In this piece, we will look at the stocks Jim Cramer discussed after the DeepSeek AI selloff.
In his recent appearance on CNBC’s Squawk on the Street, Jim Cramer continued to discuss the fallout from DeepSeek’s AI models purportedly reducing the costs of training and developing AI platforms. While the TV show host did not comment on the costs, about which little is currently understood, he did speculate about the link between DeepSeek and OpenAI.
As DeepSeek’s R-1 becomes more popular, several users have reported that it delivers answers similar to those from OpenAI’s models. In fact, Bill Gates’ software company is allegedly investigating the link between OpenAI and DeepSeek. As per Bloomberg, the software company’s security team discovered “observed individuals they believe may be linked to DeepSeek exfiltrating a large amount of data using the OpenAI application programming interface, or API.”
Cramer also wondered the same thing during his appearance as he questioned “How much did this outfit, DeepSeek, steal from OpenAI?” The TV show host however added that he was nevertheless impressed by DeepSeek’s AI “Because it is much lower cost.” However, some things that remain unanswered for Cramer are “Whether what they stole, I question how good it is, I question the hallucination factor. I question the, when I went on it, it was stupid as wood. I mean look, there are some real problems here. But the calculations are good.”
The conversation then shifted to whether DeepSeek’s splash in the West revealed that the software engineers in China were as good as those in the US. Cramer sarcastically commented “Shocker. What they thought they were blockheads?” However, while his assessment about Chinese software engineers was correct, he controversially added “We are so far ahead of them, because we’re doing robots and cars. Where’s their robots and cars?”
Cramer’s remarks about the Chinese automotive and robotics industries prompted co-host David Faber to retort that China leads the world with EVs. Cramer then tried to clarify his stance by outlining a few individuals that he believes offer America a competitive edge over China. “I’m saying that Elon, their Elon. The Jensen-Elon Musk partnership,” he shared. Cramer further added “I’m talking about the supercomputer solution. I think is a brilliant solution by Musk.” The supercomputer that he’s referring to is Musk’s plan to build the world’s largest supercomputer in Tennessee which will house a million AI GPUs.
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC’s Squawk on the Street aired on January 28th.
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).
10. Brown-Forman Corporation (NYSE:BF-B)
Number of Hedge Fund Holders In Q3 2024: 24
Brown-Forman Corporation (NYSE:BF-B) is an alcoholic beverage firm that sells wines, spirits, cocktails, and other alcoholic beverages. Its premier product is Jack Daniel’s whiskey. High inflation has hampered Brown-Forman Corporation (NYSE:BF-B)’s revenue and led to its shares losing 42% over the past year. Cramer has discussed the stock several times this year. He believes that Brown-Forman Corporation (NYSE:BF-B)’s management erred by diverting attention and funds away from Jack Daniel’s to other brands. He also believes that high prices are another factor behind the firm’s poor performance:
“Well look I think that the public is much savvier knowing that when there is inflation, stay away. I mean I follow the liquor industry of course cause my wife’s got mezcal, and I spend a lot of time looking at Diageo and Brown Forman. Those guys have to cut prices. They have to. I mean you have to cut prices. Kimberly Clark, do they have to cut prices? If you don’t cut prices, the [inaudible] will take advantage of it. We finally have, people who are trying to cut prices. Very good.”
9. Diageo plc (NYSE:DEO)
Number of Hedge Fund Holders In Q3 2024: 26
Diageo plc (NYSE:DEO) is one of the largest alcoholic beverage companies in the world. The firm sells a wide variety of products such as wine, gin, vodka, and rum. Some of its best-known brands include Johnnie Walker and Smirnoff. Like other alcoholic stocks, Diageo plc (NYSE:DEO)’s shares have also lost 16% over the past year. The shares have performed poorly as the firm has struggled in a tight consumer environment that led its sales to drop by 1.2% in fiscal year 2024. Cramer believes that one way Diageo plc (NYSE:DEO) might be able to reverse its ill fortune is by reducing prices:
“Well look I think that the public is much savvier knowing that when there is inflation, stay away. I mean I follow the liquor industry of course cause my wife’s got mezcal, and I spend a lot of time looking at Diageo and Brown Forman. Those guys have to cut prices. They have to. I mean you have to cut prices. Kimberly Clark, do they have to cut prices? If you don’t cut prices, the [inaudible] will take advantage of it. We finally have, people who are trying to cut prices. Very good.”
