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Jim Cramer on Chewy: “You Have My Blessing to Buy it Even After the Rally”

Chewy, Inc. (NYSE:CHWY) is one of the stocks Jim Cramer weighed in on. Cramer discussed the company’s earnings and analyst upgrades following it, as he said:

“What on earth happened this quarter that crushed the stock but simultaneously made two analysts feel confident enough to upgrade it? Okay, at first glance, this was a very good quarter… I don’t think the higher SG&A expenses were the real problem. In the end, this was about expectations. Most of Chewy’s numbers came in higher than the consensus analyst estimates, but they didn’t come in higher than the so-called whisper number, which is what the really bullish hedge funds were looking for…

Deutsche Bank and Seaport both upgraded it last Thursday because the stock suddenly got too cheap and the story is too good to ignore, which is one reason why it came roaring back today… Chewy put up 8.6% revenue growth in an industry that’s only been growing in the low to mid single digits. I mean, these guys are taking market share… On the conference call last quarter, management likened the subscription service to Amazon Prime or even a Costco membership. You know how much I like that? The value proposition here is just that good. Aside from the $49 annual subscription fee, Chewy+ members tend to spend a lot more time on average than non-members using Chewy. So they naturally want to sign up as many people as possible. I really like this…

So here’s the bottom line: I think it’s crazy that Chewy sold off over 16% in response to a largely good quarter. I think the two analysts were right to upgrade the stock last Thursday, and the buyers were right to step in today. So even though Wall Street’s not happy about all that Chewy spends on growth initiatives, call me on board. This will make Chewy a better investment long term. You have my blessing to buy it even after the rally it just had today.”

Stock market data. Photo by Photo by Alesia Kozik

Chewy, Inc. (NYSE:CHWY) operates an online platform and it provides pet food, treats, supplies, medications, and health products.

While we acknowledge the risk and potential of CHWY 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 CHWY and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

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When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

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  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
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  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

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