Jim Cramer’s Thoughts On These 8 Stocks and the Packaged Goods Playbook

1. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 58

Cramer deep-dived into a significant challenge that PepsiCo, Inc. (NASDAQ:PEP) is facing: effects of the weight loss drugs and changes in eating habits.

“The other day, PepsiCo got crushed on weaker than expected earnings… So take PepsiCo, I don’t know if people realize how excellent this company really is. The stock always carried a premium price to earnings multiple, meaning we’re willing to pay extra for its profits. They have terrific brands at Pepsi, Mountain Dew… FritoLay, the latter being one of the most dependable of all staples.

But now PepsiCo’s got a problem because FritoLay is not delivering the consistent numbers that it used to. Why? Management says it’s because younger generations fixate on health and there’s nothing particularly healthy about potato chips or Cheetos. They’ll buy smaller portions. That’s what their hope is. Me? Look, I’m sure that a part, that’s a part of it, but I do think that PepsiCo’s in somewhat of denial about the impact of GLP-1 weight loss drugs from Novo Nordisk, which reported a terrific quarter this morning, and Eli Lilly, which reports tomorrow.”

Cramer then highlighted that taking these weight loss drugs can result in lowered cravings for junk food. Moreover, he noted that they could be used by up to 40 million people in the U.S., a number that might be on the lower side considering that 42% of American adults are obese.”

PepsiCo, Inc. (NASDAQ:PEP) is a leading company in the manufacturing, promotion, and distribution of a wide range of beverages and snack products, including popular brands like Lay’s, Gatorade, Pepsi, Doritos, Tropicana, and Aquafina.

While we acknowledge the potential of PepsiCo, Inc. (NASDAQ:PEP) 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 PEP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article was originally published at Insider Monkey.