On Tuesday, Jim Cramer, host of Mad Money, discussed the day’s market performance and paid attention to how bank stocks are trading.
“If you ask me, the real rocket fuel, it’s the expansion of what we call the price-to-earnings multiple or what we will pay for the company’s earnings. Right now, people are simply willing to pay more for the banks.”
READ ALSO: Jim Cramer’s Latest Lightning Round: 8 Stocks in Focus and Jim Cramer Weighed In on These 11 Stocks.
Cramer pointed out that many investors do not fully appreciate how central the P/E multiple is to stock pricing. He explained that stock prices can climb even when earnings estimates remain unchanged, simply because the multiple itself increases, a phenomenon known as multiple expansion.
“It can move up a stock, or the multiple can stay the same when the earnings estimates rise, which… gives you a higher stock price too. In the case of the banks, it’s both… Both the earnings are going up, and the price-to-earnings multiple is increasing at the same time.”
Despite this momentum, Cramer expressed concern, saying, “Right now, though, the market’s saying that the Fed doesn’t matter to the bank stocks, which is nuts.” He explained that the Federal Reserve’s decisions still carry significant weight for these institutions. He explained that part of the reason for the apparent disconnect may be the multiple expansion mentioned above.
“The bottom line: I’ve been waiting for years for the banks to get higher price-to-earnings multiples. They’re incredibly important to the broader market. When the banks are winning, it’s a terrific sign for the overall trading. Remember this tomorrow if the averages take a hit from the Fed because once multiple expansion starts, it’s not easy to reverse. We might be okay. These are hard-fought moves, and I bet that they’re just at the beginning.”
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 September 16. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the second quarter of 2025, which was taken from Insider Monkey’s database of over 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer Recently Discussed These 9 Stocks
9. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 43
Bloom Energy Corporation (NYSE:BE) is one of the stocks Jim Cramer recently discussed. Cramer mentioned that he should have recommended the company stock, but he did not. He said:
“Now I’ve always admired Bloom’s technology, but frankly, I never thought much of its stock because the company’s been a chronic money loser. For years, the stock did nothing, and eventually I stopped paying attention to it. That was wrong. And now we’ve got still one more reason why, Oracle. If you want to build as many data centers as Oracle’s planning to, you need turnkey power because we know that electricity’s the biggest gating factor for these behemoths…
In short, after being a severe disappointment for years, Bloom is now one of the great success stories of this remarkable era… How about the stock? Like so many other small-cap that provide key parts and power to the data center, it’s gone ballistic, not just parabolic but ballistic. It’s up roughly 230% year to date, going from 25 to $72… My conclusion was a simple one: I missed it. Therefore, it’s not my cup of tea. All day, though, I’ve been wondering whether that’s actually true. I mean, Bloom’s a $17 billion company now with promising contracts and a pedigree of fantastic technology…
But after this huge move, I worry about recommending Bloom because I don’t want to hurt you. That said, Bloom could be very real. It just happened so fast that I didn’t grasp it, and now the easy money’s obviously already made… Still, tired as it sounds, I think you have to wait for a pullback for Bloom, like the one nuclear’s experiencing right now. And admit, darn it… I should have recommended Bloom Energy to you. I didn’t. My bad.”
Bloom Energy Corporation (NYSE:BE) designs and installs solid-oxide fuel cell systems that convert natural gas, biogas, hydrogen, or fuel blends into electricity without combustion. Additionally, it provides electrolyzers for hydrogen production and serves sectors including utilities, data centers, healthcare, and manufacturing.
8. New Gold Inc. (NYSE:NGD)
Number of Hedge Fund Holders: 31
New Gold Inc. (NYSE:NGD) is one of the stocks Jim Cramer recently discussed. A caller who bought NGD shares around $1.70 a year ago and has seen the price rise to the mid-$6 range asked for Cramer’s thoughts on the stock’s recent performance. In response, he said:
“Look, I have to tell you, if it’s gold, it’s going higher. You know, I’m a believer, I’ve been saying it over and over. Gold’s a great place to be, but my favorite is Agnico Eagle. My second is Newmont Mining.”
New Gold Inc. (NYSE:NGD) is a mining company focused on the development and operation of properties that produce gold, silver, and copper. During a July episode, a caller inquired about the stock during the lightning round, and Cramer replied:
“It’s okay. I mean, why not buy Agnico Eagle? That’s the one I really, really like. They’re doing so well. Let’s go with that, Agnico.”
