Jim Cramer, the host of Mad Money, recently shared his thoughts on the upcoming earnings season, emphasizing that investors should tread carefully and avoid making any big moves.
“When people think about an exciting time for stocks, they think of the next two weeks, that’s when some of the most important consequential companies on Earth report, practically at the same time. Throw in the actions of the new president and all I can say is, we’re not gonna have any idea what the heck we’re doing until we have time, probably at night to sift through all the data points and study all the conference calls.”
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Cramer stressed that the current week, in particular, is too difficult for snap judgments. He warned that the Federal Reserve’s decision on Wednesday will only add to the uncertainty. At one point, it seemed like the market could expect a rate cut, which would push stocks higher, but then Amex reported that its customers were spending at a rapid pace. He said:
“But when American Express says today that its millions of customers are spending like mad, the Fed can’t possibly give us a rate cut, can it?”
He added that if the Fed does lower rates on Wednesday, it would likely be because Chairman Jerome Powell has caved to President Trump’s demand for immediate cuts. In this complex situation, Cramer advised investors to just sit tight and not act, pointing out that it would be a “no-win situation” for Powell.
As if the pressure of earnings reports and the Fed’s decision were not enough, Cramer also noted that this week would feature the release of the Fed’s favored inflation measure, the Personal Consumption Expenditures (PCE) price index. However, Cramer does not expect good news, given the high level of consumer spending.
“The exhausting bottom line: Look it’s a sheer hell week. Our heads will be spinning, swivel-like, lazy Susan even, as each day you can expect a flood of earnings and a sound bite from President Trump that upsets whatever order there might be. Like I always say, don’t try to make decisions during this part of earnings season, just listen. It’s too hard and I don’t want you to lose money just because this is one of eight super exciting weeks of the year.”
Our Methodology
For this article, we compiled a list of 14 stocks that were discussed by Jim Cramer during the episode of Mad Money on January 24. 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).
14. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Cramer noted the possibility that big oil companies might increase drilling under pressure from President Trump, who would likely target larger companies like Exxon Mobil Corporation (NYSE:XOM).
“Finally, Friday brings numbers from oil giant Chevron and Exxon. I don’t wanna own the oils here because who knows if they cave to President Trump and start drilling like mad. I think they’re gonna stay disciplined but if Trump wants more drilling, do you think he’ll pick one of the little guys? No way. He’ll go straight to Exxon and Chevron.”
Exxon (NYSE:XOM) is involved in the exploration and extraction of crude oil and natural gas. The company’s Corporate Plan for 2030, announced in December 2024, aims to boost earnings by $20 billion and cash flow by $30 billion over the next six years, with a focus on achieving 10% earnings growth and 8% cash flow growth.
The company plans to generate $7 billion in cost savings by streamlining operations and modernizing systems. Exxon’s (NYSE:XOM) capital allocation strategy prioritizes high-return investments, including a $140 billion commitment to major projects and Permian Basin development, expected to yield returns over 30%. This focus on strong investment returns has led to 42 years of consecutive dividend growth.
13. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 63
Chevron Corporation (NYSE:CVX) operates globally in the energy and chemicals sector, focusing on oil and gas exploration, production, transportation, refining, and the manufacturing of renewable fuels and petrochemicals. Talking about the company, Cramer commented:
“Finally, Friday brings numbers from oil giant Chevron and Exxon. I don’t wanna own the oils here because who knows if they cave to President Trump and start drilling like mad. I think they’re gonna stay disciplined but if Trump wants more drilling, do you think he’ll pick one of the little guys? No way. He’ll go straight to Exxon and Chevron.”
Early January, Cramer talked about Chevron Corporation (NYSE:CVX), noting its 4.5% yield as of the end of last year. He pointed out that the stock has essentially remained unchanged for the past two and a half years, staying relatively flat since the peak of inflation through mid-2022.
