On Friday, Jim Cramer, the host of Mad Money, took time to guide investors through this week’s events on Wall Street, drawing attention to earnings reports from various companies, including major players in the tech sector. He also acknowledged the market’s downturn over the past few days, noting the impact of recent developments on investor sentiment.
Cramer specifically pointed out that investors should watch the new home sales report due out this Wednesday. He explained that the housing market has taken a significant hit recently, largely due to a mix of severe weather conditions and, more critically, high mortgage rates. The surge in interest rates has been particularly damaging to homebuilders.
“We need a pickup to verify that housing isn’t just falling off a cliff at this point. I’m actually not hopeful.”
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Looking ahead to Thursday, Cramer noted that the first gross domestic product reading of the week would be released, and he expects it to reflect strong performance. He attributed the anticipated strength to a business climate that gained momentum following the election, when many investors began to believe that President Trump’s policies would be more favorable for business than those of his predecessor, President Biden.
On Friday, Cramer also pointed out a noteworthy trend: interest rates had declined, a pattern that had persisted throughout the week. This, according to Cramer, raised the possibility that the upcoming GDP report could be the final strong one before the market adjusts to the changing economic environment. While Cramer clarified that he was not making any definitive predictions, he emphasized that these market movements were indicative of what the market was signaling.
“So let me give you the bottom line: Out of nowhere, the momentum stocks had a hideous downturn today. It’s hurt many aggressive growth investors. Can this pullback finally run its course? I hope so.”
Jim Cramer’s Game Plan Focuses on These 17 Stocks
Our Methodology
For this article, we compiled a list of 17 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on February 21. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer’s Game Plan Focuses on These 17 Stocks
17. Dell Technologies Inc. (NYSE:DELL)
Number of Hedge Fund Holders: 63
Cramer called Dell Technologies Inc.’s (NYSE:DELL) upcoming earnings report “crucial” and ventured a guess that the company will not miss its earnings estimates twice.
“After the close, Dell Technologies reports. This one’s crucial. Its stock was clocked last time and I think it could make a comeback given that it helps companies adopt NVIDIA’s AI platform. Great company with a terrific CEO, Michael Dell. I don’t believe it’ll miss twice in a row. That last quarter I didn’t like.”
Dell (NYSE:DELL) is recognized for its cutting-edge products in fields like AI servers, unstructured data storage, AI PCs, and networking. In November 2024, before the company reported its earnings, Cramer stated:
“Dell is the best partner of Nvidia when it comes to [the] implementation of Blackwell, which is the new generation of AI chips. I buy some now and then I buy some after it pulls back and hey, if the stock doesn’t come in after, well then you still got a good position on. I am a huge believer in Michael Dell and I think we’re lucky to be able to invest alongside him.”
16. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 120
Cramer mentioned that companies like Vistra Corp. (NYSE:VST) were recently hit and said:
“We got a couple of key momentum stocks reporting. Vistra, that’s a power producer with nuclear exposure, making it a favorite stock among people who want to bet on the data center-driven electricity shortage. I saw GE Vernova get trashed as part of the anti-momentum trade today. Maybe a positive reaction to Vistra could signal that the selling’s over. I don’t wanna hold my breath.”
Vistra (NYSE:VST) is an electricity provider and power generation firm that serves a wide range of customers, including residential, commercial, and industrial clients. In January, Cramer commented on the company and said:
“Right now, there are two utilities that generate a lot of nuclear power, Vistra and Constellation Energy… I think these two stocks are now way ahead of themselves. They trade like they’ll be able to build many nuclear reactors next to the currently approved ones because siting won’t be difficult… Oh, that’s true but building them will be. It takes ages to construct one of these things, big overruns… But hey, at least Constellation and Vistra’s real, even if their stocks have gotten overextended.”
15. Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH)
Number of Hedge Fund Holders: 58
While Cramer was uncertain whether Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) would continue its streak of great numbers, he noted that cruise stocks have done well under tough circumstances.
