In this article, we’ll explore Jim Cramer’s Latest Watchlist: 10 Stock Picks You Need to Know.
In a recent episode of Mad Money, Jim Cramer advised investors to hold onto their stocks, anticipating a rebound after the market’s downturn. This advice proved useful as the Dow rose by 484 points or 1.16% and the NASDAQ also climbed by 1.16%, indicating that selling during the market decline was not the best choice.
“Last week, I advised you to hold off on selling everything and just wait, as I believed that once the pain ended, we would see a rebound. The average investor saw gains, with the Dow up 484 points, or 1.16%, and the NASDAQ also climbing 1.16%. While it might not be a full recovery, it shows that selling into Friday’s downturn wasn’t the best strategy.”
Jim Cramer noted that the previous week was tough for economically sensitive and tech stocks, despite a mixed August employment report. This report suggested a balanced economic outlook, not too strong or weak, which initially seemed favorable for those hoping for Federal Reserve rate cuts. Despite this, Wall Street reacted negatively, shifting away from cyclical stocks to more recession-proof sectors like consumer goods and pharmaceuticals, with industries such as industrials and semiconductors being particularly affected.
Cramer observed that recession-proof stocks, such as pharmaceuticals and medical devices, have performed well recently but have seen significant gains, raising concerns about a potential correction.
“Today, recession-proof stocks like pharmaceuticals, drug wholesalers, and medical devices continued to perform well, which is dangerous as these stocks have seen parabolic gains and could be due for a correction.”
He highlighted that historically, when the Federal Reserve is about to cut rates, it signals a shift in investment strategy. With the Fed expected to ease rates soon, Cramer suggests investors consider moving away from recession-proof stocks and look into more cyclical companies that could benefit from economic stimulus. While investing in cyclical stocks during a downturn is challenging, the anticipated rate cuts could make these stocks more attractive. Cramer advises maintaining diversification but being ready to adjust investment strategies based on the economic outlook.
“Historically, when the Fed is about to start cutting rates, we know that it’s time to shift focus. With the Fed leaning towards easing and an expected rate cut next week, it’s time to consider moving away from recession-proof stocks and investing in more cyclical companies. While it’s challenging to buy cyclical stocks during a slowdown, anticipating that the Fed will boost the economy can make them strong investment opportunities. It’s important to maintain diversification but be ready to adjust as needed.”
Our Methodology
This article reviews a recent episode of Jim Cramer’s Mad Money, where he talked about several stocks. From there, we picked ten companies and discussed how hedge funds are investing in them. Finally, we rank these companies from those least owned to those most owned by hedge funds.
At Insider Monkey we are obsessed with 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 Watchlist: 10 Stock Picks You Need to Know
10. Eagle Materials Inc. (NYSE:EXP)
Number of Hedge Fund Investors: 28
Jim Cramer prefers Eagle Materials Inc. (NYSE:EXP) over Barrick Gold Corporation (NYSE:GOLD). He notes that Eagle Materials Inc. (NYSE:EXP) offers a dividend and has a stronger track record.
“Well, I like Eagle Materials, Inc. (NYSE:EXP) more, frankly. They’ve got a dividend and have had a better record than Barrick Gold Corporation (NYSE:GOLD). I just think it’s not six of one, half a dozen of another. Eagle Materials, Inc. (NYSE:EXP) has a demonstrably better growth portfolio and also better capital allocation.”
Eagle Materials Inc. (NYSE:EXP) is a strong investment choice due to its solid financial performance, focus on infrastructure and effective cost management. Eagle Materials Inc. (NYSE:EXP)’s cement segment, which supplies about 50% of its products for U.S. infrastructure projects, stands to benefit from ongoing investments in this area. Cement margins are expected to improve in fiscal 2025 as costs remain stable and prices rise. Although Eagle Materials Inc. (NYSE:EXP) recently reported a quarterly EPS of $3.76, which was below the expected $4.24, the company has a strong return on equity of 38.3% over the past year, showing its financial strength.
