In this article, we will take a detailed look at Jim Cramer’s February Portfolio: Top 10 Stocks.
Jim Cramer in a latest program on CNBC talked about the importance of investing in companies with good management teams. Cramer said that sometimes struggling companies could be turned around because of smart leadership.
“I have to tell you, I do want more out of my stocks and just better than feared. I am tired of tech just sitting there and people arguing about it all the time. It’s getting boring to me. And that’s why I want to go far afield tonight and suggest that we look for the companies with the best new coaches, because we know a great new coach with a fresh look can easily turn around a company.”
Cramer then talked about several companies where strong leadership teams and intelligent CEOs turned around struggling businesses.
“Not all publicly traded companies are hostages to forces beyond their control, like a Chinese outfit we never heard of that has just made it so all we talk about is. Sometimes when you bring in a great new CEO, they can turn around the whole business, giving the investor spectacular gains, even when tech blinds us like mustard gas.”
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article we picked 10 stocks Jim Cramer talked about in his recent programs. With each stock, we have mentioned the number of hedge fund investors. 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. SoundHound AI Inc (NASDAQ:SOUN)
Number of Hedge Fund Investors: 11
Jim Cramer was recently asked about SoundHound AI Inc (NASDAQ:SOUN). He said it’s a “meme” stock and he cannot recommend it.
“Okay, this is a meme stock, and they are kind of getting it going. I’m never going to get in the way of a meme stock because you never know how high they can go.”
SoundHound AI Inc (NASDAQ:SOUN) operates in a growing $150 billion voice AI market and is shifting toward recurring revenue. Its top customer which accounted for about 72% of revenue in 2023 now accounts for just 12%. However, competition and valuation are risks for the stock. Amazon’s Alexa, Google’s Assistant, and Apple’s Siri limit SoundHound AI Inc (NASDAQ:SOUN)’s potential growth. However, SoundHound AI Inc (NASDAQ:SOUN)’s Deep Meaning Understanding technology stands out with its advanced natural language processing and real-time capabilities, unlike competitors that use sequential processing. Nonetheless, the stock’s valuation is concerning and value-conscious investors can look elsewhere for better options.
9. Enterprise Products Partners LP (NYSE:EPD)
Number of Hedge Fund Investors: 25
Jim Cramer was recently asked about midstream energy company Enterprise Products Partners LP (NYSE:EPD). He said it’s his “absolute favorite” in the industry.
“Oh my God, it’s my absolute, absolute favorite of the group. I think you just have to stand there and buy it. It’s cheap, it’s got a good yield, and its business is fabulous.”
Enterprise Products Partners LP (NYSE:EPD) bulls believe the stock is positioned to thrive under the new Republican administration. The company expects to spend between $3.5 billion and $3.75 billion on capital projects this year. Outlays will decline to $2.5 billion in 2025, but expenditures should stay significant through the decade. All of this will strengthen Enterprise Products Partners LP (NYSE:EPD)’s ability to connect the country’s exploration hubs with domestic consumers and global markets.
8. SoFi Technologies Inc (NASDAQ:SOFI)
Number of Hedge Fund Investors: 31
Jim Cramer in a latest program on CNBC talked about the selloff around SoFi Technologies Inc (NASDAQ:SOFI) after the company reported earnings. Cramer said the selloff had more to do with the DeepSeek-related panic in the market than the actual results.
“No, the actual quarter was good. It must be the forecast…Why would I sell it over a forecast and not the fact that it’s doing quite well? And the answer is DeepSeek. In other words, it’s just getting caught up, caught up because it’s not because it’s had such a great year and a great move. Obviously, it’s kind of that secondary of like, well, wait a second, have we overstayed in a red-hot stock? And I think, David, the red-hot stocks today are trading as a unit, and SoFi Technologies Inc (NASDAQ:SOFI) is being caught up in that.”
SoFi Technologies Inc (NASDAQ:SOFI)’s latest quarterly results were solid but guidance spooked investors. For 2025, the company projects adjusted net revenue of $3.2-3.275 billion, a 23%-26% year-over-year growth, which is impressive. However, adjusted EBITDA guidance of $845-865 million fell short of the $906 million estimate. The incremental adjusted EBITDA margin of 30% aligns with the company’s goals, but it doesn’t indicate much margin expansion compared to last year.
