Cable giant Charter Communications, Inc. (NASDAQ:CHTR)’s shares are among the worst performers in the market as they are down by 50% over the past year and by 33% year-to-date. April 24th was a devastating day for the stock as it closed an unbelievable 25.5% lower. On the 24th, Charter Communications, Inc. (NASDAQ:CHTR) reported its first-quarter earnings report. The results saw the firm post $13.6 billion in revenue and $9.17 in earnings per share to meet analyst revenue estimates but miss them for earnings. Additionally, Charter Communications, Inc. (NASDAQ:CHTR) also shed 120,000 broadband customers to miss estimates of 100,000. In his morning appearance on Monday, Cramer discussed the firm’s second-quarter earnings. In its Q2 report, Charter Communications, Inc. (NASDAQ:CHTR) beat the earnings estimates but bled 172,000 internet subscribers. In his morning appearance on Monday, Cramer commented on the whispers surrounding the firm:
“. . .we could talk about what we’re worried about, obviously, whether there’s too much spend in the data center. . .and then we could talk about what I think may have been, the most poorly received quarter, since this, this quarterly report period began. And it’s that one, Charter. We have gigantic number cuts, we’ve got people who are basically whispering, okay look, this one’s in real trouble.
Concept Photo/Shutterstock.com
As the earnings figures suggest, internet customers are a key theme for Charter Communications, Inc. (NASDAQ:CHTR). The bears are worried that the decline might be a structural problem instead of a cyclical issue. They also point towards a consecutive revenue growth slowdown as sales have dropped for four consecutive quarters. On the financial front, the bears believe that Charter Communications, Inc. (NASDAQ:CHTR)’s capital expenditure, driven by the firm’s network upgrades and rural expansion, can stress short-term financials.
However, the bulls believe that the firm’s large customer base coupled with prudent pricing initiatives, can inject fresh life into its fortunes. They also point out that the valuation, with the forward P/E multiple being 3.3x, is too low considering the firm’s operating income generation.
Looking at the hedge funds, the sentiment shift is notable. During Q4 2025, 62 out of the 1,041 hedge funds part of Insider Monkey’s database had owned a stake in Charter Communications, Inc. (NASDAQ:CHTR). However, this dropped to 48 out of 1,022 funds in Q1 2206. Short interest stands at a whopping 45% of the float as of mid-July. Zooming into the hedge funds, while Two Sigma Advisors bumped its stake up by 5,040% to $65 million, Berkshire Hathaway, Pzena Investment Management and a host of others completely exited the position in Q1.
While we acknowledge the potential of CHTR to grow, our conviction lies in the belief that some 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 CHTR and that has 100x upside potential, check out our report about the cheapest AI stock.
READ NEXT: Jim Cramer Draws the Line on NVIDIA in China: Why National Security Comes First and Jim Cramer Defends His Dell Stance as Investors Complain About Missing Out.
Disclosure: None.
Hedge Fund Resource Center