8. Alaska Air Group, Inc. (NYSE:ALK)
Number of Hedge Fund Holders In Q3 2024: 28
Alaska Air Group, Inc. (NYSE:ALK) is a sizable airline that covers destinations in the Americas and the Caribbean. It has been a long-time favorite stock of Cramer’s as he believes that along with Delta, the firm’s management is running a tight ship. Alaska Air Group, Inc. (NYSE:ALK)’s shares have gained 95% over the past year as the firm has benefited from high summer demand and completed a successful merger with Hawaiian Airlines. Cramer’s latest remarks for Alaska Air Group, Inc. (NYSE:ALK) remained optimistic and praised its acquisition:
“Oh cause Alaska’s been always well run. And they bought Hawaiian.”
7. American Airlines Group Inc. (NASDAQ:AAL)
Number of Hedge Fund Holders In Q3 2024: 41
American Airlines Group Inc. (NASDAQ:AAL) is a mega-American airline with a global and international presence. The shares have performed modestly well over the past year as they have gained 15%. Two major events underlie this performance. First, American Airlines Group Inc. (NASDAQ:AAL)’s shares dipped by 15% in May after it increased its Q2 midpoint revenue drop guidance to 5.5% from an earlier 2%. Then, the shares gained 16.8% in December after the firm revised Q4 unit revenue guidance to +1% from an earlier -3%. American Airlines Group Inc. (NASDAQ:AAL)’s shares dipped by 9% after its earnings in January, and Cramer’s comments revolved around analysts not factoring in labor contracts. Here are his latest comments:
“[On AAL stumbling] It’s trying, it’s trying! It did [have a great run lately]. . . .they’re making a good run.
“American, look it’s not up for the year.”
6. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders In Q3 2024: 43
Palantir Technologies Inc. (NASDAQ:PLTR) is a data analytics company that is one of the top-performing stocks on Wall Street. Its shares are up by a whopping 362% over the past year as they’ve benefited from robust US commercial sales and the potential to modernize the US government, particularly with AI. Palantir Technologies Inc. (NASDAQ:PLTR)’s also a regular feature of Cramer’s TV shows, and he has repeatedly praised the firm’s CEO Alex Karp. This time, he went further and simply substituted the stock with Karp’s name instead:
“Well Palantir you’d pay, David, Alex Karp already told you, infinity’s too cheap. You know, look, I don’t get, I’ve been saying Alex Karp’s going to, I don’t call it Palantir, I call it Karp. I think that Karp goes to a hundred. Why? Why do I say that? Because the people who own the stock are taking it to one hundred. I mean, it reminds me of some stocks we saw in the 80s where people liked to be banging on the tables. . . .Karp, Karp, Karp, Karp, Karp. I mean, it’s a juggernaut.”
“I’m glad you brought up Palantir. Because Palantir is GameStop with a brain. Well I’m saying that the people who like GameStop . . . .they’re gonna take it [Palantir] up. And you know get out of the way, there’s probably some shorts who’re going to get run over. They do have really good stuff. Cybersecurity, I mean, cheap, the way they want to procure. They understand procurement better than anyone in the world. Call it K-A-R-P.”
5. Kimberly-Clark Corporation (NYSE:KMB)
Number of Hedge Fund Holders In Q3 2024: 45
Kimberly-Clark Corporation (NYSE:KMB) is one of the biggest consumer products companies in America. It primarily sells personal care items such as tissues, diapers, and wipes. Kimberly-Clark Corporation (NYSE:KMB)’s shares are up by 7.8% over the past twelve months despite the fact that several defensive stocks have struggled due to inflationary concerns. However, the firm has managed to stem the flow from lower volumes by increasing its prices. In fact, despite the higher prices, Kimberly-Clark Corporation (NYSE:KMB)’s volumes also grew during its fourth quarter. Cramer however wondered whether the firm would have to cut prices or if its performance allowed it to keep them higher:
“Those guys [alcoholic beverage companies] have to cut prices. They have to. I mean you have to cut prices. Kimberly Clark, do they have to cut prices?”
