On Tuesday, Jim Cramer, host of Mad Money, shared his thoughts on the market’s recent volatility and offered advice to investors regarding earnings reports. He cautioned against making trades based solely on immediate stock reactions following earnings announcements, as many of these movements might not be justified.
“The absurdity of earnings season has arrived. It didn’t take long, did it? People are already doing stupid things. And you know what? I gotta point them out to you so that you don’t make the same mistakes.”
Cramer emphasized his mission to guide individuals toward becoming more thoughtful investors, rather than impulsive traders. He noted that the Dow Jones Industrial Average dropped 325 points, while the S&P 500 declined by 0.76%, and the Nasdaq Composite fell 1.01%.
Cramer referred to this phenomenon as part of what he calls the quarterly repricing process, which is the earnings season. He explained that, typically, most stocks tend to move in tandem with the S&P 500 unless a significant event alters the market. In the absence of such an event, stock movements are often influenced by external factors that may have only a tenuous connection to a company’s actual future performance. He further clarified his perspective and stated:
“Now, I want to make one thing clear. I’m not saying that everybody’s a moron. I’m saying there are details that inform people are looking for benchmarks we’ve accepted going into earnings. Yet for the first few moments of trading, there’s just obviously oblivious action based on who knows what. It’s definitely not the key metrics. It’s definitely not the homework.”
Ultimately, Cramer described this chaotic trading behavior as a clumsy way for Wall Street to reassess stock prices in relation to their peers, driven by a flurry of parsed headlines during earnings season. He expressed relief that this sort of disorganized trading only occurs four times a year, even as he acknowledged that this is a crucial period when a stock can become detached from the S&P 500.
Concluding his thoughts, Cramer emphasized:
“Yet, if you’re not a professional, you should not be involved in this process. There are so many people playing with so much money, professionals who pay people fortunes to figure this stuff out. Let them fight to set the price. For regular investors like you, trying to trade that initial post-earnings action is just an easy way to lose money, four times a year, like clockwork.”
Cramer’s 12 Lightning Round Stocks
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Cramer during lightning rounds of Mad Money’s episodes on October 14, 15, and 16. 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: 12 Stocks to Watch
12. Cassava Sciences, Inc. (NASDAQ:SAVA)
Number of Hedge Fund Holders: 3
Talking about Cassava Sciences, Inc. (NASDAQ:SAVA), Mad Money’s host said:
“Well, I remember they do have an Alzheimer’s trial, but Lily has an Alzheimer’s formulation that is very good. And Lily does have the edge on everybody else. Let’s leave it like that.”
Cassava Sciences (NASDAQ:SAVA) is a clinical-stage biotechnology company focused on developing treatments for neurodegenerative diseases. The primary therapeutic candidate is simufilam, a small molecule drug that has completed its Phase 2 clinical trial and is now advancing into Phase 3 testing. In addition to simufilam, it is also working on SavaDx, an investigational diagnostic tool designed to identify Alzheimer’s disease through a blood-based biomarker.
Recently, Cassava Sciences (NASDAQ:SAVA) faced scrutiny from the U.S. Securities and Exchange Commission (SEC) regarding statements made about a Phase 2b clinical trial of simufilam in 2020. Following the investigation, the company reached a settlement agreement with the SEC concerning allegations of negligence in its disclosures. As part of the settlement, the company has agreed to pay $40 million in cash, while neither admitting nor denying the allegations.
The company has reiterated its earlier forecast, estimating that with this settlement, net cash utilization for operations is expected to range between $80 million and $90 million in the latter half of the year. Furthermore, it forecasts that it will conclude the calendar year 2024 with available cash between $117 million and $127 million.
On October 8, H.C. Wainwright upgraded the company stock to Buy from Neutral with a $116 price target, making a note of the settlement with the SEC. The analyst believes this settlement alleviates any concerns that could pose a significant long-term obstacle to the potential growth of the stock. Additionally, the firm estimates that a topline readout from the 52-week RETHINK-ALZ Phase 3 study, expected by the end of 2024, will serve as a positive catalyst.
11. Clover Health Investments, Corp. (NASDAQ:CLOV)
Number of Hedge Fund Holders: 9
When a caller inquired about Clover Health Investments, Corp. (NASDAQ:CLOV), Cramer said:
“Oh, man… I just don’t want to go there. I know that it’s a good company, but I just don’t want to hurt anybody. I’m sorry.”
