Jim Cramer, the host of Mad Money, urged investors to refrain from making any investments in high-value stocks, particularly in the Big Tech sector, ahead of upcoming earnings reports, which will attract considerable scrutiny. Cramer expressed concern over significant price movements in various stocks leading into earnings, stating, “you can’t make up these moves.”
READ ALSO Jim Cramer on Tesla and Other Stocks and Jim Cramer is Talking About These 12 Stocks
He emphasized that these surges create heightened risks for those looking to purchase stocks before a company’s earnings announcement. He pointed out that there is underlying volatility affecting nearly every major company. He noted that the stocks that he mentioned on Friday were trading erratically high on October 28. You can read which stocks Cramer discussed on Friday in our article, Jim Cramer’s Latest Game Plan: 20 Stocks to Watch.
He went on to highlight that:
“First you need to understand that no one knows these earnings numbers ahead of time except the CEO, the CFO, and a very small group of very important people at each company, and they are tight-lipped.”
Cramer criticized analysts for their attempts to predict earnings, stating, “We’ve seen how wrong they can be over and over again.” According to Cramer, when a stock spikes before earnings, it does not indicate insider knowledge but rather excessive enthusiasm. He further cautioned that these price increases are occurring without any solid basis, making it perilous for investors. He said, “In other words, these stocks are going up on nothing and that I think makes it very dangerous.”
Cramer reiterated his advice and said:
“I am indeed trying to discourage you from trading these stocks ahead of the quarters. It’s just a roulette game based on nothing. Often the game feels rigged, you just don’t know which way it’s rigged because companies really and truly do not let this stuff drip out.”
Concluding his remarks, he said:
“Bottom line, no one on Wall Street knows what any of the quarters will look like, except for the principals. So don’t bother to follow the money that you see trading right now in anticipation. You know why? It’s a fool’s errand.”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the lightning round of his episodes of Mad Money on October 25 and 28. 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 Lightning Round: 11 Stocks to Watch
11. Oklo Inc. (NYSE:OKLO)
Number of Hedge Fund Holders: N/A
Cramer called Oklo Inc. (NYSE:OKLO) a short squeeze and emphasized that he does not wish to partake.
“Oklo is a short squeeze… I’m getting tired of the short squeezes. Here’s my rap on short squeezes: I learned early on that if you play them, they’re like musical chairs. If you’re cool with the music and you think you can anticipate when it ends, bingo, it’s all for you. If you can’t, then you’re like me, I don’t wanna play.”
Oklo (NYSE:OKLO) is focused on designing and developing fission power plants aimed at delivering reliable and commercially viable energy solutions within the United States. In addition to its energy initiatives, the company also offers services for recycling used nuclear fuel. Backed by figures such as OpenAI CEO Sam Altman, the company has positioned itself as a leader in the evolving landscape of nuclear technology, especially through its development of advanced small modular reactors (SMRs).
Oklo’s (NYSE:OKLO) Aurora powerhouses are projected to commence operations in 2027, aligning with the increasing demand for dependable clean energy, especially from technology companies that are expanding their artificial intelligence operations.
Recently, the company announced a significant milestone with the approval of its Conceptual Safety Design Report (CSDR) for the Aurora Fuel Fabrication Facility at Idaho National Laboratory. This approval from the U.S. Department of Energy marks an important step as the company progresses toward its objective of utilizing recovered nuclear materials to fuel its first commercial Aurora powerhouse.
10. EVgo, Inc. (NASDAQ:EVGO)
Number of Hedge Fund Holders: 11
Cramer acknowledged that EVgo, Inc. (NASDAQ:EVGO) stock has been on fire but commented that it is too high.
“The stock’s been on fire. People feel like they’re the Tesla. EV[s] at EVgo are made in heaven, that people are gonna go back to EV. I think it is a spec. It’s losing money and I think it’s too high.”
EVgo (NASDAQ:EVGO) operates a fast charging network for electric vehicles across the United States, providing various charging services directly to drivers, including fleet solutions and ancillary services such as data integration, loyalty programs, and hardware support. In its second-quarter report, the company disclosed a net loss of $29.6 million, an increase from the $21.5 million loss recorded in the same quarter of 2023.
The company reported revenue of $66.6 million during this period. The company has over 1,000 fast-charging locations across 35 states, establishing a significant presence in the growing electric vehicle market. In October, the company announced that it signed a memorandum of understanding with Delta Electronics, Inc., a long-term technology partner.
