Recently on Mad Money, host Jim Cramer stressed on the necessity of staying updated on economic indicators, government actions, and industry developments to make informed investment choices. He emphasized that speculation should be approached with the mindset of a “pro” rather than a novice. Cramer mentioned that while he does not oppose speculation, it must be done with an understanding of the risks involved. He remarked:
“Otherwise, if things go south, you’ll be caught playing a game of endless musical chairs, led by me getting a huge number of lightning round calls about some very sketchy outfits that all belong to what I call the hot money segment.”
Cramer provided insight into this hot money segment, describing it as a segment with limited capital that cannot satisfy all the demand. He specifically pointed to China, explaining that the current policies from the Chinese government have created an environment where, for the moment, it seems nearly impossible to incur losses. He elaborated that the government is actively subsidizing stock purchases and promoting buybacks and insider buying through liquidity support.
It has led to significant price movements in the market. When considering investments in Chinese stocks, Cramer advised caution, suggesting that investors should focus on companies capable of withstanding market fluctuations. He pointed out that many people are tempted to buy Chinese auto stocks, especially given their impressive advancements in electric vehicle technology. Nonetheless, he warned that the electric vehicle market is becoming increasingly saturated.
Cramer added that with the limited amount of hot money available, speculative stocks now face competition from cryptocurrencies. He expressed his belief that Bitcoin and Ethereum are the only cryptocurrencies with a good chance of recovery, dismissing most others as “junk”.
He shared that he only invests in these two digital currencies and avoids common stocks tied to the cryptocurrency market, deeming them too risky compared to Bitcoin and Ethereum, which benefit from exchange-traded products backing them. Cramer concluded by mentioning that speculation should be done wisely, saying, “With any speculative trade, there’s a beginning and an endpoint.”
Jim Cramer on Shopify Inc. and More
Our Methodology
For this article, we compiled a list of 15 stocks that were mentioned by Jim Cramer during the lightning rounds of his episodes of Mad Money on October 4 and October 7. 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 Rounds: 15 Stocks to Watch
15. First Watch Restaurant Group, Inc. (NASDAQ:FWRG)
Number of Hedge Fund Holders: 8
First Watch Restaurant Group, Inc. (NASDAQ:FWRG) is an operator and franchisor of a chain of restaurants across the United States under the First Watch brand. It has more than 535 locations spanning 29 states. The company has established a significant presence in the breakfast and brunch market. Cramer thinks the stock is overvalued. As of October 8, the stock is trading at an over 126% premium compared to its sector median. When Cramer was asked about the company, he said:
“You know, right now this restaurant group is very weird… I gotta tell you, I’m worried about First Watch being a competitive outfit because the multiple is way too high. So I’m gonna say no to that one.”
On October 5, Guggenheim lowered the price target on First Watch Restaurant (NASDAQ:FWRG) to $20 from $24 and maintained a Buy rating. The firm kept its earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast for 2024 at $108 million. However, it adjusted its 2025 EBITDA estimate down to $120 million from a previous projection of $125 million.
For its updated outlook for fiscal year 2024, First Watch Restaurant (NASDAQ:FWRG) sees same-restaurant sales growth to fall within a range of -2.0% to flat, with projected traffic growth showing a decline in the negative mid-single digits. Despite these challenges, the company has reaffirmed guidance for total revenue growth between 17.0% and 19.0%, alongside an adjusted EBITDA forecast of between $106 million and $112 million.
14. AST SpaceMobile, Inc. (NASDAQ:ASTS)
Number of Hedge Fund Holders: 15
AST SpaceMobile, Inc. (NASDAQ:ASTS) is focused on creating and delivering a space-based cellular broadband network tailored for smartphones in the United States. The company is working to provide connectivity in areas lacking terrestrial cellular coverage, enabling users to stay connected in “dead zones”. The company utilizes low Earth orbit (LEO) satellites to facilitate cellular connections for devices operating on 2G, 4G, and 5G networks. Earlier this year, it secured partnerships with major telecommunications providers, AT&T and Verizon, to improve their offerings. When asked about the stock, Cramer said, “To me, it’s just too hot.”