Clover Health (NASDAQ:CLOV) is a provider of Medicare Advantage plans across the United States. The company also offers Clover Assistant, a cloud-based platform that empowers physicians to identify and manage chronic diseases at an early stage while delivering personalized, data-driven insights for patient care.
On October 10, the company announced a significant achievement regarding its Star ratings from the Centers for Medicare and Medicaid Services (CMS). The rating for its PPO Medicare Advantage plans has been elevated to 4 Stars for 2025, which will have implications for payment in 2026. In addition, the HMO Medicare Advantage plan received a rating of 3.5 Stars. Additionally, more than 95% of Clover’s Medicare Advantage membership utilizes its PPO plans, highlighting the company’s strong market presence.
CMS evaluates each plan annually based on healthcare quality and drug plan performance, assigning a Star rating that ranges from 1 to 5. Clover Health’s (NASDAQ:CLOV) overall rating for this measurement year reflects exceptional outcomes across several criteria, including Medication Adherence, the Healthcare Effectiveness Data and Information Set (HEDIS), and the Consumer Assessment of Healthcare Providers and Systems (CAHPS). Particularly significant is the company’s impressive score of 4.94 out of 5 Stars on HEDIS, which assesses the effectiveness of plans in delivering preventive screenings and managing various health conditions, such as diabetes, cancer, and heart disease.
10. Sweetgreen, Inc. (NYSE:SG)
Number of Hedge Fund Holders: 27
Talking about Sweetgreen, Inc. (NYSE:SG), Cramer said, “Sweetgreen is terrific, I really like it.” The company is making significant strides in the fast-casual dining sector with its focus on healthy foods. Since launching in 2007, it has expanded to over 225 locations across the U.S.
In the second quarter, the company reported a 21% increase in total revenue, reaching $184.6 million compared to $152.5 million the previous year. It opened 4 new restaurants during this quarter and is targeting 24-26 net new openings for the fiscal year 2024. For the full year, the company projects revenue between $670 million and $680 million, with a restaurant-level profit margin of 19%-20% and adjusted EBITDA between $16 million and $19 million.
Jonathan Neman, Co-Founder and CEO of Sweetgreen (NYSE:SG), stated that the company is successfully opening new restaurants nationwide, and the new Caramelized Garlic Steak has quickly gained popularity among customers. Neman emphasized that the company’s expanding menu resonates well with customers by offering crave-worthy dishes that prioritize quality and value.
During the Goldman Sachs 31st Annual Global Retailing Conference on September 5, Sweetgreen (NYSE:SG) expressed strong confidence in the aspects it can manage, such as its menu, marketing strategies, improvements in throughput, and the performance of new locations. However, the company also acknowledged the fluctuations present in the external environment.
9. Uranium Energy Corp. (NYSE:UEC)
Number of Hedge Fund Holders: 28
Cramer likes Uranium Energy Corp. (NYSE:UEC) and added:
“Yeah, UEC’s the real deal. You gotta double it, doesn’t matter, it’s going higher. We need more uranium I think it’s a great situation, I recommend it to all my friends… I think it’s terrific.”
Uranium Energy (NYSE:UEC) is actively engaged in the exploration, extraction, and processing of uranium and titanium concentrates across the United States, Canada, and Paraguay. In its Annual Report on Form 10-K for the fiscal year ending July 31, 2024, the company highlighted the successful startup of uranium production at the Christensen Ranch in-situ recovery operations and the Irigaray Central Processing Plant in Wyoming’s Powder River Basin.
It is a milestone as it shows the company’s capabilities in resuming operations at previously producing sites. Additionally, the company reported a total of 230 million pounds of U3O8 in the Measured and Indicated categories and 102.7 million pounds in the Inferred category across all projects, which solidifies its position as one of the largest and most diversified uranium companies focused on North America.
As of July 31, 2024, Uranium Energy (NYSE:UEC) maintained a substantial inventory of over 1.466 million pounds of U3O8, valued at approximately $125.3 million based on current market prices. Furthermore, the company is set to receive an additional 700,000 pounds of U3O8 at an average cost of $38.20 per pound, expected through December 2025. It reported around $331.5 million in cash, equity holdings, and inventory at market prices, all while carrying no debt.
An important highlight for the company was the landmark agreement with Rio Tinto America Inc., which involved the acquisition of 100% ownership of the Sweetwater Plant along with a portfolio of uranium mining projects in Wyoming. The acquisition marks the establishment of a third U.S. hub-and-spoke in-situ recovery production platform within the company’s dedicated uranium operations.
