Jim Cramer, the host of Mad Money, discussed the upcoming market and corporate activity to look forward to this week, which will be dominated by earnings reports from various companies and an important inflation report from the Labor Department.
Cramer noted that Friday marked the heavy market focus on the prospect of the White House imposing tariffs on imports from Mexico, Canada, and China. As expected, the tariffs were announced, 25% from Mexico and Canada, and 10% from China, and the market, which had already been struggling, dropped further.
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Cramer noted that the Dow plunged by 337 points, the S&P 500 fell 0.5%, and the Nasdaq declined by 0.28%. Adding fuel to the fire, President Trump later commented that he was “not concerned about the market’s reaction.” Cramer, reflecting on this, wished he could share that same sense of ease. He added:
“Finally, on Friday, we get the Labor Department’s non-farm payroll and right now the Fed is concerned that the economy might be running too hot. If we get robust job growth with higher wages, then I doubt we’ll see any rate hikes in the first half of the year.”
He then posed the question: if investors are hoping for a rising stock market, what would they want to see? Cramer explained that a job report that’s just “so-so” would be ideal, strong enough to keep rate cuts on the table, but not so strong as to hinder quarterly earnings.
“Bottom line: When you get a week that’s packed with important earnings reports and the monthly employment report plus the tariff news, you’re usually better off sitting on your hands because there’s just too much data for any individual to process even for an AI-powered individual. By the way, oh, let’s just throw in this DeepSeek stuff, which has made tech too maddening to buy or sell and too, let’s say boring. So if in doubt, do nothing.”
Jim Cramer’s Game Plan: 15 Stocks in Focus
Our Methodology
For this article, we compiled a list of 15 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 31. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 hedge funds.
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).
Jim Cramer’s Game Plan: 15 Stocks in Focus
15. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Cramer suggested to wait before buying Amazon.com, Inc. (NASDAQ:AMZN) as he explained:
“After the close, Amazon reports. Although I predict terrific numbers, they might not be as terrific as they have to be to justify the stock’s incredible recent run. We own it for the Charitable Trust too… It’s a bonanza, but you may wanna wait until after the quarter to do any buying. That’s not being, I’m not being negative, I’m just saying I don’t want you after this big run to come in and then there’ll be this give up because people are just taking profits. That’s when you wanna buy.”
Amazon (NASDAQ:AMZN) has emerged as a significant player in the global technology sector, with a wide-ranging portfolio that includes e-commerce, advertising, and subscription services. For its fourth-quarter 2024 guidance, the company has projected net sales to range between $181.5 billion and $188.5 billion, reflecting a growth of 7% to 11% compared to the fourth quarter of 2023.
Additionally, Amazon (NASDAQ:AMZN) expects operating income for the fourth quarter to fall between $16.0 billion and $20.0 billion, a noteworthy increase compared to $13.2 billion in the same period of 2023.
14. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 70
Talking about Bristol-Myers Squibb Company (NYSE:BMY), Cramer said:
“Next, another trust holding, Bristol Myers. They got a whole series of great drugs, but the one people are watching very closely is COBENFY. That’s the first new class of schizophrenia medications in 30 years, far fewer side effects than the current standard of care. If there really, you wanna call that a standard of care. I bet CEO, Chris Boerner will give us some, an early read on prescriptions written this year. Now this could be a nice upside and I’ve gotta tell you with that yield, it’s one of my faves.”
Bristol-Myers (NYSE:BMY) is a well-known company in the biopharmaceutical sector, concentrating on the development of treatments for various diseases across different therapeutic fields. Cramer was enthusiastic about the company in December 2024 when he discussed:
“Finally, as I’ve been saying pretty regularly for the past few months, I think you should consider building a position for Bristol-Myers Squibb, which happens to be the newest position of my Charitable Trust… This stock has been hot since the summer as investors have bought into the new strategy put forward by CEO Christopher Boerner, who took over late last year.
Now, Boerner’s trying to build world-class franchises in cancer, cardiology, and neuroscience. His plan started paying off when Bristol-Myers got approval for the first and a totally new class of schizophrenia drugs back in September.”
At that time, Cramer noted that despite a 42% increase since July, a particular pharmaceutical stock still trades at a low multiple of 7.9 times next year’s earnings, making it the cheapest in the S&P 500, except for unprofitable Moderna.