“In this tougher environment, the, the cruise stocks, well, they’ve held up relatively well. Can Norwegian Cruise keep its winning streak going? Not clear.”
Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is an international cruise operator, managing the brands Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. The company raised its outlook for 2024 and its full-year net yield guidance was increased by 120 basis points, now estimated at approximately 9.4%, up from the previous forecast of 8.2%.
Additionally, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) has increased its full-year adjusted EBITDA guidance by $75 million, now projected at approximately $2.425 billion, up from the prior estimate of $2.350 billion. The upward adjustment follows better-than-expected results in the third quarter and improved projections for the fourth quarter of 2024.
14. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
Cramer reaffirmed his view that investors should own, rather than trade NVIDIA Corporation (NASDAQ:NVDA) stock and expressed trust in CEO Jensen Huang.
“And then there’s the most important company to report this week, if not this year, okay, Nvidia. We had many reports offering forecast of how the $3 trillion AI and accelerated computing company might be doing. They all came out today. They were all positive. All I can tell you is that we had a huge sell-off in the semis today and the chief, with the chief index off 3%.
It’s not a good sign for Nvidia, which got decked and it fell a significant 4%. I say own it, don’t trade it but our strength may be tested by the possibility of a slow ramp in its Blackwell platform launch. New iterations of Nvidia chips have always been questioned for their worth. I bet CEO Jensen Huang offers a clear path for those who want to join the new industrial revolution that he’s helped create. Oh, I hope it matters.”
NVIDIA Corporation (NASDAQ:NVDA), known for its advancements in graphics, computing, and networking technologies, is driving significant growth through its GPUs and the CUDA software platform, both of which are vital for AI infrastructure.
13. Snowflake Inc. (NYSE:SNOW)
Number of Hedge Fund Holders: 85
Cramer highlighted that Snowflake Inc. (NYSE:SNOW) has transformed into an advisor for companies looking to learn the usage of AI.
“Then there’s Snowflake, the rent-the-cloud play that’s become far more than that. Really it’s a real advisor to those who wanna learn more about how to use artificial intelligence in the business.”
Snowflake (NYSE:SNOW) offers a cloud-based data platform that helps organizations consolidate data, gain insights, build data-driven applications, and apply AI to address business challenges.
Baron Funds stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q3 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a leading cloud data platform predominantly used for data analytics. Shares fell 15.2% in the third quarter due to a cybersecurity incident, a shifting competitive landscape, a change in leadership, and general macro complexities which are pressuring customer IT budgets. With generative AI (Gen AI) front and center, both investors and customers are closely evaluating Snowflake’s positioning in the future data ecosystem. Databricks and other competitors whose core users are data scientists who are also key buyers of Gen AI technologies, are benefiting. In addition, while Snowflake’s product innovation push should fuel future growth, it may also lead to short-term headwinds to profitability. Management reported healthy demand for its core data analytics, evidenced by solid growth rates among current customers alongside new go-to-market initiatives that could support growth. We are optimistic the new CEO, Sridhar Ramaswamy, can lead the company towards an AI-centric strategy, and therefore remain shareholders.”
12. Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 162
Cramer commented on Salesforce, Inc. (NYSE:CRM), which is set to report its fourth quarter and full-year fiscal 2025 results on February 26, and said:
“After the close, we get some fireworks. There’s Salesforce, oh boy, which is thought to be doing very well. But don’t tell that to the shareholders who have been shellacked in a battle wave of selling. This is a richly valuable momentum stock. Although a stock by the way, like ServiceNow is much more expensive.”
Salesforce (NYSE:CRM) provides an integrated platform designed to manage sales, customer service, marketing, analytics, and e-commerce, offering tools to improve customer experiences and streamline workflows. A few weeks ago, Cramer complimented the company’s CEO as he said:
“I actually think it’s okay. There was a really terrific piece out by Morgan Stanley yesterday about what the clients are doing and how great it’s been, Agentforce has been for them. It’s such a winner that I smiled. I said, oh my god, Marc Benioff is gonna do so well. I think you just stay in the stock and if it gets hit, I would buy more. That’s how much I believe in their Agentforce. It’s terrific…”
11. Lowe’s Companies, Inc. (NYSE:LOW)
Number of Hedge Fund Holders: 70
Cramer expressed delight over Lowe’s Companies, Inc.’s (NYSE:LOW) ability to rise steadily and called it a “standup performer”.