“That’s happened amid declining or stagnant energy prices and some company-specific issues like a major deal to acquire Hess, which has languished for a few reasons, including a dispute with Exxon over certain international projects but I think it’s going to be hard to keep Chevron stock down for much longer. At the end of the day, I’m less sanguine than most about the oil industry under Trump because of “drill baby drill” policy and that means more supply and more supply translates of course to lower prices.
However, there will obviously be some benefits for the integrated oils from a new regime in Washington that’s infinitely more fossil fuel-friendly than the alkaline Biden White House. Chevron, it currently sells for less than 13 times this year’s earnings estimate, offering good value in a market [that] looks increasingly stretched in places and that nearly 4.5% yield, I don’t know that seals the deal for me.”
12. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 68
Cramer’s reluctance to own Intel Corporation (NASDAQ:INTC) was apparent as he said:
“Oh, Intel reports too. Let’s hope they have a way to raise cash. Different story than Apple. They need it. Their balance sheet’s heinous. You can’t own the stock until they fix it.”
Intel (NASDAQ:INTC) designs and manufactures computing products, including processors, memory, and artificial intelligence solutions. Recently, as Cramer discussed the company, he called it a “national treasure” and said:
“Intel is a national treasure people, it can’t be allowed to fail. Too dire a possibility? I don’t think so. Its balance sheet is a mess, its product line isn’t good enough, I don’t know if it can deliver on many of its promises to [the] government. Sure, nice guy messianic former CEO Pat Gelsinger is gone but so what? Intel needs a plan in 30 days, so the stock will keep coming down even after last year’s staggering 60% decline. Intel’s too big to be bought, too indebted to be finessed… The risk is existential.”
11. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
During the episode, Cramer talked about Apple Inc. (NASDAQ:AAPL), and here’s what he had to say:
“After the close, we have the most widely anticipated disappointment that I’ve ever seen. I’m about to be facetious. I want you to hear this. It’s facetious but here’s what we’re gonna hear. Let’s see. We have horrendous Chinese cell phone orders, no lift from new AI, a surprising slowdown in service revenues, lackluster Vision Pro sales, and of course, a radical chop to the forecast for the rest of the year, all way below the consensus. There, that’s everything I’ve heard about Apple for the last two weeks.
Since the year began, I just keep hearing that over and over again but if everyone knows it’s gonna be worse than expected, can it still be worse than expected? How could it be a surprise if everyone expects the worst and we get the worst? Will the stock still get clocked? Kind of, yeah because Apple’s priced for slightly better-than-expected set of numbers and we won’t get one but so why not dump it?”
Cramer advised against trading the stock, urging investors to hold onto it instead. He noted that Apple is an exceptional company with outstanding management and that any issues the company faces will eventually be addressed, even if the timing remains uncertain. Cramer emphasized that historically, it has been more beneficial to simply hold Apple stock rather than trying to trade it.
He also pointed out that his Charitable Trust has seen a remarkable performance with Apple (NASDAQ:AAPL) precisely because the company has control over its own future, which he said is easier to maintain when management is excellent and products are of the highest quality.
10. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 50
Ahead of Caterpillar Inc.’s (NYSE:CAT) announcement of its fourth-quarter and full-year 2024 financial results on January 30, Cramer said:
“Thursday morning starts with Caterpillar, which is a conference call stock, meaning you can’t make a decision until you hear the call because that’s where you learn about the future. I think the stock’s had an amazing run, but CAT’s no longer a cyclical, it’s a secular grower because CEO, Jim Umpleby has maneuvered its business into more consistent end markets.”
Caterpillar (NYSE:CAT) is a leading global manufacturer and seller of heavy machinery and equipment, focusing on industries like construction, mining, and transportation. Previously, Cramer has called CAT a “Great Fed rate cut stock”. On January 13, analysts at financial services firm Evercore ISI upgraded the company stock from an Underperform rating to In Line following a survey of dealers in the construction equipment and heavy machinery sectors.
