Jim Cramer’s 5 Comeback Stocks

In this article, we discuss Jim Cramer’s 5 comeback stocks. If you want to see more stocks in this selection, check out Jim Cramer’s 10 Comeback Stocks. 

5. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 117

Salesforce, Inc. (NYSE:CRM) is a California-based provider of customer relationship management technology that brings enterprises and customers together worldwide. Cramer’s Charitable Trust owns shares of Salesforce, Inc. (NYSE:CRM) and he believes the stock can make a comeback, pointing to the solidity of the underlying business fundamentals. However, as of December 5, Salesforce, Inc. (NYSE:CRM) stock price hit a 52-week-low as the company’s post-earnings decline continued and indicated little signs of coming to an end any time soon.

On December 8, Baird analyst Rob Oliver downgraded Salesforce, Inc. (NYSE:CRM) to Neutral from Outperform with a price target of $150, down from $200. The macro environment remains constrained and latest executive departures are concerning, the analyst told investors in a research note. He believes the combination of macro headwinds and software pressure could tamper Salesforce, Inc. (NYSE:CRM)’s revenue growth near term. 

According to Insider Monkey’s Q3 data, Salesforce, Inc. (NYSE:CRM) was part of 117 hedge fund portfolios, compared to 116 in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 12.7 million shares worth $1.8 billion. 

Aristotle Atlantic made the following comment about Salesforce, Inc. (NYSE:CRM) in its Q3 2022 investor letter:

“We sold Salesforce, Inc. (NYSE:CRM) to reduce our weighting in the Information Technology sector. Salesforce held their investor day, and the company reiterated their organic Fiscal Year 2026 revenue target of $50 billion. This target remains more back-end loaded based on current slowing macroeconomic conditions and requires new annual contract growth well ahead of what the company has been averaging for the past few years. We are skeptical that the company will be able to achieve this revenue target organically and see Merger & Acquisitions (M&A) being key to achieving the growth. While we believe Salesforce has shown good success in growing its non-CRM clouds, we do see more competitive pressures emerging for the Marketing and Customer Service Clouds, specifically on the pricing side during a global economic slowdown.”

4. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 140

Apple Inc. (NASDAQ:AAPL) is one of the comeback tech stocks named by Jim Cramer in November 2022. Cramer’s Charitable Trust also owns shares of the tech giant. On December 20, Apple Inc. (NASDAQ:AAPL) announced that it is looking at some options to diversify its manufacturing options, and the company is planning on moving some production of its MacBooks out of China and into Vietnam. Vietnam already produces some Apple products, including AirPods, iPads, and Apple Watches. This way, Apple Inc. (NASDAQ:AAPL) will be less vulnerable to China’s Zero COVID policies. 

On December 21, after outperforming in 2019 through 2021, Apple Inc. (NASDAQ:AAPL)’s shares are significantly trading in line with the market in 2022, Citi analyst Jim Suva told investors in a research note. While the December quarter is challenged by supply, demand for Apple Inc. (NASDAQ:AAPL)’s products and services will potentially remain solid throughout fiscal 2023, noted the analyst. He sees Apple Inc. (NASDAQ:AAPL) shares trading higher and maintain a Buy rating on the stock with a $175 price target.

According to Insider Monkey’s data, 140 hedge funds were long Apple Inc. (NASDAQ:AAPL) at the end of September 2022, compared to 128 funds in the last quarter. Warren Buffett’s Berkshire Hathaway held the largest stake in the company, with approximately 895 million shares worth $123.6 million. 

Here is what Wedgewood Partners specifically said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:

“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

3. Alphabet Inc. (NASDAQ:GOOG)

Number of Hedge Fund Holders: 156

Jim Cramer listed Alphabet Inc. (NASDAQ:GOOG) as one of the top tech stocks which can rebound soon. On December 20, Alphabet Inc. (NASDAQ:GOOG)’s YouTube is said to be in advanced talks with the NFL to gain the rights to NFL Sunday Ticket. Alphabet discussed paying $2.5 billion per year for the package of Sunday NFL games, up from the current $1.5 billion paid by DirecTV. This will prove to be a positive catalyst for Alphabet Inc. (NASDAQ:GOOG) stock. 

On December 21, Evercore ISI analyst Mark Mahaney maintained an Outperform rating on Alphabet Inc. (NASDAQ:GOOG) but lowered the price target on the shares to $120 from $130. In the wake of multiple proprietary data points that indicate ongoing weakness in online advertising and cloud computing demand, the analyst has trimmed his 2023 and 2024 revenue estimates by 5% and his 2023 and 2024 operating income estimates by 9%, putting his forecasts “modestly below the Street”. However, he continues to view Alphabet Inc. (NASDAQ:GOOG) as “highly attractive for long-term investors,” calling it a “Dislocated High Quality” stock.