AST SpaceMobile, Inc. (NASDAQ:ASTS) has been working to establish its place in the industry. On September 12, it achieved a significant milestone with the successful launch of its first five commercial satellites, known as BlueBirds.
The large arrays of antennas are designed to connect directly with standard smartphones, providing broadband speeds suitable for voice, data, and video communications. Following their launch, the BlueBird satellites are expected to deliver non-continuous cellular broadband service throughout the United States, as well as in select international markets.
The capabilities of the BlueBird satellites are noteworthy, as they are engineered to support a transmission capacity of up to 40 MHz, allowing for peak data speeds of up to 120 Mbps. The coverage strategy aims for nearly complete nationwide access from space, with over 5,600 dedicated coverage cells spread across the United States.
AST SpaceMobile, Inc. (NASDAQ:ASTS) is preparing to launch its first Block 2 BlueBird satellites, which are anticipated to be approximately 3.5 times larger than the initial Block 1 satellites and offer around ten times the data processing capacity. It is scheduled for the first quarter of 2025 and will see at least four of these advanced satellites placed into orbit.
13. STMicroelectronics N.V. (NYSE:STM)
Number of Hedge Fund Holders: 16
STMicroelectronics N.V. (NYSE:STM) specializes in the design, development, manufacturing, and sale of semiconductor products, catering to various sectors, including automotive and consumer electronics. The company’s extensive portfolio features automotive integrated circuits and power transistors, as well as application-specific integrated circuits and general-purpose analog products.
Discussing the company, Cramer said, “I think it’s fine.” He mentioned that he prefers Micron, highlighting its great quarter.
On October 1, STMicroelectronics N.V. (NYSE:STM) announced a strategic collaboration with Qualcomm Technologies International, Ltd., a subsidiary of Qualcomm Incorporated. The partnership seeks to advance industrial and consumer Internet of Things (IoT) solutions by integrating Qualcomm’s AI-powered wireless connectivity technologies with STMicroelectronics’ established microcontroller ecosystem.
The collaboration will kick off with a Wi-Fi/Bluetooth/Thread combo system-on-a-chip (SoC), with initial products expected to be available to original equipment manufacturers (OEMs) in the first quarter of 2025. It marks a significant first step, with plans for a roadmap that includes additional combo SoC products and potential expansions into cellular connectivity tailored for industrial IoT applications.
12. FIGS, Inc. (NYSE:FIGS)
Number of Hedge Fund Holders: 17
Cramer said, “I think Figs is not expensive and a very good spec. That’s all I can say about it though.”
FIGS, Inc. (NYSE:FIGS) runs as a direct-to-consumer healthcare apparel and lifestyle company, serving markets in the United States and internationally. The company specializes in designing and selling a diverse range of products, including scrub wear, outerwear, under scrubs, footwear, and various accessories such as scrub caps and tote bags.
It primarily serves healthcare professionals and utilizes a digital platform that includes both a website and a mobile app, while also engaging in business-to-business sales and maintaining retail store presence.
In its recent performance report for the second quarter, FIGS (NYSE:FIGS) announced a revenue increase of 4.4%, reaching $144.2 million, which was in line with the market estimates. CEO Trina Spear highlighted the positive results, emphasizing that the company’s investments are yielding benefits.
Additionally, FIGS (NYSE:FIGS) revealed a $50 million share repurchase authorization, signaling confidence in its future prospects. For 2024, the company anticipates flat to 2% revenue growth, along with adjusted EBITDA margins projected between 9.5% and 10%.
11. New Fortress Energy Inc. (NASDAQ:NFE)
Number of Hedge Fund Holders: 20
New Fortress Energy Inc. (NASDAQ:NFE) runs as an integrated gas-to-power energy infrastructure company, providing energy and development services on a global scale. The company engages in various activities, including natural gas procurement, liquefaction, shipping, logistics, and the establishment of natural gas-fired power generation. It also supplies floating storage and regasification units (FRSU) and liquefied natural gas (LNG) carriers for lease to customers, facilitating efficient energy distribution. Cramer expressed shock at how low the company’s stock was, mentioned the CEO, and said:
“… This Wes Edens, he is so good. It’s down like three quarters, like down like 75%. I think that you have to stick with it. I’ve been wrong. I’ve been wrong in New Fortress because I believe in Wes so closely. I’d love Wes to come back on the show.”