4. Beacon Roofing Supply, Inc. (NASDAQ:BECN)
Number of Hedge Fund Holders In Q3 2024: 47
Beacon Roofing Supply, Inc. (NASDAQ:BECN) is a construction products provider that primarily sells roofing. Cramer has discussed the stock often on his show and has always been full of praise for the firm. He first mentioned Beacon Roofing Supply, Inc. (NASDAQ:BECN) when QXO made an $11 billion dollar bid for the firm which sent the shares 7.6% higher. Since then, the stock has gained an additional 1.6% as QXO has gone hostile with its bid. In his latest remarks for Beacon Roofing Supply, Inc. (NASDAQ:BECN), Cramer shared that the firm was right in demanding a higher price:
“But David why shouldn’t they ask for more money? SRS’ got a much higher multiple . . .how about the fact that they’re doing a great job? And they’re just because the multiple’s low, they’re going to get had. Sometimes you just get had, is that what you’re talking about?”
3. Viking Holdings Ltd (NYSE:VIK)
Number of Hedge Fund Holders In Q3 2024: 49
Viking Holdings Ltd (NYSE:VIK) is an American cruise ship operator. Its shares are up by a strong 88% since the date of its IPO in May 2024. Viking Holdings Ltd (NYSE:VIK) has benefited from strong financial results, as it grew its revenue by 11% during last year’s September quarter. Then, by November, the firm announced that 70% of its capacity had already been sold. Like its larger cruise industry peers, Viking Holdings Ltd (NYSE:VIK) has benefited from stronger demand that has also enabled cruise providers to charge higher prices. Cramer’s comments for the firm were in connection with the broader cruise industry:
“Look I think a lot of people really misjudged that industry. . . . I happen to like Viking by the way, not Viking Therapeutics, I like the Viking, the cruise. What people learn Carl, and I’ve spent a lot of time analyzing the industry, is it is such a bargain in an era of inflation. It’s just considered to be the best way to have a vacation. You know I just think that they are terrific. And everyone thinks, recognizes, that there are a lot of people who are snobs. Okay. The snobs don’t recognize that these things are great trips.
“I think it’s incredible and people have just misjudged the earnings power. And the earnings power is amazing.”
2. Royal Caribbean Cruises Ltd. (NYSE:RCL)
Number of Hedge Fund Holders In Q3 2024: 52
Royal Caribbean Cruises Ltd. (NYSE:RCL) is one of the biggest cruise ship operators in America. Like its peers, the firm has been performing well lately with its shares having gained 109.8% over the past year. Key to Royal Caribbean Cruises Ltd. (NYSE:RCL)’s robust performance has been its financial performance which saw the firm grow Q3 revenue by 17.8% and Q4 revenue by 13%. The latest earnings report sent Royal Caribbean Cruises Ltd. (NYSE:RCL)’s shares soaring by 12%. Cramer mentioned the stock in connection with the broader cruise industry:
“Look I think a lot of people really misjudged that industry. Royal Caribbean being the best by the way. . . . What people learn Carl, and I’ve spent a lot of time analyzing the industry, is it is such a bargain in an era of inflation. It’s just considered to be the best way to have a vacation. You know I just think that they are terrific. And everyone thinks, recognizes, that there are a lot of people who are snobs. Okay. The snobs don’t recognize that these things are great trips.” “I think it’s incredible and people have just misjudged the earnings power. And the earnings power is amazing.”
1. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders In Q3 2024: 52
The Boeing Company (NYSE:BA) is one of the largest aircraft manufacturers in the world. It makes military and commercial aircraft, with the latter being a larger business than the former. The Boeing Company (NYSE:BA)’s shares are down by 15% over the past year as it has been forced to significantly reduce its aircraft production due to quality control issues. However, a turnaround appears to be in play as the stock is up by 26% since its November bottom. Cramer interviewed The Boeing Company (NYSE:BA)’s CEO during his program, and his comments before and after the interview were as follows:
“I’m wondering, why is the second half is when things get better. I would expect that the second quarter, the reason I mention that is because I don’t people to buy the stock knowing that second quarter’s awful. I mean, how do we know that, that things are going to get better in the third quarter if the second quarter is not good?
“[After the interview] Yeah, I think that if you’re going to get a strong second half I don’t know, if you can wait. My thinking was, look if it’s going to be a really tough second, maybe wait until the last month. I was very encouraged. Particularly because there’s the possibility that you can make, they can start making a lot of planes. The backlog’s huge. And I know everyone talks about how there’s only two of these companies. It hasn’t helped people. But now, it could be. It’s close enough. And they got the cash.”
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