7. Globalstar, Inc. (NASDAQ:GSAT)
Number of Hedge Fund Holders: 15
Globalstar, Inc. (NASDAQ:GSAT) is one of the stocks Jim Cramer recently discussed. During the lightning round, a caller asked for Cramer’s thoughts on the stock, and he commented:
“I have to admit, I have waited for this to happen, and it’s finally breaking… It’s finally breaking out.”
Globalstar, Inc. (NASDAQ:GSAT) delivers mobile satellite services and equipment supporting voice, data, IoT connectivity, and asset tracking across industries such as government, energy, transportation, and emergency response. The company provides SPOT family of devices, commercial IoT solutions, satellite transmitter modules, and network engineering services.
On September 15, the company announced plans to activate its HIBLEO-XL-1 satellite system, filing to advance its expansion into next-generation mobile satellite connectivity. The company is investing $1.5 billion in its third-generation C-3 system to improve global communications with additional satellites, orbital shells, and frequency bands to strengthen reliability and reach.
6. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 91
Costco Wholesale Corporation (NASDAQ:COST) is one of the stocks Jim Cramer recently discussed. Answering a caller’s query about the stock, Cramer said:
“I think that Costco is a great long-term hold. There’s never been a moment where it’s cheap. And that is something that the late Charlie Munger talked about. He was on the board of Berkshire Hathaway. Never. So my belief is that you buy this slowly. You want to buy 50 shares? Buy 10 here. Wait for it to come down. I think it’s a great stock. Don’t buy it all at once.”
Costco Wholesale Corporation (NASDAQ:COST) operates membership-based warehouses offering branded and private-label products across groceries, appliances, electronics, apparel, and household goods. Additionally, it provides fuel stations, pharmacies, optical and food services, along with e-commerce and business delivery options. On the September 4 episode, Cramer explained why his trust owns the company stock. He remarked:
“There’s a reason, by the way, that the trust also owns Costco. We shop there constantly. We have four different Costcos where I live, and I always visit one if I see one. I do that because it’s a core position, but… also because my wife and I just can’t stay away from the place. I’ve never been worried. Richard Galanti, the former CFO, put the fear of God into all of Costco’s suppliers to ensure they kept prices low. The Costco cart’s one of the best bargains on earth.”
5. Target Corporation (NYSE:TGT)
Number of Hedge Fund Holders: 54
Target Corporation (NYSE:TGT) is one of the stocks Jim Cramer recently discussed. A caller who purchased TGT shares near its lows and is now facing losses amid the CEO transition and related uncertainty asked Cramer for his thoughts. He replied:
“Well, the stock’s down 33%. Now, I am in a wait-and-see mode on this. Why? Because I want to know this new CEO. I want to know what he’s cut out. I don’t know whether he is the right guy or not. I say we have to wait and see before I would possibly advise you to think that there’s more to buy.”
Target Corporation (NYSE:TGT) is a general merchandise retailer that provides apparel, beauty, food, electronics, home goods, and household essentials. Cramer discussed the stock in a July episode and said:
“We are experiencing a hundred trillion dollar wealth transfer from baby boomers to Gen X, Y, and Zers, and they’re cutting their teeth on stocks right now, doing just what I’m telling you. It’s easy to spot housing wins extended to beaten-down stocks like the Target or Kohl’s. I’m not a fan of Kohl’s, but I am a fan of Target. And the new buyers, the people who aren’t trapped by Fed dogma, know that there’s fundamental worth to Target, and it’s probably higher than here. You don’t need to worry about what that… worth truly is yet because we’re nowhere near when Target reports.”
4. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 75
Wells Fargo & Company (NYSE:WFC) is one of the stocks Jim Cramer recently discussed. Cramer discussed the stock’s valuation during the episode. He commented:
“I happen to like Wells Fargo, where Mayo toils, because CEO Charlie Scharf has resurrected this bank this time from regulatory hardship… Wells Fargo, Bank of America, and Citigroup sell at ridiculously low, around 10 to 12 times next year’s numbers. That’s not sustainable. It’s going to go higher.”
Wells Fargo & Company (NYSE:WFC) provides financial services, including banking, lending, investment, and mortgage solutions for individuals, businesses, and institutions. During the September 9 episode, Cramer praised the firm’s CEO, as he said:
“Now we gotta go down to the companies that have been buying back stock at a 4% clip annually to find the two that I want to pound the table on right here and right now: Wells Fargo and Apple. Wells spoke today at a conference. I liked everything I heard. Here’s what we told club members: ‘Wells has bought back $5.5 billion of its stock so far this quarter. That’s the most the bank has bought back in a single quarter all year.’