Eagle Materials Inc. (NYSE:EXP) has had some ups and downs, but analysts remain positive, with a price target of around $277, indicating a potential 30% increase. Additionally, Eagle Materials Inc. (NYSE:EXP)’s diverse product range, including Portland cement and gypsum wallboard, is in demand for both infrastructure and residential projects. Its commitment to sustainability, demonstrated by a partnership with Terra CO2 to create low-carbon materials, enhances its long-term growth prospects.
9. Hertz Global Holdings Inc. (NYSE:HTZ)
Number of Hedge Fund Investors: 38
Jim Cramer advises against investing in Hertz Global Holdings Inc. (NYSE:HTZ) at the moment, as he remains cautious about the stock. Hertz Global Holdings Inc. (NYSE:HTZ), known for its brands Hertz, Dollar, and Thrifty, is expanding its electric vehicle (EV) fleet through partnerships with Tesla Inc. (NASDAQ:TSLA) and Polestar Automotive (NASDAQ:PSNY). This shift not only aligns with sustainability trends but also meets growing consumer interest in EVs.
“The time to go in Hertz Global Holdings Inc. (NYSE:HTZ) has not yet arrived. The stock still concerns me. Big Lots also has me worried—big concern.”
The recent surge in travel, as people return to both business and leisure trips, supports the potential for its long-term revenue growth. Although Hertz Global Holdings Inc. (NYSE:HTZ) has faced profitability challenges, with a negative net margin, its revenue growth is a positive sign. Hertz Global Holdings Inc. (NYSE:HTZ) is working on improving its cost structure and managing debt more effectively.
Despite some analysts lowering their price targets, Hertz Global Holdings Inc. (NYSE:HTZ)’s focus on modernizing its fleet and capitalizing on increased travel demand provides a strong foundation for future growth. If these efforts continue to progress and travel demand remains high, Hertz Global Holdings Inc. (NYSE:HTZ) is well-positioned for long-term success, making it a compelling investment.
8. ARM Holdings plc (NASDAQ:ARM)
Number of Hedge Fund Investors: 38
Jim Cramer highlights ARM Holdings plc (NASDAQ:ARM) as a top pick despite recent volatility. ARM Holdings plc (NASDAQ:ARM), which has more than doubled since its re-listing a year ago, recently fell from $188 to $125 but got a boost after reports confirmed its chips are used in the new iPhone 16. Cramer believes the recent price dip presents a buying opportunity, emphasizing that ARM Holdings plc (NASDAQ:ARM)’s technology is crucial in mobile devices and data centers.
“Don’t forget about ARM Holdings plc (NASDAQ:ARM), the 7-nanometer kingpin whose stock has more than doubled since it came public again roughly a year ago. That’s despite pulling back from $188 in early July to $125 today. ARM Holdings plc (NASDAQ:ARM) got a nice boost today on now-confirmed reports that its chip designs are being used in the just-launched iPhone 16. The processor is built on their architecture—that’s not a shocker, but some people don’t understand that.
On Friday, many were buzzing about the relentless decline in semiconductor firm Arm Holdings. The stock fell from $123 down to $117, and this was after already coming down from $132 at the end of the previous week. Arm seemed spent, done. Then, today, it shoots back up to $125—up 7%, supposedly because the new iPhone is using their latest design for custom processors. Something that should have been obvious to everyone for months! Was Friday’s sell-off based on pure emotion, and today’s rally just emotion right back? Or did nothing truly happen at all to Arm on either Friday or Monday?
ARM Holdings plc (NASDAQ:ARM) is unique in that it designs semiconductor architecture, licenses it out to chipmakers, and collects royalties on their sales. This gives them a nice, predictable revenue stream. Their technology is firmly entrenched in data centers, mobile devices, and even the CPU portion of NVIDIA Corporation (NASDAQ:NVDA)’s top AI platforms. They’ll be big winners from a new smartphone upgrade cycle fueled by all this new AI functionality.
