When 2023 started, many analysts and financial intuitions were announcing that the year would see recession and economic contraction. But those recession fears proved to be unfounded this year. Barclays in its 2024 outlook report said that this whole recession debate is misplaced. Barclays said that if anyone anticipates a recession akin to the 2008 financial crisis, potentially leading to the collapse of major economies, it can be confidently stated, based on Barclays’ analysis, that such a recession is not projected to occur in 2024.
However, Barclays expects 2024 to be marred with uncertainties and volatility. Barclays said that central banks could go easy with their rate-hike policies in the year. The institution also expects inflation to cool this year. But the report warned that investors should be careful what they wish for since major rate cuts would only happen if there are signs of strong economic contraction.
Analysts and institutions always make headlines when they make predictions but it’s more interesting to see their evaluations in hindsight. When 2023 started, Jim Cramer also made some predictions about the stock market and named some stocks he thought would gain this year. We covered most of those stocks in our article titled Jim Cramer’s Top Stock Picks for 2023.
In this article we take a look at how Jim Cramer’s stock picks performed in 2023. Some top names include Advanced Micro Devices, Inc. (NASDAQ:AMD), Netflix, Inc. (NASDAQ:NFLX) and Meta Platforms, Inc. (NASDAQ:META).
Evaluating Performance of Jim Cramer’s Top 10 Stock Picks for 2023
10. NVIDIA Corporation (NASDAQ:NVDA)
YTD Stock Performance Through November 22: +230%
In February 2023, Jim Cramer said that the semiconductor industry got slaughtered but he still stuck with NVIDIA Corporation (NASDAQ:NVDA) because the company makes chips that power AI. One of the reasons why Cramer stuck with NVIDIA Corporation, according to him, is that when stocks like Nvidia bottom they come back up so quickly one does not get a chance to “get back in.” Cramer said that he stuck with NVIDIA Corporation and then ChatGPT came in, which was a “game changer” according to the analyst. There’s no end in sight for revenue growth for NVIDIA Corporation thanks to the AI boom that started with ChatGPT because the company’s GPUs are widely used to power generative AI software.
NVIDIA Corporation shares have gained about 237% year to date through November 2023.
O’keefe Stevens Advisory made the following comment about NVIDIA Corporation in its Q3 2023 investor letter:
“This quarter, we actively reduced our position in our favorite company, NVIDIA Corporation (NASDAQ:NVDA). Over the past several years, I have consistently noted the concentration of the top 5 holdings in our portfolio, with NVDA comprising 26% of the last quarter’s 40%. The business, management, and outlook are nothing short of excellent. The business has a dominant market share in a rapidly growing market with competition seemingly years behind, though, fighting hard to gain share. Gross margin is expected to exceed 70% in 2024 and expand in 2025, reflecting the premium customers pay for their advanced technology. Revenue growth of 30%+ on a $50B base and a return on equity over 50%. If this isn’t the best business in the world currently, certainly it is in the top 5.
Jensen is the reason we held onto the stock despite our unease about the valuation. Jensen came to the U.S. from Thailand and was sent to a boarding school in rural Kentucky for troubled youth by his aunt and uncle, who mistook it for a prep school. When buying an ownership stake in the business, we must ask ourselves who we partner with. Are they honest? Capable? Aligned?
Honest: Listening to Jensen (while promotional) is like a breadth of fresh air. He tells you how it is. When the business looked like it was headed for failure in 2009, Jensen reduced his salary to $1….” (Click here to read the full text)
Like Nvidia, Jim Cramer also likes Advanced Micro Devices, Inc., Netflix, Inc. and Meta Platforms, Inc..
9. Enphase Energy, Inc. (NASDAQ:ENPH)
YTD Stock Performance Through November 22: -61%
Jim Cramer had called Enphase Energy, Inc. (NASDAQ:ENPH) the “golden boy” of renewable energy when the year 2023 started. In February 2023, Cramer wrote in a tweet:
“Enphase is such a horse. Still the best clean energy play. Just love it.”