A huge, and by the way, that is a huge sign of confidence from CFO, Michael Santomassimo, who said that he’s seeing green shoots now that the Feds removed the asset cap penalty on Wells. I’d be a buyer if we didn’t already own so much of it for my Charitable Trust. And I know Charlie Scharf is on tomorrow morning. I want to listen to him. He’s the CEO and he’s terrific.”
3. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 102
Citigroup Inc. (NYSE:C) is one of the stocks Jim Cramer recently discussed. Cramer mentioned the company during the episode and said:
“It’s not the only bank that’s making a ferocious move. Citigroup, for example, which had been in the doldrums for so so long, just crossed the $100 mark… A 43% rally for the Citigroup stock. That’s a remarkable move in itself…
Now, kudos to Mike Mayo, the uber-bullish bank analyst at Wells Fargo, who has a terrific piece out just today entitled ‘Goliath is winning.’ He upped his price targets for all these banks, making it very clear that the capital markets are really getting hot with some terrific tailwinds like Trump deregulation, even credit quality, which has been remarkably good during this period. His favorite has been Citigroup, which CEO Jane Fraser has rescued from obscurity. Great call.”
Citigroup Inc. (NYSE:C) is a global financial services firm that provides banking, lending, investment, trading, and wealth management solutions for consumers, corporations, governments, and institutions.
2. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 124
JPMorgan Chase & Co. (NYSE:JPM) is one of the stocks Jim Cramer recently discussed. Cramer said that it could be the next trillion-dollar stock. He stated:
“The anomaly this time, it looks like the next trillion-dollar stock won’t be Eli Lilly. If anything, it’s more likely to be the stock of JPMorgan, a bank… JPMorgan’s at just over $850 billion, up 29% for the year… To me, this is a monumental move, people, a bank stock putting on that kind of market cap, right on the eve of an incredibly important Fed meeting where everyone seems to be expecting a quarter-point rate cut despite a recent uptick in inflation. What’s going on here? First, understand the trillion-dollar barrier is really hard to cross…
Meanwhile, like a horse that’s bided its time but is now at the far turn, JPMorgan stock is putting on a run for the roses move. That’s as breathtaking as it is obscure… JPMorgan stock has been consistently selling for about 14 times its earnings for many, many years, dramatically lower than the 22 times earnings bogey of the S&P 500, but it’s been levitating alongside the earnings estimates all year. Now, JPMorgan sells for 15.7 times this year’s numbers…
JPMorgan’s got something special. It excels at so many things… JPMorgan has always been a top-quality bank, but it’s now become a fantastic place to work, and its global reach is unmatched. There’s a reason its marketing cap is so much bigger than the other major banks. Can this continue? I have to tell you, if you look at the forward multiple, meaning how much JPMorgan’s trading on versus next year’s earnings estimates, the answer is a resounding yes because this one sells for just 15 times the 2026 estimates. That’s puny.”
JPMorgan Chase & Co. (NYSE:JPM) provides financial services, including consumer banking, lending, payments, credit cards, mortgages, and investment products. The firm also offers investment banking, securities services, asset management, and wealth solutions for individuals, businesses, institutions, and governments.
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is one of the stocks Jim Cramer recently discussed. While talking about the company, Cramer said that investors are not “supposed to buy drug stocks” when the Fed is cutting rates. He remarked:
“Not that long ago, pretty much everybody assumed that the next non-tech stock to cross the trillion-dollar threshold would be the stock of Eli Lilly. Why not? They’ve developed a weight loss and diabetes wonder drug with incredible prospects… Right now, Lilly’s market capitalization is roughly $724 billion…
Oh, I thought Lilly would be next… Today, Lilly announced plans to build a $5 billion manufacturing plant in Richmond, Virginia. As we told members of the investing club this morning, this facility marks the first of four American plants for targeted cancer and autoimmune drugs… When you consider all the indications for this thing… You can see why the betting line favored Lilly to cross the trillion-dollar finish line first.
But Lilly’s stock has been stalled in part because it has a vicious, some would say desperate rival in the form of Novo Nordisk… Plus, you aren’t supposed to buy drug stocks if the Fed’s going to cut interest rates… So you should avoid so-called safety drug stocks. And of course, the president seems to be hostile to the industry… So yeah, my original prediction will likely be wrong. Eli Lilly is probably not the next non-tech stock to cross the trillion-dollar barrier.”
Eli Lilly and Company (NYSE:LLY) develops and markets pharmaceuticals across diabetes, obesity, oncology, immunology, neuroscience, and pain management.
While we acknowledge the potential of Eli Lilly and Company (NYSE:LLY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LLY and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