Recently, New Fortress Energy Inc. (NASDAQ:NFE) faced challenges that disappointed investors during its second-quarter earnings release. The company missed its guidance significantly due to delays in bringing a new floating LNG facility into service. Although this facility was reportedly operational as of July 19, the preceding delays raised concerns regarding impending debt maturities.
At the close of the last quarter, it reported over $7.6 billion in debt against only $133 million in cash. Management has projected adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.3 billion for 2025, which shows cautious expectations for future performance.
10. Rocket Companies, Inc. (NYSE:RKT)
Number of Hedge Fund Holders: 21
When Cramer was asked if he could see the stock going to $25 this year, he said, “Absolutely. I think it could do that and it’s a very well-run company.”
Rocket Companies, Inc. (NYSE:RKT) operates as a fintech holding company, specializing in mortgage lending, title and settlement services, and a variety of financial technology solutions in the United States and Canada.
It was established in 1987 and has helped approximately 10 million clients, facilitating the origination of loans totaling around $1.8 trillion. Key offerings include Rocket Mortgage for home financing, Amrock for title insurance, and Rocket Homes, which provides a platform for real estate referrals.
During its Investor Day event in September, Rocket Companies’ (NYSE:RKT) CEO Varun Krishna discussed the significant opportunities within the industry, emphasizing that the company operates in crucial sectors such as mortgage, real estate, and financial services.
He said that homeownership represents a $5 trillion market, with the mortgage sector alone being valued at roughly $2 trillion. Krishna pointed out that only 24% of the total origination market share in the first half of the year was held by the top 10 mortgage lenders, leaving a considerable $1.5 trillion market available for smaller competitors.
From 2010 to the first half of 2024, the company has seen impressive growth in both purchase and refinance shares, with compound annual growth rates of 21% and 14%, respectively.
Krishna outlined ambitious market share growth targets for the next three years, aiming to double Rocket Companies’ (NYSE:RKT) purchase market share from 4% to 8% and increase its refinance market share from 12% to 20% by 2027.
9. Joint Stock Company Kaspi.kz (NASDAQ:KSPI)
Number of Hedge Fund Holders: 25
Joint Stock Company Kaspi.kz (NASDAQ:KSPI) is a provider of payments, marketplace, and fintech solutions in Kazakhstan. It serves both consumers and merchants. The company facilitates a variety of transactions, including shopping, bill payments, and peer-to-peer transfers. In addition, it offers valuable data insights that help businesses make informed decisions. The company also features travel services, allowing customers to book flights and holidays seamlessly. When asked about the company, Cramer said:
“This is fintech. It’s a good company. I prefer, right now, I’ve been watching PayPal. I think it’s a similar business, and I think a better value.”
A significant portion of Kaspi.kz (NASDAQ:KSPI) revenue, 99.6%, is generated within Kazakhstan, with a small remainder coming from operations in Azerbaijan and Ukraine.
In response to a recent research report by Culper Research, the company issued a statement expressing that the report misrepresents its business. The company highlighted its position as the first from Kazakhstan to successfully list on the Nasdaq, noting that this visibility has attracted attention from short sellers.
On September 20, TheFly reported that JPMorgan acknowledged concerns raised in the report regarding the company’s exposure to Russia. The firm also mentioned that many issues discussed were already known to investors, including the migration of Russian immigrants to Kazakhstan.
JPMorgan plans to conduct further diligence on the report while maintaining an Overweight rating on Kaspi.kz (NASDAQ:KSPI), suggesting that concerns surrounding the report may linger as a potential overhang on the stock.
8. FTAI Aviation Ltd. (NASDAQ:FTAI)
Number of Hedge Fund Holders: 33
FTAI Aviation Ltd. (NASDAQ:FTAI) is engaged in owning and acquiring aviation and offshore energy equipment to facilitate global transportation solutions. The Aviation Leasing segment focuses on acquiring and managing aviation assets, including aircraft and engines, which are subsequently leased and sold to various clients. On the other hand, its Aerospace Products segment is engaged in the development, manufacturing, repair, and sale of aircraft engines along with their aftermarket components. Cramer said:
“That stock is too hot for me. I would prefer to be in RTX… I understand this is a momentum stock. I’m not going to say people don’t play it, but it’s too expensive for me.”
