Jim Cramer, host of Mad Money, recently weighed in on the factors that will shape market movements this week, pointing to the Federal Reserve’s upcoming meeting and a slew of corporate earnings reports as key developments. However, despite the importance of these earnings, Cramer believes that the presidential election will take center stage and dominate the market’s attention.
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While acknowledging the significance of the election, Cramer emphasized that the Federal Reserve’s next decision is perhaps even more crucial for the markets. He noted that the bond market has been moving in an unfavorable direction, with the situation further complicated by a disappointing non-farm payroll report.
Though this report was skewed by hurricanes and labor strikes, it initially sparked a positive reaction in the bond market, pushing rates lower. Cramer had hoped that this would signal a positive shift, but the optimism was short-lived, as bond sellers quickly drove rates back up to their highest levels since early July.
“In my opinion, the Fed needs to cut rates again. In the last couple weeks, we’ve heard from too many businesses that have made it clear that we have a real slowdown on our hands. Economy’s a little shaky.”
Cramer also reflected on the Fed’s decision to reduce rates in September. He acknowledged that the bond market reacted negatively to the rate cuts at the time despite an economy that appeared relatively strong and a healthy labor market. Cramer discussed the possibility that if the Fed were to cut rates again, the market could see another unfavorable response. However, he remained unconcerned about this potential backlash, arguing that a rate cut could help to generate optimism in certain sectors.
“At this point in my view, if the Fed cuts rates next week, psychologically there’s some hope that we could see a pickup, particularly in housing and autos, two industries that seem to be losing strength by the day.”
Cramer highlighted that both presidential candidates appear willing to expand the federal budget. His main concern, however, was whether either candidate would be able to push their proposed agendas through Congress, a process he described as extremely difficult. Cramer noted that, in his opinion, presidential candidate Trump would likely be a bigger proponent of increasing the budget deficit than presidential candidate Harris, particularly due to the tax cuts Trump favors, which tend to result in larger deficits.
Stating his bottom line, Cramer said:
“… At the end of the day, the market’s still going to be hostage to the election, and perhaps more important, to the Fed meeting.”
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 November 1. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 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 Latest Game Plan: 15 Stocks to Watch
15. Fluor Corporation (NYSE:FLR)
Number of Hedge Fund Holders: 30
Cramer mentioned that Fluor Corporation (NYSE:FLR) is set to report on November 8 and said:
“Finally on Friday, here’s a company I haven’t talked about in about maybe 30 years, we hear from Fluor… It’s an engineering construction company that I’m actually starting to hear good things about. Makes sense, given all the infrastructure spending over the past couple of years.”
According to S&P Global, infrastructure spending is expected to increase in 2024, with around $1.8 trillion in federal grants, loans, incentives, tax credits, and other financial assistance being directed into the U.S. economy.
Fluor (NYSE:FLR) is a global provider of engineering, procurement, and construction services, serving a variety of industries through its diverse business segments. In energy solutions, it supports sectors like chemicals, liquefied natural gas (LNG), nuclear project services, and production and fuels. The company’s urban solutions division caters to advanced technology, infrastructure, life sciences, and mining and metals sectors.
In October, it was announced that the company, as part of a joint venture, had been approved by the U.S. Department of Energy (DOE) to begin work on the Hanford Integrated Tank Disposition Contract. The contract, with an estimated ceiling of $45 billion over a 10-year period, involves environmental management operations at the Hanford Site in Washington state. The company is set to recognize its share of earnings from this contract beginning in the fourth quarter of 2024.
On October 22, TipRanks reported that Citi upgraded Fluor (NYSE:FLR) to Buy from Neutral with a price target of $65, up from $52. The firm noted that the company’s backlog has increased in recent quarters and its execution continues to improve. It also highlighted the company’s equity stake in Nuscale Power, which Fluor holds 50% of, suggesting that it could monetize hundreds of millions of dollars from this investment. The analysts expect the company’s book-to-bill ratio to strengthen as 2025 approaches, indicating further positive momentum for the company in the near future.
14. Ferrari N.V. (NYSE:RACE)
Number of Hedge Fund Holders: 30
Calling Ferrari N.V. (NYSE:RACE) “the king of vehicles”, Cramer said:
“I’m actually talking about Ferrari, which is a monster of a stock. Everything luxury, and I mean everything, has been doing poorly because of China. See, it doesn’t matter for Ferrari because Ferrari’s more of an American stock. It would be shocking if it didn’t have more upside surprise. People keep betting against it, that’s been a sucker’s bet.”
