On Tuesday, Jim Cramer, host of Mad Money, spoke about the declining consumer confidence, which has been attributed to various factors, including tariffs, job losses, and other concerns.
“Big thing, this morning, the Conference Board’s consumer confidence index may be blanched. The expectations index based on consumer’s short-term outlook dropped 9.6 points to 65.2. That’s the lowest level in 12 years. You know it’s worse than Covid times?”
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He explained that the index is now well below the critical 80 threshold, which typically signals a recession. It marks the fourth consecutive month of declining consumer confidence, a trend Cramer finds very concerning. While acknowledging the severity of the situation, Cramer also pointed out a silver lining: the Federal Reserve can see these numbers and might take action if necessary. However, he also noted that the Fed’s future moves have become less predictable.
“When I see these numbers though, I think maybe the Fed can’t afford to wait until they see how much inflation the tariffs cost. We simply don’t want a recession here if it’s avoidable, but let’s address the consumer confidence issue head-on.”
Cramer went on to highlight several reasons why consumer confidence is eroding. He explained that many people in the U.S. are concerned about the White House’s actions, including layoffs and partial government shutdowns, which are contributing to fears of job insecurity. He noted that people are worried not only about layoffs but also about automation taking over jobs. Furthermore, Cramer noted that people are also anxious about the tariffs. In particular, there has been a lack of clarity from the White House on the necessity of some tariffs, leaving the public uncertain about the long-term effects.
As consumer confidence continues to erode, Cramer warned that people start to retreat, cutting back on spending, staying home more, and avoiding activities that contribute to economic growth. Cramer said that this is evident in the struggles faced by major retail companies, which are suffering due to reduced consumer activity.
“Is there anything the President can do about this? I think it might be time that he actually talks to people in a calm way about how many jobs could be created by cracking down on our so-called trading partners. Time to bury the hatchet with Mexico and Canada too, and don’t bury it in the head of Mark Carney, the new Canadian Prime Minister.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 25. We listed the stocks in ascending order of their hedge fund sentiment as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer’s Latest Lightning Round: 7 Stocks in Focus
7. Plains All American Pipeline, L.P. (NASDAQ:PAA)
Number of Hedge Fund Holders: 9
Plains All American Pipeline, L.P. (NASDAQ:PAA) was mentioned during the episode, and here’s what Cramer had to say:
“Listen, sunshine, that’s a terrific stock with a 78% yield. Not only am I a buyer, but I wish we had it for the Charitable Trust.”
Plains All American Pipeline (NASDAQ:PAA) specializes in the transportation, storage, and terminaling of crude oil and natural gas liquids, offering related services like gathering, processing, and fractionation. Its operations cover various transportation methods and the processing of NGLs, including products like ethane, propane, and butane. In January, when Cramer was asked about the stock, he was bullish on it and said, “Oh, when you say so I like that stock. Still got a 7% yield.”
6. SoundHound AI, Inc. (NASDAQ:SOUN)
Number of Hedge Fund Holders: 21
When a caller mentioned that they had bought SoundHound AI, Inc. (NASDAQ:SOUN) low, Cramer advised:
“Okay. So look, I want you to sell SoundHound. I regard SoundHound as a complete meme stock. It’s part of the cohort that we see now. It trades every morning and it’s depending upon its relationship with NVIDIA and I don’t think the relationship is really that meaningful. I think you should sell SoundHound AI, okay? I’m putting it out there. I know it’s going to give you a lot of heat online, but I don’t care.”
SoundHound AI (NASDAQ:SOUN) creates voice AI solutions that enable companies to provide interactive conversational experiences in different sectors. Its products include resources for developing customized voice assistants and improving customer support through the integration of real-time data.
5. Rocket Companies, Inc. (NYSE:RKT)
Number of Hedge Fund Holders: 30
In response to a caller’s two-pronged inquiry about Rocket Companies, Inc.’s (NYSE:RKT) acquisition of Redfin and whether the stock can double as a result of a refinancing boom if the Fed cuts rates, Cramer said:
“Okay, I was not a big fan of the Redfin acquisition… and that was in part because I’d looked at Redfin many, many times, couldn’t really figure it out. However, I am a… big believer in Rocket, and yes, exactly what you said will happen. Therefore, you can own Rocket. The Redfin, I wish they would come on and explain it. I really do because I really like them, but I thought that was quizzical.”
Rocket Companies (NYSE:RKT) offers a range of services including mortgage lending, real estate solutions, personal finance, and financial wellness tools, alongside technology platforms for home buying, loan origination, and financial management. The company also provides appraisal, title, and settlement services to support these offerings.
4. Core Natural Resources, Inc. (NYSE:CNR)
Number of Hedge Fund Holders: 39
A caller asked Cramer’s take on the coal industry and on Core Natural Resources, Inc. (NYSE:CNR). In response, Cramer said:
“You know… I was betting that coal could make a comeback only just because… that was in line with the president. But the prices for coal are so bad… That’s just another… you know, it’s a Pennsylvania coal company but there’s, there’s just not much to these stocks. I wish they could find a bottom, but they can’t. But I’m glad that you called about it.”
Core Natural Resources (NYSE:CNR) specializes in the production and sale of bituminous coal, mainly for use in power generation, industrial applications, and metallurgy. Additionally, the company provides coal export terminal services at the Port of Baltimore.
