We recently published an article titled Jim Cramer’s Bold Predictions About These 15 AI Stocks. In this article, we are going to take a look at where Evergy, Inc. (NASDAQ:EVRG) stands against the other AI stocks Jim Cramer talked about.
As trading in 2024 heads towards a close, major stock market indexes have had a good run despite mixed performance across sectors. The flagship S&P index is up 26% year-to-date while the broader NASDAQ index has gained 33.56%. On top of this, the index of the NASDAQ’s top 100 stocks is up 29.8%, which solidifies the conclusion that technology stocks have driven the stock market’s 2024 returns. For further evidence, consider the Dow’s performance. The stock index which tracks industries across the US economy is up 14% YTD, making it the weakest-performing index among all mentioned.
However, even within technology, not all stocks have performed equally well. As an example, consider the performance of two stocks. Both of these are semiconductor companies. The first, which ranked 3rd on our list of Jim Cramer’s bearish tech calls is the largest American manufacturer of memory chips. The second, which ranked 1st on the same list is Wall Street’s AI darling. The two stocks have gained 7.64% and 184.60% year-to-date, so even though both of them are technology companies, their share price returns have differed primarily because of the firms’ varying exposures to artificial intelligence.
Yet even though AI has held up the stock market in 2024, other factors continue to influence stock performance as well. Continuing with our example of the GPU designer’s shares, the stock dropped by 1.1% on the day the Federal Reserve cut interest rates but guided two cuts for 2024 instead of the earlier four. The shares fell despite the fact that the firm enjoys the widest moat possible in the AI industry. On the same day, the flagship S&P and the broader NASDAQ indexes shed 2.9% and 3.6%, respectively. Following the year-end sell-off on Friday, neither index has fully recovered to levels before the Fed’s announcement.
Cramer, for his part, had predicted that the markets might not find it easy to reverse all losses following the Fed’s announcement. Talking on CNBC’s Squawk on the Street on the day after the Fed’s decision, the host shared that “rampant Bitcoin speculation, after speculation in nuclear power, after speculation in quantum computing” was baked into markets ahead of the announcement. Commenting on quantum computing in particular, Cramer mentioned one quantum computing stock and wondered whether the industry was all hype and no substance. “How is that [the firm] going to quantum? When we don’t even know what quantum is?” wondered Cramer. “It’s a nonfungible tokens, right? Cause you know what a fungible token was?” he added.
As AI continues to shape the winners and losers in the stock market, Cramer also shared tips for trading in 2025 in a recent Mad Money episode. He believes that one key fact that everyone needs to keep in mind when trading is to not get disillusioned by strong gains. According to Cramer, while bulls and bears both “make money” on the stock market, it’s the pigs that “get slaughtered.” He elaborated further and shared that in his experience he’s “seen moments where stocks went up and up and up so much that people were intoxicated with their gains.” Yet, it’s “precisely at that point of intoxication that you need to remind yourself that you don’t want to act like a pig,” believes the television show host.
Cramer’s second tip for successful investing is to have the fortitude to hold stocks even when the market is tough. He believes that not only is holding through the thick and thin ‘the hardest part of investing,” but adds that “taking short-term pains so you can have long-term gains” lies at the heart of the market’s performance “for a century.”
Finally, one key factor that several people ignore while trading stocks is to hunt for the right entry price. Cramer cautions against buying in bulk. “Do not, under any circumstances, buy your whole position at once,” he stresses and adds that “you should never sell all at once,” either. Instead, Cramer recommends staging “your buys, work your orders, try to get the best price over time.”
Our Methodology
To compile our list of Jim Cramer’s bold predictions about AI stocks, we scanned the stocks he mentioned in Mad Money and Squawk on the Street as far back as in August. Then, we picked out stocks with AI computing, hardware, and energy generation exposure, and ranked them by the number of hedge funds that had bought the shares in Q3 2024.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
A power line stretching across a sunbathed landscape with rural homes in the foreground.
Evergy, Inc. (NASDAQ:EVRG)
Number of Hedge Fund Holders In Q3 2024: 30
Date of Cramer’s Comments: 8-26-24
Performance Since Then: 4.10%
Evergy, Inc. (NASDAQ:EVRG) is a large Missouri-based utility that generates power through conventional and clean energy sources. It is one of the biggest AI infrastructure plays on the street due to more than one gigawatt of data center projects it has signed with big ticked AI companies Meta, Alphabet, and Microsoft. These projects have made Evergy, Inc. (NASDAQ:EVRG) project that its electricity demand could grow by as much as 3% over the next couple of years. The shares are up by a modest 15.5% year-to-date as they’ve been held back by a delayed recovery in residential power consumption. Cramer mentioned Evergy, Inc. (NASDAQ:EVRG)’s AI exposure in August:
“Let’s look at a utility stock that can serve as a safety net if the Fed’s rate cuts fail to boost the economy. Even if the economy improves, utilities are set to benefit from the insane demand for electricity driven by the construction of data centers for AI workloads. Many high-quality utilities have yields that aren’t quite high enough to make this list, but we want stocks with yields higher than the 10-year Treasury. Dominion Energy has the highest yield among utilities in the S&P 500, but I’m not confident in their dividend due to some ongoing issues.
“Instead, I recommend Evergy, the second-highest yielding utility in the S&P 500, with a 4.34% yield. Evergy, based in Kansas City, was formed by the merger of Great Plains Energy and Westar Energy in 2018. Although the stock has mostly traded sideways since the merger, there’s a new angle to the story that hasn’t yet been reflected in the stock price.
“Evergy’s service area has announced three major projects that will eventually consume massive amounts of electricity: a $4 billion electric vehicle battery plant from Panasonic, the largest in the world when fully operational in 2026; an $800 million data center from Meta, expected to be fully online by 2027; and a billion-dollar data center from Google, expected to be online by 2028. Combined, these projects represent a staggering 750 megawatts of load. This is exactly what you want to see in a utility stock—a solid yield and potential for load growth.”
Overall EVRG ranks 14th on our list of the AI stocks Jim Cramer recently talked about. While we acknowledge the potential of EVRG 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 timeframe. If you are looking for an AI stock that is more promising than EVRG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.