While Cramer thinks the stock is too hot, it is worth taking into account that, on September 30, Jefferies analyst Sheila Kahyaoglu raised the price target on FTAI Aviation Ltd. (NASDAQ:FTAI) to $155 from $140 and kept a Buy rating.
The analyst’s projections indicate a potential EBITDA of $1.75 billion by 2026, based on the expectation of handling 750 CFM56 modules at a rate of $1.25 million per module, which is 40% higher than the target. Furthermore, an optimistic scenario of full factory utilization at 1,350 modules could lead to an EBITDA of $2.8 billion.
Moreover, recently, FTAI Aviation Ltd. (NASDAQ:FTAI) made a significant move by completing the acquisition of Lockheed Martin Commercial Engine Solutions, which includes a sizable 526,000-square-foot aircraft engine maintenance and repair facility located in Montréal, Québec.
The facility was obtained from Lockheed Martin Canada, marking an expansion in the company’s Maintenance, Repair, and Exchange (MRE) operations.
With this acquisition, it is better positioned to advance maintenance services offered to airline customers, aligning with its goals of growth in this sector. Integrating the maintenance capabilities of LMCES with those already present at FTAI’s QuickTurn facility in Miami, Florida, allows for increased operational capacity.
Together, these facilities can perform up to 1,350 CFM56 module overhauls and conduct over 500 engine tests annually. Following the acquisition, both facilities will adopt the FTAI Aviation brand, with the Montréal site being rebranded as FTAI Aviation Canada and the Miami facility as FTAI Aviation USA.
Next Century Growth Investors, LLC stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q2 2024 investor letter:
“FTAI Aviation Ltd. (NASDAQ:FTAI) is an aftermarket aerospace company focused on engine repair and maintenance for commercial airlines. They have carved out a strong competitive position in the CFM56 engine, which is one of the largest commercial aftermarket opportunities, and they recently added the V2500 engine to their addressable market. We believe the aerospace aftermarket will continue to experience strong demand, allowing FTAI to deliver strong revenue and profit growth.”
7. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 33
VICI Properties Inc. (NYSE:VICI) is an S&P 500 experiential real estate investment trust. It has an extensive portfolio that includes some of the most renowned destinations in Las Vegas, such as Caesars Palace, MGM Grand, and the Venetian Resort. It has a total of 93 experiential assets and its portfolio includes 54 gaming facilities and 39 other venues spread across the United States and Canada. The properties are operated by leading companies in the industry, all of which are secured under long-term, triple-net lease agreements. Discussing the company, Cramer said “you got a 5% yield, so it’s a little bit better than treasuries. It’s a well-run company.” He reiterated that the stock is “fine”.
The primary source of revenue for VICI Properties Inc. (NYSE:VICI) is from the gaming properties, many of which include associated hotels. Importantly, the company does not own the casinos. Instead, it leases the land to operators, ensuring a steady and growing stream of rental income.
The business model has proven effective, as evidenced by the company’s financial performance. In the most recent quarter, it reported revenue of $957 million, which is a 6.6% increase despite the current economic challenges. Per-share earnings also rose from $0.69 to $0.71.
VICI Properties Inc. (NYSE:VICI) has a strong history of dividend growth, further affirmed by a 4.2% increase in its quarterly dividend to $0.4325 announced on September 5. It is payable by October 3 to stockholders of record as of September 18.
The company is committed to returning capital to shareholders and is focused on ongoing expansion plans, including a commitment to invest up to $950 million this year. A significant portion of this investment will go toward renovations and enhancements at The Venetian Resort Las Vegas, along with a recently closed loan secured by several Great Wolf Resorts.
6. Tetra Tech, Inc. (NASDAQ:TTEK)
Number of Hedge Fund Holders: 37
Cramer talked about the company and stated:
“Tetra Tech is remarkable and even at 38 times earnings, I gotta tell you, I see people still buying. It doesn’t seem to slow them down. I would take a breather, but it’s been a great one.”
