In this article, we’ll explore Jim Cramer’s Top 12 Must-Watch Stocks.
In a recent episode of Mad Money, Jim Cramer traveled to Dreamforce to understand the true capabilities of artificial intelligence (AI) and to separate fact from hype. After diving deep into the topic, he feels more equipped to identify which AI claims are genuine and which are simply marketing fluff. He noted that there seems to be far more misleading information than real advancements.
“All right, I had to come all the way out here to Dreamforce, the Salesforce Tech Festival, to learn what artificial intelligence is really capable of and what’s pure hype. After immersing myself in AI, I feel a lot more confident in sorting out the real from the phony. And you know what? There’s a hell of a lot more phony than there is real. That’s why I want to show you which AI claims are meaningless and which ones are legit.
Look, I know this is Mad Money, not Mad AI. On a day like today, I could just focus on the Fed and only the Fed, whether we’ll get a quarter percent rate hike or maybe a half percent rate tomorrow. Today, the averages whipped around, finishing off 16 points, the S&P ending up 0.3%, and the NASDAQ inching up 2%. Stocks were all over the place.”
Maximizing Profit Potential Through Lower Rates and AI Innovation
Cramer emphasized that we don’t need expert predictions to see that interest rates are likely to drop, which is crucial for sustaining a bull market. He urged viewers not to overthink the situation and instead focus on promising opportunities, especially in the rapidly growing field of artificial intelligence.
“Today is proof that you can game the ungameable. But you don’t need a San Francisco weatherman to know which way the wind blows. In the end, we know rates are headed lower, not higher, and that’s what we need to sustain this bull market. Please do not overthink it. I’d rather focus on what can help us make some money, like the biggest theme in the world right now: artificial intelligence.”
While AI is causing excitement in the stock market, Cramer observed that its impact on the overall economy has been minimal so far. Some applications, like cost savings in corporate back offices, exist, but they aren’t groundbreaking. This lack of significant progress has led many analysts to suggest that the hype around AI may be turning into a bubble.
“Specifically, what does AI actually do? We’ve heard so much about this technology and how it’s going to revolutionize everything. Right now, though, we know that while AI has taken the stock market by storm, it really hasn’t taken the actual economy by storm. There are use cases, sure, back office corporate cost savings—nothing flashy. That’s why so many commentators now come on air and call the whole thing a bubble.”
Cramer explained that AI, particularly when paired with advanced computing from chip giants, can greatly enhance efficiency by allowing machines to perform tasks intelligently, similar to skilled humans. He pointed out that businesses strive to produce quality products, but a worker shortage, exacerbated by the COVID pandemic, has hindered their ability to connect with customers effectively. Sales associates often end up rushed and confused, which affects the customer experience.
“Let me tell you what AI really does. When coupled with accelerated computing, AI makes everything go faster. It rationalizes processes and can make machines behave like smart, good humans. Businesses want to produce good products and sell them to real people, whether for enterprises or homes—that’s capitalism 101. But right now, we don’t have enough workers to do it.
That became apparent during COVID. We can’t interact effectively because our sales associates are too busy to be anything but brisk or confused. They’re harried from the moment they come in to the moment they leave. It’s a late-stage capitalist directive. What can I say? What doctor has time to talk to you? What nurse practitioner can give you the time of day?”
Elevating Customer Service Through Advanced AI Agents
Cramer highlighted that companies are pushing their employees hard for profits, creating a stressful work environment. However, after attending Marc Benioff’s keynote, Cramer recognized the potential of a technology called Agent Force. This AI initiative can engage customers in a friendly manner, using personalized data to answer common questions efficiently.
Cramer believes AI is a great solution for customer service, offering clear assistance without the frustrations that often come from overwhelmed human employees. AI agents can listen, reason, and either direct customers appropriately or handle their inquiries independently.
“Companies are already squeezing as much as they can out of their employees to boost stock prices and profits for executives. Then it hit me while watching Marc Benioff’s incredible keynote today. He described an initiative called Agent Force, and I realized what this technology can really do. It has time for you, acknowledges you, and is polite. It can almost always answer your questions because there are only so many that get asked regularly, and it has the data to respond to your data. It knows your preferences.
