moderna Inc (NASDAQ:MRNA) went “crazy” during the pandemic, then crashed:
“Ever since it crashed, I’m in, I’m in,” Cramer said.
In January, Cramer said that Moderna Inc (NASDAQ:MRNA) CEO Stéphane Bancel is the “real deal.” Cramer said that he would “back” Moderna Inc (NASDAQ:MRNA) at the current levels.
5. Comfort Systems USA, Inc. (NYSE:FIX)
Number of Hedge Fund Investors: 34
Jim Cramer was recently asked about Texas-based heating, ventilation and air conditioning installation, maintenance, repair and replacement services company Comfort Systems USA, Inc. (NYSE:FIX). Cramer said “HVAC is king!” and added that he likes Comfort Systems USA, Inc. (NYSE:FIX). In April, Comfort Systems USA, Inc. (NYSE:FIX) upped its dividend by 20%. During the first quarter, Comfort Systems USA, Inc. (NYSE:FIX) GAAP EPS came in at $2.69, surpassing estimates by $0.69. Revenue in the quarter jumped 30.8% year over year to $1.53 billion, beating estimates by $60 million.
Insider Monkey’s database of 919 hedge funds shows that 34 hedge funds reported owning stakes in Comfort Systems USA, Inc. (NYSE:FIX) as of the end of the first quarter of 2024. The biggest stakeholder of Comfort Systems USA, Inc. (NYSE:FIX) during this period was Richard Driehaus’s Driehaus Capital which owns a $46 million stake in Comfort Systems USA, Inc. (NYSE:FIX).
Over the past five years Comfort Systems USA, Inc. (NYSE:FIX) shares have gained about 600%. The stock’s PE ratio is 33, which is high when compared to the sector media PE of 19.44. Comfort Systems USA, Inc. (NYSE:FIX) is expanding its footprint through acquisitions. Comfort Systems USA, Inc. (NYSE:FIX) earlier this year announced to acquire Summit Industrial Construction to gain exposure to technology, power and industrial firms as clients. Population growth and rising demand for mechanical and plumbing services is another organic growth catalyst for the stock. However, for value-conscious investors, the market presents several other opportunities.
