In this article, we will take a detailed look at Jim Cramer’s Top Picks: 10 Stocks to Buy and Sell.
Commenting on the aggressive rate cut by the Federal Reserve, Jim Cramer said in a latest program on CNBC that the “double” rate cut was needed for the economy and it would help the housing market, industrials and companies catering to the “less well-off” households.
“There really are two economies in this country. There is the one that needs lower interest rates because business is slowing and it’s harder to find a job and then there is one that says we don’t really care about where the stinking rates are. That’s who we can get a double rate cut today and still going lower.”
Cramer said he is currently in Silicon Valley and after talking to many companies, he feels tech companies do not care about interest rates since they are selling to businesses. Cramer said these technology companies are focused on innovation.
For this article, we picked 10 stocks Jim Cramer recently talked about during his latest programs on CNBC. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. IONQ Inc (NYSE:IONQ)
Number of Hedge Fund Investors: 12
When asked about quantum computing hardware and software company IONQ Inc (NYSE:IONQ), Jim Cramer said that he cannot recommend the stock because it’s losing too much money.
Cramer is right about IONQ Inc (NYSE:IONQ) losing money. While it has no debt and over $360 million in cash and marketable securities, it’s burning a lot of cash.
In the second quarter, IONQ Inc (NYSE:IONQ) generated just under $8 million in revenue but burned through more than $34 million in free cash flow. For every $1 of revenue, IonQ is spending $4 in cash, which is far from sustainable.
Quantum computing is a promising but capital-intensive industry with no promises of profits especially in the current volatile environment.
IONQ Inc (NYSE:IONQ) focuses on quantum computing, a cutting-edge technology that uses quantum mechanics to solve problems beyond the capabilities of traditional computers. The company is improving the accuracy and performance of its systems by increasing the fidelity of its qubits, the fundamental units of quantum information. By enhancing the fidelity of its barium qubits, IonQ aims to reduce errors and move closer to commercially viable quantum solutions.
IONQ Inc (NYSE:IONQ) has made notable progress in the commercial sector, surpassing revenue expectations and securing a significant contract with ARLIS, part of the U.S. national security apparatus. With innovations such as new error-correction techniques and ongoing improvements in qubit fidelity, IonQ is optimistic about reaching key milestones in quantum computing by 2025.
IONQ Inc (NYSE:IONQ) has increased its revenue outlook for 2024, but consistent profitability remains elusive, and scalable quantum computing is still a long-term objective. The stock is currently priced at 36x forward sales, down from over 50x earlier this year. But even at 34x, expectations are sky-high for a company that is far from profitable.
9. Garmin Ltd (NYSE:GRMN)
Number of Hedge Fund Investors: 31
Jim Cramer in a latest program praised Garmin Ltd (NYSE:GRMN) products, saying the company has “unbelievable” fitness watches and fishing equipment.
Cramer said that Garmin is the “real deal.”
“This company has it going people have given up on it they are quite wrong and you are dead right it is going higher.”
Thanks to its high spending on R&D, Garmin Ltd (NYSE:GRMN) has been able to develop a diverse revenue stream. It operates across five segments: fitness, outdoor, aviation, marine, and auto OEM, with the outdoor segment generating the highest revenue and operating income in 2023.
Garmin is known for its innovation, particularly in the aviation and marine sectors, where it is a market leader. In aviation, Garmin Ltd (NYSE:GRMN) has won top honors in Aviation International News’ Product Support Survey for flight deck avionics for 20 consecutive years. In the marine industry, it was recently named Supplier of the Year by Independent Boat Builders, Inc.
The wearable and smartwatch market, where Garmin Ltd (NYSE:GRMN) fitness and outdoor products play a key role, is also expanding. According to Grand View Research, the North American wearables market is expected to grow at a compound annual growth rate (CAGR) of 12.9%. This positions Garmin Ltd (NYSE:GRMN) well for continued growth in these categories.
Garmin (GRMN) holds a strong financial position with approximately $2.2 billion in cash and no debt.
Diamond Hill Long-Short Fund stated the following regarding Garmin Ltd. (NYSE:GRMN) in its fourth quarter 2023 investor letter:
“Other bottom contributors included our short positions in Garmin Ltd. (NYSE:GRMN) and International Business Machines (IBM), as well as our long position in Chevron. Outdoor fitness and adventure equipment maker Garmin benefited from strong growth in its fitness and auto original equipment manufacturer segments. Over the long term, we believe the company’s high-end wearables products will face significant competition from competitors like Apple and Samsung.”