Ferrari (NYSE:RACE) is a renowned Italian company engaged in the design, engineering, production, and global sale of luxury performance sports cars. Known for its high-performance vehicles, it offers a diverse lineup that includes special series, Icona models, supercars, limited-edition cars, and bespoke one-off creations. The company also manufactures racing cars and provides a wide range of after-sales services, such as repair, maintenance, and restoration.
In its third-quarter earnings report, released on November 5, the company revealed a 12.5% increase in adjusted earnings, reaching €2.02 per share, which slightly exceeded analysts’ expectations of €1.99 per share, as reported by Barron’s, citing data from FactSet. The company’s net revenue for the quarter came in at €1.64 billion, aligning with Wall Street’s forecast.
However, Ferrari (NYSE:RACE) faced a slight dip in shipments, with a 2% decrease in the total number of cars delivered compared to the same period last year, amounting to 3,383 vehicles. The decline in shipments was particularly sharp in mainland China, Hong Kong, and Taiwan, where sales dropped by 29% year-over-year. The slowdown in these markets has been attributed to ongoing challenges in China, where efforts to revive growth after the stringent zero-COVID lockdowns have been sluggish, leading to weaker demand for luxury products.
Despite these challenges, the company has largely been able to weather the downturn in its key markets, and its stock price had largely remained resilient prior to the earnings report. The company reaffirmed its guidance for the full year, projecting that annual sales would grow by more than 9%, reaching approximately €6.55 billion by the end of 2024, a forecast it initially issued in August.
13. Affirm Holdings, Inc. (NASDAQ:AFRM)
Number of Hedge Fund Holders: 34
Cramer discussed affiliate plays, noting that he believes they occupy a strong niche for advertisers aiming to reach hard-to-target audiences. He also mentioned that he thinks that Affirm Holdings, Inc. (NASDAQ:AFRM) will report similar great numbers as Reddit.
“… and Affirm drops this numbers too. And we know this buy now pay later enabler has been crushing it. Stock’s been almost straight up since it reported last time.”
Affirm (NASDAQ:AFRM) is a fintech company that specializes in providing Buy Now, Pay Later (BNPL) services, offering consumers flexible and transparent repayment options. The company’s core product allows consumers to make purchases immediately and pay over time in installments. Its model gives borrowers more control and transparency over their debt, with loans underwritten on a per-transaction basis.
Unlike many of its competitors, it does not charge late fees, and if borrowers opt for a longer repayment period, the company applies simple interest, rather than the more common compound interest. Founded with the goal of helping businesses increase sales while offering consumers responsible spending solutions, the company has grown to become a leader in the BNPL space. It partners with a range of major retailers, including e-commerce giants like Shopify and Amazon, and has more than 18.6 million users.
It also serves over 303,000 merchants. The company generates revenue from both interest-bearing loans and merchant fees, and it has seen significant growth in the number of transactions processed through its platform. One of its key innovations is the Affirm Card, launched in 2021, which allows users to split payments into BNPL loans either at the time of purchase or retroactively. This card has been well-received, attracting around 1.2 million users.
Affirm (NASDAQ:AFRM) has also expanded its services through partnerships with major players like Apple, which teamed up with Affirm for its BNPL offering in 2024. Additionally, in November, it was announced that it is continuing its expansion beyond its domestic market, with plans to offer its fast-credit options in the UK, marking a significant step in its international growth strategy. The move to the UK reflects the company’s ongoing push to increase revenue and reach more consumers globally.
12. Arm Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Holders: 38
Discussing Arm Holdings plc (NASDAQ:ARM), Cramer highlighted how the semiconductor industry is presently “mood dependent”. It is set to report its second quarter earnings report of fiscal year 2025 on November 6.
“After the close, Arm Holdings reports. Now, this chip architecture play is tightly linked with Apple, but Arm’s IP is everywhere. I think it prints an excellent number, but you know what? That might not matter to this particular stock market if it’s in a bad mood day because the semis has suddenly become mood-dependent, not earnings-dependent. We also wanna know about Arm’s lawsuit with Qualcomm. Seems very nasty.”
