On Wednesday, Jim Cramer, the host of Mad Money, shared his thoughts on the importance of recognizing the scale of opportunity when evaluating a company.
“Sometimes I wonder that I’m doing a big disservice to you as a viewer when I talk about earnings per share or upside surprises or possible buybacks, dividends. I wonder if I’m failing you for focusing on what feels like the minutiae right now.”
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According to Cramer, there are instances when the opportunity at hand is so vast that the smaller elements seem insignificant, and nowhere was this more apparent than at NVIDIA’s annual GTC event. While he usually focuses on the larger game, one in which every player stands to win, Cramer said that he would rather talk about the finer points of individual stocks.
At the event, Cramer emphasized that the conference was less about today’s trends and more about what lies ahead, especially in terms of how companies could transform industries by embracing GPU kingpin’s cutting-edge technology. He pointed out that the real shift happens when companies, not consumers, adopt this technology.
“Notice I said if other companies embrace it, not you, not the consumer and that’s hard to bring light. We’ve gotten used to consumer-oriented tech conferences for years.”
The company’s work, he argued, is not aimed at the everyday consumer but at businesses and enterprises, which adds a layer of complexity in communicating its value. Cramer noted that while the focus on the enterprise might seem challenging, it is also a double-edged sword. On one hand, it is a tougher sell to individual investors, many of whom hold stocks but do not fully understand the significance of enterprise-oriented stocks. The lack of understanding, Cramer suggested, often drives investors to sell off shares in companies when their performance dips, as has happened recently. He added:
“The good news, the enterprise is much bigger than the consumer so it’ll produce much bigger earnings per share. Catering to the corporation is typically a much better business model than catering to the individual.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 19. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer on These 9 Stocks Recently
9. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) was mentioned during the episode, and here’s what Mad Money’s host had to say:
“We might do the same with Gemini from Google, reels from Meta, Copilot from Microsoft. Those are all consumer-oriented. Everybody understands the consumer because we’re consumers. Tech conferences have been like that ever since the first iPhone was rolled out into 2007 and that’s when you, the consumer, became the pre-eminent person when it came to tech.
You moved the needle with your choices. But before the iPhone, it was always the enterprise that mattered most because the enterprise is bigger than the consumer. It buys more hardware and software and… It’s predictable. It’s not hostage to advertising, to a fickle consumer.”
Microsoft (NASDAQ:MSFT) creates software, services, devices, and solutions across various sectors, including productivity tools, cloud services, enterprise applications, gaming, and products for both consumers and businesses. Columbia Seligman Global Technology Fund stated the following regarding the company in its Q4 2024 investor letter:
“Within software, the fund maintained an underweight position to Microsoft Corporation (NASDAQ:MSFT), which proved beneficial as share price for the company fell during the fourth quarter. Microsoft’s outlook for its Azure business came down slightly, which hampered the stock price at times during the quarter and, combined with losses on the Open AI business, led to a disappointing end to 2024. The company has guided its capital expenditure spending up slightly and investors continue to wait for additional monetization from the company’s large commitment to AI infrastructure spending. The fund continued to hold an overweight allocation to Oracle as we believe Oracle is positioned to be a major beneficiary of the AI rollout and has the potential to compete with other large cloud providers, such as Amazon, Alphabet and Microsoft. Oracle shares moved lower during the quarter and the stock suffered its worst day of the year in December, as the company narrowly underperformed analysts’ average estimates. Oracle’s business model remains strong as demand for computer power that can handle AI is increasing and the company’s revenues from its cloud infrastructure unit moved higher year over year.”
8. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 262
Talking about Meta Platforms, Inc. (NASDAQ:META), Cramer said:
“We might do the same with Gemini from Google, reels from Meta, Copilot from Microsoft. Those are all consumer-oriented. Everybody understands the consumer because we’re consumers. Tech conferences have been like that ever since the first iPhone was rolled out into 2007 and that’s when you, the consumer, became the pre-eminent person when it came to tech.
You moved the needle with your choices. But before the iPhone, it was always the enterprise that mattered most because the enterprise is bigger than the consumer. It buys more hardware and software and… It’s predictable. It’s not hostage to advertising, to a fickle consumer.”
Meta (NASDAQ:META) creates products that facilitate global communication through platforms such as Facebook, Instagram, Messenger, and WhatsApp, along with augmented and virtual reality hardware, software, and content. During an episode of Squawk on the Street, Cramer commented:
“That Meta, they’re reliant on advertising but it’s good… There’s nothing wrong with Meta other than perhaps advertising which is economically sensitive.”
7. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Highlighting how tech conferences have become consumer-oriented, Cramer mentioned Alphabet Inc. (NASDAQ:GOOGL) and explained:
“We might do the same with Gemini from Google, reels from Meta, Copilot from Microsoft. Those are all consumer-oriented. Everybody understands the consumer because we’re consumers. Tech conferences have been like that ever since the first iPhone was rolled out into 2007 and that’s when you, the consumer, became the pre-eminent person when it came to tech.
You moved the needle with your choices. But before the iPhone, it was always the enterprise that mattered most because the enterprise is bigger than the consumer. It buys more hardware and software and… It’s predictable. It’s not hostage to advertising, to a fickle consumer.”
Alphabet (NASDAQ:GOOGL) is a conglomerate of companies, with Google being the largest. Its diverse range of widely used products and platforms, such as Search, Ads, Chrome, Cloud, YouTube, and Android, are accessed by billions of people daily.
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Discussing how tech conferences used to be enterprise-oriented, Cramer mentioned Apple Inc. (NASDAQ:AAPL) and stated:
“We’ve gotten used to consumer-oriented tech conferences for years. Like whenever Apple launches a new phone, I mean, does it dazzle? Is it explosive? Is it a dud? And of course, will we buy it? You know that if Apple impresses enough people, that stock’s going to go higher.”
