We recently compiled a list of the Jim Cramer’s Game Plan: 23 Stocks to Watch. In this article, we are going to take a look at where Norfolk Southern Corporation (NASDAQ:NSC) stands against the other stocks to watch according to Jim Cramer.

As Wall Street dives into the heart of earnings season, Jim Cramer has provided insights into market trends and earnings reports to watch in the upcoming week. Cramer remarked,

“It’s hard to believe, but this market’s now been up for six straight weeks. That’s right, despite interest rates running higher since mid-September, despite being on the verge of an election where both candidates want to pile on trillions of dollars of debt to an already unfathomable amount of borrowing, this market seems like it can’t help itself from going higher.”

Cramer highlighted the influence of the Federal Reserve, noting that ever since the rate cut on September 18, the market has largely trended upward. He emphasized that it is not solely the Fed driving this bullish sentiment, the earnings season has brought some remarkable quarterly results. With strong performance from banks kicking off the earnings cycle, Cramer posed the question of whether the rally could extend into a seventh consecutive week, suggesting following his game plan to assess this possibility.

On a separate note, addressing economic indicators, Cramer warned that if the economy continues to produce solid numbers, the likelihood of substantial rate cuts will diminish. While he believes that rates will eventually decline, he cautioned those shorting Treasurys, suggesting that they may be making a mistake.

Cramer noted a significant caveat, which is the upcoming election, and pointed out that both candidates are advocating potentially inflationary policies.

“Both candidates have pushed potentially inflationary policies. As I said at the top, if Trump can win enough of a majority to pass his huge tariffs, or Harris expands housing tax credits and de facto subsidy, they could push home prices higher. Then inflation might stage a comeback. But I’m not betting on that. I think both parties are terrified of being blamed for inflation, which almost single-handedly sunk Joe Biden’s presidency. No matter what the candidates campaign on, I don’t see their allies in Congress taking any chances with inflation beyond the usual unwillingness to balance the budget.”

He concluded that those betting against Treasurys have overreached, suggesting that their efforts to counter the Fed’s policies are unlikely to end well. Cramer observed that when a large number of investors align on one side of a trade, as seen currently, that group often ends up being incorrect.

Our Methodology

For this article, we compiled a list of 23 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 18. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.

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).

Norfolk Southern Corporation (NASDAQ:NSC)

Number of Hedge Fund Holders: 50

Cramer commented on Norfolk Southern Corporation’s (NASDAQ:NSC) new CEO and recent solid earnings. Here’s what he said:

“Now, we have so many winners reporting, but there’s one lagger that I figure could break out here, Norfolk Southern. It’s got a new CEO, Mark George, who I think will bring some financial discipline to this great railroad. Norfolk Southern could put up some excellent numbers. Previous CEO should get some credit for that, by the way.”

Norfolk Southern (NASDAQ:NSC) offers rail transportation services, moving a wide range of materials, including agricultural products, chemicals, metals, and automotive goods. During the second quarter, the company secured a significant agreement with a metallurgical coal producer, which will involve shipping nearly 5 million tons of premium-grade coal once the mine achieves full production.

On August 1, the company announced plans for a major investment exceeding $200 million to improve capacity along the 3B Corridor in Alabama. The key rail line connects northern and central Alabama to the Port of Mobile, facilitating access to global markets. The 3B Corridor plays a critical role in the company’s overall traffic, serving essential industries such as agriculture, automotive, chemicals, forestry, and steel.

The project includes various improvements to terminal and track infrastructure, featuring capacity upgrades in central and southwest Alabama and multiple grade crossing improvements across the region. The benefits of this investment are expected to materialize as the improvements come online in 2025.

Additionally, Norfolk Southern (NASDAQ:NSC) reaffirmed its guidance for the operating ratio in the second half of the year, projecting a range between 64% and 65%. However, management has adjusted the full-year revenue forecast, now expecting growth of approximately 1%, down from the earlier estimate of around 3%.

Overall NSC ranks 14th on Jim Cramer’s list of stocks to watch. While we acknowledge the potential of NSC as an investment, our conviction lies in the belief that 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 NSC 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.