Enphase Energy, Inc. shares have lost about 61% year to date through November 22. Jim Cramer’s “golden boy” of the renewable energy space saw its shares plummet in October after Enphase Energy, Inc. posted mixed Q3 results and gave a disappointing Q4 guidance. For the fourth quarter Enphase Energy, Inc. expects revenue in the range of $300 million to $350 million, much lower than the analyst consensus estimate of $597 million.
Insider Monkey’s database of 910 hedge funds shows that 40 hedge funds reported having stakes in Enphase Energy, Inc. as of the end of the September quarter.
ClearBridge SMID Cap Growth Strategy made the following comment about Enphase Energy, Inc. in its Q2 2023 investor letter:
“We exited our position in Enphase Energy, Inc. (NASDAQ:ENPH), in the IT sector, which designs, manufactures and sells semiconductor equipment for the residential solar photovoltaic industry. New regulations within California, as well as improving supply chain dynamics in Europe, have placed additional pressure on the company. Facing concerns surrounding weaker U.S. residential demand, decelerating revenue growth trends and falling prices compressing margins, we elected to sell the position and redeploy our assets to other, higher-conviction holdings.”
8. American Electric Power Company Inc. (NASDAQ:AEP)
YTD Stock Performance Through November 22: -17%
American Electric Power Company, Inc. (NASDAQ:AEP) was one of Jim Cramer’s stock picks when the year 2023 started. He kept giving bullish calls for American Electric Power Company, Inc. throughout the year. In September Cramer said:
“You buy it…This won’t just be a smooth ride, 4.2% yield is good. A lot of people sold this stock because the short term rates have gone so high because the Fed has raised rates so rapidly. That’s why it’s going down, nothing to do with the company which is incredibly well run. I would be a buyer of American Electric Power.”
American Electric Power Company, Inc. shares have lost about 17% year to date through November 22.
Earlier this month American Electric Power Company, Inc. posted Q3 results. Adjusted EPS in the period came in at $1.77, beating estimates by $0.07. Revenue in the quarter fell about 3.6% year over year to $5.3 billion, missing estimates by $80 million.
American Electric Power Company, Inc. also narrowed its earnings guidance.
7. Northrop Grumman Corporation (NYSE:NOC)
YTD Stock Performance Through November 22: -12%
Jim Cramer had predicted in January 2023 that Northrop Grumman Corporation (NYSE:NOC) could be one of the best-performing stocks in the S&P 500 index this year given the geopolitical environment and the expected increase in demand for weapons. Northrop Grumman Corporation has lost about 12% year to date through November 22.
Harding Loevner Global Equity Strategy made the following comment about Northrop Grumman Corporation in its Q1 2023 investor letter:
“Our other purchase was Northrop Grumman Corporation (NYSE:NOC), a US defense contractor whose stock price experienced a pullback. We like that Northrop has a larger presence than its rivals in the most favorable subcategories of the defense industry-namely, nuclear weapons, space systems, and what’s known as C4ISR (which stands for Command, Control, Communications, Computers. Intelligence, Surveillance, and Reconnaissance). C4ISR refers to digital systems that translate data picked up from different sensors-such as an incoming hypersonic missile or advancing troops-into a common format, and then escalate key information to the right people These differentiated technologies are especially relevant in a time of increased geopolitical tensions. Northrop also benefits from large barriers to entry in this stable industry, which should enable continued strong earnings and cash flow.”
6. Halliburton Company (NYSE:HAL)
YTD Stock Performance Through November 22: -0.8%
Jim Cramer had picked Halliburton Company (NYSE:HAL) for 2023 as he expected the company to have its multi-year rally ahead of it. In April 2022, Jim Cramer said that “this is Halliburton’s time.” Halliburton Company has remained almost flat in 2023 but over the past six months it has gained about 24%. In October Cramer reiterated his bullish stance on Halliburton Company after weak quarterly results.
“Let Halliburton [stock] come down, but this company’s going to do just fine if oil stays at these prices,” Cramer said.
Carillon Eagle Mid Cap Growth Fund made the following comment about Halliburton Company in its Q3 2023 investor letter:
“Halliburton Company (NYSE:HAL) provides equipment and services to the global energy industry. The stock was an impressive outperformer in the quarter, as the recent sharp increase in oil prices should translate to healthy levels of North American shale activity in the remainder of the year and into 2024. Halliburton also is poised to benefit from the ongoing multi-year international and offshore upstream investment cycle.”