8. Hertz Global Holdings Inc (NASDAQ:HTZ)
Number of Hedge Fund Investors: 38
When asked about Hertz Global Holdings Inc (NASDAQ:HTZ) in a latest program, here is what Jim Cramer said:
“That stock really does have me very concerned.”
Hertz Global Holdings Inc (NASDAQ:HTZ) shares are down about 69% so far this year. The company’s second-quarter results came in short of market expectations amid the “fleet refresh” steps taken by the company and higher operating expenses per transaction in addition to depreciation costs that has been dragging the company’s results for multiple quarters.
The rise in direct operating expenses per transaction was primarily due to non-recurring charges, with the rest attributed to higher insurance, personnel, collision, and damage costs, as well as general inflation. Adjusted corporate EBITDA turned negative at $460 million, compared to a positive $347 million last year, mainly driven by a spike in vehicle depreciation, which jumped to $600 per unit per month from $197 a year earlier.
The number of rental vehicles grew by 3%, but utilization dropped by 2 percentage points to 80%. Revenue per transaction day (RPD) fell 3% to $59.94, contributing to a 3% drop in overall revenue to $2.4 billion, falling short of Wall Street estimates.
On the balance sheet, vehicle-related debt increased by 4.3%, while non-vehicle debt surged 33%, leading to an 11% rise in total debt to $17.4 billion. Free cash flow remained negative, widening to -$553 million.
Amid increasing problems and lack of visibility into new catalysts, analysts believe it’s better to stay away from Hertz Global Holdings Inc (NASDAQ:HTZ) for now.
7. Motorola Solutions Inc (NYSE:MSI)
Number of Hedge Fund Investors: 42
When asked about Motorola Solutions Inc (NYSE:MSI), Cramer said the company is “incredibly, incredibly good.”
“I got to tell you, it does two-way radios, it does barcodes, it does lots of government infrastructure and it just coins money,” Cramer added.
Motorola Solutions Inc (NYSE:MSI) has raised its full-year revenue growth guidance to 8% as it reported strong growth in the second quarter for Video Security and Land Mobile Radio (LMR) businesses, with year-over-year increases of 10% and 9%, respectively.
For Motorola Solutions Inc (NYSE:MSI), Video security remains a key growth area for the company, covering both fixed and mobile solutions that offer end-to-end security for the public sector, including detection, analysis, and communication tools. Rising demand for public safety from governments and agencies continues to drive this expansion.
Motorola Solutions Inc (NYSE:MSI) has been investing in its video offerings, launching new products like a video recorder that works on both cloud and on-premises platforms. Its large customer base for LMR products also relies on regular upgrades and services, supported by the ongoing APX NEXT refresh cycle, which could boost revenue as outdated tech is replaced. Analysts believe the company can deliver high-single-digit revenue growth soon. The LMR business is benefiting from supply chain improvements and should grow 10% in FY24. In video, Motorola’s Avigilon Unity Video 8, its latest surveillance solution, should drive a 12% increase. Cloud-based video management could also make this business more recurring.
Wedgewood Partners stated the following regarding Motorola Solutions, Inc. (NYSE:MSI) in its Q2 2024 investor letter:
“Motorola Solutions, Inc. (NYSE:MSI) was a contributor to performance as the Company continued its steady execution with +10% sales growth and +20% operating earnings growth. Motorola also continues to grow its backlog due to its competively advantaged core land mobile radio (LMR) business is a critical long-term solution for emergency services around the globe. The technology behind LMR is relatively simple compared to current 5G wireless standards, but it is an extremely robust implementation that must withstand regular and even mega catastrophes to guarantee uptime to the emergency services that depend on it for communications. Motorola has unmatched competitive positioning in this core business and should be able to continue to expand value-added service offerings to LMR and drive attractive long-term growth.”
6. AES Corp (NYSE:AES)
Number of Hedge Fund Investors: 46
Jim Cramer was recently asked about the utility and power generation company AES Corp (NYSE:AES). Here is what he said:
“I think it’s good. At 4% yield, I am surprised it is this low. It is very inexpensive. Let’s go for it.”
Jefferies recently started covering AES Corp (NYSE:AES) shares with a Buy rating and a $20 price target, as the firm sees the company as “a way to gain exposure to U.S. renewables with a quality improvement twist at a discounted price.”
AES Corp (NYSE:AES) is selling power in 15 countries and employs about 10,000 people. As a Fortune 500 company, AES positions itself as a key player in the renewable energy sector, with plans to expand its solar power portfolio to 25-30 GW by 2027. The company expects a 10% annualized base growth rate, one of the highest in the U.S. utility sector, making it an attractive investment.