This is the perfect way to handle customer interactions instead of relying on humans who can be unclear, impatient, or exhausted. Humans are, well, human, harried and ready to go home. But machines infused with AI are delightful, smart, and engaging. They don’t mind going to work, and that’s where these AI agents come in. The machines can listen, reason, and either direct you to the right place or handle everything themselves.”
He further explained that AI enhances customer experiences by remembering preferences, helping with returns, and suggesting alternatives based on past purchases. This reduces the need for interaction with human salespeople who may be stressed or impatient. If customers remain unsatisfied, they still have the option to speak to a human, but many might prefer friendly interaction with an AI agent.
“So, what AI really is and what it does is provide us with something better than what we currently have. It’s a retailer that knows all about your preferences, can help you return an item, and asks if you want something different from what you bought last time. It frees you from the hassle of a human salesperson who might be frustrated or upset. And if you’re not satisfied, you can still speak to a human if you want to, but I doubt you will, because the AI agent is just so much more pleasant.”
Revolutionizing Everyday Life: How AI Outperforms Humans in Healthcare, Driving, and Beyond
Cramer also predicted that in ten years, people might wonder why they relied on human doctors when AI could provide more compassionate and effective care. These AI systems could analyze vast amounts of medical data to quickly identify serious health issues, making it easier to catch dangerous patterns before they escalate.
“It’s not just retail. In ten years, I think we’ll wonder why we ever wasted a doctor’s time when AI agents were so much better, kinder, and more empathetic. Doctors could analyze millions of test results that might have taken a decade to sort through, identifying dangerous patterns well before they become problematic, like melanoma, heart disease, or kidney cancer. It’s all in the data, and only AI can compile it in an accessible way.”
Additionally, Cramer noted that self-driving cars are becoming more common and are significantly safer than human drivers since they don’t get distracted or impaired. He mentioned that AI can handle tasks like proofreading without making mistakes, allowing law firms to operate with fewer associates.
“We see self-driving cars everywhere. They’re much safer than human drivers. They don’t drink and drive, they don’t even drink. An AI agent can proofread, correct, and never make a mistake. Law firms can now hire half as many associates because of this efficiency”
Finally, Cramer emphasized that AI agents generally outperform humans in most scenarios. For repetitive tasks, he believes it’s preferable to engage with a courteous and efficient AI rather than a stressed human who may not want to help.
“The bottom line is that if you let the AI agent do its job, it will outperform humans in the vast majority of cases. And for repetitive tasks, trust me: you’d much rather have a polite and friendly AI agent than a harried, angry, or exhausted human who really doesn’t want to deal with you.”
Our Methodology
This article provides a summary of Jim Cramer’s latest episode of Mad Money, where he reviewed several stocks. We picked 12 companies and ranked them based on how much they are owned by hedge funds, starting with the ones that are least owned and moving to those that are most owned.
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 Top 12 Must-Watch Stocks
12. Portland General Electric Company (NYSE:POR)
Number of Hedge Fund Investors: 21
Jim Cramer highlighted Larry Culp’s impressive turnaround at Portland General Electric Company (NYSE:POR). When Culp took charge, he faced struggling divisions and made the tough decision to sell valuable assets, including the biopharma business, which was sold to Danaher Corporation (NYSE:DHR) for $21 billion.
Cramer explained that Culp’s goal was to reduce debt and strengthen Portland General Electric Company (NYSE:POR)’s financial position, as he stated in his release. While losing that fast-growing division must have been difficult, Cramer believes that without this sale, Culp might not have been able to execute GE’s highly profitable three-way breakup.
“Of course, the biggest salvage job was the one Larry Culp pulled off at GE. When he took over, he had sick divisions all over the place, so he had to sell some gems, like the biopharma business, which he sold to Danaher for $21 billion in cash. That was a best-in-show business. Why did he do it?
Simple: Larry said he was taking thoughtful and deliberate action to reduce leverage and strengthen the balance sheet—right from the release. I know the loss of that fast-growing business must have hurt him, but if Culp hadn’t sold it, I don’t know if he could have pulled off GE’s insanely lucrative three-way breakup.”
A positive outlook for Portland General Electric Company (NYSE:POR) is based on its stable growth prospects, commitment to renewable energy, and strong financial performance. Portland General Electric Company (NYSE:POR) is transitioning to renewable energy sources, aiming to significantly reduce carbon emissions by 2040. This positions it well in the growing clean energy market through investments in wind, solar, and energy storage projects.