Arm Holdings (NASDAQ:ARM) is a prominent player in the semiconductor industry, known for designing and licensing central processing unit (CPU) products and related technologies. Although the company does not manufacture chips itself, its designs serve as the foundation for semiconductor companies and original equipment manufacturers (OEMs), who then customize these designs to meet specific needs.
Its business model revolves around licensing its CPU architectures and collecting royalties on every product sold that incorporates its designs. According to the company, approximately 280 billion products incorporating its technologies have been shipped. The company’s influence extends beyond traditional markets, as it is gaining traction in the personal computer (PC) and data center sectors.
The company’s flexible business model allows its clients to optimize chips for specific applications, contributing to its growing footprint in these areas. CEO Rene Haas has expressed confidence that the company could capture 50% of the Windows PC market within the next five years.
As reported by Bloomberg, Arm Holdings (NASDAQ:ARM) has issued a 60-day notice to Qualcomm, signaling its intent to cancel its architectural license agreement, which allows Qualcomm to create its own chips based on Arm’s standards. This move is part of a broader dispute that began in 2022, when the company sued Qualcomm for breach of contract and trademark infringement.
The disagreement centers around Qualcomm’s 2021 acquisition of Nuvia, another Arm licensee, and Arm’s contention that Qualcomm failed to renegotiate contract terms following the acquisition. Qualcomm, on the other hand, argues that its existing agreement still covers Nuvia’s activities. Both companies are set to face off in court to resolve the matter.
11. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 39
Cramer likes Cloudflare, Inc. (NYSE:NET) and commented:
“Now we get results from Cloudflare too. This is a network security play we’ve had on quite a bit. I think it’s got a great setup.”
Cloudflare (NYSE:NET) offers a broad range of cloud-based services focused on security, performance, and connectivity. The company provides integrated security solutions and also delivers performance tools, alongside network connectivity products and cloud-based network-as-a-service solutions. Additionally, it offers products geared toward developers, including edge computing services that use AI accelerators to bring computing closer to end users.
While the company is not specifically an AI-focused company, its infrastructure plays an important role in supporting the growing AI sector through its cybersecurity and network acceleration capabilities. In recent months, the company has made several strategic moves to strengthen its offerings. In October, it announced the acquisition of Kivera, a cloud security and compliance platform. This acquisition is expected to advance the Cloudflare One platform by embedding preventive security controls directly into the cloud deployment process, making it faster, simpler, and more secure.
Cloudflare One platform is known for providing single-vendor Secure Access Service Edge (SASE) and Security Service Edge (SSE) solutions. Organizations around the globe trust Cloudflare One to provide secure access to the web, SaaS, and private applications or infrastructure, protect against cyber threats, and ensure strong data security across their networks.
Earlier in May 2024, the company also acquired BastionZero, a company specializing in Zero Trust infrastructure access. This acquisition expands the capabilities of Cloudflare One by providing a VPN replacement solution that secures both applications and infrastructure resources.
Cloudflare (NYSE:NET) has experienced strong demand across its suite of services. According to Wells Fargo in October, while the security reselling and distribution space saw a downturn in the third quarter, it was one of the companies that showed continued strength, with a 31% net increase in demand.
This positive performance was driven by the overall demand for products like SASE, CDN, and cloud security. Despite some increases in discounting, the company’s offerings have continued to resonate in the market, even in a relatively weak environment for security resellers.
10. Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
During Friday’s Mad Money episode, Cramer talked about Palantir Technologies Inc. (NYSE:PLTR), calling it a cult stock. Here’s what he had to say:
“Palantir stock is one of the best performers of the S&P 500 this year. The cult members who own the stock, they seem eager to push it up to exceed the 2024 percentage gain of Nvidia. Right now, Nvidia’s up 173%, Palantir’s 144%, so it will require some heavy lifting. Now they could pull it off. If the stock gets hit on its numbers, I want you to buy some… It’s insane to watch these buyers by the way… who don’t really care how company’s doing. They just buy the stock because they want it to go higher.”
Palantir (NYSE:PLTR) is a leading developer of software platforms focused on complex data integration and decision-making, serving the intelligence and government sectors and also commercial clients. The company’s product suite includes platforms such as Gotham, Foundry, Apollo, and its enhanced Artificial Intelligence Platform (AIP), which are designed to help organizations manage and make sense of vast amounts of data. On September 23, the company achieved a significant milestone when it joined the S&P 500 index.