David Raso, managing director and analyst at Evercore ISI, noted in a January 12 report that “Caterpillar (NYSE:CAT) is somewhat relying on price to move equipment, but it’s generally working.” He added that Caterpillar dealers’ six-month sales and purchasing forecasts are above the industry survey’s average. Additionally, Evercore ISI found that while new inventory remains above the industry average, it is gradually declining. However, used inventory has increased, which they attribute to weaker pricing for both new and used equipment compared to the industry survey’s average.
9. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 99
Cramer highlighted that Tesla, Inc. (NASDAQ:TSLA) has been called an “AI ETF” and suggested owning the stock.
“Alright, then there’s Tesla. Now I think Elon Musk, get this, I think he could sell tickets to this conference call. He could command a thousand dollars, easy. The last time Tesla reported, missed numbers badly and then it proceeded to have one of the biggest runs ever. Just soared right when it reported that number, and I’ve gotta tell you, I figured it out. Actually, Morgan Stanley’s, Adam Jonas figured it out for me. He calls Tesla, after that quarter, an AI ETF. People want an IETF so they buy the stock no matter what, especially if it’s down the next day. I want you to own Tesla. Just own it.”
After the election results came out in 2024, Cramer argued in favor of investing in Tesla (NASDAQ:TSLA), a leading company in the electric vehicle and energy sector, stock, emphasizing that the appeal lies not in President-elect Donald Trump’s potential easing of U.S. self-driving regulations, but in the leadership of CEO Elon Musk. He commented:
“While I don’t buy the national self-driving mandate, I think nothing truly dulls the case for owning Tesla. The Musk premium will work its magic in other ways, perhaps favorable municipalities and Tesla rentals next to federal highways.”
8. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Cramer posited that Meta Platforms, Inc. (NASDAQ:META) will reveal “visceral, raw dominance” when it reports its fourth quarter and full year 2024 results on January 29.
“The second wild card, Meta Platforms. I think the company will talk about dominance, visceral, raw dominance, both on the top and the bottom line. Lookout, TikTok, you think you’re so darn hot, but Mark the Hunter Zuckerberg has you in his sights. I for one am glad that Zuckerberg’s an American.”
Meta (NASDAQ:META), a worldwide leader in digital connectivity, has established itself as a key influence in shaping the way people communicate and share information online. The company set expectations for its fourth-quarter 2024 total revenue to fall between $45 billion and $48 billion. According to management, two main factors contribute to the company’s revenue performance: its capacity to provide engaging experiences for users and its ability to effectively monetize that engagement over time.
In terms of future growth, Meta (NASDAQ:META) is focusing heavily on generative AI. The company plans to significantly scale its infrastructure capacity while also prioritizing its fungibility. The company expects its capital expenditures for 2024 to range from $38 billion to $40 billion, slightly adjusted from the prior range. The company anticipates continued growth in capital expenditures in 2025.
7. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
Talking about the prominent technology company, Microsoft Corporation (NASDAQ:MSFT), Cramer said:
“How about two wild cards? First is Microsoft. Now, this has become a battleground stock because its aggressive data center build-out, so far failed AI PC, got a call ‘em as I see ‘em, a possible fallout with OpenAI, and the possibility that Copilot is nothing but Clippy 2, yes, that little paperclip that almost ruined Microsoft Office in the late nineties. I keep trying to figure out how CFO Amy Hood can be positive on her part of the conference call, which is really frankly the only part of the conference call that matters because she handles the guidance.
And the guidance is the guidance. We pared this one back for the Charitable Trust and if it weren’t for the fact that Microsoft has an installed base to meet demand, I have to tell you, we would’ve sold our entire position.”
For fiscal Q2 2025, Microsoft (NASDAQ:MSFT) expects Azure cloud services to grow by 31% to 32%, slower than the previous quarter’s 34%. The Intelligent Cloud segment is projected to see an 18% to 20% revenue increase year-over-year. Additionally, AI product sales are expected to remain steady, with Microsoft optimistic that Azure will gain momentum in the second half of the fiscal year due to new data center investments.