There’s a reason Apple Inc. (NASDAQ:AAPL) went with ARM Holdings plc (NASDAQ:ARM)’s architecture—they dominate the mobile space. Again, I’d be a buyer into the recent weakness because I think the long-term upside potential is enormous, and I don’t mind that it’s up that much today. It can go further.
Here’s the bottom line: it’s time to fall back in love with semiconductors. Some of the most beaten-down chip stocks have been punished enough, and now you’re finally getting a chance to buy ARM Holdings plc (NASDAQ:ARM) and Micron Technology, Inc.(NASDAQ:MU) at a discount.”
ARM Holdings plc (NASDAQ:ARM) is an attractive investment due to its strong financial performance and strategic role in the tech industry. In Q1 FY2025, ARM Holdings plc (NASDAQ:ARM) reported earnings per share of $0.40, beating the expected $0.34, and revenue of $939 million, which was higher than the forecast of $903.57 million. This growth, a 3.92% increase over estimates, is mainly due to rising royalty revenue from ARM Holdings plc (NASDAQ:ARM)’s Armv9 technology.
ARM Holdings plc (NASDAQ:ARM)’s partnership with Apple Inc. (NASDAQ:AAPL) further boosts its prospects, as the upcoming iPhone 16 will feature ARM’s chips, highlighting ARM’s key role in mobile and AI technology. This partnership has already driven a 60% increase in ARM Holdings plc (NASDAQ:ARM)’s stock in 2024, with investors expecting continued growth in royalty revenues.
7. Super Micro Computer Inc. (NASDAQ:SMCI)
Number of Hedge Fund Investors: 47
Jim Cramer comments on the recent volatility of Super Micro Computer Inc. (NASDAQ:SMCI), a partner of NVIDIA Corporation (NASDAQ:NVDA). He notes that Super Micro Computer Inc. (NASDAQ:SMCI) dropped from $404 to $386 on Friday, impacted by a report from short-seller Hindenburg accusing the company of aggressive accounting practices. However, Super Micro Computer Inc. (NASDAQ:SMCI) rebounded to nearly $410 today. Cramer questions whether this rebound is significant or just a brief fluctuation, suggesting that the recent price movements might not provide clear insight into the company’s true performance.
“How about this absurdity: Super Micro, fell from $404 to $386 on Friday, still hobbled by a report from short-seller Hindenburg about the company’s aggressive accounting. Then today, Super Micro bounced back to almost $410 again. Either the climb was meaningless, or the rebound is meaningless, or both are meaningless. We don’t know.”
Super Micro Computer Inc. (NASDAQ:SMCI) is a strong investment option due to its significant growth in the AI and high-performance computing markets. Super Micro Computer Inc. (NASDAQ:SMCI) has excelled in AI server infrastructure, driven by a rise in demand for AI applications. For fiscal year 2024, Super Micro Computer Inc. (NASDAQ:SMCI) reported a remarkable 143% increase in revenue, reaching $5.31 billion. Although net income grew by 82%, profit margins have narrowed as Super Micro Computer Inc. (NASDAQ:SMCI) has focused on gaining market share through competitive pricing.
Looking forward, Super Micro Computer Inc. (NASDAQ:SMCI) expects revenue to double in fiscal 2025, forecasting between $26 billion and $30 billion. Analysts anticipate impressive growth rates for Super Micro Computer Inc. (NASDAQ:SMCI), with revenue and earnings per share expected to increase at annual rates of 58% and 52%, respectively, from 2023 to 2026. Super Micro Computer Inc. (NASDAQ:SMCI)’s expanding partnerships with Nvidia, AMD, and Intel strengthen its position in the rapidly growing AI market.
Additionally, the planned 10-for-1 stock split on October 1, 2024, could make Super Micro Computer Inc. (NASDAQ:SMCI) more appealing to investors by lowering its price per share. Despite facing competition from larger companies like Dell Technologies Inc. (NYSE:DELL) and Hewlett Packard Enterprise Company (NYSE:HPE) and dealing with margin pressures, Super Micro Computer Inc. (NASDAQ:SMCI)’s strong market presence and ambitious growth plans make it a promising long-term investment.
