We recently compiled a list of the Jim Cramer’s Bold Predictions About These 15 Tech Stocks. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other tech stocks Jim Cramer recently talked about.
Like all of us, Jim Cramer is always wondering what’s next for the stock market. So far, the year has seen AI continue to dominate the market, accompanied by the Federal Reserve and the 2024 US Presidential Election. Now, with the election over and investors pondering over the incoming administration’s tariff policies, like us, Cramer is also focused on the Federal Reserve.
The reason why the Fed and tariffs are related is because the latter can cause inflation to force the former to keep interest rates higher for longer. While it tries to decipher what’s ahead for AI, Wall Street is also wondering about the pace, magnitude, and frequency of the Federal Reserve’s 2025 interest rate cut cycle. This nervousness is reflected in bond yields touching 4.38% on Friday, and asset manager Apollo Global warning that four key inflation indicators appear to be reaccelerating. As per Apollo, the Core CPI, the Core PCE, the Supercore CPI, and the Supercore CPE have all started to rise again.
In Mad Money aired last week, Cramer also had the Fed in mind. Cramer, in his show, commented on the nervousness in the market. The television show host wondered why the stock market wasn’t responding to semiconductor stocks doing well. He started out by sharing that “I hate the endless focus on the Fed. By everybody. Because it detracts you from benefiting from long-term performance for your stock portfolio.” This is because Cramer believes that “every little signal from the Federal Reserve brings out predictions, causing many people to sell good stocks when they are freaked out.”
He did add that the economic data shows that there will be dissent at the Federal Reserve when it comes to further reducing interest rates at the upcoming December meeting. Cramer shared that “while I don’t think the data is cool enough to be positive about the prospects of more cuts for now, I also don’t want you to make decisions purely on what the Fed does. Contrary to popular belief, there’s more to investing than monetary policy. And I wish everyone knew that. They don’t.”
On the topic of tariffs, Cramer had plenty to share in November. He started out by analyzing the performance of the benchmark S&P index between mid-2017 and the start of 2020. Cramer pointed out that “this is where we start to get the real tariff action from the first Trump administration.” He shared that “Trump imposed tariffs on steel, aluminum, solar panels, and washing machines among other goods.” While “all these helped the industries in question . . .the broader market didn’t like that we were triggering a global trade war.”
Cramer pointed out the index’s performance between January 22nd and December 24th, 2018 to bolster the view that tariffs weren’t great for the stock market. However, before you write them off, consider his remarks. According to Cramer, during this time period, “the S&P 500 lost 18% of its value. Of course, some of that is because the Fed got much more aggressive about raising interest rates through this period. Taking them up. a 100 basis points that year. But it definitely wasn’t just the Fed. You can see from the chart that virtually every time we got more tariffs, the S&P would roll over, every time China retaliated, we’d sell off.”
Yet, according to Cramer, “once the Fed decided to stop tightening at the very end of 2018, the S&P was finally able to find a floor.” Following this, the market “rebounded like crazy” as part of a “bullish trading cycle, one that continued until Covid hit in 2020. Long story short, the market couldn’t handle the trade war when the Fed was tightening. But as soon as the Fed started easing, all those losses evaporated.”
Using charts from Jessica Inskip, Cramer compared the last intersection of the Fed and Trump tariffs with today’s environment. He outlined that the “Fed is now our friend.” Why is that so? Well, according to Cramer, as soon as the Fed stopped tightening, the market “stopped reacting as aggressively to the trade war.” He shared that Inskip believes that “something like a trade war can certainly hurt us badly when the market’s already trending bearishly. But if we’ve got a bullish trading cycle like we do right now, then she’s not worried as long as we can maintain this cycle.”
So, as Cramer remains cautiously optimistic about the stock market’s future, we decided to see how his views about stocks have stood the test of time.
Our Methodology
To make our list of the 15 stocks Jim Cramer has made bold predictions about, we compiled his statements about top tech stocks and ranked them by the date the statements were made.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders In Q3 2024: 286
Date of Cramer’s Comments: 10-07-24/10-08-24
Amazon.com, Inc. (NASDAQ:AMZN) received a lot of attention from Cramer on a Mad Money episode aired in October. The firm’s narrative relies on its high-volume retail business and its high-margin and recurring revenue AWS cloud division. Cramer’s comments revolved around a Wells Fargo downgrade, which he wasn’t impressed by, to say the least. In his characteristically blunt manner, the host outlined:
“First downgrade, Amazon by Wells Fargo titled “Positive Revision Story on Pause Reducing to Equal Weight”. Totally get it, lots of headwinds, stock’s abused from the so-called bad quarter when Amazon fell from $184 to $161. Since then, it’s traded as high as $195, but it’s $186 as of last week. It’s time to sell? I’m not so sure. What do these analysts fear? Amazon spending a lot on a ton of initiatives, worries about Walmart impact. So there’s a slight estimate cut, too. Wait a second. I say. How many times, how many times has Amazon been up against headwinds? Do you know how many times the company’s made some inexplicable moves? This is nothing new. Yet Amazon has always come back. It’s in their culture. It’s in their DNA. It always does.
“I remember a year and a half ago when I was screaming at them because Amazon Web Services was underperforming. Came right back. Last time they reported, I was in disbelief at the Olympics and the attempted assassination of Donald Trump led to a light third-quarter sales guide. I was apoplectic at the Alexa losses and what happens? Comes right back. So I say knock yourself out and sell it if you have to. Let me ask you, did you sell Amazon at $161 after that last supposedly bad quarter? How did it feel when the stock didn’t bounce to $195? Once again, I think it’s just a matter of time before Amazon bounces back. As usual. No hurry. Stock does seem to be headed lower, I’ve no doubt about that. I get it. But sell to buy it lower? Can you really get back in that? Too hard.”
Cramer’s anger was justified as since that day, Amazon.com, Inc. (NASDAQ:AMZN)’s shares have soared by a cool 25.8%. During this time, not only did the firm’s third-quarter revenue and EPS of $6.82 billion and $0.92 beat and meet analyst estimates, but analysts from Redburn Atlantic boosted their share price target to $235 from $225 to unlock additional momentum for the shares.
Overall AMZN ranks 12th on our list of the tech stocks Jim Cramer recently talked about. While we acknowledge the potential of AMZN 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 timeframe. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