6. ServiceNow, Inc. (NYSE:NOW)
Number of Hedge Fund Holders: 78
Cramer urged his viewers to tune in to ServiceNow, Inc.’s (NYSE:NOW) earnings release and suggested buying the stock after hours.
“Now, same goes for ServiceNow. Now, ServiceNow, let’s listen to this. This is the quarter where ServiceNow will report a number that sends the stock down in after-hours trading and you have to buy it right then and there because it will rally huge at the opening the next day, Thursday. Time and time again this happens, it goes down after the evening report. Why? It’s pushed down by short sellers trying to keep it down and then it opens up gigantically when the shorts again are routed the next day.
ServiceNow doesn’t even know how to miss. Set your clock to this one at least until some company actually attempts to compete with their artificial intelligence savvy. Buy that dip and I almost never advise buying after hours, but I’m doing it right now for ServiceNow.”
ServiceNow (NYSE:NOW) is a top provider of digital solutions that assist businesses in automating workflows and improving operational efficiency across various enterprise functions. Previously, Cramer highlighted the growing interest in expensive enterprise software stocks, noting that companies selling software to large businesses are well-positioned in the current market. He praised ServiceNow (NYSE:NOW) for using AI to improve enterprise workflows and added:
“At the CNBC Investing Club meeting, Jeff Marks and I talked about which companies could be helped or hurt by Trump 2.0. Enterprise software, it came out unscathed. I think that should put a premium on enterprise software stocks. But at this point, enough is enough. I say let ’em come down and then you can buy.”
5. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 66
Cramer mentioned T-Mobile US, Inc. (NASDAQ:TMUS) during the episode. Here’s what Mad Money’s host had to say:
“At least Wednesday starts with a predictable, which is T-Mobile’s earnings. Lately, the stock’s been beaten down. That’s precisely… that’s the best setup for the stock if you want a post-quarter rally.”
T-Mobile US (NASDAQ:TMUS) is a leading telecommunications provider that delivers a variety of services, such as voice, messaging, and data plans, to millions of customers. In November 2024, Cramer praised the company as he said:
“If you want a wireless carrier, the outfit that’s taken the market by storm, the best value is T-Mobile, which is why they seem to report great numbers every quarter. T-Mobile has the best retention, the lowest churn… They were the ones that said Apple sales are good, plus CEO, Mike Sievert hates to lose. That is a great quality in a chief executive officer.”
4. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 76
Cramer expressed faith in Starbucks Corporation’s (NASDAQ:SBUX) CEO and mentioned that the stock might be worth buying after the earnings call.
“After the close, we hear Brian Niccol lay out his vision for Starbucks. Now, we own the stock for the Charitable Trust, and I think it might be worth buying after we hear the new plan. I believe in Brian, he did an incredible job turning around Chipotle and I bet he can do the same thing with Starbucks.”
Starbucks (NASDAQ:SBUX) is a prominent global player in coffee roasting, marketing, and retail, offering a diverse range of beverages, beans, and food items across its stores. On January 27, Stifel analyst Chris O’Cull increased the price target for the stock to $114 from $110 while maintaining a Buy rating on the stock. The firm has a positive outlook, particularly if investors can purchase shares at a discount due to concerns over coffee tariffs. O’Cull believes Starbucks shares are likely to rise as U.S. comparable sales show improvement, which Stifel anticipates will become evident in the coming months.
Recently, Starbucks’ (NASDAQ:SBUX) Chairman and CEO, Brian Niccol, outlined the company’s ongoing transformation efforts aimed at revitalizing the brand. The focus has been on improving the in-store experience. Marketing has shifted from discounts to emphasizing the brand’s story and coffee expertise, while pricing transparency has been improved by eliminating non-dairy milk upcharges.