Like Advanced Micro Devices, Inc., Netflix, Inc. and Meta Platforms, Inc., Halliburton is a notable stock Jim Cramer picked for 2023.
5. Stanley Black & Decker, Inc. (NYSE:SWK)
YTD Stock Performance Through November 22: +17%
Stanley Black & Decker, Inc. ranks 5th in our list of Jim Cramer’s top 10 stock picks for 2023. When the year started Cramer recommended investors to initiate small stakes in Stanley Black & Decker, Inc. and slowly add to their positions. Earlier this month Cramer reiterated his bullish stance on the company and said his investing club members should consider the stock. Cramer has been bullish on Stanley Black & Decker, Inc. for a long time. In March 2022 Cramer had said during a program that Stanley Black & Decker, Inc. is cheap.
So far Cramer’s call about Stanley Black & Decker, Inc. has proven to be correct. Stanley Black & Decker, Inc. has gained about 17% so far this year through November 22.
As of the end of the third quarter of 2023, 19 hedge funds tracked by Insider Monkey had stakes in Stanley Black & Decker, Inc..
Appleseed Fund made the following comment about Stanley Black & Decker, Inc. in its Q1 2023 investor letter:
“During the most recent quarter, Appleseed Fund added three new equity holdings: Medtronic (MDT), Stanley Black & Decker, Inc. (NYSE:SWK), and Synovus Financial (SNV). Stanley Black & Decker is the world’s largest tool manufacturer. It produces power tools, hand tools, storage, digital tool solutions, lifestyle products, outdoor products, engineered fasteners, and other industrial equipment. 2022 was quite a forgettable year for the Company with its stock price falling by roughly 60%. Due to supply chain issues, bloated inventories, inflationary pressures, and weaker demand, the Company badly missed its original 2022 guidance. With recessionary fears, waning earnings momentum, a more elevated leverage profile, and reliance on the U.S. construction market, it is of no surprise how poorly the stock price behaved last year. In our view, the sell-off has been excessive with the stock price trading near March 2020 pandemic lows and at levels otherwise not seen since early 2014. We view the stock at washed-out levels with a favorable profile going forward.”
4. Constellation Energy Corporation (NASDAQ:CEG)
YTD Stock Performance Through November 22: +50%
Jim Cramer was bullish on Constellation Energy Corporation (NASDAQ:CEG) during the start of 2023 as he believed the stock would benefit from the US government’s spending for green energy under the Inflation Reduction Act. In December 2022 Cramer said that he liked Constellation Energy Corporation because nuclear energy is the best option for carbon-free energy production. Cramer also liked Constellation Energy Corporation because he believed ESG-focused funds were showing interest in it.
Constellation Energy Corporation shares have gained a whopping 50% this year through 2023.
As of the end of the third quarter of 2023, 50 hedge funds tracked by Insider Monkey reported having stakes in Constellation Energy Corporation.
Alger Capital made the following comment about Constellation Energy Corporation in its Q3 2022 investor letter:
“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.”
3. Netflix, Inc. (NASDAQ:NFLX)
YTD Stock Performance Through November 22: +65%
Jim Cramer has been bullish on Netflix, Inc. throughout 2023. In February 2023 Cramer said about Netflix:
“You got the pain, you get the gain. Stick with it.”
Netflix, Inc. shares have gained about 65% year to date.
After Netflix, Inc.’s first quarter results, Cramer reiterated in a program on CNBC that Netflix stock was a bargain.
RiverPark Advisors made the following comment about Netflix, Inc. in its Q3 2023 investor letter:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top detractor in the quarter on weaker than expected reported and guided revenue, despite 2Q subscriber growth that was well above expectations (+5.9 million versus estimates of +2.1 million). The company’s subscriber growth re-accelerated following the company’s crack down on password sharing, and the rollout of the advertising supported subscriber offering known as the Ad Tier, but the average revenue per user came in below expectations and is expected to remain muted in the near term. NFLX reiterated expectations for full year 2023 operating margins of 18-20%, and guided free cash flow to at least $5 billion, up from prior guidance of $3.5 billion. Despite the positive momentum in the company’s business, market participants took comments from management at a recent conference to mean revenue growth may be slower in the coming years than expected. This was not our interpretation of these comments.