Black Bear Value Partners stated the following regarding Core Natural Resources, Inc. (NYSE:CNR) in its Q4 2024 investor letter:
“Core Natural Resources, Inc. (NYSE:CNR): Both ARCH and CEIX were down ~18% during the month of December as fears of retaliatory tariffs (these have a large export component to their businesses), economic slowing and likely tax-loss selling drove the stocks lower. Like our discussion on BLDR, the long-term story remains intact, and we used this as an opportunity to further concentrate our investment. Due to their impending merger neither Company can buy back their stock. Once the merger is complete in Q1 there should be abundant cash to buy back stock. I am generally constructive on the merger as the Companies should be able to realize some modest synergies. My sense is more mergers will be coming to this sector given the depressed prices of the securities.
ARCH is one of the leading U.S. producers of high-quality metallurgical coal (“met coal”). This is the kind of coal used for steelmaking. ARCH also has a thermal coal business that contributes ~20% of their earnings. CONSOL is a leading producer of thermal coal.
Met coal demand is projected to climb for the next 25 years, driven by the economic development and urbanization in India and the rest of Southeast Asia. ~60% of the world’s population lives in Asia, where met coal demand is centered and where local sources are limited. Over the coming years demand will likely outstrip supply, leading to higher prices. There has been a severe lack of investment in met coal due to ESG concerns with investment peaking in 2014…” (Click here to read the full text)
3. FMC Corporation (NYSE:FMC)
Number of Hedge Fund Holders: 48
A caller asked if FMC Corporation (NYSE:FMC) is a buy and Cramer replied:
“I was very depressed by FMC… They, they came out and they were like, I mean they dropped the ball. It’s very rare to see a fumble like, that was so bad… It was like a pick-six against them. I want you to stay away from FMC. They have a lot to prove. That was a terrible quarter.”
FMC Corporation (NYSE:FMC) is a company focused on agricultural sciences, providing products for crop protection, plant health, and pest control to enhance crop productivity and quality, along with pest management solutions for non-agricultural industries. During an episode of Squawk on the Street in February, Cramer remarked:
“There’s a company called FMC. And that’s an agricultural company. It’s an old food machinery company, it’s based in Philadelphia. And the stock is down 35% today because they have inventory problems. Too much of the crop chemicals used for . . . corn, potatoes, and sorghum. I just remind that there certain industries that are in this economy that are seemed to just, I don’t know we have to stay close to ag. That’s a very very bad number. And I’m kind of shocked because it’s a pretty reliable company. But the ag business maybe not as great as we think judging from the fact that they have a lot of insecticides, herbicides. So, stay close to ag.”
2. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 64
A caller inquired if it was time to get back into Palantir Technologies Inc. (NASDAQ:PLTR). Here’s what Mad Money’s host had to say in response:
“Yes, it is. Palantir’s a winner and I’m telling you, we’re going to see what they do with the defense department. I’m telling you they’re going to help… the procurement process. And I’m a believer in Palantir, even if they don’t believe in me. I don’t care.”
Palantir (NASDAQ:PLTR) develops software platforms for complex data integration and decision-making, offering products like Gotham, Foundry, Apollo, and AIP to help organizations manage and analyze large datasets. Appearing on Squawk on the Street almost two weeks ago, Cramer stated:
“The winners will become not winners. Except for Palantir because they own the media… he’s good. The odd thing about Karp is that is as noisy as he is, he actually delivers. And I think that they would do great things. I’m actually looking for them to be able to help the Defense Department really take the costs out. Because we do have great ideas. But most importantly, the problem with the Defense Department is procurement. And Alex Karp and his team have answers for procurement. Which is congratulations, it’s a byzantine world and they’ve got it figured out. Unleash them and not just . . .Musk.”
1. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 64
During the lightning round, when a caller asked Cramer’s opinion on Shopify Inc. (NYSE:SHOP), he said:
“Oh, Shopify, the Canadian… that is going be moving to here and listed in New York. I say buy, buy.”
Shopify (NYSE:SHOP) offers a platform that allows merchants to manage and sell their products across various channels, providing tools for inventory management, payment processing, analytics, and securing financing. RiverPark Advisors stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q4 2024 investor letter:
“Shopify Inc. (NYSE:SHOP): Shopify was a top contributor in the fourth quarter following a strong 3Q earnings report that included better than expected revenue growth and continued margin expansion. GMV growth of 24% was three percentage points above investor estimates, revenue of $2.2 billion was $40 million better and free cash flow of $421 million was $80 million better. A combination of new merchants to the company’s platform, increased adoption of SHOP’s offerings by existing merchants, and e-commerce market share gains are driving this revenue growth and profitability.
In 2023, 10% of US retail e-commerce sales flowed through SHOP, second only to Amazon, and the company is still enjoying significant tailwinds as retail merchants of all sizes adopt SHOP’s software tools to display, manage and sell their products across a dozen different sales channels. We believe that the overall growth of e-commerce, combined with the development of new products and services, such as its digital wallet Shop Pay, should continue to drive revenue growth of more than 20% per year over the next several years, accompanied by re-acceleration of operating margin growth and FCF generation.”
While we acknowledge the potential of Shopify Inc. (NYSE:SHOP) 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 SHOP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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