In this article, we will take a detailed look at Jim Cramer’s Latest Portfolio: Top 10 Stocks to Watch.
Jim Cramer in a latest program on CNBC said that pain is “inevitable” in the stock market as investors go through the volatility infused by the latest tariffs announced by the US government against China, Canada and Mexico. However, Cramer said investors should get used to this volatility and be ready for different situations.
“Commerce Secretary Howard Lutnick said in the last of his myriad interviews of the day that maybe the Canadian and Mexican tariffs could be partially rolled back, perhaps as soon as tomorrow. Yes, it is all that capricious, and you better get used to it if you’re going to own stocks,” Cramer said.
READ ALSO 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 stocks Cramer has been talking about recently. With each company we have mentioned the number of hedge fund investors. 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).
10. Arm Holdings Plc (NASDAQ:ARM)
Number Of Hedge Fund Investors: 42
Jim Cramer in a recent program on CNBC answered a question about Arm Holdings Plc (NASDAQ:ARM) and said investors should own the stock for the long term.
“I’ve got to tell you, Arm is just a very good company. It’s Rene Haas, and we can own it for the long term. That’s what I encourage you to do. If it got down to 120, I would buy more. I’d put a double down on the position.”
9. Airbnb Inc (NASDAQ:ABNB)
Number Of Hedge Fund Investors: 54
Jim Cramer in a latest program talked about cyclical trends in the market and said Airbnb Inc (NASDAQ:ABNB) has become a company that continues to see growth amid strong travel demand.
“When you travel, you need someplace to stay, don’t you? They (Airbnb) just reported excellent numbers. These were cyclical stocks before COVID, but now they’re secular, meaning they seem to have growing growth no matter what.”
Oakmark Equity and Income Fund stated the following regarding Airbnb, Inc. (NASDAQ:ABNB) in its Q4 2024 investor letter:
“Airbnb, Inc. (NASDAQ:ABNB) is an online marketplace to list, discover and book unique accommodations worldwide. The company benefits from a strong network effect between its guests and hosts. We believe there is a long growth runway as global travel is an attractive market, and alternative accommodations have been taking share. We anticipate Airbnb will drive further growth by creating more valuable services for both sides of its network, which includes the potential for paid placement, which has created significant economic value for comparable market places. In our view, management is aligned shareholders and well qualified to lead Airbnb as the company attempts to capture these growth opportunities. Short-term concerns about the macro travel environment and declining margins stemming from growth investments allowed us to purchase shares at a discount to our estimate of business value.”
8. Royal Caribbean Cruises (NYSE:RCL)
Number Of Hedge Fund Investors: 58
Royal Caribbean Cruises (NYSE:RCL) is one of the stocks Jim Cramer recently recommended during his show on CNBC while discussing sectors benefiting from strong travel demand.
“Or buy the stock of Royal Caribbean. It keeps beating the numbers—beating numbers and beating numbers again. The cruise lines haven’t been cyclical since COVID.”
Recurve Capital stated the following regarding Royal Caribbean Cruises Ltd. (NYSE:RCL) in its Q4 2024 investor letter:
“Cruise companies (Royal Caribbean Cruises Ltd. (NYSE:RCL) and NCLH) – 12% of assets as of 12/31/2024
The cruise lines are disruptive in the vacation market. They offer extraordinary, high-satisfaction experiences at great value compared to land-based alternatives. The scale of demand they generate in their businesses allows them to build bigger and better assets, including new portfolios of private destinations which elevate satisfaction while keeping customers (and their wallets) captive within the cruise ecosystem all day. These private destinations magnify the returns of all the vessels that visit these destinations and improve ROIC across their asset portfolios. They have meaningful opportunities to continue these and other innovative expansions over the coming decades. I recommend reading our recent Insight about RCL’s private resorts.
With only 2% market share in vacations and less than 10% of all Americans ever having taken a cruise (but with high repeat rates), the sector has a long way to go before it reaches maturity – especially as the operators keep elevating the quality of the assets and the experiences they can deliver to guests. There remains a significant price differential between cruise vacations and their land-based alternatives, but cruising is not just a value play. The experience is unique and compelling outside of its superior economic value. These are not like customers looking to trade down from a Ritz Carlton to a Marriott to save money – these are vacationers looking for a unique experience that only cruising can deliver.