The company is earning a strong reputation for its ability to address intricate data management needs across both government and commercial domains, providing solutions that enable better decision-making and operational efficiency. In recent quarters, it has placed significant emphasis on expanding its AI offerings. This has proven to be a key driver for the company, particularly in the U.S. market.
Palantir’s (NYSE:PLTR) focus on AI has been central to its strong performance in the third quarter and the results were reported on November 4. The company reported Q3 revenue of $726 million, surpassing its initial guidance of $703 million. Adjusted EPS for the quarter was $0.10, outperforming the $0.09 consensus estimate.
The company ended the quarter with $4.6 billion in cash, cash equivalents, and short-term investments, with no long-term debt. In a statement accompanying the earnings report, CEO Alex Karp highlighted the company’s success, particularly in the AI sector, stating that the demand for AI is “unrelenting” and that the U.S. is at the heart of an AI revolution.
He noted that the company aims to empower those organizations that lead this transformation, positioning the company as a key player in a world increasingly divided between those who can harness AI and those who cannot.
9. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 47
Cramer highlighted Super Micro Computer, Inc.’s (NASDAQ:SMCI) troubles with its auditors and hinted at what it could mean for the company.
“Now, the most intriguing story coming out next week is Super Micro. We know this company is on the firing line after its auditor, Ernst & Young, resigned noisily this week because they couldn’t swear by the numbers and no longer trust management. It’s suboptimal. I have no idea what Super Micro is gonna say. I do know this, ever since Ernst & Young resigned, one of Super Micro’s key competitors, Dell has seen its stock march relentlessly higher. I think that’s pretty ominous for Super Micro.”
Super Micro (NASDAQ:SMCI) is a company that specializes in the development and manufacturing of high-performance server and storage solutions. The company designs and assembles servers and rack systems for its clients in areas such as AI and data storage. One of the company’s distinguishing features is its early adoption of direct liquid cooling (DLC) technology for servers. This is especially important for AI-powered servers, which generate significant heat and consume large amounts of energy.
DLC provides an effective solution to keep these systems cool and operational, making it a preferred choice for enterprises seeking efficient, high-performance systems. The company recently reported a surge in demand for its products, particularly in the AI sector. The company now ships over 100,000 graphics processing units (GPUs) per quarter, which are critical for AI applications.
However, Super Micro (NASDAQ:SMCI) has faced some challenges recently. In September, the Wall Street Journal reported that the company’s accounting practices were under investigation by the Department of Justice (DOJ), which caused a significant drop in the company’s stock value. This negative momentum was further compounded when Ernst & Young, the company’s auditor, resigned.
The accounting firm cited concerns about the company’s governance, transparency, and internal controls as the reasons for its departure. Ernst & Young, which had begun auditing the company earlier in the fiscal year, stated that it was “unwilling to be associated with the financial statements prepared by management.”
In response, the company disagreed with the concerns raised by Ernst & Young and expressed confidence that no restatements would be necessary for its financial reports. The company is currently in the process of finding a new accounting firm to continue its audit.
8. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 56
DraftKings Inc. (NASDAQ:DKNG) is set to report its third-quarter results on November 7. Cramer called it a “terrific story”.
“DraftKings also reports after the bell. And you know, you might be shocked to find out that there’s gambling going on here. I think it’s a terrific story and a very good investment.”
DraftKings (NASDAQ:DKNG) is a leading digital sports entertainment and gaming company, providing a range of online products and services. The company offers online sports betting, casino games, daily fantasy sports, and retail sportsbooks. In addition to its consumer-facing offerings, it develops and supplies sports betting and casino gaming software for online and retail sportsbooks, as well as iGaming operators.
The U.S. sports betting market has seen rapid growth in recent years, with Goldman Sachs Research projecting that Americans could spend $45 billion annually on sports betting once the market matures. Since 2018, sports betting in the U.S. has evolved into a $10 billion industry. As of Q2, the company reported 3.1 million monthly unique players, indicating substantial potential for further user growth.
