On Monday, Jim Cramer, host of Mad Money, took a closer look at the current status of the Magnificent Seven stocks, offering insight into both their market positioning and how the White House’s stance seems to be shifting.
“First, I can’t be sure that Trump has changed, but I do believe that he’s never lost sight of the markets and he watches the business channels.”
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Cramer emphasized that his analysis is not political, rather, it is a “clear-eyed” assessment of what the president aims to achieve. According to Cramer, Trump is pushing for more jobs and manufacturing within the U.S., even if it means sacrificing access to cheap goods from overseas. Turning his attention to the Magnificent Seven stocks, Cramer said:
“Everybody knows the Magnificent Seven is not so magnificent anymore… But as I said over and over again, you simply can’t count these stocks out.”
He explained that these stocks still hold significant value despite their significant drops from their peak highs. For Cramer, these companies are not to be dismissed lightly. He mentioned that six of them are part of his Charitable Trust, making them especially relevant to his analysis. He noted that some serious damage had been done to the group.
As Cramer continued his commentary, he pointed out that analyst sentiment toward the Magnificent Seven has become more positive after a year of skepticism. However, he highlighted that only Amazon and Nvidia have truly favorable setups at the moment. For the others, it remains to be seen what the future holds. Regardless of their uncertain outlooks, Cramer noted one important factor common to all these companies: as their stock prices fall, they actually become more affordable.
“Their stocks actually truly do get cheaper as they go lower, and that’s more than I can say for many others that have held up well during this exceedingly difficult period.”
Our Methodology
For this article, we compiled a list of stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 24. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock 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).
7. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Cramer highlighted Tesla (NASDAQ:TSLA) as a “tech company” and said:
“Finally, there’s the one that everyone’s been dumping on and that’s Tesla. I think that people are misunderstanding the power of Tesla, the tech company. At these prices, Tesla, the car company, could have sales that were cut in half and I don’t know how much lower it would go.”
Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles and energy products. The company offers a range of services, including vehicle sales, financing, energy storage solutions, solar energy systems, and other related services to a wide range of customers. Polen Capital stated the following regarding the company in its Q4 2024 investor letter:
“The largest relative detractors in the quarter were Tesla, Inc. (NASDAQ:TSLA) (not owned), Thermo Fisher Scientific, and Broadcom (not owned). We’ve spoken at length about our rationale for not owning Tesla. The stock enjoyed a 54% return during the quarter, with effectively all of the share price performance strength coming in the post-election period, as the market expressed a positive view on Elon Musk’s prominent role in the incoming Trump administration and its potential implications for Tesla. While we agree this development should be a net positive for Tesla and recognize the company’s interesting future prospects for autonomous driving and humanoid robots, its current valuation demands that shareholders pay primarily for potential innovations that have yet to materialize, with uncertain risks and timelines, presenting a different type of risk profile than we are comfortable with. Today, Tesla is an automobile manufacturer limited to the higher-income segment and is increasingly challenged to sell vehicles when interest rates are not zero. As such, we continue to question the company’s long-term growth profile, its ability to scale a large robotaxi service (which seems to be the source of euphoria in Tesla shares), and its corporate governance.”
6. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
While Cramer was bullish on NVIDIA Corporation (NASDAQ:NVDA), he did express concern over the death cross pattern.
“Six, we saw Nvidia up close and personal last week and I was actually blown away. I believe in the earnings. In fact, I think the AI infrastructure spending will only get stronger when they roll out new chips next year, cheap. Now, I am concerned about this death cross thing, a pattern where the 50-day moving average slices through a 200-day, signaling a real breakdown. I wouldn’t normally mind, but there’s so many double inverse Nvidia ETFs and zero-day options. Those have the power to be the tail that wags the dog sometimes. That is worrisome. I, we need to see this thing break out of that whole death cross stuff. We can take that out of the equation.”
NVIDIA (NASDAQ:NVDA), recognized for its innovations in graphics, computing, and networking technologies, is fueling substantial growth with its GPUs and the CUDA software platform, which are essential components of AI infrastructure.
5. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Cramer expressed disappointment in Microsoft Corporation (NASDAQ:MSFT) as he stated:
“I’m plenty worried about Microsoft too. Its Copilot really isn’t as important or impressive as it’s made out to be, and it’s a total pain in the butt when they try to force it down your throat every time you turn on your PC. I think Marc Benioff was right when he knocked Copilot and said it’s the new Clippy. It’d be one thing if Microsoft could make the estimates, but they’ve missed three times now. That’s why the stock’s been such a dog. It could stay a dog if it misses again. I don’t detect the urgency you need to have when you’ve missed three times.”
