Jim Cramer’s Top 5 Stock Picks for 2023

In this article, we will be taking a look at Jim Cramer’s top 5 stock picks for 2023. To read our detailed analysis of Cramer’s investment philosophy, you can go directly to see Jim Cramer’s Top 10 Stock Picks for 2023.

5. Constellation Energy Corporation (NASDAQ:CEG)

Number of Hedge Fund Holders: 54

Constellation Energy Corporation (NASDAQ:CEG) is a utility company based in Baltimore, Maryland. The company sells natural gas, renewable energy, and other energy-related products and services.

An Overweight rating was reiterated on Constellation Energy Corporation (NASDAQ:CEG) shares on January 31 by Neil Kalton at Wells Fargo.

Cramer said this January that Constellation Energy Corporation (NASDAQ:CEG) will benefit from funding through the Inflation Reduction Act. He also added that the company is the best operator of nuclear plants in the US at present. The company’s third-quarter revenue of $6.05 billion beat estimates by $2.13 billion.

Constellation Energy Corporation (NASDAQ:CEG) was found among the 13F holdings of 54 hedge funds in the third quarter, with a total stake value of $2.3 billion.

Alger Capital, an investment management company, mentioned Constellation Energy Corporation (NASDAQ:CEG) in its third-quarter 2022 investor letter. Here’s what the firm said:

“Constellation Energy Corporation (NASDAQ:CEG) is America’s leading clean energy company, based on carbon-free production. The company is the largest supplier of clean energy and sustainable solutions to homes, businesses, governments, community aggregations, and a range of wholesale customers (such as municipalities, cooperatives, and other end markets) across the continental U.S., backed by approximately 32,400 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas and hydroelectric assets. Constellation produces nearly 10% of the nation’s carbon-free energy.

Shares outperformed during the third quarter primarily due to the Inflation Reduction Act (IRA). Signed into law in august, the bill provides a nuclear production tax credit of approximately $43.75 per megawatt hour of energy generated. This credit favorably impacted earnings, resulting in an increase in Constellation’s share price.”

4. Enphase Energy, Inc. (NASDAQ:ENPH)

Number of Hedge Fund Holders: 59

Enphase Energy, Inc. (NASDAQ:ENPH) is a semiconductor-equipment company based in Fremont, California. The company designs home energy solutions for the solar photovoltaic industry for sale.

Craig-Hallum analyst Eric Stine holds a Buy rating on Enphase Energy, Inc. (NASDAQ:ENPH) shares as of February 8.

Cramer has named Enphase Energy, Inc. (NASDAQ:ENPH) the “renewable golden boy,” noting that the company is a profitable and solid business in the energy tech sector. The company has reported a financial year of 2022 revenue growth of 42.6%, and expects revenue growth to further increase at a three-year compound annual growth rate of 27.8%.

Our hedge fund data shows 59 funds long Enphase Energy, Inc. (NASDAQ:ENPH) in the third quarter. Their total stake value was $2.2 billion.

ClearBridge Investments, an investment management company,  mentioned Enphase Energy, Inc. (NASDAQ:ENPH) in its third-quarter 2022 investor letter. Here’s what the firm said:

“In IT, Enphase Energy, Inc. (NASDAQ:ENPH) delivered a strong quarter driven by secular growth in global rooftop solar, increased penetration into Europe, where demand accelerated, and a continued ramp up in battery storage sales. Also with a strong presence in the U.S., Enphase Energy designs and manufactures microinverters for residential and small commercial solar PV systems and has made strides in evolving from a solar inverter maker into a “home energy management” company that can act as the brains for the home’s energy system, including microinverters for solar, as well as storage and energy management software.”

3. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 89

Advanced Micro Devices, Inc. (NASDAQ:AMD) is an information technology company based in Santa Clara, California. The company operates through its Computing and Graphics, and Enterprise, Embedded, and Semi-Custom segments.

As of February 1, Morgan Stanley analyst Joseph Moore holds an Overweight rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) shares.