In its recent Q2 2024 earnings report, Portland General Electric Company (NYSE:POR) reported revenues of $642 million, a year-over-year increase due to higher customer demand and energy prices, along with an earnings per share of $0.70 that exceeded analysts’ expectations. Operating in a regulated environment provides Portland General Electric Company (NYSE:POR) with stable revenue and profitability, and it has effectively resolved recent rate cases to maintain financial health while investing in infrastructure improvements.
Portland General Electric Company (NYSE:POR) is also focused on enhancing customer engagement through technology and smart grid initiatives, which improve operational performance and reliability. As economic growth in the Pacific Northwest leads to increased electricity demand, Portland General Electric Company (NYSE:POR)’s proactive planning and investments in sustainable projects position it to meet future energy needs.
11. Vertiv Holdings (VRT)
Number of Hedge Fund Investors: 26
Jim Cramer called Vertiv Holdings the top data center stock, praising its chairman, Dave Cote, for his extensive business knowledge that surpasses that of many S&P 500 executives. Cramer believes this strong leadership makes Vertiv Holdings a promising investment.
“Vertiv is the premier data center stock, and with a chairman like Dave Cote, who knows more about business than many S&P 500 members, I think it’s a winner.”
10. Equity Residential (NYSE:EQR)
Number of Hedge Fund Investors: 30
Jim Cramer described Equity Residential (NYSE:EQR) as a fantastic stock, highlighting that it still offers a yield of about 3%. He acknowledged its significant gains but emphasized the ongoing housing shortage and Equity Residential (NYSE:EQR)’s extensive portfolio of apartment complexes, making it a strong investment choice.
“Total winner! Equity Residential is just an amazing stock. It still yields about 3%, and you can still make money on it. I know it’s up huge, but talk about a shortage in housing and apartment complexes, they’ve got them all!”
A promising report for Equity Residential (NYSE:EQR) is based on its solid fundamentals, favorable market conditions, and strategic efforts in the multifamily housing sector. Equity Residential (NYSE:EQR) operates in key urban areas where demand for rental housing is strong, driven by growing populations, a trend toward urban living, and challenges in homeownership affordability.
In its recent Q2 2024 earnings report, Equity Residential (NYSE:EQR)l announced revenues of $505 million, a year-over-year increase, and a funds from operations (FFO) per share of $0.85, which surpassed analyst expectations, indicating solid performance. Equity Residential (NYSE:EQR)consistently achieves rent growth and high occupancy rates, allowing it to benefit from strong apartment demand.
Equity Residential (NYSE:EQR) also focuses on enhancing tenant experiences through property upgrades and sustainability initiatives, which help retain tenants and attract environmentally conscious renters. As the multifamily rental market continues to thrive due to job growth and urbanization, Equity Residential (NYSE:EQR)’s strategic presence in high-demand cities like New York, San Francisco, and Washington, D.C. supports its growth potential. Recent acquisitions and partnerships to improve property management further enhance Equity Residential (NYSE:EQR)’s positive outlook.
Baron Real Estate Fund stated the following regarding Equity Residential (NYSE:EQR) in its Q2 2024 investor letter:
“In the second quarter, the shares of Equity Residential (NYSE:EQR), the largest U.S. multi-family REIT, appreciated due to continued strong operating updates, an improved full-year growth outlook, and faster-than-expected improvement in the company’s West Coast markets. Management has assembled an excellent portfolio of Class A apartment buildings located in high barrier-to-entry coastal markets with favorable long-term demographic trends and muted overall supply growth. Please see the “Top net purchases” for further thoughts on the company.
In the second quarter, we increased the Fund’s REIT exposure to best-in-class multi-family owners/operators Equity Residential and AvalonBay Communities, Inc. Our meetings with each management team supported our view that both companies are led by astute executives that are highly focused on driving value creation for shareholders…” (Click here to read the full text)
9. Moderna Inc. (NASDAQ:MRNA)
Number of Hedge Fund Investors: 39
Jim Cramer expressed disappointment in Moderna Inc. (NASDAQ:MRNA), noting that despite having ample funding, the company has not delivered expected results. He believes they urgently need to develop a personalized vaccine to regain credibility and momentum.
“MRNA has been a big disappointment. They had all that money; I would have thought they could come up with something. They need to come up with a personalized vaccine right now.”
