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 Exxon Mobil Corp (NYSE:XOM) 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).
Aerial view of a major oil rig in the middle of the sea, pumping crude oil.
Exxon Mobil Corp (NYSE:XOM)
Number of Hedge Fund Investors: 86
Jim Cramer was recently asked about ExxonMobil. He recommended investors stay away from the stock and said it’s overvalued when compared with Chevron.
“I think Exxon Mobil Corp (NYSE:XOM) is overvalued versus Chevron. Now, that has been the wrong call to make in 2024. Until recently, these stocks, by the way, are not stocks you want to own because they are actually high-priced, high-earning multiple stocks with yields that are not as great—only because the stocks are still too high.”
Exxon continues to manage its debt effectively, lowering its debt-to-market-cap ratio to 13.5% from 16.7%. The company’s debt-to-equity ratio remains well below that of its peers, while its liquidity ratios significantly exceed the industry median.
Recent acquisitions and expansion into areas like carbon capture, hydrogen, and renewable fuels should keep the company stable, even if oil prices slump. At the Barclays Energy-Power Conference, Exxon Mobil Corp (NYSE:XOM) CEO emphasized the company’s focus on decarbonization, including the Baytown hydrogen project, which is set to be the world’s largest low-carbon hydrogen facility by 2029.
According to Goldman Sachs, oil demand won’t peak until 2034, even with the push for electric vehicles and green energy. Goldman forecasts peak oil demand at 110 million barrels per day by 2034, potentially rising to 113 million barrels by 2040 if EV adoption is slower.
Overall, XOM ranks 2nd on our list of stocks to watch in Jim Cramer’s December portfolio. While we acknowledge the potential of XOM, 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 XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.
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