Tetra Tech, Inc. (NASDAQ:TTEK) is a consulting and engineering company that provides a wide range of services across the globe. It is focused on data collection, analysis, and information management. Additionally, the company offers project management and operations maintenance.
The company offers services and solutions related to climate change adaptation, energy management, and greenhouse gas assessment and reduction. It is actively involved in environmental remediation, reconstruction services, and industrial water treatment, positioning itself as a key player in addressing a variety of environmental challenges.
Over the past year, the stock is up by over 56%. Cramer went on to say, “… That is infrastructure and it’s just kicking butt. A lot of people wish they had that stock.”
Recently, Tetra Tech (NASDAQ:TTEK) announced that Northern Ireland Water selected the company, including its RPS operations, for a framework contract valued at up to £800 million. The 8-year agreement will aid in the sustainable development of essential water and wastewater infrastructure projects across Northern Ireland. The company’s engineers and scientists will play a vital role in managing programs aimed at enhancing climate resilience and improving service delivery for customers of NI Water.
Further emphasizing its capabilities, the company also secured a $249 million contract from the U.S. Army Corps of Engineers (USACE) for environmental assessment and design services at various facilities throughout the United States.
It is a 7-year contract that allows the company’s experts to engage in a wide range of environmental services, including the formulation of water resource management plans, ecosystem assessment and protection, and the design of sustainable building elements that optimize water and energy efficiency.
Additionally, Tetra Tech (NASDAQ:TTEK) showed its diverse capabilities when it was awarded a $39.3 million contract by the U.S. Agency for International Development (USAID). The single-award contract focuses on increasing gender equality and enhancing women’s economic empowerment in sectors such as water, power, infrastructure, transportation, and information and communications technology on a global scale.
TimesSquare Capital Management stated the following regarding Tetra Tech, Inc. (NASDAQ:TTEK) in its Q2 2024 investor letter:
“Many of our Industrial positions provide necessary business-to-business operational services, highly technical components, automation & efficiency improvements, or essential infrastructure services. Tetra Tech, Inc. (NASDAQ:TTEK) provides consulting and engineering services. Its stock price rose 11% after they reported fiscal second quarter revenues that surpassed Street estimates and increased forward guidance. A key development in the quarter was an FDA ruling imposing a very strict contamination limit on polyfluoroalkyl (PFAS) chemicals in drinking water. We believe PFAS analysis, monitoring and remediation can be an important business driver for Tetra Tech for several years.”
5. Crown Castle Inc. (NYSE:CCI)
Number of Hedge Fund Holders: 38
Crown Castle Inc. (NYSE:CCI) operates as a significant player in the communications infrastructure sector, owning and managing over 40,000 cell towers and approximately 90,000 route miles of fiber that support small cell and fiber solutions throughout major markets in the United States. The extensive portfolio includes around 115,000 small cell nodes that are either operational or under contract, establishing a comprehensive network that links urban areas and communities to critical data and wireless services.
About the company, Cramer said, “Crown Castle is just okay. It’s not that well run. It’s got a decent yield of 5.6%. I would not chase the stock. It just had a nice move up. I don’t want to be there.”
Since entering the fiber market in 2015, Crown Castle Inc. (NYSE:CCI) has expanded its fiber operations through various acquisitions. Despite this growth, the high expenses associated with constructing fiber infrastructure have negatively impacted financial performance, leading the company to reconsider its approach to the fiber business and implement cost-cutting measures.
In light of these challenges, the company has been evaluating potential options for its fiber assets, particularly after reaching an agreement with activist investor Elliott Investment Management, which aimed at altering the company’s board structure.
Speculation surrounding its fiber and small cell assets intensified when Reuters’ report emerged about potential bids from EQT-backed Zayo and TPG, suggesting a valuation in the range of $8 billion to $10 billion.
On October 2, Wells Fargo kept an Equal Weight rating and $100 price target on Crown Castle Inc. (NYSE:CCI). The firm mentioned that expectations in the market were leaning towards a valuation exceeding $10 billion.
The firm mentioned that the reported figures falling short of these expectations contributed to a decline in share prices. The firm was not surprised by the lower-than-expected valuation, given recent assessments showing relatively limited demand for the company’s portfolio.