Moderna, Inc. (NASDAQ:MRNA) is backed by its innovative mRNA technology platform, strong financial results, and significant growth potential in various therapeutic areas. While known for its COVID-19 vaccines, Moderna, Inc. (NASDAQ:MRNA)’s platform can also develop treatments for infectious diseases, cancer, and rare genetic disorders.
In its recent Q2 2024 earnings report, Moderna, Inc. (NASDAQ:MRNA) reported revenues of $3.6 billion, primarily from ongoing COVID-19 vaccine sales and contributions from its diverse product pipeline. This resulted in a net income of $1.2 billion, showcasing strong profitability. Moderna, Inc. (NASDAQ:MRNA) is expanding into new markets, including treatments for flu and respiratory viruses, and its strategic partnerships are designed to speed up the development of these products.
With considerable investments in research and development, Moderna, Inc. (NASDAQ:MRNA) is well-positioned to take advantage of emerging healthcare trends and meet unmet medical needs. The rising interest in personalized medicine and its ability to quickly develop and scale new vaccines and treatments enhance its competitive edge. Recent positive results from trials for its Moderna, Inc. (NASDAQ:MRNA) based flu vaccine and new collaboration agreements highlight Moderna’s commitment to leveraging its technology and expanding market opportunities, suggesting a bright future for the company.
8. Nextracker Inc. (NASDAQ:NXT)
Number of Hedge Fund Investors: 39
Jim Cramer mentioned Nextracker Inc. (NASDAQ:NXT), acknowledging that it has disappointed club members. However, he urged them to stay committed to Nextracker Inc. (NASDAQ:NXT), noting that it is currently much cheaper than First Solar Inc. (NASDAQ:FSLR).
“Let me also throw in NextTracker. I know it’s been a big disappointment for club members, but you’ve got to stick with it; it’s much cheaper than First Solar.”
Nextracker Inc. (NASDAQ:NXT)’s positive outlook is based on its leadership in solar tracker technology, strong financial results, and rising demand for renewable energy. As a top provider of solar tracking systems,Nextracker Inc. (NASDAQ:NXT) improves solar panel efficiency, positioning itself to benefit from the growing need for solar energy driven by global sustainability efforts.
In its recent Q2 2024 earnings report, Nextracker Inc. (NASDAQ:NXT) reported revenues of $260 million, a significant year-over-year increase, with a gross margin of 25%, showcasing its operational efficiency. The demand for renewable energy, supported by government incentives and corporate sustainability commitments, enhances the market for Nextracker Inc. (NASDAQ:NXT)’s products, which are essential for maximizing solar installation efficiency.
Nextracker Inc. (NASDAQ:NXT) has also secured contracts with major energy developers, boosting its order backlog and revenue visibility. With a favorable industry outlook shaped by net-zero emissions goals and increasing renewable energy capacity, Nextracker Inc. (NASDAQ:NXT) is well-positioned for continued growth, making it an appealing investment in the changing energy landscape.
7. Powell Industries (NASDAQ:POWL)
Number of Hedge Fund Investors: 28
Jim Cramer expressed confusion over the short position in Powell Industries (POWL), arguing that it is a well-managed company with reasonable pricing. He suggested that concerns might stem from its exposure to the oil and gas sector. Because of this, Cramer believes Powell Industries (POWL) is a good buying opportunity at this moment.
“I don’t really understand the short position at all because it’s a very well-run company that isn’t even that expensive. I think it may be related to its oil and gas exposure. I believe POWL is a buy, and I reiterate that it’s an opportunity to buy it right now.”
6. First Solar Inc. (NASDAQ:FSLR)
Number of Hedge Fund Investors: 66
Jim Cramer noted that First Solar Inc. (NASDAQ:FSLR) is performing well in the stock market, calling it an “up stock.” He expressed his positive outlook on First Solar Inc. (NASDAQ:FSLR), indicating that its strong performance is something he appreciates.
“First Solar is an up stock. I like that.”
First Solar Inc. (NASDAQ:FSLR) is a strong investment choice, supported by increasing demand for renewable energy, strategic growth plans, and solid financial results. In its Q2 2024 earnings report, First Solar Inc. (NASDAQ:FSLR) revealed a revenue of $1.4 billion, a 25% increase from the same quarter last year. This growth stemmed from higher sales of its advanced solar modules, which are gaining popularity.
