We recently published a list of Jim Cramer Discusses These 13 Stocks & Rejects The AI PC Super Cycle. In this article, we are going to take a look at where Union Pacific Corporation (NYSE:UNP) stands against other stocks that Jim Cramer discusses.
In a fresh appearance on CNBC’s Squawk on the Street, Jim Cramer commented in quite a bit of detail on artificial intelligence and AI PCs. AI, the technology that has caught the investing world by storm, has two facets. The first covers enterprise computing with cloud computing services such as Azure and AWS offering businesses new AI tools for their tasks. The second is the consumer end, dominated primarily via chatbots and services like the Chinese firm DeepSeek’s R1 and OpenAI’s o1.
Another aspect of AI that received quite a lot of attention last year was AI PCs. These computers use hardware designed to run artificial intelligence workloads. This hardware includes graphics processing units (GPUs) and neural processing units (NPUs), which means that their price tag is often higher than a standard computer.
On top of Cramer’s mind was a recent Morgan Stanley consumer survey report which analyzed consumer sentiment with respect to a super-cycle in AI-enabled products. The bank revealed that just 15% of the 400 respondents bought some of the products primarily because they wanted to access AI. The bank added that 60% of respondents inadvertently bought an AI PC and more than 60% shared that they would not pay extra for AI products.
Commenting on the research, Cramer started by sharing “I think the AI hardware super cycle Morgan Stanley piece is perhaps the most damming piece I’ve read.” According to him, the research was striking “Because there’s absolutely no evidence of a super cycle whatsoever.” The CNBC host shifted towards enterprise AI use cases and was appreciative of them. “I mean I think AI is very good when you listen to what Jamie Dimon [inaudible] to say, that AI is very good when you listen to what Marc Benioff has to say,” he outlined.
However, while AI has impressed business users, Cramer admitted to being wrong about consumer demand for AI PCs. “But the PC, I thought we were all gonna upgrade. And now we’re all in wait-and-see mode,” he shared. Cramer added that those he knew who have bought an AI PC “haven’t used it or there’s a button there and it doesn’t work.”
Yet, even though consumer interest in AI PCs might be lackluster, Cramer is still an AI believer. He revealed that “I use it [ChatGPT] every day.” One ChatGPT use case he likes is comparing drugs. “And you start at ChatGPT. You really do. And it’s very authoritative and it tells you who to go to. And I think it’s extraordinary. It’s an extraordinarily good product,” according to Cramer.
In fact, Cramer’s “on ChatGPT maybe five times before I come down here. Ten times before I do Mad Money. There’s nothing I don’t run through. Because I don’t want to make a mistake.” However, he did add that while ChatGPT is great, this doesn’t mean “that it’s not hallucinating.” Yet, Cramer still suggests “. . anyone use it before they buy a stock. It’s that good.”
His praise for ChatGPT isn’t the first time that Cramer’s shared opinions on AI. In a recent CNBC morning appearance, he outlined some enterprise AI use cases. Cramer shared:
“Healthcare’s gonna be a very big, very big part of AI. David, it’s not yet. And we need that, well-meaning people who believe in the industry have to have what people who are more than just trying to figure out how to make it so there’s a call center that’s better.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down all the stocks he mentioned during CNBC’s Squawk on the Street aired on January 23rd.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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).
An intermodal container train winding through a rural landscape.
Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders In Q3 2024: 78
Union Pacific Corporation (NYSE:UNP) is one of the largest railroad companies in America. As it transports industrial goods, the stock is dependent on industrial and business activity in America. As a result, the shares closed 2024 6.4% lower. However, Union Pacific Corporation (NYSE:UNP)’s fate appeared to turn around in January. Its shares soared by 5% in January after the firm’s Q4 profit of $2.96 per share beat analyst estimates of $2.78 as higher grain volumes and good intermodal performance helped the firm. However, while Union Pacific Corporation (NYSE:UNP)’s management shared during the call that it expects coal to decline, Cramer took the opposing view:
“Yes, let’s talk about the railroad. I mean it’s a gigantic railroad. Reported excellent numbers. Jim Vena is now running it. . . The operating ratio which of course you want to go lower was superb. And David I’ve got to tell you, they’ve got strong core pricing gains for industrials which I think is where you’re gonna do very well. Premium strength to, in international West Coast imports. This is really good and they, intermodal growth. I’ve got to tell you, this just may be one of the great reports. Now I’m gonna go a step too far. Alright. But the President is an old energy guy. West Virginia, Wyoming, Pennsylvania. The three biggest coal producers, Wyoming at the top, okay. Coal. I think coal’s gonna come back in fashion.”
“[When asked why?] Well those three states went for Trump. . .natural gas is, I think is going to five. And at that point they switch. Because there’s really coal all over the country and we’re going to export a lot. . . And by the way, coal was thirty percent of how we heated things in ten years ago and now it’s down to fifteen percent.”
Overall, UNP ranks 9th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of UNP as an investment, our conviction lies in the belief that some 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 UNP 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 is originally published at Insider Monkey.
