Jim Cramer Says “Cummins Has Underappreciated Data Center Exposure”

Cummins Inc. (NYSE:CMI) is one of the relatively cheap S&P 500 stocks Jim Cramer talked about. Cramer highlighted headwinds and positives around the company, as he said:

“Cummins, CMI, works too. Their company’s core truck engine business has headwinds from the prolonged weakness in the freight market. But Cummins has underappreciated data center exposure, making backup power generators for these warehouses full of servers that cannot go down.”

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Cummins Inc. (NYSE:CMI) delivers power solutions, including diesel and natural gas engines, drivetrain systems, transmissions, and aftertreatment technologies. In addition, it provides power generation equipment, aftermarket services, and develops electrified and hydrogen-based technologies for diverse industries. Cramer discussed the company a year ago in September 2024. He remarked:

“Finally, let’s talk Cummins, the engine maker with major exposure to the data center market. It might be the Detroit Lions running back, Jahmyr Gibbs, of the stock market. The knock on Cummins is that it’s an engine maker during a freight recession, and truck orders are weak right now. The knock on Gibbs is that he has to share the workload with fellow Lions running back, David Montgomery. I think both concerns are overblown. Cummins is seeing growth with new ventures, like selling backup power units for data centers—we heard them talk about that during their recent earnings call. Meanwhile, Gibbs is thriving because he’s a much better pass catcher than Montgomery.”

Since the above comment was aired, Cummins Inc. (NYSE:CMI) stock has gained around 45%.

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