Microsoft (NASDAQ:MSFT) creates software, services, devices, and solutions across various sectors, including productivity tools, cloud services, enterprise applications, gaming, and products designed for both individuals and businesses.
4. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 262
Discussing Meta Platforms, Inc. (NASDAQ:META) during the episode, Cramer said:
“Fourth, I worry about Meta. It’s acting so well, but it’s pure, pure advertising play and advertising is struggling in a slowdown. But what I am most worried about is Meta AI, its generative AI platform. It’s got a lot of users and it scrapes from its own sites among others. Big leg up. We need to see if it can have the scale of Elon Musk Grok or OpenAI’s ChatGPT… Both the ChatGPT and Grok are better I think. Unless, and I use, I try Meta AI all the time, unless Mark Zuckerberg would like to come on Mad Money and show me how to use it better, I don’t see that attraction. It’s a push.”
Meta (NASDAQ:META) creates products that facilitate global communication through platforms such as Facebook, Instagram, Messenger, and WhatsApp, along with augmented and virtual reality hardware, software, and content.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Cramer mentioned that all the negatives are priced in Apple Inc. (NASDAQ:AAPL) stock and remarked:
“How about Apple? Look, lots of people really abhor Apple here and the myriad bears have been feasting this way, which is why it now trades at just 30 times earnings but Apple has 1.3 billion users.
I think they have the leverage to let others spend fortunes on AI to get into their universe, that more than makes up for the Siri-gate fiasco. Okay, what’s not in the numbers here? The release of a foldable phone next year with big average selling price. Plus, I think most of the negatives are getting priced in, if not all of them. Kind of compelling, certainly compelling lower.”
Apple (NASDAQ:AAPL) designs and sells various consumer electronics, such as smartphones, computers, tablets, wearables, and accessories, in addition to offering services. The company also runs subscription services like Apple Music, Apple TV+, and Apple Arcade, while overseeing platforms like the App Store and Apple Pay.
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Cramer said that he would be a buyer of Amazon.com, Inc. (NASDAQ:AMZN) and discussed:
“Next is Amazon. I think Amazon’s doing well with both of them, its Web Services business and the Prime offerings. There’s no sign whatsoever its retail share… is tapering off. Its ad business has become a favorite of the big ad buyers along with YouTube and Google. Lots of the big non-tech titans run their websites on Amazon Web Services…. Call me a buyer.”
Amazon (NASDAQ:AMZN) has positioned itself as a leading force in the global tech sector, offering a wide range of services that include e-commerce, advertising, and subscription-based products. Burke Wealth Management stated the following regarding the company in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Whereas most of the discussion around Amazon focuses on trends in its AWS business, our focus has been on the progression of margins in its retail business. Happily, both units appear to be on the upswing which drove strong fourth quarter share price performance. In AWS, Q3 sales growth was a solid 19% and the run rate of the business is now $110B. Equally encouraging is that margins were 38%, marking the third consecutive quarter that AWS operating margins were in the 36%-38% range after spending the last two years in the 28% range. This margin gain is being driven by demand for higher value applications as well a benefit from extended life usage across its data center architecture. On the retail front, the margin story remained in full force with North American margins reaching 5.9% in the third quarter and International margins delivering positive results (+3.6%) for the third straight quarter after 10 straight quarters in negative territory. CEO Andy Jassey has pointed out that Amazon’s efforts to reconfigure its distribution network from a centralized to a regional network has yielded productivity gains and that he sees no reason why retail margins in North America can’t meet or exceed previous record levels. We think a consistent run towards the high-single-digit range is likely. International retail sustaining profitability would be an added bonus and this great white whale finally seems within our grasp as Amazon reaches critical mass across numerous large international markets.”
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOGL) was mentioned during the episode, and here’s what Mad Money’s host had to say:
“First, alphabetically speaking, is Alphabet, less than 19 times earnings with the stock down from $207 to $167. This one seems to have the most problematic situation because it’s got a lot to lose in Google Search revenue that may not be offset by Gemini, its chatbot. I don’t know so who uses it? But Alphabet does have YouTube and YouTube’s crushing it and Google Cloud Services is kicking butt. I’m inclined to use today’s strength actually to sell the stock though, because there’s real earnings risk from Google Search.”
Alphabet (NASDAQ:GOOGL) was formed as the parent company after Google underwent a restructuring, with Google remaining primarily associated with its search engine. On Friday, during an episode of Squawk on the Street, Cramer commented:
“I do think that, you take a stock like Alphabet, there’s no good news, coming from Alphabet, so I don’t want to own Alphabet.”
While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOGL) 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 time frame. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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