DraftKings (NASDAQ:DKNG) has been actively expanding its presence in other sectors of the gaming industry, largely through acquisitions. In 2022, the company acquired Golden Nugget Online Gaming to strengthen its position in the iGaming market, a move that has already proven beneficial. During the last earnings call, management highlighted that in a recent third-party survey, the DraftKings and Golden Nugget apps were ranked No. 1 and No. 2 in iGaming.
Additionally, the company made another acquisition in 2024, purchasing the digital lottery platform Jackpocket. This move is aimed at capitalizing on the expanding lottery market, with management expecting Jackpocket’s integration to positively contribute to EBITDA by 2025.
As DraftKings (NASDAQ:DKNG) continues to grow and expand into new markets, the company is also addressing the challenges posed by high-tax states. For states with multiple sports betting operators and tax rates exceeding 20%, including Illinois, the company intends to introduce a gaming tax surcharge starting January 1, 2025.
7. Builders FirstSource, Inc. (NYSE:BLDR)
Number of Hedge Fund Holders: 59
Talking about Builders FirstSource, Inc.’s (NYSE:BLDR) Q3 report, Cramer said:
“Tuesday, we’ll hear from Builders FirstSource, the big distributor of housing supplies, and I bet they tell you the same thing I just said a few minutes ago: they need rates to go lower to have a lot of business to be reignited.”
Builders FirstSource (NYSE:BLDR) is a prominent manufacturer and supplier of building materials in the U.S. construction industry. The company offers a diverse range of products and services, including manufactured components and construction services, primarily targeting professional homebuilders, subcontractors, remodelers, and individual consumers. On November 5, it released its third-quarter earnings results, revealing a 6.7% drop in net sales, which totaled $4.2 billion.
This decline was largely attributed to a combination of lower core organic sales and commodity deflation, though the impact was partially offset by growth from acquisitions and an additional selling day during the quarter. Net income for the period fell by 36.9%, coming in at $284.8 million, or $2.44 per diluted share, compared to $3.59 per diluted share in the same quarter of the previous year.
Builders FirstSource (NYSE:BLDR) CEO Dave Rush remarked on the company’s acquisition activity, stating that the six acquisitions during the quarter are part of the company’s ongoing efforts to expand its portfolio of value-added offerings, which aim to strengthen its margins and improve overall financial performance.
During the earnings call, management said that the initial response to the Federal Reserve’s first interest rate cut in September has been mixed, with some homebuyers choosing to stay on the sidelines, awaiting further rate cuts as mortgage rates continue to fluctuate in the short term.
6. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 60
Cramer highlighted CVS Health Corporation’s (NYSE:CVS) new CEO and said:
“Wednesday CVS reports and we’ll learn about new CEO David Joyner’s turnaround plans, we hope. He’s got some real heavy lifting to do because CVS has a very jumbled set of assets. I’m rooting for him. Poor guy needs all the help he can get.”
CVS Health (NYSE:CVS) offers a wide range of health solutions in the U.S., including health insurance products and services, pharmacy benefit management, and pharmacy services. It serves diverse customers, such as employer groups, individuals, health plans, and government programs. Additionally, the company sells prescription drugs, and over-the-counter products, and provides consulting services to healthcare facilities.
However, the company has faced multiple challenges these few past years, marked by slow revenue growth and declining stock performance. Since January, the company’s shares have dropped by over 32%. This downturn is partly attributed to rising labor costs, both at the corporate level and in pharmacy operations. The healthcare benefits segment, which includes Aetna, has also struggled due to higher healthcare costs and increased utilization.
According to the company, there was a notable increase in its Medical Benefit Ratio (MBR) in the most recent quarter, and it cited higher Medicare Advantage utilization, lower Star ratings, and greater Medicaid acuity as key factors.
In light of these difficulties, CVS Health (NYSE:CVS) announced a significant leadership change in October 2024, appointing David Joyner as President and Chief Executive Officer. This change coincided with the company’s decision to withdraw its 2024 earnings forecast and disclose that its third-quarter profits would fall well below analysts’ expectations, which led to further declines in its stock price.
As reported by Bloomberg News, in an internal memo to employees, Joyner acknowledged the challenges facing the company and called for financial and operational improvements to ensure the company’s continued leadership in the healthcare industry. According to Reuters, Joyner has highlighted his previous experience at Aetna, where he addressed similar issues, and expressed confidence in his ability to navigate the current difficulties and drive the company forward.