AES Corp (NYSE:AES) has a 66 GW development pipeline, with 12.7 GW in backlog and nearly 35 GW already in operation, of which 54% is renewable. So far this year, it has added over half a gigawatt and aims to add 3.6 GW by year-end. For 2024, 92% of the necessary equipment for construction is already on-site.
Much of AES Corp (NYSE:AES) future demand will come from data centers, with major tech companies—many of which are committed to CO2-neutral operations by 2030—accounting for over 40% of its backlog. This sector is likely to fuel AES’s growth.
AES Corp (NYSE:AES) talked in detail about its data center projects in its latest earnings call:
“We have further expanded our partnership with Google, signing a 15-year PPA for 727 megawatts in Texas to power its datacenter growth.
The agreement includes a combination of wind and solar to further Google’s 24-7 carbon-free energy goals. These projects are expected to come online in 2026 and 2027. We also recently signed a retail supply agreement with Google for 310 megawatts to support their Ohio datacenters. This agreement demonstrates the strong trust and collaboration between our companies, which began with our original 2021 partnership to provide 24-7 renewable power in Virginia. We see further opportunities to add renewables to support Google’s datacenter growth in Ohio. Turning to slide seven, with these major announcements today on our collaborations with hyperscalers, we have now signed a total of 8.1 gigawatts directly with technology companies, which is clearly a leading market position.”
Read the entire earnings call transcript here.
5. Domino’s Pizza Inc (NYSE:DPZ)
Number of Hedge Fund Investors: 52
Cramer was recently asked about Domino’s Pizza Inc (NYSE:DPZ). Here is what he said:
“Domino’s itself did screw up. They didn’t know that they had a weak franchise that was missing its numbers from overseas, and that caused people to think that wait a second maybe they are not in control of their destiny as we thought and that’s why the stock is going down and that is the actually worry for me too.”
In July, Australia’s Domino’s Pizza (NYSE:DPZ) said it will close up to 80 low-volume stores in Japan and 10–20 stores in France and anticipates flat to slightly positive store growth for the current fiscal year.
Domino’s Pizza Inc (NYSE:DPZ) shares have been posting lackluster performance ever since the glory days of the pandemic ended. While the company still expects to open about 175 net new stores per year from 2024 to 2028, it’s facing growth headwinds internationally.
So far this year the stock is down about 2%. Despite this, it’s fairly valued and investors should not expect strong growth in the stock price during the upcoming months. Wall Street expects Domino’s Pizza Inc (NYSE:DPZ) to post $16.16 in earnings per share (EPS) for fiscal 2024, giving the stock a forward price-to-earnings (P/E) ratio of 25.3x. While this is about 16.2% lower than the five-year average of 30.15x, the drop is somewhat justified as the company’s growth has slowed. Domino’s five-year compound annual growth rate (CAGR) for diluted EPS is 11.9%. Analysts’ current estimates suggest slightly slower growth.
4. Mongodb Inc (NASDAQ:MDB)
Number of Hedge Fund Investors: 54
When asked about Mongodb Inc (NASDAQ:MDB), here is what Cramer said during a latest program:
“That was an enterprise software company that put up terrific numbers that is not getting credit.”
Cramer said that’s because people “hate” enterprise software. However, he thinks MongoDB is at the “right place.”
Wedbush analyst Dan Ives said a couple of months back that AI stocks including Mongodb Inc (NASDAQ:MDB) are “way oversold.”
MongoDB Inc (NASDAQ:MDB) shares plunged after Q1 results but rebounded as Q2 numbers eased investors’ concerns.
Mongodb Inc (NASDAQ:MDB) is a decent AI play amid its database AI applications that can handle complex data structures efficiently, eliminating the need for multiple database systems and simplifying processes.
Mongodb Inc (NASDAQ:MDB) has launched the MongoDB AI Applications Program. This initiative offers resources like reference architectures, a full tech stack, professional services, and unified support to help customers implement AI using its platform. MongoDB is also gaining traction in search. Delivery Hero is using MongoDB Atlas Vector Search, and a major gaming company has shifted its content moderation platform to Atlas and Atlas Search. The gaming company uses Atlas Search Nodes for workload isolation and high performance. Additionally, Mongodb Inc (NASDAQ:MDB) made Stream Processing generally available in May, drawing significant interest. This momentum supports MongoDB’s belief that its platform can handle a wide range of use cases.