8. Mobileye Global Inc. (NASDAQ:MBLY)
Number of Hedge Fund Holders: 28
Cramer was asked about Mobileye Global Inc. (NASDAQ:MBLY) and he said that it is difficult to comment on it.
“I know Mobileye well. It’s an Israeli company, obviously, its big stake is held by Intel. We don’t know what to do here with this, Intel, Qualcomm, I think it’s just too hard to tell. I’m gonna stay away from it.”
Mobileye Global (NASDAQ:MBLY) is engaged in the development and implementation of advanced driver assistance systems (ADAS) and autonomous driving technologies, serving a global market. For the fiscal year of 2024, the company has revised its revenue expectations, now projecting figures between $1.6 billion and $1.68 billion, a decrease from the previous guidance of $1.83 billion to $1.96 billion. The updated guidance reflects a 13% reduction in expected revenue, primarily due to lower forecasts for shipments of both the EyeQ and SuperVision products in the latter half of 2024. The company attributes this adjustment to various factors affecting performance expectations.
Mobileye Global (NASDAQ:MBLY) also adjusted expected operating loss, with estimates ranging from $580 million to $531 million compared to the earlier projection of $468 million to $378 million, a decline of 31%.
On October 15, Barclays analyst Dan Levy lowered the price target on company stock to $19 from $27 and kept an Overweight rating as part of his Q3 earnings preview for the automotive and mobility sector. The firm remains more favorable toward automakers compared to suppliers. Despite the challenging investor sentiment surrounding suppliers, the analyst notes a glimmer of hope for a potential end to the trend of negative estimate revisions.
7. GXO Logistics, Inc. (NYSE:GXO)
Number of Hedge Fund Holders: 29
When asked about GXO Logistics, Inc. (NYSE:GXO) during the lightning round, Cramer said to hold on to it.
“Just hold on. Its stock’s had a parabolic move… But I think that this is a very valuable company and even if it doesn’t get a bid, I think you’ll probably only lose about like 10-15%. So why don’t you hold on to see what you get.”
GXO Logistics (NYSE:GXO) delivers a range of logistics services on a global scale. The company’s offerings include warehousing and distribution, order fulfillment, e-commerce solutions, reverse logistics, and various other supply chain services. In the second quarter, the company achieved a revenue increase of 19% year-over-year, reaching a record $2.8 billion. The company secured new business amounting to approximately $270 million in annualized revenue during this period, while also noting that contract lengths have been extended as customers seek reliable partners for outsourcing.
Additionally, the completion of the Wincanton acquisition is expected to yield significant synergies, with the board projecting annual net run-rate benefits of £45 million (pre-tax) by the end of the third year of integration, primarily through procurement efficiencies and operational overlaps.
On October 10, Reuters reported that GXO Logistics (NYSE:GXO) is considering a potential sale following interest from various buyers. It was reported that the company is collaborating with a financial advisor to evaluate acquisition proposals, which reportedly include interest from competing logistics firms. However, as discussions remain confidential, no final decision regarding a sale has been made, and it remains uncertain whether these talks will culminate in a transaction.
6. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 41
While Cramer called Halliburton Company (NYSE:HAL) a great company, he wishes to keep his distance from it.
“Alright, no I, don’t wanna own [it]… I wanna stay away from Halliburton. That’s too bad, it’s a really great company.”
Halliburton (NYSE:HAL) offers a range of products and services for the global energy sector, including services focused on production enhancement, cementing solutions, and comprehensive drilling support. Recently, the company disclosed a cybersecurity incident that came to light on August 21, where unauthorized access to certain systems occurred. The company acknowledged that this breach caused disruptions and limited access to various business applications essential for its operations. Although the attacker managed to extract information from its systems, the company is actively assessing the scope of the breach and determining the necessary notifications.
While the company has incurred expenses related to responding to this incident, it stated that the attack has not materially impacted its financial position or operational results. Nonetheless, it remains aware of the risks associated with such cybersecurity threats. Currently, it is evaluating the specifics of the information that was accessed and is cautious about any potential long-term implications.
On October 14, BofA lowered the price target on Halliburton (NYSE:HAL) to $38 from $40 and maintained a Buy rating in light of the broader market conditions. The analyst informed investors that a slowdown in global oil demand growth, coupled with an oversupply, is likely to create difficulties in 2025 for oil prices and stock selection in the Oilfield Services sector. The firm suggests that the present outlook for global oil supply and demand requires U.S. land oil production to stabilize rapidly, and the analyst has adjusted price targets downward by an average of 6% across the industry.