Apple (NASDAQ:AAPL) creates and markets a range of consumer electronics, including smartphones, computers, tablets, wearables, and accessories, as well as services. The company also provides subscription services like Apple Music, Apple TV+, and Apple Arcade, and manages platforms such as the App Store and Apple Pay. Last week on Squawk on the Street, Cramer said:
“I think that Apple, I’ve been saying it, own it don’t trade it. . .I said look I think Apple’s going lower, wasn’t, I don’t think it’s revelatory. You can’t, if you can’t make the estimates your stock goes lower. I mean it’s not like they’re somehow immune to that. And I think that the Morgan Stanley piece yesterday was very good about trying to assess exactly how much lower. When you miss your numbers, you miss your numbers. And it doesn’t matter who you are… Look there’s a cadence to having your stock go up and Apple doesn’t have it.”
5. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 108
While replying to a question about The Walt Disney Company (NYSE:DIS) from the floor as he attended the annual Nvidia GPU Technology Conference, Cramer said, “Oh, Disney. I love Disney, over $100, it’s, I’m still buy, buy, buy Disney.”
Disney (NYSE:DIS) is a leading global entertainment company engaged in film and TV production, streaming services, and operating theme parks and resorts. Additionally, the company offers sports entertainment and live event experiences.
4. Gladstone Land Corporation (NASDAQ:LAND)
Number of Hedge Fund Holders: 10
Asking about Gladstone Land Corporation (NASDAQ:LAND), a caller mentioned its monthly dividend and that it comes out to roughly 5% annually. In response, Cramer said:
“I’m gonna see your Gladstone Land and raise you with Realty Income, which also has a monthly dividend and I feel much better about it. What can I say?”
Gladstone Land (NASDAQ:LAND) is a real estate investment trust that acquires and owns farmland and farm-related properties, leasing them to independent farmers. The company holds a variety of farms, including those growing permanent crops like almonds, apples, and pistachios, as well as blueberry groves and vineyards. For context, over the past year, LAND stock declined more than 18% while O stock went up over 7%. In February, Cramer commented:
“We also hear it from one of my favorite real estate investment trusts. I know boring I, you know what, I like making money. It’s never boring. Realty Income, letter O, I’m partial to this one because it pays a monthly dividend, which just got boosted earlier this week.”
3. Deckers Outdoor Corporation (NYSE:DECK)
Number of Hedge Fund Holders: 66
Mentioning that the stock has gone from an all-time high to a 52-week low in less than two months, a caller asked about Deckers Outdoor Corporation (NYSE:DECK). Cramer replied:
“I’m split. I think Hoka is real good, but that last quarter, Uggs was quite bad. Some people say it was, it was a problem with how much inventory they had. I think you should actually buy Deckers under 120. I like it. Next, buy 100. Get a good basis.”
Deckers (NYSE:DECK) offers a wide range of footwear, apparel, and accessories, including premium UGG products, athletic gear from HOKA, and casual footwear and sandals from brands like Teva, Sanuk, Koolaburra, and AHNU. The London Company stated the following regarding the company in its Q4 2024 investor letter:
“Deckers Outdoor Corporation (NYSE:DECK): DECK manages top brands in the footwear industry and has outperformed other retailers for several years. UGG and HOKA are benefitting from brand heat, and management remains focused on thoughtfully acquiring and retaining customers. The most recent earnings report in October showed that HOKA doubled sales in only two years (off a $1B base), which has helped to diversify the seasonality of DECK and expand margins. UGG also continues to defy expectations and is growing quite nicely in both its on and off-seasons. Deckers Outdoor (DECK) – Trimmed on strength. After a multi-year run, its valuation is elevated. The UGG and HOKA brands remain strong.”
2. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 60
A caller asked Cramer’s thoughts on International Business Machines Corporation (NYSE:IBM) and he remarked:
“Nah, IBM is a winner. You know what? I have not focused on it nearly enough. It is a pure [buy, buy, buy] and I just think right down here, I mean, up, you know, it’s up five, that doesn’t matter. It’s going higher, maybe to 300.”
International Business Machines (NYSE:IBM) provides a variety of integrated services and solutions, such as hybrid cloud and AI platforms, along with server and storage solutions tailored for hybrid cloud environments. Appearing on Squawk on the Street in February, Cramer said:
“IBM had a remarkably good quarter. It’s a software company. They’re 42% software and they’ve got the annual contracts. We’ve always wanted that to happen. It’s what I was hoping would happen with Cisco. It’s really happening with IBM.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
While at NVIDIA Corporation’s (NASDAQ:NVDA) annual GTC event, Cramer mentioned the company and said:
“See, NVIDIA facilitates the part of the A of AI that I believe will take over America and the world. They’re transforming the economy from one that’s run by people into one where people manage machines… I know I haven’t been able to convey the excitement people feel about NVIDIA here because it’s hard to express in terms of earnings per share. In the short term, it’s absolutely about earnings, but longer term, as Jensen Huang says, it’s about the sheer size of the opportunity, the AI opportunity.
So let me say this, in my 45 years of examining companies, I’ve never seen a business with this much opportunity. Could this nearly $3 trillion company one day be worth, say $10 trillion? Sure, why not? I’m not doubting it. Or if you want this distillation, plain and simple, NVIDIA, own it. Don’t trade it.”
NVIDIA Corporation (NASDAQ:NVDA), recognized for its innovations in graphics, computing, and networking technologies, is experiencing substantial growth driven by its GPUs and the CUDA software platform, both of which play an important role in AI infrastructure.
While we acknowledge the potential of NVIDIA Corporation (NASDAQ:NVDA) 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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