Patient Capital Management stated the following regarding SoFi Technologies, Inc. (NASDAQ:SOFI) in its Q4 2024 investor letter:
“The top performers in the fourth quarter were once again Financials and Travel names. We’ve been over-indexed to them since the pandemic, which has served us well. We strategically added to certain financial names like SoFi Technologies, Inc. (NASDAQ:SOFI) and Coinbase Global Inc. (COIN) during the year. Both companies rebounded strongly in the fourth quarter.
Sofi Technologies Inc. (SOFI) was a standout in the quarter, climbing 95% and up 156% from the intra-day lows in June. The company benefited from Fed rate cuts and the market’s growing optimism that the economy will avoid a recession. The company continues to grow its customer count while successfully cross selling into their loans and financial service products. In the quarter, we saw the company take on a new revenue stream by originating loans for third parties, creating an attractive balance sheet-light revenue source, helping improve return on equity and margins. Sofi is early in its life cycle, currently being a small player in a very large total addressable market (TAM). With their strong management team, we believe the company will continue to deliver on their guidance of strong growth and expanding margins.”
7. Wingstop Inc (NASDAQ:WING)
Number of Hedge Fund Investors: 39
Jim Cramer in a latest program on CNBC said he’s “worried” about Wingstop Inc (NASDAQ:WING) because he is not getting the answers to his questions on the company’s underperformance.
“I am worried about Wing now. See, Wingstop Inc (NASDAQ:WING), when they reported last, did not give me an explanation about why they didn’t do well, and so, therefore, I went off on them. Now, I have to tell you, I don’t personally dislike them. I have to like the product. But when you come on the show and you talk a good game, you know, and say good things, and I say good things about you, and then you don’t give me the information I need to say why I should continue to like you, then I have to turn on you. It’s just what I do, and it’s not just because I’m from Philadelphia.”
Carillon Eagle Mid Cap Growth Fund stated the following regarding Wingstop Inc. (NASDAQ:WING) in its Q4 2024 investor letter:
“Wingstop Inc. (NASDAQ:WING) is a franchisor and restaurant operator that specializes in cooked-to order chicken wings in a fast-casual setting. The stock pulled back sharply as quarterly earnings came in short of very high expectations. Additionally, forward guidance pointed to more slowing in the business than expected as Wingstop laps extremely strong comparable sales.”
6. Palantir Technologies Inc (NASDAQ:PLTR)
Number of Hedge Fund Investors: 43
Jim Cramer in a latest lightning round program on CNBC mentioned Palantir Technologies Inc (NASDAQ:PLTR) while answering a question about AppLovin and said the tech company, like Palantir, has no end in sight when it comes to stock performance. Cramer said both AppLovin and Palantir Technologies Inc (NASDAQ:PLTR) will keep going higher.
“I’m going to give you a two-for-one—I’m going to say the same thing about Palantir. Palantir Technologies Inc (NASDAQ:PLTR) and AppLovin should go get married,” Cramer said after praising AppLovin’s gains.”
Alger Mid Cap Focus Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“Palantir Technologies Inc. (NASDAQ:PLTR) builds advanced platforms for data integration, management, and security, enabling interactive, AI-assisted analysis for its users. Its core offerings include Palantir Gotham, designed for government clients, and Palantir Foundry, tailored for commercial customers. Originally focused on U.S. intelligence agencies, Palantir has expanded into defense contracts with western governments and entered the commercial market in 2016. During the quarter, shares contributed to performance after the company reported better-than-expected fiscal third quarter operating results, along with management raising its full year 2024 revenue guidance. Management noted that the recent launch of its AI platform (AIP), which leverages generative AI to optimize business operations, has driven significant growth and investor interest. Additionally, we believe Palantir could be a key partner for the U.S. government’s new Department of Government Efficiency (DOGE), as its AI-driven platforms are ideally suited to help identify inefficiencies, allocate resources effectively, and achieve cost reductions.”
5. Lululemon Athletica Inc (NASDAQ:LULU)
Number of Hedge Fund Investors: 45
Jim Cramer in a latest program praised Lululemon Athletica Inc (NASDAQ:LULU) and said the company’s CEO Calvin McDonald is “excelling.”