First Solar Inc. (NASDAQ:FSLR) also reported an improved gross margin of 29%, reflecting effective cost management and operational efficiencies. Furthermore, First Solar Inc. (NASDAQ:FSLR) raised its full-year revenue forecast, indicating strong business momentum. Recently, First Solar Inc. (NASDAQ:FSLR) announced a $1.2 billion investment to expand its manufacturing capabilities in the U.S., aligning with the government’s clean energy initiatives and benefits from the Inflation Reduction Act.
This expansion aims to boost production capacity and reduce dependence on international supply chains, enhancing First Solar Inc. (NASDAQ:FSLR)’s role in the domestic solar market. First Solar Inc. (NASDAQ:FSLR)’s focus on thin-film solar technology gives it a competitive advantage, as this approach offers greater efficiency and lower environmental impact compared to traditional silicon panels. Partnerships with major utility companies and a robust project pipeline further strengthen its market position.
5. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Investors: 75
Jim Cramer discussed Intel Corporation (NASDAQ:INTC)’s financial situation after reading the company’s recent releases. He emphasized that fixing the balance sheet should be the top priority, as Intel appears to have more money going out than coming in over the next year. While the much-talked-about deal with Amazon Web Services for next-generation AI chips is significant, it comes with hefty costs for capital equipment, and Intel Corporation (NASDAQ:INTC) currently lacks the funds to fully realize these ambitions.
Cramer pointed out that the most important news from Intel Corporation (NASDAQ:INTC)’s announcements wasn’t the AWS deal, but rather the suspension of plans to build large facilities in Germany and Poland.
“First thing we do is fix the balance sheet. That’s what I thought when I read the various releases issued by Intel last night, including one meant to alleviate balance sheet concerns. The company seems to have much more money going out than coming in over the next 12 months. Of course, what everyone is talking about is Intel’s deal with Amazon Web Services to provide them with next-generation chips for AI. I know it’s a big win, but it requires Intel to spend a fortune on capital equipment. Unfortunately, right now, Intel doesn’t have the money to build out everything it wants to or even what it’s committed to building.
That’s why the best news we got last night wasn’t the AWS deal; it was Intel’s suspension of its plan to build gigantic plants in Germany, which were expected to cost as much as €30 billion, and in Poland, which was to cost €4.6 billion. This pause is causing great turmoil, especially since the German government committed €10 billion to Intel to get that facility up and running. It was a linchpin of Germany’s attempt to support job growth, especially in the semiconductor space. Now that the auto industry has cooled, these actions are being taken to buy time.”
With new leadership, Intel Corporation (NASDAQ:INTC) is undergoing a major restructuring to improve operational efficiency and manufacturing capabilities, focusing on its foundry services to better compete with rivals like TSMC and Samsung.
In its recent Q2 2024 earnings report, Intel Corporation (NASDAQ:INTC) reported revenues of $13.2 billion, a 10% increase from the previous year, along with an adjusted earnings per share (EPS) of $0.50, surpassing analyst expectations and signaling a recovery from past downturns. Intel Corporation (NASDAQ:INTC) plans to launch new products, including its 14th Gen Core processors and advanced server chips, aimed at regaining market share in consumer and enterprise segments, especially in the growing AI and data center markets.
Intel Corporation (NASDAQ:INTC)’s significant investments in AI technologies and high-performance computing demonstrate its commitment to these key growth areas, highlighted by the announcement of its Gaudi AI chip. Partnerships with major tech firms like Microsoft and Google enhance its technology offerings and support broader adoption of Intel Corporation (NASDAQ:INTC)’s innovations. Recent product launches and plans to expand manufacturing in the U.S. and Europe align with global semiconductor demand trends, positioning Intel Corporation (NASDAQ:INTC) for strong growth and recovery in a competitive market.
Ariel Global Fund stated the following regarding Intel Corporation (NASDAQ:INTC) in its Q2 2024 investor letter:
“Alternatively, several positions weighed on performance. One of the world’s largest semiconductor chip manufacturers by revenue, Intel Corporation (NASDAQ:INTC), underperformed in the period on news of a longer than expected turnaround in profitability within the Foundry business. This was exacerbated by disappointing near-term guidance due to a weakening demand environment signaling an extended replacement cycle.