Polen U.S. Small Company Growth Strategy stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q2 2024 investor letter:
“The second largest contributor to the Portfolio’s relative performance was Super Micro Computer, Inc. (NASDAQ:SMCI), a provider of high- performance, energy-efficient servers, which the Portfolio does not own. The stock declined notably in the quarter, providing a tailwind to relative performance. On a YTD basis, however, Super Micro is still our largest relative detractor, given its robust 1Q return.”
6. The AES Corporation (NYSE:AES)
Number of Hedge Fund Investors: 46
Jim Cramer was asked by a viewer for his thoughts on The AES Corporation (NYSE:AES) stock and he expressed a positive view of the company regardless of election results. He finds The AES Corporation (NYSE:AES) attractive due to its 4% yield and is surprised by its current low price. Cramer considers The AES Corporation (NYSE:AES) a good buying opportunity and recommends investing in it.
” I think it’s good at a 4% yield. I’m surprised it’s this low. It’s very inexpensive. Let’s go for it.”
The AES Corporation (NYSE:AES) is an appealing investment due to its strong commitment to renewable energy and its strategic role in the global shift towards cleaner energy. The AES Corporation (NYSE:AES) is focusing on expanding its portfolio with investments in renewable projects, such as wind and solar farms, including the notable Chevelon Butte Wind Farm. Although The AES Corporation (NYSE:AES) missed earnings expectations in Q2 2023, reporting revenue of $3.03 billion—up from $2.99 billion the previous year—its long-term growth prospects remain robust.
The AES Corporation (NYSE:AES) targets a 7%-9% annual growth rate through 2025, reflecting its potential as it continues to invest in renewable energy. The AES Corporation (NYSE:AES)’s recent move to sell a 20% stake in its AES Colon project is part of its strategy to optimize its portfolio and concentrate on high-growth, sustainable assets. Given its strong focus on renewable energy and alignment with global energy trends, The AES Corporation (NYSE:AES) is well-positioned for future growth, making it a strong candidate for long-term investment.
5. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Investors: 52
Jim Cramer recently analyzed the stock of Medtronic plc (NYSE:MDT) after it reached a 52-week high last Wednesday. He tested generative AI chatbots and shared his insights on the latest tech tools, emphasizing that tonight’s lightning round will feature rapid-fire stock evaluations. Cramer highlights Medtronic plc (NYSE:MDT) as a strong choice in the medical device sector. He notes that Medtronic plc (NYSE:MDT), which produces devices for cardiovascular, neurological, surgical, and diabetes management, has shown impressive performance.
“After the stock hit a 52-week high last Wednesday, I’m seeing what’s on the horizon with the company. I decided to put generative AI chatbots to the test. Do not miss the fast-moving head-to-head results and how I’m scoring some of the newest tools in tech. It’s a hoot, and all your calls are rapid-fire tonight’s lightning round. So stay with us.
What do we do with the stock of Medtronic plc (NYSE:MDT), the heavy hitter in the med device space? Now that the stock has finally gotten some real lift, Medtronic plc (NYSE:MDT) is a fantastic way to play the healthcare utilization bull market. They make all sorts of devices for cardiovascular disease, neuroscience, surgery, and diabetes management. When these guys reported near the end of August, they delivered an incredible quarter. Since then, we’ve seen a rotation in healthcare. Medtronic plc (NYSE:MDT)’s stock has risen more than 6%.”
In Q1 FY2025, Medtronic plc (NYSE:MDT) reported earnings per share of $1.23, slightly surpassing expectations, and revenue of $7.97 billion, which is a 3.4% increase from the previous year. This growth is driven by rising demand for medical devices, especially in the cardiac and neurovascular areas. Medtronic plc (NYSE:MDT) has also updated its earnings guidance for FY2025, predicting an EPS between $5.42 and $5.50 and revenue between $33.5 billion and $33.8 billion.