This collaboration seeks to develop next-generation EV charging architecture that includes innovative features such as advanced software, integrated power electronics, a contactless payment interface, and ultra high-power dispensers capable of delivering 400kW. EVgo (NASDAQ:EVGO) expects that final designs and comprehensive interoperability testing will take place in its Innovation Lab, with plans to deploy these new charging solutions by the latter half of 2026.
9. QuantumScape Corporation (NYSE:QS)
Number of Hedge Fund Holders: 11
Commenting on QuantumScape Corporation (NYSE:QS), Cramer said:
“No… The guys who told me to buy QuantumScape, they were Quantum wrong. So I don’t want to be Quantum wrong. I want to be Quantum right. I would avoid QuantumScape. Quantum escape, so to speak.”
QuantumScape (NYSE:QS) is a research and development-focused company dedicated to creating and commercializing solid-state lithium-metal batteries for electric vehicles and other applications. The company is working to advance battery technology to meet the increasing demand for efficient energy storage solutions. On October 23, it released its third-quarter report, revealing that it did not generate any revenue, as the company has not yet commercialized its products.
The net loss increased from $111 million to $120 million or a loss of $0.23 per share, which aligned with Wall Street’s expectations. While these figures were expected, the company highlighted a significant development: it had begun producing the first test samples of its QSE-5 batteries during the quarter and had commenced shipping these test cells to automotive customers. Achieving this milestone was one of its key objectives for 2024.
QuantumScape’s (NYSE:QS) approach to mass production involves a two-stage plan for manufacturing the components needed for its solid-state electric vehicle battery. The initial stage, referred to as the “Raptor” process, has been successfully utilized to produce low-volume prototypes.
The company also announced that the first low-volume B-sample battery cells from this production process have been shipped for testing by automotive clients. Looking ahead, the next phase, known as the “Cobra” stage, is currently under development alongside efforts to mass-produce the solid-state electrolyte separator and is expected to commence in 2025.
8. Joby Aviation, Inc. (NYSE:JOBY)
Number of Hedge Fund Holders: 15
Here’s what Cramer had to say about Joby Aviation, Inc. (NYSE:JOBY):
“Well, they just raised capital and that capital is gonna let them, you know, they’ve got enough money to be able to last for some time… I think they’re okay for now because of the 40 million shares that they sold at $5.05, and that’s not that far from here, but if it gets to $7, I would take the money and kaching kaching.”
Joby Aviation (NYSE:JOBY) is a vertically integrated air mobility company focused on developing electric vertical takeoff and landing (eVTOL) aircraft designed for air transportation as a service. Recently, the company announced the pricing of its underwritten public offering, which consists of 40,000,000 shares of common stock priced at $5.05 per share. This offering is projected to generate gross proceeds of approximately $202 million, excluding underwriting discounts and related expenses.
While the industry presents inherent risks due to its emerging nature, the company has positioned itself as a significant player through its technological advancements. Currently, the company has constructed three production prototype aircraft, and its certification plans are moving forward. Recently, the Federal Aviation Administration (FAA) has released operational rules and pilot training requirements for powered-lift aircraft, like those developed by Joby.
Joby Aviation (NYSE:JOBY) also achieved a significant milestone by receiving certification from the United Arab Emirates, making it the first electric air taxi to gain official recognition worldwide. In a recent announcement, Toyota committed $500 million to support Joby’s certification and commercial production efforts.
7. NextEra Energy Partners, LP (NYSE:NEP)
Number of Hedge Fund Holders: 20
When a caller asked about NextEra Energy Partners, LP’s (NYSE:NEP) dividends, Cramer said:
“I’m warning you about the dividend again. I mean, I think, dividend, when you get those yields 15, 20%, you know, it is trouble. There will be people who don’t know that it’s trouble and they will sell when they cut the dividend and then we’ll look at it.”
NextEra Energy (NYSE:NEP) focuses on acquiring, owning, and managing contracted clean energy projects. The company has a diverse portfolio that includes renewable generation assets such as wind, solar, and battery storage projects, as well as contracted natural gas pipeline assets. Currently, the company offers a substantial dividend yield, appealing to income-focused investors. However, as of October 29, its forward payout ratio is 150%.
During the third quarter earnings call, management adjusted expectations and indicated that dividends per share are anticipated to grow at roughly 10% annually through at least 2026, based on a 2024 base.