We view the quarter as a temporary trough that should dissipate as we see signs of a cyclical recovery for personal computers (PCs) and central processing units (CPUs), driven by the Windows 11 upgrade. In our view, the market is overlooking the progress Intel is making to advance its manufacturing process. Not to mention, the company’s efforts to serve as a viable second source foundry partner of leading-edge silicon.
We believe the separation of the design and manufacturing businesses will be a key catalyst in unlocking improved financial performance while also enhancing the competitiveness of the foundry business.”
4. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Investors: 84
Jim Cramer expressed a positive outlook on Pfizer Inc. (NYSE:PFE), highlighting several key factors that contribute to his recommendation. He is particularly drawn to Pfizer Inc. (NYSE:PFE)’s attractive dividend yield of 5.6%, which offers a solid return for investors looking for income.
“I like Pfizer here. I like the 5.6% yield and their cancer strategy. The answer is yes, buy more!”
Pfizer Inc. (NYSE:PFE) is developing a wide range of drugs, especially in oncology, rare diseases, and immunology, with potential approvals that could significantly increase revenue. In its recent Q2 2024 earnings report, Pfizer Inc. (NYSE:PFE) reported $12.7 billion in revenue, mainly from its COVID-19 vaccine and treatments, along with an adjusted earnings per share (EPS) of $1.12, which exceeded analyst expectations. Ongoing demand for COVID-19 products, driven by booster campaigns and new variants, further supports its revenue.
Strategic acquisitions, like Arena Pharmaceuticals, and partnerships with biotech firms strengthen Pfizer Inc. (NYSE:PFE)’s ability to innovate. Pfizer Inc. (NYSE:PFE) is also committed to providing value to shareholders through regular dividends and stock buybacks, making it appealing to income-focused investors. With promising drug approvals and advancements in gene therapy, Pfizer Inc. (NYSE:PFE) is well-positioned for continued growth, suggesting a strong future for the company.
Parnassus Value Equity Fund stated the following regarding Pfizer Inc. (NYSE:PFE) in its first quarter 2024 investor letter:
“During the quarter, we added new positions in Pfizer Inc. (NYSE:PFE), NICE and Charter Communications. We purchased Pfizer to capture the potential upside from any turnaround following the COVID-induced boom-bust cycle of the last few years. Pfizer’s stock price sank by more than 40% in 2023 as COVID-19 vaccine revenues rolled off, providing an attractive entry point for us. The company completed its acquisition of Seagen, which should strengthen Pfizer’s pipeline in antibody-drug conjugates (ADC). Pfizer also offers an attractive dividend yield.”
3. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Investors: 92
Jim Cramer stated that he has a stronger preference for The Walt Disney Company (NYSE:DIS)’s stock compared to Universal Studios. He acknowledged that he prefers The Walt Disney Company (NYSE:DIS) instead.
“Universal Studios have just been emerging from a tough period. I’m not into the stock or its growth rate. I actually prefer Disney’s stock, and that’s saying something.”
The Walt Disney Company (NYSE:DIS)’s vast library of popular franchises and new content from Disney+, Marvel, Star Wars, and Pixar continues to attract and engage subscribers, which is essential for the success of its streaming service.
In its recent Q3 2024 earnings report, The Walt Disney Company (NYSE:DIS) reported impressive revenue of $22.3 billion, along with a significant recovery in theme park attendance and an adjusted earnings per share of $1.09 that beat analyst expectations. The rebound in its parks and experiences segment, supported by the reopening of international parks and expansion plans, is expected to drive further growth.
The Walt Disney Company (NYSE:DIS) is also working to improve the profitability of Disney+ through strategic price changes and content optimization. With a strong lineup of upcoming films and series, along with plans for international expansion, The Walt Disney Company (NYSE:DIS) is well-positioned to leverage its strengths and benefit from recovery trends, suggesting a bright future for the company.
Mar Vista Focus strategy stated the following regarding The Walt Disney Company (NYSE:DIS) in its Q2 2024 investor letter:
“The Walt Disney Company’s (NYSE:DIS) shares declined after its earnings release, even though the company exceeded recently upgraded financial forecasts. While Disney+ and Hulu reached a milestone by turning their first quarterly profit, the company cautioned about theme park attendance returning to pre-pandemic norms. This signals a deceleration following a period of exceptional growth, impacting the stock as theme parks and experiences account for roughly 60% of Disney’s earnings.