“There’s a lot of negativity today, so I figured I’d put something positive in. Lululemon Athletica Inc (NASDAQ:LULU) pre-announced its positive upside. Now, they had already delivered a really terrific last quarter. Calvin McDonald is just excelling here. They had just a fabulous season. But they, David, have the most momentum of anyone right now in retail—quite extraordinary.”
4. Applovin Corp (NASDAQ:APP)
Number of Hedge Fund Investors: 51
Jim Cramer in a latest program on CNBC praised Applovin Corp (NASDAQ:APP) and said the stock can keep going higher because of a lack of competition.
“I’m hate-loving Applovin Corp (NASDAQ:APP). I cannot believe the stock goes up every day. Do I ever wish my travel trust had this? I actually wish I were the stock. I wish I could say, “Hi, Mr. Applovin Corp (NASDAQ:APP).” This thing does not quit—it doesn’t know how to quit. And all I can tell you is unless someone else comes in directly and says, “You know what, we do what they do and we charge half the price,” this stock is going to keep going up because it is a love stock.”
Carillon Eagle Mid Cap Growth Fund stated the following regarding AppLovin Corporation (NASDAQ:APP) in its Q4 2024 investor letter:
“AppLovin Corporation (NASDAQ:APP) is a platform for mobile app developers to grow their apps through user acquisition, monetization, and analytics. The company reported robust revenue growth as its latest tools are finding strong reception from customers. Furthermore, investors appreciated the initial success the company is having in moving beyond mobile games advertising into e-commerce advertising.”
3. Lam Research Corp (NASDAQ:LRCX)
Number of Hedge Fund Investors: 58
Jim Cramer was recently asked about Lam Research Corp (NASDAQ:LRCX). He said it’s a cheap stock and recommended investors to buy it.
“That stock is so cheap. Oh, I want to buy it, I want to buy it. We have so much semi in the charitable trust, but that stock is the cheapest I’ve seen in a long time. I really like Lam Research Corp (NASDAQ:LRCX).”
Lam Research Corporation (NASDAQ:LRCX) is one of the largest providers of etching equipment for the semiconductor industry. Etching refers to any technology that will selectively remove material from a thin film on a substrate.
China-related concerns have weighed on the stock but the bulls believe that’s an overreaction and the stock has secular growth catalysts, especially due to AI.
As the third-largest semiconductor equipment supplier globally, LAM Research (NASDAQ:LRCX) dominates the etching process. Over the past decade, LAM Research (NASDAQ:LRCX)’s market share has averaged between 45% and 55%. The semiconductor equipment market has consolidated among a few major players, creating an oligopoly. Similar to how ASML dominates lithography, AMAT and Tokyo Electron control deposition, and KLAC leads in process control, LAM Research (NASDAQ:LRCX) benefits from high switching costs, large R&D investments, and experience-driven improvements. These factors contribute to its strong EBIT margins and return on capital.
LAM Research (NASDAQ:LRCX)’s largest customers are memory manufacturers, who have increased their use of Memory Wafer Fabrication Equipment (WFE). From 2010 to 2023, memory WFE consumption accounted for 64% of total WFE, up from 46% during 2001-2009. Additionally, as semiconductor designs have evolved from 2D to 3D, more etching steps are required in the manufacturing process, further driving demand for LAM Research (NASDAQ:LRCX)’s equipment.
Vltava Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q4 2024 investor letter:
“In the quarter just ended, we added to the portfolio two new companies from the technology sector: Applied Materials and Lam Research Corporation (NASDAQ:LRCX). Both are in the same industry as is another of our investments that we have held for some time, KLA Corporation. This industry is termed semiconductor devices and materials. One chapter in Hidden Investment Treasures is devoted to investing in technology companies and, among other things, the controversy over what really constitutes a technology company. As investors, we try to view technology companies not according to the industry into which they are formally classified but by whether the technologies and technological processes used in the production of their products and services are an essential element in value creation or if they are a source of long-term, sustainable competitive advantage. Among the companies that are formally categorized as technology-based and fall into either the Information Technology or the Communications Services sector, we find some that can be said to be just that but also others for which this classification is at least debatable. Similarly, among companies that do not formally belong to these two sectors, we find many that clearly are built to a large extent on technology and base their market positions and competitiveness on it. In the cases of Applied Materials and Lam Research, there can be no doubt that these are technology companies not only as a formality but also in fact.