Recently, NextEra Energy (NYSE:NEP) declared a quarterly distribution of $0.9175 per common unit, which corresponds to an annualized rate of $3.67 per common unit. This represents an increase of nearly 6% from the previous year and will be payable on November 14, 2024, to unitholders of record as of November 6.
6. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 24
When asked about SolarEdge Technologies, Inc. (NASDAQ:SEDG), here’s what Mad Money’s host had to say:
“Well… I’m gonna give you some positive news about SolarEdge Technologies. I’ve been in this business a long time and I have learned one thing: stocks stop at zero.”
SolarEdge Technologies (NASDAQ:SEDG) designs and manufactures optimized inverter systems for solar installations, providing a range of energy management solutions, monitoring platforms, and battery storage options. The company has faced significant challenges, with a 73% drop in revenue during the second quarter compared to the same period last year. This downturn is particularly evident in Europe, where a high interest rate environment has led to decreased spending on renewable energy systems.
Management noted during the last earnings call that the commercial and industrial market in Europe has remained largely flat over the last three quarters, with little expectation for improvement in the latter half of the year across most countries. While the company has seen a reduction in inventory levels during the second quarter, these levels remain elevated due to the sluggish recovery in the European market.
On October 23, JPMorgan lowered the price target on SolarEdge Technologies (NASDAQ:SEDG) to $29 from $35 and maintained an Overweight rating. The adjustment occurred because of weaker-than-expected demand for solar and storage solutions highlighted in Enphase Energy’s third-quarter earnings report.
Although the companies differ in their product offerings and geographic presence, the analyst suggested that it is better to revise estimates ahead of SolarEdge’s upcoming earnings call on November 6, given the company’s exposure to the challenging European market. JPMorgan acknowledges that the stock may experience pressure until there is greater clarity on future demand and market conditions.
5. NetApp, Inc. (NASDAQ:NTAP)
Number of Hedge Fund Holders: 44
Cramer likes NetApp, Inc. (NASDAQ:NTAP) and highlighted that its stock is cheap. He commented:
“That’s a good company. They’re making a lot of money. It’s not expensive. I’m all in. We saw ’em in San Jose… I saw it. I said I’m gonna look into this. It turned out to be very cheap.”
NetApp (NASDAQ:NTAP) offers a suite of enterprise software, systems, and services that help customers improve their data infrastructures, focusing on data management, storage solutions, cloud services, and professional support. As of October 29, the stock has a forward PE ratio of 17.07, trading at a 30.28% discount compared to its sector median.
NetApp’s (NASDAQ:NTAP) financial results for the first quarter of fiscal year 2025 revealed net revenues of $1.54 billion, marking an 8% increase year-over-year. Looking ahead, the outlook for the second quarter of fiscal year 2025 shows that net revenues are expected to fall between $1.565 billion and $1.715 billion, with EPS projected in the range of $1.27 to $1.37. Furthermore, for the entire fiscal year 2025, the consolidated gross margins are expected to be between 70% and 71%, while EPS is estimated to range from $5.17 to $5.37.
4. Suncor Energy Inc. (NYSE:SU)
Number of Hedge Fund Holders: 44
Cramer expressed hesitation regarding the energy industry. Disccussing Suncor Energy Inc. (NYSE:SU), he remarked:
“Well, you know what? There’s another time when energy wasn’t so bad that I would say Suncore, 4% yield, let’s give it a shot. No shots are being given in this industry. I can’t do that.”
Suncor Energy (NYSE:SU) is an integrated energy company that explores, develops, and produces oil and gas products, while also refining crude oil and managing the distribution and marketing of energy products. According to Reuters on October 22, Elliott Investment Management has significantly increased its investment in the company stock, raising its stake to nearly $3 billion from approximately $1.6 billion.
It shows the firm’s confidence in the potential for improved share prices and its ongoing advocacy for changes within the company, including board refreshment and management restructuring, which were initiated two years ago. Portfolio manager Mike Tomkins highlighted these developments during his remarks at the 13D Monitor Active-Passive Investor Summit.
On September 16, Morgan Stanley analyst Devin McDermott lowered the price target on Suncor Energy (NYSE:SU) to C$55 from C$57 and kept an Overweight rating. According to the firm, the energy sector has underperformed the market by 10% in the third quarter, influenced by declining oil prices, slowing inflation, and the prospect of interest rate cuts, which pose challenges to performance.
As a result, Morgan Stanley has adopted a selective approach, favoring defensive positions in midstream and major energy sectors, with a preference for gas over oil in exploration and production.
3. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders: 84
Cramer likes Lam Research Corporation (NASDAQ:LRCX) and commented that the stock should not have suffered.
“And the answer about Lam Research is, I like it very much here. LRCX should not have gone down today. I think it’s doing extraordinarily well. And it’s not just linked entirely with what ASML is. They already told you how much Chinese exposure they have and they’ve had to cut it back. So the answer is I would buy it.”
Lam Research (NASDAQ:LRCX) operates in the semiconductor industry, focusing on the design, manufacturing, marketing, refurbishment, and servicing of equipment used in the production of integrated circuits. On October 23, it revealed its fiscal first quarter results. Following the announcement, Lam’s stock experienced an upward movement, providing a sense of relief to investors after ASML reported disappointing results.
For the quarter, the company reported adjusted earnings of 86 cents per share on revenue totaling $4.17 billion. These figures exceeded the expectations set by analysts surveyed by FactSet, who had expected earnings of 81 cents per share and revenue of $4.01 billion. During the earnings call, Chief Financial Officer Douglas Bettinger noted that 37% of the company’s revenue for the quarter came from China, a slight decrease from 39% in the previous quarter.
Bettinger mentioned that the figure was more favorable than what the company had initially projected. Lam Research (NASDAQ:LRCX) management indicated expectations for a decline in domestic China Wafer Fabrication Equipment in the second half of the fiscal year when compared to the first half. Additionally, the company’s revenue derived from China is expected to normalize to around 30% in the upcoming December quarter.
2. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 100
Acknowledging investors’ love for QUALCOMM Incorporated (NASDAQ:QCOM), Cramer said that he is not a fan.
“Well, People love QUALCOMM… I mean, I can tell you that I think that they’re overreaching, talking about buying Intel. I also think that they’re on the wrong side of the trade in that lawsuit with Arm. I’m not a fan.”
QUALCOMM (NASDAQ:QCOM) develops and commercializes foundational technologies for the wireless industry, including integrated circuits, software, and licensing of intellectual property, while also investing in early-stage companies across various sectors. Arm Holdings initiated a lawsuit against Qualcomm in 2022, following Qualcomm’s acquisition of Nuvia.
The dispute centers on Qualcomm’s failure to negotiate a new licensing agreement, which has significant implications for the future of its chip designs. Arm claims that the technology intended for Microsoft’s Copilot+ laptops is directly derived from Nuvia’s chip architecture. Additionally, Bloomberg News recently reported that Arm is planning to cancel an architectural license agreement that permits Qualcomm to utilize Arm’s intellectual property for chip design.
On September 5, Reuters reported that QUALCOMM (NASDAQ:QCOM) has been exploring the potential acquisition of parts of Intel’s design business. As per the report, the company is interested in enhancing its product portfolio by acquiring various segments of Intel, which is currently facing challenges in generating cash and is looking to divest certain business units. Sources familiar with the situation indicate that Qualcomm executives are particularly interested in Intel’s client PC design business, although they are considering other design units as well. However, the feasibility and specifics of such acquisitions have not been confirmed by either company.
1. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
When a caller referred to Taiwan Semiconductor Manufacturing Company Limited’s (NYSE:TSM) PE ratio, this is what Cramer had to say about it:
“The reason why that price-to-earnings multiple is so high is because they blow away the numbers. Turns out, it’s actually a lower price-to-earnings multiple. I think this company is the best in the business. They’re terrific. They are partners with Nvidia and I think you should own it.”
Taiwan Semiconductor (NYSE:TSM) plays an important role in the global semiconductor industry, specializing in the production, packaging, testing, and distribution of integrated circuits and a wide range of semiconductor components. As the largest semiconductor foundry worldwide, its facilities are integral to the operations of leading chipmakers, including Nvidia, AMD, Broadcom, and Qualcomm.
At the close of 2023, Taiwan Semiconductor (NYSE:TSM) reported an extensive customer base of 528, reflecting its capability to manufacture nearly 12,000 distinct products. In the third quarter, the company’s revenue surged by 36% year-over-year, reaching $23.5 billion. A fifth of this revenue was generated from the company’s cutting-edge 3-nanometer chip technology, highlighting the growing importance of advanced manufacturing processes in its business model. The company is preparing for the launch of its next-generation 2-nanometer chips, anticipated to debut in 2025 and ramp up in production by 2026. This upcoming technology is projected to deliver substantial efficiency improvements.
While we acknowledge the potential of TSM 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 TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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