“We also hear from Lowe’s, which is always, you know, a horse race with Home Depot, but it’s been a standup performer for years. That stock never soars. It just quietly goes higher. I love that.”
Lowe’s (NYSE:LOW) is a home improvement retailer based in the U.S., providing a diverse selection of products for construction, maintenance, repairs, remodeling, and decoration. As per its full-year outlook for 2024, the company projects total sales to range between $83.0 billion and $83.5 billion.
Lowe’s (NYSE:LOW) expects comparable sales to decline by approximately 3.0% to 3.5% compared to the previous year. Additionally, the company anticipates an adjusted operating income as a percentage of sales (adjusted operating margin) to fall between 12.3% and 12.4%.
10. CAVA Group, Inc. (NYSE:CAVA)
Number of Hedge Fund Holders: 47
Cramer noted that CAVA Group, Inc.’s (NYSE:CAVA) stock decline is not related to its last earnings report and predicted that its upcoming earnings report will contain great numbers.
“Now have you seen the action in CAVA of late? This once beloved restaurant stock, although a still beloved chain, has plummeted and it’s not because of the last quarter, which was stellar. I bet they report another set of great numbers. But when Wall Street has turned against momentum stocks, it doesn’t matter how well your business is doing. File CAVA away if the quarter’s great. We’re circling back at lower levels.”
CAVA (NYSE:CAVA) is a company in the fast-casual dining industry, managing an expanding chain of Mediterranean-themed restaurants throughout the United States. Over the past year, CAVA stock has gained over 110%.
9. Workday, Inc. (NASDAQ:WDAY)
Number of Hedge Fund Holders: 89
Cramer is of the opinion that Workday, Inc. (NASDAQ:WDAY) will witness a downside if it reports softer sales.
“After the close, we hear from Workday. That’s an enterprise software company that got downgraded this week because of the possibility of softer sales. The enterprise software group is really at the heart of this market’s weakness. If the sales are soft, I expect much more downside.”
Workday (NASDAQ:WDAY) provides cloud-based enterprise software that assists organizations in managing financial, human resources, spending, planning, and supply chain functions, along with tools for analytics, reporting, and custom application development.
Polen Capital stated the following regarding Workday, Inc. (NASDAQ:WDAY) in its Q3 2024 investor letter:
“We added to several existing positions in the quarter including Adobe, Workday, Inc. (NASDAQ:WDAY), Shopify, MSCI, and Paycom Software. Workday is still growing revenue at a mid-to-high-teens rate, but in recent years, slower macroeconomic growth has made closing deals more challenging. Amidst a pullback, we increased our position as we found the valuation attractive for a well-positioned, recurring revenue business with still strong growth potential. The company also recently stated publicly that it will be focused on expanding profit margins meaningfully over the next five years—something we have expected and are pleased to see.”
8. Sempra (NYSE:SRE)
Number of Hedge Fund Holders: 34
Highlighting Sempra’s (NYSE:SRE) growth, Cramer said:
“How about a sleeper stock? One that’s withstood the seller, Sempra. Sempra’s a growth utility with a decent yield and a lot of opportunity. CEO Jeff Martin, that, guest many times, can show you that this stock offered a better return than most of the traditional growth names. You know when this might be worth buying on weakness, I’m debating to put it in the Charitable Trust.”
Sempra (NYSE:SRE) is an energy infrastructure company that provides electric and natural gas services, manages electricity transmission and distribution, and focuses on the development of energy infrastructure. Cramer’s positive stance on the company and its CEO is not new as he said in January:
“I think Sempra is such a buy, I don’t even care that it only yields 3%. I think that, you know, like this is Jeff Martin, he’s bankable, bankable, bankable. I want you to own the stock.”