Dozens of companies are directly or indirectly involved in the production of semiconductors. Within this broad group of companies, there are several without which it would not be possible to produce advanced types of semiconductors in the world today. These include a group of five very well-known companies, each of which has a dominant global position in its particular field, and which together operate more or less as oligopolies. These are Lam Research, Applied Materials, KLA Corporation, ASML, and Tokyo Electron. At the end of the year, we benefited from a significant correction in the share prices of Applied Materials and Lam Research, and, together with KLA Corporation, we now own three of them. We view these as one collective investment into a critical point within a very important segment of the global economy that is growing and will continue to grow over the long term.
Lam Research manufactures wafer fabrication equipment for the semiconductor industry and also provides related services. The company is a market leader in plasma etching, thin film deposition platforms, photoresist systems, as well as wet and plasma-based cleaning products for individual wafers. Its main customers are the four major semiconductor manufacturers Micron, Samsung, SK Hynix, and Taiwan Semiconductors. Lam Research is a business with net margins of around 27% and ROCE of about 30%. Capital outlays are relatively small. The company has good capital allocation with a preponderance of share buybacks…” (Click here to read the full text)
2. Rtx Corp (NYSE:RTX)
Number of Hedge Fund Investors: 72
In his latest program, Jim Cramer praised the quarterly results of defense giant Rtx Corp (NYSE:RTX) and mentioned the company’s growth catalysts in the Middle East.
“What a pleasure it is to just have a purely good quarter. 11% organic sales growth, 15% commercial aftermarket, 10% commercial operating, and then 10% defense. They’re making money in defense, cybersecurity.. It is true that they do a huge amount of business in the Middle East—a monster. And when Israel has to replenish, when the European continent wants to protect itself against Russia, you have to be thinking that that’s their orders too.”
Longleaf Partners Fund stated the following regarding RTX Corporation (NYSE:RTX) in its Q4 2024 investor letter:
“RTX Corporation (NYSE:RTX) – Aerospace and defense company RTX was a top contributor for the year. Our appraisal value has grown nicely since we first purchased the company just over a year ago. While the issues for Pratt & Whitney’s (P&W) Geared Turbofan engine are still not yet fully fixed, they have gotten better and given us another reminder that the point of maximum pessimism is only obvious in retrospect. We continue to have a conservative valuation on P&W so view this as a source of future value upside. The Raytheon segment has also performed better as the year has gone on, with recent signs of margin improvement. Strong industry tailwinds, prudent capital allocation and a solid balance sheet provide a foundation for sustained growth and eventual full value recognition.”
1. Eli Lilly And Co (NYSE:LLY)
Number of Hedge Fund Investors: 106
Jim Cramer in a latest program was asked about his thoughts on Viking Therapeutics. He said he prefers Eli Lilly And Co (NYSE:LLY) instead.
“Okay, people think that even if Eli Lilly And Co (NYSE:LLY) stock can’t go up, why would we want Viking Therapeutics? And a lot of people were in it for a takeover. So far, it doesn’t look like that’s materializing, so they’re giving up and they are selling it. I prefer Eli Lilly And Co (NYSE:LLY).”
Madison Sustainable Equity Fund stated the following regarding Eli Lilly and Company (NYSE:LLY) in its Q3 2024 investor letter:
“Alphabet Inc.,Eli Lilly and Company (NYSE:LLY), Qualcomm Incorporated, Microsoft Corporation, and Apple Inc. were the largest detractors. After first half strength, Eli Lilly has traded in a range this quarter, despite dramatically raising revenues and earnings following their second quarter report. There is a lot of noise in the Diabetes-Obesity space as many companies are looking for opportunities to get into the market, which is expected to exceed $100 billion in revenues in 2030. We have not seen any competitor data that would dethrone Novo Nordisk or Lilly but are watching carefully. Manufacturing capacity is a key barrier to entry and Lilly and Novo have locked up capacity for the next several years.”
While we acknowledge the potential of Eli Lilly And Co (NYSE:LLY), our conviction lies in the belief that under the radar 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 LLY 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. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the Top 10 AI Stocks That Are Being Monitored By Wall Street and Jim Cramer Discussed These 12 Stocks Amidst The DeepSeek AI Selloff.