He also highlighted Bristol-Myers’ (NYSE:BMY) 4.4% yield, the second highest in the sector, and pointed out that the company’s fundamentals had improved significantly in the second half of the year. Cramer added that the stock remains undervalued, with an attractive dividend that was recently raised.
13. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 106
Cramer, a long-time admirer of Eli Lilly and Company (NYSE:LLY), commented:
“Thursday, more drugs. Yes, this is a tough drug week. Aforementioned Eli Lilly reports while CEO David Ricks announced here on CNBC that 2025 will be a good year, we gotta get some more details before we plow in. I remain steadfast. We have a big position for the trust… If you do get good news from Novo Nordisk, get this, you might wanna buy some Eli Lilly before it reports on Thursday.”
Eli Lilly (NYSE:LLY) is dedicated to the discovery, development, and marketing of a variety of pharmaceutical products, including treatments for diabetes, cancer, autoimmune diseases, pain, and migraines. Recently, during a Mad Money episode, Cramer stated:
“Okay, so I mean we just found out today that Ozempic has something for kidney failure and that means that maybe Lily has it. Now Lilly has, I will say this, the single worst chart I have seen in a long time and there are a lot of people on Wall Street, are chartists. However, I actually like the fundamentals. Now, David Ricks did on our show, preannounce a better-than-expected quarter and nobody listened. But I do believe in Lilly, we own it for the trust, and I’ve gotta tell you, I think in another dip, you get another opportunity to buy and I’m sticking by that.”
12. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 36
Cramer highlighted that Ford Motor Company (NYSE:F) has turned out to be dismaying and said:
“After the close Wednesday, we hear from Ford Motor. Ford’s been a disappointment largely because of warranty costs, things that went wrong, but with long-term interest rates high and likely going higher, their sales could be stalling. The stock’s been awful. So there’s limited downside at these levels. I question the upside.”
Ford (NYSE:F) focuses on the development, production, and maintenance of various vehicles, including trucks, cars, vans, SUVs, and luxury Lincoln models. In December 2024, Cramer was piqued with the stock as he commented:
“It is a great American company, but it does have warranty problems that I think are gonna come back to haunt it. And I had to sell for the Charitable Trust because it just kept missing the quarter and that’s no way to run a stock. Maybe a car company but not [a] stock.”
11. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 61
Cramer mentioned that he expects Novo Nordisk A/S (NYSE:NVO) to forecast a good 2025 like its peer, Eli Lilly.
“Novo Nordisk, okay, now this is really interesting. See, this is the drug company behind Ozempic. They report. Now maybe they can give us clarity about how well these drugs are doing because Eli Lilly has already announced soft fourth-quarter sales but expects a very good 2025. Remember, we heard them when we were out in San Francisco. I’d like to hear the same thing from Novo Nordisk. If you do get good news from Novo Nordisk, get this, you might wanna buy some Eli Lilly before it reports on Thursday.”
Novo Nordisk (NYSE:NVO) specializes in the research, development, and production of pharmaceutical products. It is worth noting that over the past 5 years, LLY stock has gained a staggering 453% while NVO is up more than 165% during the same period.
10. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 76
Cramer emphasized that The Walt Disney Company (NYSE:DIS) is especially cheap and advised to buy the stock.
“Wednesday we get results from Walt Disney. Now, recent weather events could bring noise as hurricanes impacted Disney World last quarter. LA wildfires likely impacted the outlook for Disneyland this quarter. But I think everything else is hitting on all cylinders, including linear TV. Stock soon can put its recent weakness behind it. Disney’s historically cheap here, which is why we’ve been telling members of the investing club to buy it.”
Disney (NYSE:DIS) is a well-known player in the global entertainment industry, with operations that include film and TV production, streaming services, and theme park management. Cramer has been a staunch promoter of the company as he said in 2024:
“It’s come down quite a bit. It sells at 18 times earnings. It’s down today because of I think the storms, but you know what? Disney is doing much better than people realize. And it’s about time, people started giving a little more respect. I’m a buyer of it. The analysts are dumping all over it. They’re dumping all over it now. I say buy more Disney.”
Over the past 12 months, the company stock has gained more than 16%.
9. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 69
Chipotle Mexican Grill, Inc. (NYSE:CMG) was mentioned by Cramer during the episode as he said:
“Now, we’ve been focused on a handful of great restaurant chains lately, especially the incredible rally of Brinker, which you know as Chili’s. The premier growth stock in the group though has always been Chipotle, but somehow it’s been lost in the shuffle here.
Now maybe this is a chance to get back in before the next big move higher. Buying Chipotle on weakness is generally the right call, like forever. Of course, it has a new CEO Scott Boatwright, but he is an old Chipotle hand, and the rest of the crew’s intact, including friend of the show Jack Hartung, former CFO, now president and chief strategy officer. It might be time to start a position.”
Chipotle (NYSE:CMG) runs a well-known restaurant chain that focuses on offering a range of Mexican-inspired meals. The company expects mid to high single-digit comparable restaurant sales growth for 2024, along with the opening of 285 to 315 new company-operated locations, over 80% of which will feature Chipotlanes. For 2025, it plans to open 315 to 345 new locations, with more than 80% again incorporating Chipotlanes.
8. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Cramer wondered if Advanced Micro Devices, Inc. (NASDAQ:AMD) has seen demand increase in the aftermath of the DeepSeek launch.
“AMD’s been quiet of late. Now I wonder if the chip maker has landed some big wins because, in the wake of this DeepSeek affair, which proved AI outfits can do more with less computing power, AMD’s cheaper GPUs suddenly look a lot more attractive versus NVIDIA’s best-of-breed chips. Alright, that’s my thesis. Now, let’s see if it’s true.”
Advanced Micro (NASDAQ:AMD) is a worldwide semiconductor company that designs and provides microprocessors, graphics chips, chipsets, and embedded processors. Interestingly, when Cramer discussed the company in December 2024, he commented:
“… The other chip maker that’s been trading like a loser is AMD, another Charitable Trust holding. Now this is different. While AMD is clearly far, far behind Nvidia in making these ultra-fast GPUs, it was seen as, really the only chip maker that could even come close. But the fact that these hyperscalers are quite interested in custom silicon solutions from the likes of Broadcom and Marvell has investors wondering if these ancillary chips might actually be the next best option, not AMD and that’s a big reason why the stock’s down 12% since Marvell reported two weeks ago and it’s now down 45% from its highs in March.
So that’s what’s happened. But what are we doing about it?… Even after it’s come down, I gotta trim something. It’s just not getting the kind of traction I thought it would with… AI chips. if we got Broadcom and Nvidia, we don’t need to keep sticking our necks out on AMD. This is a new theme. We just aren’t seeing the demand we thought we would for AMD’s AI chips and we haven’t seen a big move into AI PCs either, which they also have a big stake in.”
7. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Talking about Alphabet Inc. (NASDAQ:GOOGL) during the episode, Cramer remarked:
“After the close, Alphabet reports and we wanna find out if the Search business is being cannibalized by its Gemini AI offering. I think YouTube is just on fire and that covers up any weakness. The new CFO, Anat Ashkenazi, you might remember, she was at Eli Lilly, she tells a terrific story. We’ll be listening for anything about the growth of Google’s cloud infrastructure business. If it is strong, the stock will fly.”
Alphabet (NASDAQ:GOOGL) was established as the parent company following Google’s restructuring in 2015, with Google continuing to be known mainly for its search engine.
Oakmark Funds stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
6. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 58
Cramer mentioned that packaged food stocks like PepsiCo, Inc. (NASDAQ:PEP) have been hit because of GLP-1s but mentioned its attractive yield as well.
“The packaged food stocks have been dogs, dogs ever since the GLP-1 drugs burst on the scene, especially PepsiCo, one of my faves with its soft drink and snacks businesses. I think the new weight loss drugs make it hard for this great company to play offense. Hasn’t helped that this supermarket has become an inflation battleground, but PepsiCo yields 3.6%. You never know when you can catch a total rotation into this beaten-down group.”
PepsiCo (NASDAQ:PEP) is a leading company in the production, marketing, and distribution of a wide range of beverages and snack products, featuring popular brands like Lay’s, Gatorade, Pepsi, Doritos, Tropicana, and Aquafina. When Cramer discussed the company in November 2024, he recommended avoiding the stock, citing several factors that could negatively impact its performance.