MongoDB reported $478 million in revenue for the second quarter, reflecting a 13% year-over-year increase. For the third quarter, Mongodb Inc (NASDAQ:MDB) forecasts revenue between $493 million and $497 million, a 14% year-over-year increase. The company expects full-year revenue to reach between $1.92 billion and $1.93 billion, also representing 14% growth.
Alger Mid Cap Growth Fund stated the following regarding MongoDB, Inc. (NASDAQ:MDB) in its first quarter 2024 investor letter:
“MongoDB, Inc. (NASDAQ:MDB) is a scalable open-source database platform that allows developers to store, manage, and process structured. semi-structured and unstructured data generated by or feeding into the applications. Atlas, their cloud database-as-a-service platform, supports a comprehensive suite of core workloads, covering database, search, analytics and charts, and device sync. We believe the company is benefiting from a secular increase in demand for high-volume data storage driven by organizations needing to be able to store large amounts of data while still performing rapidly. During the quarter, the company reported strong fiscal fourth quarter results where revenues and operating profits beat analyst estimates, driven by strong growth in Atlas. However, shares fell after management issued forward revenue guidance that was below consensus estimates due to one-time items related to unused credits and multi-year upfront enterprise agreements. Nevertheless, we continue to believe the company is well positioned to become a best-in-class database management platform given its exposure to the secular increase in demand for high volume data storage solutions.”
3. Vertiv Holdings Co (NYSE:VRT)
Number of Hedge Fund Investors: 92
When asked about Vertiv Holdings Co (NYSE:VRT), Cramer said that Vertiv stock has “come down enough.”
“I’ve had it with the sellers. They’ve got to recognize that the time to sell Vertiv has come and gone.”
Vertiv Holdings Co (NYSE:VRT) is a market leader in the data center power and cooling market, which has nowhere to go but up from here since companies are hungry for data center solutions as they begin to deploy AI software.
Vertiv Holdings Co (NYSE:VRT) is forming long-term partnerships with Intel and Nvidia to develop tailored solutions for their products. This is especially notable because AI training requires significantly more electricity and produces more heat than traditional servers, driving demand for specialized systems that Vertiv Holdings Co (NYSE:VRT) provides. The company estimates that the additional demand from AI could boost its top-line growth by up to 4% annually.
By designing products specifically for Nvidia’s GPUs, Vertiv can tap into Nvidia’s growth with minimal effort, as their systems are crucial for optimizing GPU performance. If Nvidia powers data centers with its processors, Vertiv provides the infrastructure that keeps them running efficiently.
Vertiv Holdings Co (NYSE:VRT) revenue has grown on average at 10% in the most recent quarters. The company has a backlog of over $7 billion, more than a year’s worth of current revenue. Vertiv is targeting a 20% operating margin by 2028.
Baron Small Cap Fund stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its Q2 2024 investor letter:
“Vertiv Holdings Co (NYSE:VRT) a leading provider of critical digital infrastructure for data centers, contributed during the quarter. As an industry leader in data center cooling and power management, Vertiv is poised to benefit from AI-driven growth in data center spend. The NVIDIA partner network, strong industry relationships, and broad product portfolio that Vertiv maintains enables its participation in the creation of the technology roadmap for the future of the data center. In addition, Vertiv is investing in its capacity to serve this growing end market more effectively. The company also has an extensive global service network to aid customers as they grow. We believe the company has durable competitive advantages and a flexible balance sheet to benefit from the expected significant capital investment in data centers for years to come. Vertiv reported very strong results for the March quarter, with orders up 60%, which highlighted the strong demand it is seeing for its products. We sold some of our position into strength after the runup from the positive report, but still hold a major position in the Fund as we see considerable upside in the shares over time.”
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 108
Talking about AI semiconductor stocks, Cramer said that Advanced Micro Devices, Inc. (NASDAQ:AMD) is among his charitable trust holdings.
Cramer said he started buying AMD shares when they began their slide in July.
“While Nvidia is currently unrivaled in the red hot AI infrastructure space Advanced Micro Devices, Inc. (NASDAQ:AMD) is in the second place, that’s a close second there is nobody in third. And that’s the only company on Earth that stands a chance to catching up to Nvidia,” Cramer said.
Advanced Micro Devices, Inc (NASDAQ:AMD) impressed Wall Street with solid second-quarter results amid strong data center revenue. Data center revenue in the period grew 49% year over year.