Cramer believes that since Advanced Micro Devices, Inc. (NASDAQ:AMD) performed well in 2022, it will continue this trend in 2023. He believes in the company’s CEO, Lisa Su, and the company’s underlying business. Advanced Micro Devices, Inc. (NASDAQ:AMD) reported share buybacks of $3.7 billion in 2022, and its data center reported a 41% revenue growth year-over-year in the fourth quarter.

Advanced Micro Devices, Inc. (NASDAQ:AMD) had 89 hedge funds long its stock in the third quarter, with a total stake value of $4.9 billion.

2. Netflix, Inc. (NASDAQ:NFLX)

Number of Hedge Fund Holders: 115

Netflix, Inc. (NASDAQ:NFLX) is a movies and entertainment company based in Los Gatos, California. It offers TV series, documentaries, feature films, and more on its online streaming platform.

A Buy rating was reiterated on Netflix, Inc. (NASDAQ:NFLX) shares on February 8 by Jefferies analyst Andrew Uerkwitz.

Jim Cramer sees Netflix, Inc. (NASDAQ:NFLX) as an improving franchise that will appeal to growth-oriented money managers, stating that the company has really turned itself around in the past few years. The company increased its subscribers in 2022 by 7.66 million to 230.75 million between October and December alone, beating the company’s own October guidance.

There were 115 hedge funds long Netflix, Inc. (NASDAQ:NFLX) in the third quarter. Their total stake value was $6.7 billion.

Alger Capital, an investment management company, mentioned Netflix, Inc. (NASDAQ:NFLX) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“Netflix, Inc. (NASDAQ:NFLX) provides a subscription-based service for streaming movies and television episodes over the internet. In doing so, it is redefining how people consume entertainment in a rapidly digitizing world. Shares outperformed during the period as the company reported solid third quarter results, driven by net subscription additions that beat expectations. Management also raised fiscal fourth quarter guidance owing to strong customer acquisitions across all regions. Moreover, the company remains optimistic on new monetization efforts around ad pricing within their basic account tier.”

1. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 177

Meta Platforms, Inc. (NASDAQ:META) is a communication services company based in Menlo Park, California. The company engages in the distribution of social media services worldwide.

BofA analyst Justin Post holds a Buy rating on Meta Platforms, Inc. (NASDAQ:META) shares as of February 13.

Cramer believes that while Meta Platforms, Inc. (NASDAQ:META) performed poorly in 2022, it can mount a comeback this year by either continuing to invest in the metaverse or by diverting its budget to other segments like WhatsApp. On February 1, the company announced a $40 billion share buyback program. The next day, the stock rose from $153 to $197, adding about $100 billion to its market capitalization.

A total of 177 hedge funds were long Meta Platforms, Inc. (NASDAQ:META) in the third quarter, with a total stake value of $14.2 billion.

Investment management company Vulcan Value Partners mentioned Meta Platforms, Inc. (NASDAQ:META) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“During the quarter we sold Meta Platforms, Inc. (NASDAQ:META) after owning the business for over four years. The fundamentals of our investment case were based on the tremendous number of users that spent time on its various properties and the advertising dollars that flowed to the company as a result. We believed its competitive advantage was that the platform was, more or less, a monopoly on people’s time and attention. The rise of TikTok and other emerging platforms has given us pause on the company’s ability to maximize that advantage. From our perspective, the idea of “one platform to rule them all” may now be a thing of the past as social offerings have become more fragmented.

In addition, though our research has indicated that much of the initial damage done from Apple’s iOS 14.5 privacy changes has been repaired, we remain concerned with Apple’s influence over the digital advertising ecosystem. Apple is one of the largest gatekeepers to Meta’s mobile services, and it has become more difficult for us to gauge the pace of change emerging from Apple relating to privacy, as well as evaluating Apple’s ambitions in advertising…” (Click here to read the full text)

See also Jim Cramer’s Recession-Proof Stocks and 14 Best Stocks To Buy Before A Recession.