During the latest episode of Mad Money, which aired on the 1st of May, Jim Cramer dove straight into the recent tech earnings reports and celebrated the fact that some of the biggest names reported great earnings, saying:
“Sometimes you forget why you ever like something in the first place. Take the super stocks, the hyperscalers, the tech titans, I don’t care, whatever you want to call them. These stocks all got lumped together because of their size, their gigantic market caps that dwarf the rest of the market and then they lost their juice. […] We’re reminded of how the mega caps got so big to begin with. It’s their scale, their smarts, their moats, their balance sheets, and their sensational products.”
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He then emphasized how quickly the market turned around on the back of those great earnings reports:
“Couple weeks ago, the formerly magnificent seven felt impossible to own. But days like today remind you why you avoid these stocks at your own pearl. You got to have a couple of them. These companies are endowed with tens of billions of dollars. They’re like nation states. They don’t flinch at spending tens of billions to compete in artificial intelligence. They have the flexibility to pivot to what’s necessary. […] They’re run by seasoned hands who are incorruptible and bold and can course correct if they missed the mark the previous quarter. They are marvellous gems.”
Voicing his support for the big American tech companies, he said:
“This is why I take every chance to harangue public officials and urge them to stand up for these companies which because of their size have become honeypots for lawsuits by foreign governments who never stop hitting them up for money. But in the end, their optionality knows no bounds. Save tariffs. Something that they could not have seen coming and snuck up on them very fast. Snuck up on everyone. This has been the roughest stretch for these amazing companies that I can recall. “
Finally, he gave his nod of approval to these resilient companies, before beginning to analyze their recent earnings reports:
“But the bottom line, if we’re in for lean times, you know what? It’s quarters like these that remind me that these mega caps were built to prosper, built to make money in any kind of market, and they’re truly ready to excel when things turn south for everybody else, including Apples.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on May 1. 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).
8. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Jim Cramer reviewed the strong earnings from mega-cap tech stocks, and started off by praising Microsoft Corporation (NASDAQ:MSFT) for delivering what he called a “thing of beauty.” He highlighted the company’s impressive quarter, especially the performance of Azure and the long-awaited upside guidance from CFO Amy Hood, which had been lacking in previous reports. Here’s what he said:
“[Talking about the market’s gains] Led by two of these mega caps, the Microsoft and Meta platforms, we’re reminded of how the mega caps got so big to begin with. It’s their scale, their smarts, their moats, their balance sheets, and their sensational products. Microsoft stock finished up 30 points or 7.63% today after a monster quarter […]
Microsoft’s a machine. It’s a conference call that’s incredibly well orchestrated. CEO Satya Nadella starts with a mellifluous analysis of what’s going great guns. He takes it from 30,000 ft all perfect every division including most proudly Azure.
Then CFO Amy Hood, perhaps the most professional of the CFOs in the business, gives the breakdown of the far more prosaic numbers, how much each division gained over the previous year. Then she delivers the single most important bullet in the call: the part where she raises guidance, sometimes huge, sometimes just big.
[Talking about previously reducing guidance in previous quarters] Not this time. This time, it was a glorious course of raised numbers. Azure, it had huge accelerated revenue growth and will continue to do so. […] This quarter was a thing of beauty.”
Here’s what Mar Vista’s U.S. Quality Select Strategy Fund said about Microsoft Corporation (NASDAQ:MSFT) in its Q1 2025 investor letter:
“Microsoft (MSFT) reported strong bookings, highlighted by an accelerating remaining performance obligation of nearly $300 billion, representing 36% year-over-year growth, as well as healthy cloud revenue growth of 21% year-over-year. Despite this solid performance, MSFT stock came under pressure as Azure revenue growth, at 31% year-over-year, came in at the low end of expectations. Additionally, guidance for the March quarter forecasted Azure revenue growth of 31% to 32%, reflecting a slowdown in non-AIrelated Azure growth.”
