In this article, we will look at Jim Cramer’s Mad Money stock calls as he urged investors to exercise caution when it comes to red-hot AI stocks. The host of CNBC’s Mad Money said Thursday that while he has no issue with stocks surging because of shortages, the trading action surrounding Cerebras Systems left him uneasy.
We had this IPO today… Cerebras, priced at $185. The stock opened at $350, instantly making it worth $17 billion on a fully diluted basis. Then it goes all the way up to $386, before closing at $311. Now, there is a word for that, that word is fanciful because it was fanciful to pay that much the whole time… Now, it doesn’t have to be this way, people. Perhaps there are people who will say, look, I lost so much money when the IPO market got too hot in 2021 or 2014 or when it was totally overwhelmed in 2000. But my fear is that was now too long ago, and there’re just not enough losers from then who know not to repeat those mistakes. Maybe we just have to live through it again. I’m trying to stop it.
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It is worth noting that Cramer said that there are AI stocks like Cisco and NVIDIA that deserve the hype. He also said that while he has long maintained that if he ever witnessed this type of extreme enthusiasm return to the market, he would “scream from the rafters,” he would tell investors that it is necessary to pause the nonstop praise surrounding overheated sectors and remind investors that these stories can end badly. He continued to say that he knows that he said that he would urge people to stay disciplined and take the time to understand what these companies actually do, as well as why certain valuations may not make sense, but he added:
Here’s the bottom line: I don’t mind stocks that go up huge on shortages. I don’t think Micron, or Sandisk, or Western Digital, or even HBM chips from SK Hynix are overvalued, provided the Chinese don’t flood our markets with cheap memory. Cisco, NVIDIA, fine with me, but Cerebras, it’s like a Sondheim play, Send in the Clowns, because today that’s exactly what happened.
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on May 14. We listed the stocks in the order that Cramer mentioned them.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Jim Cramer’s 11 Stock Calls Including Marvell and Trane, and Caution About Overhyped AI Stocks
11. BillionToOne, Inc. (NASDAQ:BLLN)
BillionToOne, Inc. (NASDAQ:BLLN) was among Jim Cramer’s Mad Money stock calls as he urged investors to exercise caution when it comes to red-hot AI stocks. Toward the end of the lightning round, a caller sought Cramer’s opinion on the stock, and he commented:
We like BillionToOne. We looked at it, we thought the name was so silly… But it’s a real company… That’s going to be very good. I say buy it.
BillionToOne, Inc. (NASDAQ:BLLN) develops precision molecular diagnostics using a platform that counts DNA molecules to improve disease detection. The company’s tests include non-invasive prenatal screening and liquid biopsies to detect and monitor cancer mutations. Cramer was bullish on the stock when a caller inquired about the stock during the April 27 episode, as he commented:
We looked into BillionToOne. We think it’s a really good diagnostic company. Now, the diagnostic companies themselves have been going down, whether it be Becton, Dickinson, whether it be Abbott Labs, they’ve not been working. That said, this stock never ran to begin with. I think BillionToOne’s a winner.
10. Design Therapeutics, Inc. (NASDAQ:DSGN)
Design Therapeutics, Inc. (NASDAQ:DSGN) was among Jim Cramer’s Mad Money stock calls as he urged investors to exercise caution when it comes to red-hot AI stocks. A caller asked for Cramer’s thoughts on the company, and here’s what he had to say:
Pure spec, pure spec. Understand, you can lose everything, or you can double on that one. I don’t know which it’s going to be. That’s the problem.
Design Therapeutics, Inc. (NASDAQ:DSGN) is a clinical-stage biopharmaceutical company that develops small-molecule drugs to treat inherited genetic diseases caused by nucleotide repeat expansion. The company uses its proprietary platform, GeneTAC, to create potential treatments for conditions such as Friedreich’s Ataxia, Huntington’s Disease, and other progressive neuromuscular and neurodegenerative disorders.
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