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).
15. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders In Q3 2024: 91
Date of Cramer’s Comments: 9-12-24
Cramer commented on enterprise resource planning and AI infrastructure provider Oracle Corporation (NYSE:ORCL) as part of his Morning Thoughts program aired in September. He outlined:
“Oracle’s amazing transformation continues. Just days after reporting strong fiscal 2025 first-quarter results that sent its stock soaring, executives guided for fiscal 2026 revenues of at least $66 billion, above the $64.5 billion consensus estimate. Shares are jumping Friday. Price target bumps are flooding in, too. Larry Ellison’s prediction that Oracle will one day operate at least 1,000 data centers, up from 162 currently, is looking more and more realistic.”
Since his remarks, Oracle Corporation (NYSE:ORCL)’s shares have gained 5.4% but they faced some turbulence in December after the firm’s fiscal second-quarter earnings were a bloodbath. Not only did the firm’s Q2 revenue of $14.06 billion miss analyst estimates of $14.10 billion, but its midpoint Q3 guidance of $14.3 billion also missed $14.65 billion in estimates. The stock sank by 7% in the aftermath, indicating the high expectations that Wall Street has for the firm to deliver with the billions of dollars it is spending to acquire expensive NVIDIA GPUs and scale up AI infrastructure.
14. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders In Q3 2024: 58
Date of Cramer’s Comments: 9-19-24
On a broadcast of Mad Money aired in September, Cramer pointed out that the China exposure of semiconductor equipment provider Lam Research Corporation (NASDAQ:LRCX) was a worrying sign. He also shared that the firm’s partnership with Intel might not do it any favors given the latter’s troubles. According to him:
“Lam Research is a key semiconductor capital equipment maker. Right now, they’re being suppressed by a lack of Chinese orders, not to mention Intel slowing its European manufacturing plans. If not for those issues, I think it’d be a great buy right now. But given that the industry has problems, I say let it come down even more. However, Lam is the best in the group.”
Turns out he was right on the dot as Lam Research Corporation (NASDAQ:LRCX)’s shares have lost 3.36% since Cramer’s warning. The loss came after chip equipment giant ASML slashed its 2025 guidance to €30 billion – €35 billion. The guidance cut spooked investors who worried that lower capital expenditure by fabrication companies would end up harming firms like Lam Research Corporation (NASDAQ:LRCX). The firm’s third-quarter earnings did provide some respite as the stock soared by 6.6% over the next two days following Q4 revenue guidance of $4.30 billion surpassing analyst estimates of $4.24 billion.