5. Core Scientific, Inc. (NASDAQ:CORZ)
Number of Hedge Fund Holders: 53
Cramed called Core Scientific, Inc. (NASDAQ:CORZ) a cold stock because of its various services and solutions.
“Okay. This is a very big cold stock because it’s got blockchain and infrastructure, artificial intelligence. It’s a mini Palantir. So I think you should just go buy Palantir.”
Core Scientific (NASDAQ:CORZ) offers digital asset mining services across North America, providing a range of offerings that include blockchain infrastructure, software solutions, and operational support through its data centers. The company not only engages in mining digital assets for its own account but also extends its services to host large-scale Bitcoin miners. Additionally, it supplies electrical power and infrastructure services essential for maintaining operations, as well as selling mining equipment to its customers.
In early June, Core Scientific (NASDAQ:CORZ) entered into a 12-year agreement with AI cloud provider CoreWeave, aimed at delivering high-performance computing power. The contract has the potential to generate an estimated $3.5 billion in revenue over its duration, highlighting the company’s expanding role in the intersection of digital asset mining and AI computing.
The company reported achievements in September, including the self-mining of 345 Bitcoins for the month, which brought its year-to-date total to 5,621 Bitcoins, with 1,115 mined in the third quarter alone. Furthermore, clients utilizing its data centers earned approximately 66 Bitcoins during the same period. Adam Sullivan, the CEO, noted ongoing initiatives to support the company’s expansion into high-performance computing. Specifically, construction is underway for a 100-megawatt data center in Muskogee, Oklahoma, and the company is on track to complete a similar expansion in Pecos, Texas.
He said that Core Scientific (NASDAQ:CORZ) remains focused on developing advanced infrastructure equipped with state-of-the-art liquid cooling systems, tailored for AI GPU cloud workloads, with plans to begin service for its HPC customers in the first half of 2025.
4. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 67
Cramer said that AbbVie Inc. (NYSE:ABBV) is cheap and the company is doing well. Here is what Mad Money’s host had to say:
“I think AbbVie is doing very, very well. It’s not an expensive stock. My favorite in this group right now though remains Abbott Labs, which had a monster quarter this morning.”
AbbVie (NYSE:ABBV) is a pharmaceutical company engaged in the discovery, development, manufacturing, and marketing of a diverse range of medications. Known for its strong portfolio, it includes well-known products such as its migraine treatment Qulipta, and the immunology therapies Skyrizi and Rinvoq, which have emerged as significant contributors to the company’s growth. While Humira, once its flagship treatment for autoimmune diseases, has experienced a decline following the loss of its U.S. patent exclusivity, the company has effectively positioned itself to navigate this transition.
In anticipation of the challenges posed by Humira’s patent expiration, the company made substantial investments in research and development, along with strategic acquisitions aimed at expanding its product lineup. In the second quarter, the company reported a revenue increase of 4.3% year-over-year, reaching $14.5 billion. The company’s immunology portfolio plays an important role in mitigating the impact of Humira’s declining sales. Moreover, it reported that Skyrizi and Rinvoq are experiencing rapid sales growth.
AbbVie (NYSE:ABBV) management has revised its sales projections for these two drugs, forecasting combined revenues exceeding $27 billion by 2027, which represents an increase of $6 billion from earlier estimates and the optimistic outlook extends well into the next decade.
3. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 67
When Cramer was asked about Novo Nordisk A/S (NYSE:NVO), he said, “Now look, I’ve gotta tell you, Novo Nordisk doesn’t hold a candle to Eli Lilly… Lilly’s the one.”
Novo Nordisk (NYSE:NVO) is engaged in the research, development, manufacture, and distribution of pharmaceutical products. With a legacy spanning over eight decades, the company has established a strong presence in diabetes care, holding a significant share of both the diabetes treatment and insulin markets. Its growth has been largely driven by its GLP-1 therapies, particularly Ozempic, which is used for diabetes management, and Wegovy, aimed at obesity treatment.
The company is actively pursuing the development of successors to Ozempic, leveraging its financial resources and entering into collaboration agreements with biotech firms that are working on innovative solutions. On September 16, it announced a collaboration with Korro Bio focused on drug development, valued at $530 million. The partnership includes funding for research and development, milestone payments, royalties, and an upfront payment to initiate the collaboration. Korro Bio is known for its expertise in RNA editing, with a platform that allows for the modification of messenger RNA (mRNA) before it is translated into proteins, potentially opening new avenues for therapeutic advancements.