Medtronic plc (NYSE:MDT) is investing in key growth areas like robotics, AI-driven surgical systems, and diabetes care, supported by a strong R&D pipeline and strategic acquisitions. Its healthy balance sheet, with a debt-to-equity ratio of 0.55 and a dividend yield of about 3.2%, reinforces its ability to return value to shareholders. Given its diverse product range, ongoing innovations, and steady financial results, Medtronic plc (NYSE:MDT) is well-positioned to meet the growing global demand for medical technologies, making it a compelling choice for long-term investors.
Carillon Eagle Growth & Income Fund stated the following regarding Medtronic plc (NYSE:MDT) in its Q2 2024 investor letter:
“Medtronic plc’s (NYSE:MDT) fundamental updates in the second quarter were mostly positive, including issuing solid quarterly results and reporting positive results from two cardiology clinical trials. However, there is some investor apprehension around the implied cadence of guidance for fiscal 2025, which was exacerbated by the recent departure of the company’s CFO for a role in another industry.”
4. Lyft Inc. (NASDAQ:LYFT)
Number of Hedge Fund Investors: 53
Jim Cramer sees value in Lyft, Inc. (NASDAQ:LYFT) despite its recent struggles. He acknowledges that the stock may have been overpriced at one point, as many investors viewed it as part of a secure duopoly with little risk. However, Cramer now believes that Lyft Inc. (NASDAQ:LYFT) is a good buying opportunity because it is currently trading at a lower price, making it more affordable based on its financial metrics.
“What am I missing with Lyft, Inc. (NASDAQ:LYFT) here? Okay, it got overheated. I think people felt that it was a true duopoly like nothing could go wrong. But I’m with you. I think Lyft, Inc. (NASDAQ:LYFT) should be bought here because it’s now inexpensive, believe it or not, on the numbers.”
Lyft Inc. (NASDAQ:LYFT) stands out as a promising investment due to its strong recent performance and positive future outlook. In Q2 2024, Lyft Inc. (NASDAQ:LYFT) exceeded expectations with earnings of $0.24 per share, beating the forecast of $0.19. Revenue jumped by 40.6% from the previous year to $1.435 billion, thanks to a 10.2% increase in active riders, which now number 23.7 million.
Lyft Inc. (NASDAQ:LYFT)’s gross bookings also grew by 17% year-over-year, reaching $4.018 billion. Lyft’s adjusted EBITDA, a measure of profitability, more than doubled from the previous year to $102.9 million, with a solid margin of 2.6%. Additionally, Lyft Inc. (NASDAQ:LYFT) has strengthened its financial position by reducing long-term debt and increasing cash reserves. Looking ahead, Lyft Inc. (NASDAQ:LYFT) forecasts gross bookings between $4.0 and $4.1 billion for Q3 2024 and expects to achieve positive free cash flow for the year.
3. Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Investors: 93
Jim Cramer highlighted a recent positive report from Oracle Corporation (NASDAQ:ORCL), noting that much of the good news is tied to the expansion of AI data centers. Cramer believes that the sell-off in chip stocks has been overdone, as the reasons for favoring this sector earlier in the year still hold true. He emphasized that the surge in AI spending is genuine, with significant investments in building the necessary infrastructure, as demonstrated by Oracle Corporation (NASDAQ:ORCL)’s latest results.
“This very evening, we got a startlingly good report from Oracle. A lot of the good news came in concert with data centers for AI. Hey, not bad! In the end, I think the chip stocks have sold off way too hard. Every reason we had to like this group earlier this year remains intact. The AI spending boom is very real, and there’s a ton of money being spent to build out the infrastructure, as we heard from Oracle this evening.
More importantly, there’s more to chips than AI. For the past couple of quarters, we’ve been exiting a period of oversupply in the semiconductor market, and we’re now finally seeing some excellent sales growth. Yes, we’re past the point of equilibrium—we’re going up!”