He pointed out potential rate cuts by the Federal Reserve, the impact of GLP-1 drugs on consumer behavior, and rising concerns about junk food consumption. Despite PepsiCo (NASDAQ:PEP) offering a 3.5% yield at the time, Cramer believed these elements could cause the stock to decline as he stated, “I think it goes lower.” Since then, the stock has declined more than 10%.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 80
Cramer expects to hear good news from Pfizer Inc.’s (NYSE:PFE) fourth-quarter and full-year 2024 earnings report.
“We also hear from two huge drug companies, Merck and Pfizer… Pfizer bought Seagen, the old Seattle genetics at the end of 2023. We still haven’t seen the breakout anti-cancer drugs that would justify the deal’s $43 billion price tag. Now maybe we’ll hear something good this quarter. If so, the stock could soar, very little downside at these low levels… Then again, if you want yield in this market, I’d much rather own Merck or Pfizer.”
Pfizer (NYSE:PFE) develops and distributes biopharmaceuticals across various therapeutic areas, including cardiovascular health, infectious diseases, cancer, immunology, and vaccines. The company projects full-year 2025 revenues between $61.0 billion and $64.0 billion, with COVID-19 product revenues expected to remain consistent with 2024, excluding a non-recurring $1.2 billion from Paxlovid in 2024.
Pfizer (NYSE:PFE) expects operational revenue growth for 2025 to range from flat to 5% year-over-year, based on its 2024 baseline guidance. Additionally, the company expects adjusted diluted EPS for 2025 to be between $2.80 and $3.00, reflecting a year-over-year growth of 10% to 18% from the midpoint of its 2024 baseline guidance.
4. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 86
Discussing the global healthcare company, Merck & Co., Inc. (NYSE:MRK), Cramer said:
“We also hear from two huge drug companies, Merck and Pfizer. Merck, despite some excellent acquisitions, it’s still all about Keytruda. It’s a revolutionary cancer treatment that just keeps working against so many different varieties of disease. I bet the numbers will be good, but there are other issues. I also want to get more of a readout on the drugs that Merck picked up in its recent wave of acquisitions, one for pulmonary arterial hypertension and a whole immunology franchise… Then again, if you want yield in this market, I’d much rather own Merck or Pfizer.”
In early January, Cramer mentioned Merck (NYSE:MRK) and noted:
“How about Merck? Okay, now here’s a company with the single greatest anti-cancer franchise of all time. It’s called Keytruda, but I think it’s not getting enough credit for an acquisition it made in 2021, that was the purchase of Acceleron for $11.5 billion. With that acquisition, they got this drug called Winrevair. It is approved by the FDA, just this last year for an almost always fatal disease called pulmonary arterial hypertension… They (the company) also have a shot, Gardasil, that protects against HPV. It’s [a] very common STD, that can cause cervical cancer. It’s a true lifesaver. Women have been using it for years. [The] Chinese government recently approved it for men too. But for some reason, Merck’s having a problem with its Chinese distribution and women. Weird situation going on over there. Right now, the stock’s well-ensconced a few points around 52-week low.”
3. Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 98
Cramer discussed Spotify Technology S.A. (NYSE:SPOT) during the episode. Here is what Mad Money’s host had to say:
“Tuesday’s jam-packed. Alright, now we start the morning with PayPal and Spotify, both of which could have terrific numbers… Now Spotify is a classic beat-and-raise story. It tends to blow away the estimates. I love these subscription businesses, you know that, think Netflix, Amazon because of Prime, and Spotify’s always in the conversation.”
Spotify (NYSE:SPOT) offers subscription-based audio streaming services, giving users access to a wide selection of music and podcasts. The company was on Cramer’s list of companies that hit $100 billion in market cap in 2024 and he stated:
“Third, no one talks about the meteoric rise of Spotify. The audio subscription company with popular figures like Taylor Swift, the Weekend, Bad Bunny, Chappell Roan, oh and Billie Eilish as well as a host of famous podcasters including the influential Joe Rogan.
Spotify has rallied 165% year to date, joining the hundred billion dollar club as of Friday’s close. Why did it suddenly take off? Simple, the market loves subscription models because they’re sticky. Netflix, Amazon, Costco, all subscription businesses, they’re raving successes and now Spotify is too.”
2. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 90
Cramer mentioned that PayPal Holdings, Inc.’s (NASDAQ:PYPL) CEO will be able to return the company to its glory.
“Tuesday’s jam-packed. Alright, now we start the morning with PayPal and Spotify, both of which could have terrific numbers. PayPal’s now being captained by Alex Chriss. I think he’s returning the company to solid growth mode. Now, PayPal used to be the king of digital mobile payments at one point, but then it fell in hard times as it frantically tried to play catch up to the buy now pay later crowd. I believe Chriss can restore the growth rate and the luster because PayPal serves as the digital wallet that often is the first interaction that young people have with the payment system.”
PayPal (NASDAQ:PYPL) is a prominent technology platform that enables digital payments for consumers and businesses alike. During an episode of Squawk on the Street in December 2024, Cramer mentioned the company, as discussed in our article Jim Cramer Just Discussed These 13 Stocks, and said:
“Well, I was going to give you one that, that David introduced me to, that is, I’m crowning the new king of fintech, Paypal. Breaking out here. No, no, Barclays just joined this and pattern says basically this is better than all the others. And I think, PayPal spewing cash, this guy Alex Chriss is doing a terrific job of, February meeting, everybody will know it then. Kind of like when Marvell, everyone should have known, when Matt Murphy goes and buys a million dollars worth it’s not idle… I just pointed out PayPal because I think it has much higher to go.”
1. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 43
Cramer started his game plan for this week with Palantir Technologies Inc. (NYSE:PLTR) as he discussed:
“Alright, the fireworks start on Monday. Well, of course, we’ll have to worry about the fallout, right,… of the tariffs, but Palantir’s reporting after the close. Now Palantir’s a really odd duck, so we’re gonna spend a second on it. Data-driven consultant that helps everyone from packaged goods companies to the Pentagon to get more out of the resources. Right now, they’re focused on fixing the military procurement system. We give way too much business to a handful of defense contractors and it jacks up the price of all the hardware we, the taxpayers pay for.
Now Palantir’s volatile. Unabashed CEO Alex Karp is a messianic figure to some and a Pied Piper to others. He caters to his retail investor base and the stock’s a levitator. I call it GameStop with a brain. I’ve been saying it’s going to $100 ever since it was in the fifties. Now it’s at $82, shows no sign of letting up. Mark my words, a hundred dollars robust.”
Palantir Technologies Inc. (NYSE:PLTR) is a leading provider of software designed to facilitate complex data integration and decision-making, serving both government and intelligence organizations, along with commercial customers. Headwaters Capital Management stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“More specifically for this strategy’s benchmark, the top two performing factors during Q4 for the Russell Mid Cap Index were high beta (+10.1%) and non-earning companies (+8.3%), while high return on equity was one of the worst factors (see appendix). Given the quality focus of this strategy, I am not surprised that the portfolio lagged in this market. It is déjà vu given that the portfolio’s worst quarter of relative performance was Q1 of 2021, which coincided with the top of the last speculative bubble.
Speaking of 2021, I am surprised by the market’s amnesia as it seems to be repeating similar mistakes that were made only a few years ago. The parallels to the 2021 bubble are striking. Palantir Technologies Inc. (NASDAQ:PLTR), the Russell Mid Cap Index’s largest holding and one of the poster children of the 2021 bubble, is a good example. PLTR more than doubled in Q4 entirely driven by multiple expansion, which at the end of the year, surpassed its peak achieved in Q1 2021!
Note the correlation between PLTR’s valuation and the price of bitcoin, which again highlights the broad rotation into speculative assets. Just so readers are clear, PLTR was trading at 51x SALES at the end of 2024. I don’t know much about PLTR, I’m only using this as an example. Paying that kind of multiple generally makes it difficult to achieve strong returns in the future. For example, the last time PLTR traded at this level, the stock returned -68% over the following year. I could choose plenty of additional charts like this (ARK Innovation ETF, fringe AI stocks, quantum computing, etc), but I think readers get the idea that I believe there are pockets of frothiness in the market.”
While we acknowledge the potential of Palantir Technologies Inc. (NYSE:PLTR) 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 PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article was originally published at Insider Monkey.