In a competitive industry, maintaining a supply that meets market demand has emerged as a crucial factor for companies like Novo Nordisk (NYSE:NVO). Rival companies like Eli Lilly are not hesitant to capitalize on opportunities to increase market share. In February, the company made headlines with its intent to acquire Catalent, a contract development and manufacturing organization, in a deal valued at $16.5 billion. However, the acquisition has drawn scrutiny, particularly from Senator Elizabeth Warren, who has raised concerns about its potential implications for competition in the industry.
2. Vistra Corp. (NYSE:VST)
Number of Hedge Fund Holders: 92
Cramer acknowledged that Vistra Corp. (NYSE:VST) stock situation is complicated but also said to own it.
“Okay, this is a very complicated situation because what I said the other day was you gotta let it come in, it went down for a couple days and then it’s right back up. Let’s just say this, own it. Put a half position on, no more, put a half position on, and then let it come down because it has had such an amazing rally. I can’t just say go buy it.”
Recently, while talking about the stock’s price movement, Cramer commented that while it might seem unusual for a traditional utility to see such growth, he emphasized that carbon-free electricity has become a highly sought-after commodity. Vistra (NYSE:VST) is an electricity retail and power generation company that provides services to residential, commercial, and industrial customers. It has a generation capacity of approximately 41,000 megawatts and serves around 5 million clients across various markets.
On October 17, JPMorgan analyst Jeremy Tonet initiated coverage of Vistra (NYSE:VST) with an Overweight rating and a $178 price target. The firm holds a positive outlook on independent power producers, referring to favorable conditions despite the stock’s performance earlier in the year. Tonet highlights several structural tailwinds influencing the industry, such as manufacturing onshoring, increasing electrification trends, and the growth of data centers. These factors contribute to what he describes as a “paradigm shift” in power demand.
JPMorgan believes that the growth in competitive market supply may not keep pace with this rising demand, which could allow companies to secure larger profit margins over time. The firm views Vistra as having a particularly appealing risk/reward profile within the sector.
1. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 93
A caller referred to Jensen Huang’s, NVIDIA’s CEO, comment about the healthcare segment having a huge opportunity for AI and asked whether Cerner would be a needle mover for Oracle Corporation (NYSE:ORCL). Here’s what Cramer said in response:
“Cerner has not been a big payoff off yet…I think that Oracle is going to be working with Jensen. So I like the prospects, but you’re in it for the data center and data center business is excellent.”
Oracle (NYSE:ORCL) offers a diverse portfolio of products and services designed to meet the needs of organizations worldwide. Its cloud offerings include various applications for enterprise resource planning (ERP), healthcare management, and supply chain logistics, alongside essential infrastructure technologies such as databases and middleware. In a significant move in 2021, the company announced its acquisition of Cerner Corporation, a leading digital information systems provider for hospitals and healthcare systems. The all-cash tender offer valued at approximately $28.3 billion aimed to integrate Cerner’s advanced capabilities into Oracle’s health solutions.
The company got an extension in its contract to modernize the electronic health records (EHR) system for the U.S. Department of Veterans Affairs (VA) across its 172 facilities. However, in June, Bloomberg reported challenges with the software’s effectiveness in improving patient care, particularly from the VA, which is its primary public client in the healthcare segment. This has raised concerns about the performance of the Cerner division, leading to expectations of revenue decline in the fiscal year.
It should be noted that Oracle (NYSE:ORCL) continues to innovate in the technology space, as demonstrated by its introduction of the world’s first zettascale cloud computing cluster powered by NVIDIA Blackwell GPUs in September. The groundbreaking development allows Oracle Cloud Infrastructure (OCI) to offer the largest AI supercomputer available in the cloud, capable of supporting an impressive 131,072 NVIDIA GPUs.
In October, the company revealed plans to invest over $6.5 billion in artificial intelligence and cloud computing in Malaysia. It will establish a cloud region that offers cutting-edge AI technologies, featuring the largest AI supercomputer available in the cloud. Out of the many services, users will have the option to choose configurations with up to 131,072 NVIDIA Blackwell GPUs, complemented by NVIDIA ConnectX-7 NICs for RoCEv2 networking, or opt for NVIDIA GB200 NVL72 rack solutions that utilize liquid cooling and NVIDIA Quantum-2 InfiniBand networking.
While we acknowledge the potential of Oracle Corporation (NYSE:ORCL) 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 ORCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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