5. Pinterest, Inc. (NYSE:PINS)
Number of Hedge Fund Holders: 61
Talking about Pinterest, Inc. (NYSE:PINS), Cramer said that affiliate plays have the potential to advertise to hard-to-reach audiences.
“Pinterest reports and it’s coming on the heels of an amazing quarter from Reddit. Maybe there’s new money coming toward Pinterest too. These are affiliate plays that are, I think, have a great niche market for advertisers trying to reach hard to get people.”
Pinterest (NYSE:PINS) operates as a visual search and discovery platform, designed to help users find, save, and share ideas across a wide range of interests, from recipes and home décor to fashion and DIY projects. The platform’s primary function is to allow users to explore, save, and shop these ideas, creating a user-powered cycle that fuels its advertising algorithms.
This user-generated content makes its first-party ads effective. One of the key features of the platform is its ability to showcase “shoppable” pins, allowing users to purchase products directly from pinboards. This feature has made the platform particularly attractive to retailers, many of whom have uploaded their entire product catalogs to Pinterest.
In 2023, Pinterest expanded its advertising approach by partnering with Amazon and Google’s parent company, Alphabet, allowing third-party demand alongside its exclusive first-party advertising model. As CEO Bill Ready mentioned during the Q2 earnings call, Pinterest is still in the early stages of integrating third-party ads into its platform.
In the second quarter of 2024, Pinterest (NYSE:PINS) reported a 12% year-over-year increase in Global Monthly Active Users (MAUs), reaching 522 million users. In the future, the company seeks to become a key player in e-commerce. It has made significant strides in this direction by using AI-powered algorithms to recommend relevant shoppable content to users based on their preferences. This personalized approach helps encourage user engagement and purchasing behavior.
4. Arista Networks, Inc. (NYSE:ANET)
Number of Hedge Fund Holders: 65
Calling Arista Networks, Inc. (NYSE:ANET) stock a buy, Cramer remarked:
“The best networking story to own out here is Arista. That’s right. It’s a hyperscaler helper and it makes network switching equipment that’s ubiquitous in the data center. It reports after the close Thursday and it is a buy.”
Arista (NYSE:ANET) provides networking solutions for data centers, campuses, and routing, including AI-driven switches and software for automation, monitoring, and security. It offers post-sales support and serves industries like internet, finance, and telecommunications through various sales channels. Network switching equipment is hardware used to manage and direct data traffic within a computer network.
According to the company, it serves over 10,000 customers globally, with a total of 100 million ports deployed worldwide. In June, the company introduced a new product called the Etherlink AI platform. This platform is designed to be fully compatible with a specific standard for Ethernet, which is a type of network connection. Essentially, it helps different types of network equipment work together more easily.
During its Q2 earnings call, Arista (NYSE:ANET) management highlighted that the company is positioned as a pure-play networking innovator, with a total addressable market (TAM) exceeding $70 billion. The company also emphasized that 2024 is expected to be a year marked by the introduction of new products, the acquisition of new customers, and expanded use cases for its solutions.
For 2024, it set its revenue growth guidance for 2024 at a minimum of 14%. Additionally, the company’s gross margin outlook is forecasted to remain between 62% and 64%, while its operating margin projection has been raised to approximately 44%.
3. Constellation Energy Corporation (NASDAQ:CEG)
Number of Hedge Fund Holders: 71
Cramer mentioned his love for nuclear power and also called Constellation Energy Corporation (NASDAQ:CEG) a cult stock.
“We’ve all fallen in love with nuclear power and that means we like Constellation Energy. I’ve been recommending this stock for years, but I think it’s become a cult stock and it doesn’t matter what they have to say.”
Constellation Energy (NASDAQ:CEG) operates in the U.S. energy sector, focusing on generating and selling electricity. The company offers a range of products, including natural gas and various energy-related solutions, while also emphasizing sustainable practices. Its generating capacity includes a mix of nuclear, wind, solar, natural gas, and hydroelectric resources, catering to a broad customer base that includes distribution utilities, municipalities, cooperatives, and a wide range of commercial, industrial, governmental, and residential clients.
In the third quarter, the company reported a significant increase in its GAAP net income, achieving $3.82 per share, compared to $2.26 per share during the same period the previous year. The company’s focus on reliable and carbon-free generation was evident as it produced over 41 million megawatt-hours from its nuclear facilities, achieving an impressive capacity factor of 95%. Similarly, the performance of its renewable and natural gas assets was noteworthy, with a 96% capture rate for renewable energy and a power dispatch matching rate of 98.2%.