RCL and NCLH trade at relatively modest P/E multiples. They have highly visible future capacity growth since newbuild pipelines are contracted years in advance. Their normalized growth algorithm is straightforward and reminds me of the old cable equity algorithm (back when there was growth in cable!): modest capacity growth + modest pricing growth + cost growth below inflation = HSD/LDD revenue growth and LDD-mid-teens earnings growth. If we layer on accretive balance sheet actions that are now opening up in the post-Covid recovery period (reducing interest expense and returning capital to shareholders), we can get to >20% medium-term EPS CAGRs.
Both RCL and NCLH trade at undemanding valuations because most investors treat them as cyclicals trading at or near peak earnings or peak pricing power. There will always be periods of relative strength and weakness, but the long-term trendline on pricing is up – well above inflation. It would take a severe recession for pricing to turn negative.”
7. Affirm Holdings Inc (NASDAQ:AFRM)
Number Of Hedge Fund Investors: 61
Jim Cramer in a latest program on CNBC said Affirm Holdings Inc (NASDAQ:AFRM) shares have more upside potential.
“Affirm, which has had a remarkable run is not done. It hit a high today, but could back off a little.”
Affirm Holdings Inc (NASDAQ:AFRM) shares are up 34% over the past month.
6. Toll Brothers Inc (NYSE:TOL)
Number Of Hedge Fund Investors: 64
Jim Cramer in a latest program on CNBC discussed the reasons why Toll Brothers Inc (NYSE:TOL) shares fell following earnings. Cramer said TOL is one of his favorite homebuilder stocks.
“Last night, Toll Brothers, one of my favorite homebuilders, reported a quarter that was mixed, and the stock just got hammered. The entire group took a hit. The conference call was instructive because it showed cracks developing, with lower average housing prices around the country and some very soft markets—something that’s not supposed to happen when the Fed is cutting rates. Mortgage rates are still way too high for this group.”
Cramer mentioned Toll Brothers Inc (NYSE:TOL)’s management comments from the latest conference call where they pointed to high prices in certain areas.
“Those prices have to come down—that’s raw inflation. They have to come down before we beat inflation in this country. Toll Brothers, the entire industry,” Cramer said.
5. United Airlines Holdings Inc (NASDAQ:UAL)
Number Of Hedge Fund Investors: 86
Jim Cramer in a latest program gave bullish comments about United Airlines Holdings Inc (NASDAQ:UAL) amid strong travel demand. He believes United’s valuation is justified.
“United is up 10% year to date. I think it can challenge this old high of 116, given that people seem to want to travel no matter what. We’re well past the initial post-COVID boom here. I think it can absolutely justify paying eight times earnings for United.”
Patient Capital Management stated the following regarding United Airlines Holdings, Inc. (NASDAQ:UAL) in its Q4 2024 investor letter:
“United Airlines Holdings, Inc. (NASDAQ:UAL) had a strong fourth quarter, gaining 70.2% in the period. The company benefitted from continued strong demand that surprised the market as well as the initiation of a buyback program, the first since COVID. There continues to be strong travel demand from both retail and business travelers. According to the International Air Transport Association (IATA), global air passenger travel is still below the pre-COVID implied trend path despite reaching a new all-time high this year. United’s focus on the customer over the last few years has led to strong improvement in net promoter scores (NPS) which should continue to flow through the model via better TRASM (total revenue per available seat mile) and higher cash flows and earnings. As of today, United alone accounts for ~30% of the overall industry’s profits. We expect this market share to grow and be defensible as we transition to an environment where customer service becomes the differentiating factor, and scale provides unparalleled ability to reinvest in the customer experience.”
4. Bristol-Myers Squibb. Co (NYSE:BMY)
Number Of Hedge Fund Investors: 88
A caller recently asked Jim Cramer about his thoughts on Bristol-Myers Squibb. Co (NYSE:BMY) Here is what Cramer said:
“Bristol Myers is the most attractive drug stock, other than Eli Lilly. I think COBENFY is going to be one of the largest drugs of all time because it’s going into schizophrenia. It’s a great drug for the brain, really incredibly hard. I do a lot of stuff. I can tell you that this company really has the silver bullet for schizophrenia, which is one of the worst diseases in the world. It can be expanded beyond that. It’s a multi-billion-dollar drug, and it is going to be great. While you wait, 4.5% yield, own Bristol Myers.”
3. Walt Disney Co (NYSE:DIS)
Number Of Hedge Fund Investors: 108
Jim Cramer in a latest program on CNBC recommended investors to buy Walt Disney Co (NYSE:DIS) on the back of strong travel and leisure demand.