In fact, the recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving improved operating margin to more than 25% (revenue grew 3% for 2Q23 and operating margin was 22.3%, up from 13% in 2019). We also believe that the stabilization of content spend should allow the company to continue to scale its FCF.”
2. Advanced Micro Devices, Inc. (NASDAQ:AMD)
YTD Stock Performance Through November 22: +86%
In January this year, Jim Cramer painted a contrast between two analyst calls on Advanced Micro Devices, Inc.. One of these calls was bullish, while the other was bearish. Cramer said that both were right, since the bearish call was right about Advanced Micro Devices, Inc. in the short term. Cramer said that the optimist call on Advanced Micro Devices, Inc. would eventually would be proven right since he believed the downturn in the semiconductor market would end.
“The bearish analyst [is] right as rain because AMD’s business is awful now and shows no signs of improving, but over the long-haul, the bullish analyst is going to be right, because eventually, the semiconductor downturn will end,” Cramer said.
According to CNBC, Advanced Micro Devices, Inc. is in Jim Cramer’s investing Club’s Bullpen watch list for stocks that could become part of the portfolio.
Advanced Micro Devices, Inc. shares have gained about 86% in 2023 through November 22.
As of the end of the third quarter of 2023, 110 hedge funds tracked by Insider Monkey had stakes in Advanced Micro Devices, Inc..
Artisan Global Opportunities Fund made the following comment about Advanced Micro Devices, Inc. in its Q2 2023 investor letter:
“Among our top contributors were Advanced Micro Devices, Inc. (NASDAQ:AMD), NU Holdings and Netflix. AMD’s data center CPUs are used in the cloud service provider (CSP) servers. In addition to the broader secular tailwind from cloud adoption, the company has a performance and pricing advantage over Intel, which we believe will enable it to continue capturing market share. However, the recent stock price rally was due to growing excitement around the company’s AI exposure. It will launch its new MI300 graphics processing unit (GPU) chip later this year to compete against the dominant market leader NVIDIA. Similar to its approach that won market share from Intel within the CPU market, AMD’s product will aim to provide similar performance at a more attractive price. AMD is already working with Microsoft and Meta, while Amazon publicly stated that it is evaluating AMD’s inferencing chips. Using assumptions around the total GPU market size, potential market share gains and price points, our research indicates this could be a $20 billion opportunity for AMD. That would nearly double its revenue. While the company has not historically missed many deadlines, there is execution risk as it works to manufacture and distribute these complex chips at scale, which, combined with an elevated valuation after the stock’s strong performance run, led us to trim the position.”
1. Meta Platforms, Inc. (NASDAQ:META)
YTD Stock Performance Through November 22: +170%
In February, Jim Cramer said that there was a time when he was “hurt” seeing Meta Platforms, Inc.’ results but he did not lose hope as he believed there was a path forward for the company via discipline and cost cutting. Cramer said that’s exactly what Mark Zuckerberg achieved and Cramer was pleased to see the Q4 2022 results of the social media giant.
Meta Platforms, Inc. has indeed surprised everyone this year. Meta Platforms, Inc. started to use AI to improve its algorithm and increase engagement on its platforms. Meta Platforms, Inc. has gained about 170% year to date through November 22.
Weitz Investment Management Large Cap Equity Fund made the following comment about Meta Platforms, Inc. in its Q3 2023 investor letter:
“As for other quarterly contributors, Alphabet, Inc., (GOOG) and Meta Platforms, Inc. (NASDAQ:META) added to their exceptional year-to-date returns. Meta Platforms and Alphabet were the true year-to-date standouts. After steep declines in 2022, both stocks rebounded sharply due to a combination of solid fundamentals, disciplined operational execution, and improved sentiment. Despite outsized gains and attention, we think both Alphabet and Meta remain undervalued.”
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This article is originally published at Insider Monkey.