But can Advanced Micro Devices, Inc (NASDAQ:AMD) continue gaining in the coming months? Analysts are hopeful amid the launch of its Instinct™ MI300 Series accelerators that are designed for AI and HPC workloads. The new chip competes with Nvidia’s H100 AI chip. Advanced Micro Devices, Inc (NASDAQ:AMD) now plans to release new AI chips annually, including the MI325X in Q4 this year, the MI350 in 2025, and the MI400 in 2026. Advanced Micro Devices, Inc (NASDAQ:AMD) said MI350 would be a competitor to Nvidia’s Blackwell.
Advanced Micro Devices, Inc (NASDAQ:AMD) data center business doubled its revenue but this growth was not at the cost of profits. The segment’s operating income increased by 405% compared to the year-earlier period. However, Advanced Micro Devices, Inc (NASDAQ:AMD) data center business is still very small compared with NVDA. It generated about $2.8 billion in revenue vs. $22.6 billion in quarterly revenue for NVDA. However, Advanced Micro Devices, Inc (NASDAQ:AMD) CPU and GPU businesses are also thriving. Ryzen CPU sales increased 49% over year and slightly quarter over quarter. Although gaming revenue declined 59% due to decreased PlayStation and Xbox sales, Advanced Micro Devices, Inc (NASDAQ:AMD) Radeon 6000 GPUs saw a year-over-year sales increase.
Advanced Micro Devices, Inc (NASDAQ:AMD) is trading 17% below its 3-year average P/E ratio. The company is estimated to grow its EPS by 43% in the long term, compared to 33% for Nvidia. During the third quarter, its revenue growth is expected to come in at 15% on a QoQ basis. Amid growth forecasts based on new chips and an expected increase in AI spending by other companies, Advanced Micro Devices, Inc (NASDAQ:AMD) forward P/E of 38 makes the stock undervalued at the current levels.
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.”
1. NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 179
Jim Cramer in a latest program on CNBC talked about what he called the “complication” around understanding NVIDIA Corp (NASDAQ:NVDA) technologies and plans.
Cramer said some people believe there is a “slowdown” around Nvidia, but he rejected that notion.
“That’s just not true. There is no slowdown. What there is is a complication,” Cramer said.
Cramer specifically read a sentence from a latest release from Oracle about the company’s partnership with NVIDIA Corp (NASDAQ:NVDA) to explain what is the complication:
“New AI supercomputer, the largest in the cloud, to deliver up to 131,072 NVIDIA GPUs to enable customers to build, train, and inference AI at scale.”
Cramer said this sentence went “over his head” and he is trying to understand what that means.
“We are now in the moment where NVIDIA Corp (NASDAQ:NVDA) is too hard for people to understand and we need Jensen to explain it… So I’d say we are at a moment of confusion with Nvidia, not a moment of slowdown,” Cramer added.
Nvidia’s declines after the latest quarterly results were more or less expected amid Blackwell delay reports confirmed by management. However, the delays were mainly due to a change in Blackwell GPU mask. That does not affect the main functional logic or design of the chip, according to analysts. While Blackwell has been delayed for a few months, it does not change the core growth thesis for Nvidia.
Nvidia is set to see huge growth on the back of the data center boom amid the AI wave.
At Nvidia’s GPU Technology Conference in March 2024, CEO Jensen Huang estimated annual spending on data center infrastructure at about $250 billion. Over the next decade, this could total between $1 trillion and $2 trillion, depending on how long this level of investment continues. During the same Q&A session, Bank of America’s Vivek Arya echoed this estimate, suggesting the total addressable market would fall in the $1-2 trillion range, particularly as countries invest in their own AI infrastructure. By the end of the decade, spending could be at the high end of that range.
Of course, Nvidia won’t dominate the entire $2 trillion opportunity, as it faces competition from companies like AMD and internally developed AI accelerators from Google, Amazon, and even Apple. Some analysts believe Nvidia’s data center market share between 2025 to 2029 will be over $950 billion—less than half of the total market—but still enough to make it the leader in the sector.
Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the market leader in visual computing through the production of high-performance graphics processing units (GPUs). The company targets four large and growing markets: Gaming, Professional Visualization, Data Center, and Automotive. NVIDIA’s products have the potential to lead and disrupt some of the most exciting areas of computing, including: data center acceleration, artifi cial intelligence (AI), machine learning, and autonomous driving. The reason for the stock’s appreciation in the quarter was twofold: First, the stock benefi ted from tremendous excitement surrounding the further development of generative AI and the likelihood this would necessitate the purchase of a large number of Nvidia’s products far into the future; Second, Nvidia posted another strong beat[1]and-raise quarter, where the company upped its F2Q25 revenue guidance above Street estimates, showcasing its dominant position in the buildout of today’s accelerated computing infrastructure.”
While we acknowledge the potential of NVDA, 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
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