“You need someplace to go, don’t you? I keep hounding you to buy Disney stock because it’s doing so well, yet all people seem to care about is some weak link in the cable business, which I think is going to pick up sooner or later. Anyway, theme parks—yes, they are expensive, but that doesn’t seem to stop people from going.”
Disney reported decent quarterly results last month. Its Direct-to-Consumer streaming segment achieved profitability for the first time in 3Q24 and continued raking in profits in the latest quarter. Disney expects operating income growth of 6-8% for the Experiences segment in FY25.
2. Salesforce Inc (NYSE:CRM)
Number Of Hedge Fund Investors: 162
Jim Cramer was recently asked about Salesforce Inc (NYSE:CRM). Here is what he said:
“This happens now. We own Salesforce. We started buying it when it was at eight bucks. It’s had a big run. I don’t blame you one bit for feeling like, ‘Ouch, that one’s down a lot.’ All I can do is say, and I’ll say it on Thursday, is this: it’s worth buying more and getting a better average. Why? Because I think the company’s going to have a blowout quarter.”
Salesforce’s latest quarterly results were mixed. It reported revenue of $9.99 billion, missing estimates by about $50 million. For Q1, the company forecasts a year-over-year growth between 6% and 7%. For FY 2026, Salesforce expects total revenue between $40.5 billion and $40.9 billion, reflecting a 7%-8% year-over-year growth. This implies a 1 percentage point deceleration in growth compared to FY 2025. CRM bulls are counting on the Agentic AI market but that catalyst could take a while to realize.
Montaka Global Investments stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q4 2024 investor letter:
“There are multiple structural trends in the enterprise software space, including (i) the ongoing cloud migrations and digital transformations of enterprises, and (ii) the infusion of AI into software applications.
While the former remains in its early innings (80-85% of enterprise workloads still reside ‘on-premise’ – many of which will ultimately move to public clouds), the latter remains in its infancy.
Given all the hype of late, it’s hard to fathom that large-scale deployments of AI-based enterprise applications have barely even started. It’s all still to come. And we believe 2025 will be the first year that we really start to see meaningful deployments and adoption of these kinds of applications.
Consider another of our top 10 holdings, Salesforce, for example. Its revenue growth is at a cyclical low. Indeed, at just +8% per annum, as reported in the company’s most recent quarter, its rate of revenue growth has never been lower.
But in 2025, not only will price increases that were announced two years ago boost Salesforce, Inc.’s (NYSE:CRM) revenue growth, but the year will also mark the early stages of adoption of the company’s new ‘Agentforce’ (released only weeks ago). This is a new platform that lets businesses build and deploy their own custom AI agents to automate tasks, improve efficiency, and enhance customer experiences…” (Click here to read the full text)
1. Meta Platforms Inc (NASDAQ:META)
Number Of Hedge Fund Investors: 262
Jim Cramer in a recent program said he sold some Meta Platforms Inc (NASDAQ:META) shares for this charitable trust amid the strong bull run. However, Cramer said the trust still owns the stock.
“It went up so much that we actually did a little bit of trim for the trust because it got so huge for us.”
Meta crushed expectations with the latest quarterly results, but yet again pointed to higher expenses in the future. In 2025, it sees total operating expenses in a range of $114-$119 billion, with 19-25% y/y growth. Capex is expected to rise 61-74% y/y to $60-$65 billion, compared to just $37.3 billion in FY24. Advertising rose strongly but analysts believe it should be seen in the context of higher political ad spend and holiday quarter perspective. In 2025, the company might not be able to keep reporting double-digit growth in ad pricing amid weaker consumer spending and a cautious macroeconomic backdrop.
In the long term, Meta shares are expected to grow because of AI. How?
Meta Platforms (NASDAQ:META) is driving usage and ads revenue by improving its algorithms and user experience thanks to AI. Meta Platforms (NASDAQ:META)’s advancements in Reels and WhatsApp are helping manage CapEx growth as the company strives to stay competitive in AI. Meta Platforms (NASDAQ:META)’s substantial user base of 3.3 billion provides a data and distribution edge that could capture a significant share of the GenAI market.
Rowan Street Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.
For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.
Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)
While we acknowledge the potential of Meta Platforms Inc (NASDAQ:META), our conviction lies in the belief that under the radar 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 META but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at Jim Cramer Discussed These 11 Stocks & Erratic Stock Market Performance and 10 Stocks That Analysts Think Will Go Up.
