We recently compiled a list of the Jim Cramer’s Game Plan This Week: 10 Stocks to Watch. In this article, we are going to take a look at where Adobe Inc. (NASDAQ:ADBE) stands against the other stocks featured in Jim Cramer’s game plan for this week.
Jim Cramer, the host of Mad Money, recently discussed the current state of the market, touching on various factors including upcoming earnings reports and new inflation data. Reflecting on the November jobs report, which came in largely as expected, Cramer noted:
On Friday, Cramer remarked that the market had a relatively calm session, with the Dow dipping by 123 points, the S&P gaining 0.25%, and the NASDAQ climbing 0.81%. He emphasized that nothing about Friday’s action surprised him, and he maintained his expectation for a 25-basis point rate cut later this month. Cramer added that he still anticipates the Fed will go ahead with this move despite the recent data.
READ ALSO: Jim Cramer Discussed 10 Stocks That Can Do Well in December and Jim Cramer’s Lightning Round: 7 Stocks to Watch
Looking ahead, Cramer highlighted Wednesday’s upcoming release of the Consumer Price Index (CPI), which he noted could play a crucial role in the Fed’s decision-making. With the Federal Reserve meeting in just two weeks, he cautioned that there will be chatter about the Fed’s decision to cut rates.
“All of us still see high prices when we go to the supermarket, right? So we shouldn’t be surprised if the CPI comes in hot. At that point, why should the Fed really bother to cut? Be ready for that kind of chatter. Don’t worry, they’ll still cut.”
The following day, Thursday, will bring the release of the Producer Price Index (PPI), which Cramer pointed out is another important inflation measure. He again expressed concern that inflation needs to cool down in order to avoid complications. There has been ongoing speculation about whether the Fed could hesitate on rate cuts, which could derail the market’s expectations. Cramer remarked that if inflation remains elevated, the Fed might have no choice but to delay or even shelve rate cuts for next year.
“Bottom line: Look, I’m trying to get my arms around a market that takes up all sorts of crypto, lots of unprofitable companies, never too great a sign for those who want the Fed to cut repeatedly,” he said. “I want you to keep that in mind so you won’t be surprised if we get some overheated inflation numbers next week and the market gives up some of these extraordinary gains.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on December 6. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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).
A team of engineers and scientists collaborating at a workstation surrounded by their applications and solutions.
Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Commenting on stocks like Adobe Inc. (NASDAQ:ADBE), Cramer said:
“As I mentioned earlier, the enterprise software stocks have been roaring, reacting very positively to pretty much everything these days. So maybe we should start thinking about buying the stock of Adobe, which has some of the very best software to help businesses with marketing and web design. I like this company very much, but it’s been stuck in enterprise software purgatory. Not anymore. Maybe it has a real run by just delivering good numbers.”
Adobe (NASDAQ:ADBE) is a well-established software company known for offering a broad range of products and services, particularly in the fields of digital media creation and document management. The company has focused on integrating AI into its document cloud offerings, with features like the AI Assistant aimed at enhancing productivity and improving user experience with digital documents.
In the graphic design space, its suite of tools remains a leader, and to stay ahead in the evolving market, the company developed its own generative AI model, Firefly. This model has gained significant traction, with over 12 billion images created using it, according to the company.
Adobe (NASDAQ:ADBE) also introduced its AI-first content creation application, Adobe Express, which is designed to assist individuals, students, teams, and enterprises with quick design tasks. The application has seen notable growth, with a 96% quarter-over-quarter increase in monthly active mobile users and an 86% year-over-year rise in the number of creations made using the app during the third quarter.
Looking ahead, the company projects total revenue for the fourth quarter to range between $5.50 billion and $5.55 billion. The company expects GAAP earnings per share of $3.58 to $3.63 and non-GAAP earnings per share of $4.63 to $4.68.
Overall, ADBE ranks 2nd on our list of the stocks featured in Jim Cramer’s game plan this week. While we acknowledge the potential of ADBE 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 time frame. If you are looking for an AI stock that is more promising than ADBE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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