Additionally, the company has set a goal of reducing wait times to four minutes and extended coverage hours in over 3,000 stores. The company also aims to promote 90% of retail leadership roles internally within three years. While the initial focus has been on U.S. and Canadian stores, the company is now looking at the global role, structure, and size of its support teams to further its transformation.
3. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 64
Cramer commented on the well-known global automotive manufacturer, General Motors Company (NYSE:GM), as he said:
“Tuesday morning, we hear from General Motors, which delivers usual great numbers and after a nice opening, it will drift down and remain one of the cheapest stocks of the S&P because, in the end, it sells cars and the market only has eyes for one automaker, Tesla and that’s got nothing to do with the car business.”
Today, General Motors (NYSE:GM) reported strong financial performance for the full year 2024, posting a net income attributable to shareholders of $6.0 billion and EBIT-adjusted of $14.9 billion. For the fourth quarter, the company achieved operating profits of $2.5 billion and adjusted EPS of $1.92, which was a 55% increase compared to the previous year and exceeded analyst expectations.
The company also saw an 11% increase in quarterly revenue, reaching $47.7 billion, surpassing estimates. In General Motors’ (NYSE:GM) Q4 2024 shareholders’ letter, CEO Mary T. Barra highlighted the significant growth GM achieved throughout the year. The company’s full-year revenue grew by 9%, and GM led the U.S. market in total, retail, and fleet deliveries. GM also expanded its market share while effectively distancing itself from industry pressures related to pricing, incentives, and inventory.
2. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 59
Cramer mentioned AT&T Inc. (NYSE:T) during the episode as he said, “AT&T reports too and given that Verizon, it didn’t stink up the joint, I have to think AT&T will be fine.”
AT&T (NYSE:T) provides a wide range of telecommunications and technology services, including wireless voice and data, broadband, cloud solutions, and managed services. On January 27, the company reported strong Q4 results, with adjusted earnings of $0.54 per share and $32.3 billion in revenue, exceeding expectations. CEO John Stankey attributed these results to consistent execution by the company’s teams over the past several years.
In addition to the strong quarterly performance, AT&T (NYSE:T) exceeded all its full-year targets, with mobility service revenue rising by 3.5%, broadband revenue increasing by 7.2%, and free cash flow totaling $17.6 billion. The company also added 482,000 net postpaid phone subscribers in Q4, marking the best result in this category for the company in over a year. Additionally, the company saw significant growth in its fiber services, with 307,000 new fiber service additions in the quarter.
1. SoFi Technologies, Inc. (NASDAQ:SOFI)
Number of Hedge Fund Holders: 31
Discussing SoFi Technologies, Inc. (NASDAQ:SOFI) during Mad Money’s episode, Cramer said:
“… we hear from fan-favorite SoFi on Monday morning. Now, I’ve been championing this fintech company and CEO Anthony Noto for ages, but it was one of the most heavily shorted stocks out there and they’ve been keeping it down for no reason. I expect good numbers and the shorts are going to continue to be routed.”
SoFi (NASDAQ:SOFI) offers a variety of services, such as lending, banking, insurance, and investment options, all available through a unified online platform. The company reported strong financial results for Q4 2024, with net revenue reaching $734 million and net income of $332 million, which showed solid growth and robust returns. The company saw a significant 24% increase in adjusted net revenue, driven by a combined 52% growth in its Financial Services and Tech Platform segments. These segments now account for 49% of SoFi’s total adjusted net revenue.
SoFi’s (NASDAQ:SOFI) performance in 2024 was also marked by a 34% increase in its member base and a 32% rise in the number of products offered, both of which were driving contributors to its growth. The company achieved a record fee-based revenue of $289 million, which grew by 63%, further emphasizing the strength of SoFi’s shift toward higher return on equity revenue streams. Anthony Noto, CEO of SoFi Technologies stated, “2024 was SoFi’s best year ever.”
While we acknowledge the potential of SoFi Technologies, Inc. (NASDAQ:SOFI) 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 SOFI 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.