Aristotle Capital Management, LLC stated the following regarding Crown Castle Inc. (NYSE:CCI) in its Q2 2024 investor letter:
“We first invested in Crown Castle Inc. (NYSE:CCI), a provider of telecommunications infrastructure (including towers, fiber and small cells), in 2021. During our holding period, tenancy ratios for the company’s tower business increased. However, the company’s fiber and small cell business segments have yet to deliver the expected benefits from the 5G network transition. Additionally, the CEO of Crown Castle stepped down at the end of 2023, influenced by Elliott Investment Management, an activist investor. Concurrently, the company has initiated a strategic and operational review of its fiber segment to determine whether to pursue a turnaround or a complete/partial sale. Given the uncertainty surrounding the company’s business strategy and new management team, we decided to exit the investment. We will continue to monitor the company from the sidelines.”
4. Pure Storage, Inc. (NYSE:PSTG)
Number of Hedge Fund Holders: 38
Pure Storage, Inc. (NYSE:PSTG) is a provider of data storage and management solutions. The company’s Purity software stands out because it offers data reduction and protection across multiple storage protocols. The hardware portfolio includes the FlashArray, designed specifically for block storage, and the FlashBlade, which is optimized for handling unstructured data. In addition to these offerings, it provides cloud-native solutions like Portworx, tailored for Kubernetes environments, and Pure Fusion, which simplifies unified storage management.
Mentioning the company, Cramer said, “It does its job very well. It’s actually had a good run here. I think I would hold on to it.”
In the second quarter, Pure Storage (NYSE:PSTG) reported significant achievements in subscription revenue and overall operational performance. Subscription services revenue reached $361.2 million, which was a remarkable 25% increase year-over-year. It was largely fueled by the strong uptake of Evergreen//One, which provides on-demand, scalable storage solutions.
Pure Storage (NYSE:PSTG) also made progress in its initiatives surrounding hybrid cloud and artificial intelligence. New offerings like Portworx and Pure Fusion are experiencing growing acceptance in the market.
Management has largely reaffirmed its outlook for the fiscal year, projecting total revenue of $3.1 billion and a non-GAAP operating income of $532 million. However, the target for total contract value (TCV) sales has been adjusted to $500 million for the year, down from the previous forecast of $600 million.
3. Zscaler, Inc. (NASDAQ:ZS)
Number of Hedge Fund Holders: 45
Zscaler, Inc. (NASDAQ:ZS) is a cloud security company that provides a suite of solutions designed to offer secure access for users and devices in a digital environment. Among its key offerings is Zscaler Internet Access, which enables secure connections to externally managed applications. Its Zscaler Private Access facilitates safe access to internal applications that reside in both data centers and cloud environments. The company’s Posture Control solutions focus on safeguarding data within public cloud frameworks, while its Cloud Infrastructure Entitlement Management prioritizes identity and privilege access management.
When asked about the stock, Cramer said, “I think Jay Chaudhry’s doing an okay job.” He mentioned that he likes Palo Alto and CrowdStrike better.
However, it is worth noting that, on October 5, Citi maintained its Buy rating on the stock and lowered the price target on Zscaler (NASDAQ:ZS) to $230 from $240. The firm made a note of the negative sentiment surrounding the company, along with execution risks anticipated in the latter half of the year, which has created a cautious outlook.
Citi started a “90-day positive catalyst watch” on the shares. Against a backdrop of lowered expectations and a discounted valuation, the firm maintains that it has confidence in its rating for the company.
In fiscal 2024, Zscaler (NASDAQ:ZS) reported revenue of $2.167 billion, a substantial 34% increase from the previous fiscal year. The figure not only surpassed management’s guidance of $2.141 billion at the midpoint but also highlights the company’s growth trajectory, as the guidance was raised three times during the year.
Management estimates that the company has an addressable market estimated of $96 billion. During the latest earnings call, CEO Jay Chaudhry emphasized the strong demand for the company’s zero-trust security solutions and commented that advancements in generative artificial intelligence are opening up new growth opportunities.
2. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 56
Shopify Inc. (NYSE:SHOP) is a leading global commerce company that provides a versatile platform and a suite of services designed to assist merchants in managing their businesses across various markets. Its platform allows merchants to display, market, and sell products through a multitude of sales channels, which include online and mobile storefronts, physical retail spaces, pop-up shops, social media platforms, native mobile applications, and various marketplaces. Merchants using the platform benefit from an array of tools designed to streamline operations.
When asked about the prospects of the stock, Cramer commented:
“… Yes, I think that Shopify is at a great level to buy. I think that Harley Finkelstein is doing a terrific job and the stock should be purchased here.”
As e-commerce continues to expand globally, Shopify Inc. (NYSE:SHOP) is well-positioned to capitalize on this growth. The company reported a gross merchandise value (GMV) of $67.2 billion in the second quarter, which is a year-over-year increase of 22%.
The company’s revenue for the same period reached $2 billion, driven by a mix of subscription fees, transaction-processing charges, and advertising revenue from its app store. The launch of financial services such as Shopify Payments and Shop Pay has proven particularly successful, with Shopify Inc. (NYSE:SHOP) processing $41.1 billion in payments during the second quarter, which accounted for approximately 61% of the total GMV.
Rowan Street Capital stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q2 2024 investor letter:
“Shopify Inc. (NYSE:SHOP) has been an incredibly rewarding investment for those lucky enough to get in early after the company’s initial public offering (IPO) in 2015. The shares have delivered a return of 2,600% or 42% annual. Its revenues have grown at 49% per annum since the end of 2014 from $105 million to estimated $8.6 billion in 2024. The massive e-commerce market is a huge opportunity, as the company’s growth indicates. As you tell from the chart below, revenues are forecasted to grow above 20% for the next 3 years. Keep in mind, Shopify has been around for more than a decade — and it’s still growing at these high rates.
We have owned Shopify for only 2.5 years, establishing our position in the first quarter of 2022 at a cost basis of $60, after the stock collapsed from its highs of $169 in November 2021. In hindsight, our entry may have been a bit premature, as the stock continued to plunge, eventually reaching a low of $27 in October 2022. However, such market movements are inherently unpredictable, and we seized the opportunity to invest in a company we had long admired…” (Click here to read the full text)
1. Schlumberger Limited (NYSE:SLB)
Number of Hedge Fund Holders: 67
Schlumberger Limited (NYSE:SLB) is a Texas-based company that delivers a wide range of technology and services aimed at advancing hydrocarbon production and field development. It offers carbon management and the integration of energy systems. The company focuses on various facets of the energy industry. Its services include reservoir interpretation, well construction services, and subsurface geology evaluations, all of which are essential for efficient exploration and production processes. The company supplies crucial drilling fluids and equipment, as well as artificial lift production systems that facilitate extraction efforts. Cramer said:
“SLB has not gone up nearly as much as I would’ve expected. Given the fact that oil’s up, I would buy the stock right here. It is the best of breed.”
Schlumberger’s (NYSE:SLB) management has highlighted the trend towards deepwater developments, particularly in regions like Latin America and Africa, where the majority of future oil capacity expansions are expected.
Projections by management for offshore final investment decisions (FID) suggest a substantial growth trajectory, with estimates reaching $100 billion in 2024 and a similar figure in 2025, driven by rising interest in high-yield, low-carbon assets.
On September 30, Schlumberger (NYSE:SLB) announced the formation of Turnwell Industries LLC OPC, a joint venture with ADNOC Drilling Company and Patterson-UTI. Through the JV, the companies aim to harness cutting-edge innovations in artificial intelligence, smart drilling design, and advanced completions engineering.
The joint venture will prioritize the acceleration of the United Arab Emirates’ unconventional oil and gas initiatives, with an ambitious plan to complete an initial 144 wells by the end of 2025. Within this partnership, Schlumberger will contribute integrated drilling, stimulation, and completion services, alongside project management and digital capabilities, to support the venture’s objectives. ADNOC Drilling will hold a 55% majority stake, while Schlumberger will have a 30% stake and Patterson-UTI will own the remaining 15%.
While we acknowledge the potential of Schlumberger Limited (NYSE:SLB) 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 SLB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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