In Q1 2024, Oracle Corporation (NASDAQ:ORCL)’s earnings rose to $2.93 billion, or $1.03 per share, surpassing expectations. Its adjusted earnings of $1.39 per share also beat forecasts of $1.32. Revenue grew by 6.9% to $13.31 billion, driven mainly by its cloud services. The cloud segment, boosted by the acquisition of Cerner Corporation (NASDAQ:CERN), saw a 20% increase year-over-year, reaching $5.3 billion. Oracle Corporation (NASDAQ:ORCL)’s Infrastructure as a Service (IaaS) experienced a remarkable 42% growth, highlighting its successful focus on high-demand cloud and AI services.
Additionally, Oracle Corporation (NASDAQ:ORCL) has secured over $12 billion in AI contracts, positioning itself strongly in the AI field. Oracle Corporation (NASDAQ:ORCL)’s future revenue prospects are supported by a substantial $98 billion in remaining performance obligations. With its leadership in cloud technology and expanding AI contracts, Oracle Corporation (NASDAQ:ORCL) is set for continued growth, making it an attractive investment.
Carillon Eagle Growth & Income Fund stated the following regarding Oracle Corporation (NYSE:ORCL) in its Q2 2024 investor letter:
“Oracle Corporation (NYSE:ORCL) stock rose to all-time highs after the company announced better than expected cloud infrastructure revenue. Oracle signed dozens of new customers, including two leaders in generative artificial intelligence. The backlog remains, and strong growth appears poised to accelerate.”
2. Micron Technology Inc.(NASDAQ:MU)
Number of Hedge Fund Investors: 120
Jim Cramer points out that Micron Technology Inc. (NASDAQ:MU) is expected to earn $9.59 per share in its 2025 fiscal year, with projected earnings rising to nearly $13 per share the following year. Despite these strong earnings forecasts, Micron Technology Inc.(NASDAQ:MU)’s stock is currently trading at less than seven times the expected earnings for next year, which Cramer considers very low.
“Micron Technology Inc. (NASDAQ:MU) is now in its 2025 fiscal year, where it’s expected to earn $9.59, with that number growing to nearly $13 the following year. In other words, Micron Technology Inc. (NASDAQ:MU) is trading at less than 7 times next year’s fiscal earnings estimates. That’s insanely cheap—but remember, that often means people don’t believe in the estimates. That’s how it gets to seven times. I understand that, but I think the estimates are okay.”
Micron Technology (NASDAQ:MU) is a strong investment choice due to its leading role in the semiconductor memory market, especially in areas like AI and next-generation memory technologies. Micron Technology Inc.(NASDAQ:MU) excels in DRAM and NAND technologies, which are crucial for AI, autonomous vehicles, and data centers. In fiscal Q3 2024, Micron Technology Inc.(NASDAQ:MU) reported revenue of $6.81 billion, surpassing expectations due to high demand for AI products and strong performance.
Its non-GAAP earnings of $0.62 per share also exceeded forecasts. Key to its success are innovations like the 9th-generation NAND technology and PCIe Gen 6 SSDs, which are first-of-their-kind advancements for data centers. Although the memory industry is facing short-term challenges, analysts remain positive about Micron Technology Inc.(NASDAQ:MU)’s future. For instance, Susquehanna analyst Mehdi Hosseini notes that despite a “mid-cycle correction” in the memory market, Micron Technology Inc.(NASDAQ:MU) is well-positioned to benefit from changes in the DRAM sector and growing demand for AI-related memory.
1. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Investors: 184
Jim Cramer notes that Wall Street has largely ignored Apple Inc. (NASDAQ:AAPL)’s new iPhone features, but he expects consumers to embrace them. He advises focusing on buying high-quality stocks during market dips rather than reacting to short-term volatility. Cramer suggests that if Apple Inc. (NASDAQ:AAPL) stock drops tomorrow, it could be a good buying opportunity. Overall, he recommends staying calm and strategic instead of reacting to daily market swings.