7. Planet Fitness, Inc. (NYSE:PLNT)
Number of Hedge Fund Holders: 41
Planet Fitness, Inc. (NYSE:PLNT) was mentioned during the episode, and here’s what Mad Money’s host had to say:
“Now, next there’s Planet Fitness. Well, this is one, it’s a puzzle. It’s a puzzle. Many stocks are puzzles. I think young people are more health conscious these days. They’re trying to stay in shape, avoid unhealthy foods, and of course beverages like liquor. Will Planet Fitness verify that thesis? I bet they do.”
Planet Fitness (NYSE:PLNT) franchises and operates fitness centers under its brand and sells fitness equipment to franchisees while also managing corporate-owned locations. As per the company’s provided outlook for the full year 2024, it expects system-wide same-club sales to grow by 4% to 5%, an increase from the prior range of 3% to 5%. Revenue is forecast to rise by 8% to 9%, up from the previous estimate of 4% to 6%.
Planet Fitness (NYSE:PLNT) expects adjusted EBITDA to increase in the 8% to 9% range, compared to the earlier projection of 7% to 9%. Adjusted net income is projected to grow by 8% to 9%, surpassing the earlier forecast of 4% to 6%. Furthermore, adjusted diluted net income per share is expected to increase by 11% to 12%, improving on the earlier range of 7% to 9%.
6. The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 88
While Cramer noted the possibility of The Home Depot, Inc. (NYSE:HD) reporting a soft quarter, he also mentioned the benefit of rebuilding activities after storms.
“Tuesday morning’s big. Alright, we own Home Depot for the Charitable Trust and we wanna build a large position ahead of eventual rate cuts. And as I said yesterday on our monthly conference call, we expect a soft quarter because of weak housing but the company will benefit from the need to rebuild after major storms, both in the Southeast and the fires in Los Angeles.”
Home Depot (NYSE:HD) is a home improvement retailer offering a wide range of products, including building materials, décor, and maintenance items, along with installation and tool rental services, catering to both homeowners and professionals in the construction and renovation industries.
Following Home Depot’s (NYSE:HD) third-quarter earnings report, Carillon Tower Advisers stated the following regarding the company in its Q3 2024 investor letter:
“While Home Depot, Inc.’s (NYSE:HD) recent reported earnings were somewhat tepid, the market seems to be pricing in an inversion of the company’s sales, driven by lower interest rates. Home Depot reported its seventh consecutive quarter of same-store sales declines, giving back substantial gains that it enjoyed during the pandemic. High mortgage rates have also put a damper on existing home sales. People typically spend the most on home repairs and improvements in years when they buy or sell houses, often conducting both transactions in the same year.”
5. Hims & Hers Health, Inc. (NYSE:HIMS)
Number of Hedge Fund Holders: 38
Cramer highlighted the chatter around whether Hims & Hers Health, Inc. (NYSE:HIMS) will be able to offer cheaper alternatives to GLP-1 drugs.
“Finally, I have to tell you there’s one stock that’s become a true battleground here and I don’t mean Palantir. I’m talking about a stock called Hims & Hers Health. That’s an online healthcare company that currently offers a less expensive alternative to the GLP-1 weight loss drugs as long as they’re relatively unavailable. Now today the FDA said that Novo Nordisk GLP-1 formulation is no longer in short supply, which, which could mean that the compounding pharmacies that are making similar versions of the drug have to stop.
Now Hims & Hers has said it can still make the cheaper version some way, but the market seems skeptical. Hence the stock’s astounding 26% collapse today. But then again, it’s still up more than a 100% year to date so profit-taking… makes sense to me.”
Hims & Hers Health (NYSE:HIMS) offers a telehealth platform that delivers both prescription and over-the-counter health and wellness products and services, such as medication, skincare, sexual health, hair care, and wellness items, along with continuous support from licensed healthcare providers.