A highlight of the quarter was Constellation Energy’s (NASDAQ:CEG) announcement of a 20-year power purchase agreement with Microsoft, aimed at facilitating the launch of the Crane Clean Energy Center. Through this agreement, Microsoft plans to procure the output from the renewable plant to help power its data centers within the PJM interconnection, aligning with its commitment to clean energy.
Furthermore, management commented that the Crane facility is expected to qualify for the technology-neutral clean electricity production tax credit (PTC), which is part of the Inflation Reduction Act, for its initial ten years of operation.
2. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 100
Cramer mentioned that QUALCOMM Incorporated (NASDAQ:QCOM) is set to report its earnings on November 6 and highlighted chatter around its plan to buy Intel.
“… Qualcomm reports at the same time. Now, there have been stories floated about how CEO Cristiano Amon has been interested in buying Intel. Intel. They wanna buy ’em. I think he has to move fast because, after the quarter Intel reported yesterday, that stock’s going higher, regardless of whether it’s been booted from the Dow like it was this evening. Qualcomm itself is quite charmed. It tends not to go down on weak numbers and it soars on strong ones. Wow, that’s a very good risk reward, isn’t it?”
QUALCOMM (NASDAQ:QCOM) is a key player in the wireless industry, focusing on the development and commercialization of essential technologies, including integrated circuits, software, and licensing of intellectual property.
A significant legal challenge arose when Arm Holdings filed a lawsuit against Qualcomm in 2022, following Qualcomm’s acquisition of Nuvia. This legal dispute primarily concerns Qualcomm’s alleged failure to negotiate a new licensing agreement after the acquisition, which has critical ramifications for the future of its chip designs.
Arm claims that technology developed for Microsoft’s Copilot+ laptops is based on Nuvia’s chip architecture, a point of contention that has escalated tensions between the two companies. Additionally, Bloomberg News reported that Arm intends to cancel an architectural license agreement that permits Qualcomm to utilize Arm’s intellectual property in its chip designs. This cancellation, for which Qualcomm was given a 60-day notice in October, could severely impact Qualcomm’s operations.
The chip division is a substantial contributor to the company’s revenue, and its growth has outpaced that of the licensing segment. Without the architectural license, the company will face many difficulties regarding the sales of many new chip products.
As reported by Reuters in September, QUALCOMM (NASDAQ:QCOM) has been considering acquiring parts of Intel’s design business. This interest comes as Intel faces challenges in generating cash and seeks to divest certain segments. While specific details remain unconfirmed, sources indicate that the company is particularly focused on Intel’s client PC design division, among other potential design units.
1. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Cramer commented that Berkshire Hathaway Inc. (NYSE:BRK-B) tends to experience good quarters and praised Warren Buffett.
“There’s no such thing as a bad quarter at Berkshire, right? Because we’re dealing with Warren Buffett. I do want to know what he thinks about the election… he’ll make money no matter what.”
Berkshire Hathaway (NYSE:BRK-B) operates globally through subsidiaries in insurance, freight rail, utilities, manufacturing, and retail, providing a wide range of services including insurance, energy generation, and various consumer and industrial products. The company also engages in logistics, construction, and distribution across diverse sectors.
In the third quarter, the conglomerate’s operating earnings decreased by 6%, totaling $10.1 billion compared to $10.8 billion in the same quarter of the previous year. This decline follows a record high of $11.6 billion in operating profits reported in the second quarter. Revenue for the quarter reached $93 billion, a slight decrease of 0.2% year-over-year.
The company’s net earnings per average equivalent Class A share stood at $18,272, while Class B shares reported net earnings of $12.18. At the end of the quarter, its cash reserves rose significantly, exceeding $325 billion, up from $276.94 billion as of June 30, 2024.
Furthermore, during this latest quarter, Berkshire Hathaway (NYSE:BRK-B) reduced its stake in Apple, the leading smartphone manufacturer, as well as in Bank of America, the second-largest lender in the United States, by over 20%, as indicated in its recent quarterly filing.
While we acknowledge the potential of Berkshire Hathaway Inc. (NYSE:BRK-B) 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 BRK-B but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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