We recently published a list of Jim Cramer’s December Portfolio: Top 10 Stocks to Watch. In this article, we are going to take a look at where Lumen Technologies, Inc. (NYSE:LUMN) stands against other stocks to watch in Jim Cramer’s December portfolio.
Jim Cramer in a latest program on CNBC talked about the evolution of AI and how the technology has come from being ignored as “hype” to now completely changing everyday lives for many. Cramer mentioned the AI solutions offered by Marc Benioff’s company and said the technology is actually exceeding expectations “dramatically.” [read Marc Benioff’s latest comments here]
Cramer mentioned the comments of Benioff on his company’s new AI-powered solutions:
“Suddenly, though, we have Agent Force, and with it, Marc said, I quote, “We’re unleashing this new year of digital labor force for every business and every industry.” He went on to say, quote, “The implications are just simply profound. Now people ridicule me for saying how much we need AI, but Marc says, quote, ‘For decades, economic growth depended on expanding the human workforce. It was all about getting more labor,’ end quote. Not anymore—not with agents powered by AI who, as you’re stating, can work faster, doing tedious things but essential jobs that nobody wants.
And there it is—you hear that Marc got 200 deals in the first week of Agent Force alone, lots of brand-name companies too. Do you know there are thousands more in the pipeline? Real customers, real money, tangible. That’s an insane amount of business to do,” Cramer said.
READ ALSO: Jim Cramer’s Latest Lightning Round: 11 Stocks to Watch and Jim Cramer on AMD and Other Stocks
For this article, we watched some latest programs of Jim Cramer and picked 10 stocks he was talking about. With each stock we have mentioned the number of hedge fund investors. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Lumen Technologies Inc (NYSE:LUMN)
Number of Hedge Fund Investors: 26
Jim Cramer was asked by a caller on CNBC about the declines of Lumen Technologies Inc (NYSE:LUMN). Cramer said the stock is not done going down and recommended investors to avoid it.
“It should be down. It should be down; it doesn’t have—it’s to me, this is kind of the stock that we should never have gone up. This is digital solutions for business purposes. It should never have gone up as much as it did, and it’s going to come back down. It’s not done going down. It went too high, it’s up way too much, and I want you to avoid it.”
Third Point Management stated the following regarding Lumen Technologies, Inc. (NYSE:LUMN) in its Q3 2024 investor letter:
“While some economic activity has been showing signs of slowing, the defensive composition of the current high yield market with a high mix of higher quality credit and short duration has let the rates tailwind overwhelm such concerns. The lowest quality sectors of the market have performed best, fueled by both soft/no landing expectations, as well as two positive events in the beleaguered telecom space. Telecom/cable have been poor performers year to date due to overhang from the growth of FWA (aka “wireless cable”) and increased fiber building, however the sector re-rated materially on two deals. First, Lumen Technologies, Inc. (NYSE:LUMN) announced that its Level 3 (LVLT) subsidiary was doing a fiber infrastructure build to support AI growth. Our aversion to secular decline (most of LUMN is melting copper infrastructure) kept us out of the situation but the AI fairy dust resulted in a massive rerating of LUMN debt and equity. These higher security prices in turn facilitated several moves to refinance portions of the capital structure and extend the runway.”
Overall, LUMN ranks 10th on our list of stocks to watch in Jim Cramer’s December portfolio. While we acknowledge the potential of LUMN, our conviction lies in the belief that under the radar 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 LUMN 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.
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