According to Insider Monkey’s Q3 data, Alphabet Inc. (NASDAQ:GOOG) was part of 156 hedge fund portfolios, compared to 153 in the last quarter. Chris Hohn’s TCI Fund Management is the leading position holder in the company, with 52.4 million shares worth over $5 billion. 

Here is what Stewart Asset Management has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2022 investor letter:

“We invest in businesses with strong, resilient earnings growth which are less cyclical. In the pandemic recession of 2020, the aggregate earnings of the portfolios we manage did not decline year-over-year, and in fact grew, albeit modestly. Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. Alphabet (NASDAQ:GOOG), then called Google, reported earnings that doubled from 2007 to 2010.”

2. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 269

Amazon.com, Inc. (NASDAQ:AMZN) is part of Cramer’s Charitable Trust portfolio and the tech giant is one of the stocks that Cramer is expecting to make a comeback. On December 20, Amazon Web Services was awarded a $723.88 million five-year, single-award, firm-fixed-price enterprise software license or blanket purchase agreement by the US Department of Navy. Work will be performed for a maximum of five years from December 2022 through December 2028.

On December 19, Evercore ISI analyst Mark Mahaney maintained an Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) but trimmed the firm’s price target on the shares to $150 from $170. The analyst slashed estimates for operating income and revenue for 2023 and 2024 but continues to view Amazon.com, Inc. (NASDAQ:AMZN) as “highly attractive for long-term investors,” and categorized it as a “Dislocated High Quality” stock. 

According to Insider Monkey’s Q3 data, 269 hedge funds were bullish on Amazon.com, Inc. (NASDAQ:AMZN), compared to 252 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is a significant position holder in the company, with approximately 50 million shares worth $5.6 billion. 

Here is what Farnam Street Investments has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2022 investor letter:

“Change doesn’t just impact investors. Business people also bet for or against change. Jeff Bezos was once asked this exact question:

“You can build a business strategy around the things that are stable in time. It’s impossible to imagine a future ten years from now where a customer comes up and says, ‘Jeff, I love Amazon, I just wish the prices were a little higher.’ Or, ‘I love Amazon, I just wish you’d deliver a little slower.’ Impossible. So we know the energy we put into these things today will still be paying off dividends ten years from now. When you have something you know is true, you can afford to put a lot of energy into it.”

A lot of energy… and more than $172 billion in capital expenditure in the last fifteen years.

Deeper, slower moving layers turn exponential growth into “S-curves.” A rapidly dividing bacteria crashes into the resource-wall of its Petri dish. Nineteenth-century commercial robber barons were smacked by the governance layer of the Sherman Antitrust act. Amazon (NASDAQ:AMZN) Prime free shipping leaned on the creaking infrastructure of the U.S. Postal Service until it was forced to invest in its own infrastructure (all those delivery vans you see driving around).

Hopefully, next time you’re thinking about change, you can recall pace layers as a helpful construct to understand how successful systems change.”

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 269

Microsoft Corporation (NASDAQ:MSFT) is one of the tech names backed by Jim Cramer to make a recovery. Cramer’s Charitable Trust also owns a position in the tech giant. Microsoft Corporation (NASDAQ:MSFT) is one of the top stock picks for 2023 at investment advisories like Baird, Oppenheimer, Wedbush, JPMorgan, and Morgan Stanley.

On November 29, Morgan Stanley analyst Keith Weiss said that investors are concerned that Microsoft Corporation (NASDAQ:MSFT)’s estimates have not been derisked and noted that short-term investor concerns typically fall into two categories – margins and revenue growth. However, he sees a solid and resilient demand signal in the commercial businesses that should lead to improving revenue and EPS growth in the second half of 2023, said the analyst, who argued that Microsoft Corporation (NASDAQ:MSFT)’s “unique positioning as a consolidator” should drive demand that holds up better than investors fear. The analyst has an Overweight rating and a $307 price target on Microsoft Corporation (NASDAQ:MSFT) shares.

According to Insider Monkey’s third quarter database, 269 hedge funds were bullish on Microsoft Corporation (NASDAQ:MSFT), compared to 258 funds in the last quarter. Bill & Melinda Gates Foundation Trust is the biggest position holder in the company, with 39.2 million shares worth $9.14 billion. 

Diamond Hill made the following comment about Microsoft Corporation (NASDAQ:MSFT) in its Q3 2022 investor letter:

“Also among our bottom contributors were media and technology giant Alphabet, software and IT services provider Microsoft Corporation (NASDAQ:MSFT) and insurance company American International Group (AIG). Microsoft shares declined in Q3, along with other tech companies, as rising interest rates impacted the near-term outlook. We expect the business to continue to generate strong revenue growth and benefit from operating leverage. Microsoft’s cloud computing services business, Azure, is generating robust growth, confirming its competitive positioning.”

You can also take a look at 10 Best Uranium Stocks To Buy and 11 Best TaaS Stocks To Invest In.