Despite broader consumer worries, Disney’s stock is still trading with a significant discount to fair value. We expect the gap between Disney’s market price and its intrinsic value to shrink as its streaming division evolves and increases profitability over time.”
2. Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Investors: 93
Jim Cramer expressed his frustration over Oracle Corporation (NASDAQ:ORCL)’s plans to potentially add another 1,000 to 2,000 data centers on top of its existing 162. He raised concerns about the environmental impact of such expansion, noting that data centers currently consume about 4% of the world’s energy.
“What drives me crazy is that Oracle has 162 data centers and is considering adding another 1,000 or 2,000. What does that do to the planet? If you think about it, data centers use about 4% of all energy today, and if that doubles to 8%, we need to control the 30% that’s wasted.”
Oracle Corporation (NASDAQ:ORCL) has seen substantial expansion in its cloud business, especially with its Autonomous Database and Oracle Cloud Infrastructure (OCI), allowing it to meet the rising demand for cloud solutions due to digital transformation across various industries. In its recent Q1 FY2024 earnings report, Oracle Corporation (NASDAQ:ORCL) reported revenues of $12.5 billion, a 17% increase from the previous year, with cloud services and license support revenues up by 23%.
Key partnerships, like the one with Microsoft, improve its cloud interoperability, while the acquisition of Cerner enhances Oracle Corporation (NASDAQ:ORCL) presence in healthcare. Oracle Corporation (NASDAQ:ORCL)’s investments in AI applications and data analytics also boost its appeal to businesses looking to adopt advanced technologies. Additionally, Oracle Corporation (NASDAQ:ORCL)’s focus on returning capital to shareholders through dividends and buybacks makes it attractive for investors seeking both growth and income.
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.
1. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 108
Jim Cramer discussed his observations from Dreamforce, noting that AI isn’t a magic solution for major problems like curing cancer or creating new products. Instead, it’s primarily beneficial for hardware manufacturers like Advanced Micro Devices Inc. (NASDAQ:AMD).
“At Dreamforce, AI is not just a strategy; it doesn’t cure cancer, create products to sell, or even generate numbers for anyone except the companies that manufacture the underlying hardware, that includes AMD. For everyone else, including the hyperscalers, AI is just a necessary expense to keep up with the Joneses. Kind of pathetic, isn’t it? But I found out otherwise today.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) is based on its strong position in fast-growing areas like data centers and artificial intelligence. As the need for high-performance computing rises, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s EPYC processors and Radeon graphics cards are seeing increased sales, outperforming competitors such as Intel Corporation (NASDAQ:INTC) and NVIDIA Corporation (NASDAQ:NVDA). The successful launch of the Ryzen 7000 series further strengthens Advanced Micro Devices, Inc. (NASDAQ:AMD)’s market presence.
Partnerships with major cloud providers like Microsoft Corporation (NASDAQ:MSFT) and Alphabet Inc. (NASDAQ:GOOG), boost its use in enterprise solutions. Additionally, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported a 30% year-over-year revenue increase, reaching $5.3 billion in Q2 2024, highlighting its financial strength. Its leading role in the gaming console market ensures a steady income, while ongoing investments in AI capabilities promise future growth.
Baron Technology Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2024 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global fabless semiconductor company focusing on high performance computing technology, software, and products including CPUs,9 GPUs, FPGAs,10 and others. Shares of AMD remain volatile, and after a strong run earlier in the year, the stock fell during the quarter as investors continue to wrestle with AMD’s competitive positioning in the AI compute market relative to NVIDIA, who continues to strengthen its full-system solution offerings at a rapid pace.
AMD also updated its MI300 GPU chip revenue expectations for the full year to “greater than $4 billion” vs. prior $3.5 billion, which disappointed the market a bit relative to high expectations. Over the long-term, we believe AMD, with its unique chiplet-based architecture and open-source software ecosystem, will play a meaningful role in the rapidly growing AI compute market, where customers don’t want to be locked into a single vendor and AMD offers a compelling total-cost-of-ownership proposition, especially in inferencing workloads.
Simultaneously, we believe AMD will continue to take share from Intel within traditional data center CPUs, which, while now a slower growth market, is likely to see a near-term refresh as data centers look for ways to improve energy efficiency and optimize existing footprints.”
While we acknowledge the potential of Advanced Micro Devices, Inc. (NASDAQ:AMD), 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.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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