4. Cleveland-Cliffs Inc. (NYSE:CLF)
Number of Hedge Fund Holders: 49
When commenting on Cleveland-Cliffs Inc. (NYSE:CLF), Cramer expressed worry about steel imports from Mexico.
“I also care about Cleveland-Cliffs so when it reports as this steel company has been beaten up by cheap exports from China via Mexico transshipment, they call it, I worry about how it’s doing, whether the US can actually stop these darn subsidized transshipped imports.”
Cleveland-Cliffs (NYSE:CLF) is a North American manufacturer of flat-rolled steel, offering a variety of steel products. Earlier in January, Cramer was discontent with steel stocks like CLF and said:
“Well, I know I was, I was into the company today, trying to get them to come on tonight’s show. Now here’s the problem: Honestly, the steel stocks are the worst stocks in the market and I think that you could buy this stock and if you’re willing to take a point or two down, then I think it’s okay but you have to accept the fact that that’s exactly what could occur.”
3. Realty Income Corporation (NYSE:O)
Number of Hedge Fund Holders: 36
Discussing Realty Income Corporation (NYSE:O) during the episode, Cramer said:
“We also hear it from one of my favorite real estate investment trusts. I know boring I, you know what, I like making money. It’s never boring. Realty Income, letter O, I’m partial to this one because it pays a monthly dividend, which just got boosted earlier this week.”
Realty Income (NYSE:O) is a real estate investment trust (REIT) known for delivering monthly dividend payouts, focusing on net lease properties in various industries. A few weeks ago, when Cramer was asked about the company, he replied:
“I, I have been toying with the idea of owning Realty Income because they pay monthly checks. I think it’s a really, really good situation… Realty Income, I really like the idea.”
2. Coterra Energy Inc. (NYSE:CTRA)
Number of Hedge Fund Holders: 48
As per Cramer, Coterra Energy Inc. (NYSE:CTRA) is among the best oil and gas companies and he remarked:
“After the close, we get results from Coterra Energy. That’s one of the best oil and gas companies, which is why we own it for the Charitable Trust. With natural gas back up to $4… I think the future looks bright for this group.”
Coterra (NYSE:CTRA) is an independent oil and gas company dedicated to the exploration, development, and extraction of oil, natural gas, and natural gas liquids throughout the United States. Cramer was equally bullish on the company back in October 2024 when he said:
“… It’s the one I feel the most confident in. Why? Because it’s half oil, half nat-gas. And it’s a low-cost producer of oil, it’s the lowest-cost producer in the world [of] nat-gas. It can make money even at these levels. Tom Jorden is money. I think you buy the stock. I can’t believe that it’s still independent.”
1. Domino’s Pizza, Inc. (NASDAQ:DPZ)
Number of Hedge Fund Holders: 46
Cramer commented that Domino’s Pizza, Inc.’s (NASDAQ:DPZ) earnings would contain information on how consumers are doing and called the company’s CEO a “straight shooter”.
“Monday starts with Domino’s Pizza, DPZ, which could give us real insight into the possible weakening of the consumer. By the way, that’s the approximate cause of today’s hideous market. Right after the election, consumers experienced a surprising level of euphoria, but that seems to have dissipated. Now I gotta ask you something, is it, is it happening all over at economic levels? Is it just rich? Is it the poor? Is it the middle? Is it temporary? Why don’t we listen to Russell Weiner, the CEO of Domino’s? He’s a straight shooter. He’s gonna give us some real insight.”
Domino’s Pizza, Inc. (NASDAQ:DPZ) is an internationally known pizza brand that provides a wide range of products, including pizzas, oven-baked sandwiches, pasta, chicken, wings, bread, desserts, and beverages. The company runs its operations through domestic outlets, global franchise locations, and a supply chain segment.
While we acknowledge the potential of Domino’s Pizza, Inc. (NYSE:DPZ) 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 DPZ 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. This article was originally published at Insider Monkey.