“Today Apple Inc. (NASDAQ:AAPL) introduced a new phone, and nobody seemed to care. I think this is one of those product launches that gets lost on Wall Street but is eventually loved on Main Street. Wall Street doesn’t care about better battery life, autocorrect spell-checks, or the ability to take a picture of a restaurant and immediately see reviews. It doesn’t care about AI functionality. The Street just wants to know the rollout schedule so they can model earnings. But Main Street wants everything Apple Inc. (NASDAQ:AAPL)’s offering, and you know the wireless carriers will push the new iPhone 16 like they do with every iPhone iteration.
Which brings me back to sitting on your hands. Most of the big moves are a product of algorithms that spit out strategies, creating tons of volatility. Rather than trying to figure out what’s driving these irrational moves, you should focus on buying dips in high-quality stocks when there’s no data—like Apple Inc. (NASDAQ:AAPL) , which I would have told you to own, not trade. At the same time, I’d use the strength to sell some of the defensive stocks that have gone parabolic—they seem risky to me.
And of course, you need to decide whether to buy Apple Inc. (NASDAQ:AAPL) stock tomorrow morning, right when the negative Wall Street analysts clash with the rabid desire of Apple users to buy the new iteration. That’s what’s substantive. I’m hoping for you that Apple Inc. (NASDAQ:AAPL) opens down.
Bottom line: Apple Inc. (NASDAQ:AAPL)’s 9-cent decline in value is the only true move in a session dictated by larger macro forces that are most likely wrong by themselves but possibly right when taken together. The recent action? So rather than freaking out during Friday’s sell-off or just celebrating today, you could have just sat on your hands and spared yourself the agony and friction that comes with endless buying and selling.”
Apple Inc. (NASDAQ:AAPL) remains a strong investment choice due to its solid market position, growing services sector, and advancements in artificial intelligence (AI). Despite facing recent challenges like increased competition in China and a softer iPhone 15 cycle, Apple Inc. (NASDAQ:AAPL)’s future prospects look promising. The upcoming iPhone 16, which is expected to include advanced AI features, is likely to drive strong demand.
Additionally, Apple Inc. (NASDAQ:AAPL)’s Services division continues to grow, becoming a key part of its financial success. Apple Inc. (NASDAQ:AAPL) benefits from its large base of over 2 billion iOS devices, providing a steady revenue stream. New AI innovations are set to further boost growth. CEO Tim Cook’s strategy to address competition and focus on AI is crucial for Apple Inc. (NASDAQ:AAPL)’s expansion. Analyst Daniel Ives predicts a recovery in iPhone sales for fiscal year 2025 and highlights the potential of new AI features.
Even though Apple Inc. (NASDAQ:AAPL) recently saw a dip in stock price and a reduced stake by Warren Buffett, Berkshire Hathaway (NYSE:BRK-B)’s continued investment indicates confidence in Apple’s long-term outlook. Overall, Apple Inc. (NASDAQ:AAPL)’s loyal customer base and innovative AI efforts position it well for future growth.
Baron Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q2 2024 investor letter:
“The Fund’s chief relative detractor was Apple Inc. (NASDAQ:AAPL), even though it was a meaningful contributor to absolute performance, as we added to our Apple position significantly during the period. We bought Apple well, but in 20/20 hindsight we didn’t buy enough. Because Apple has an oversized weight in the Benchmark (its average weight was 15.7% for the period), when Apple’s stock outperforms (it appreciated 23.0%), it has generally been a headwind to relative performance. Our Apple underweight accounted for 33% of our relative underperformance for the period.
This quarter we increased the size of our position in Apple Inc., a leading technology company known for its innovative consumer electronics products like the iPhone, MacBook, iPad, and Apple Watch. Apple is a leader across its categories and geographies, with a growing installed base that now exceeds 2 billion devices globally. The company’s attached services – including the App Store, iCloud, Apple TV+, Apple Music, and Apple Pay – provide a higher margin, recurring revenue stream that both enhances the value proposition for its hardware products and improves the financial profile… (Click here to read more)
While we acknowledge the potential of Apple Inc. (NASDAQ:AAPL), 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 the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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