We recently published a list of 10 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other stocks on Jim Cramer’s radar.
Jim Cramer, the host of Mad Money, recently pointed out a significant gap in the American education system, emphasizing that financial literacy is rarely taught in schools, from middle school all the way through college. According to Cramer, managing personal finances is one of the most essential skills, especially when it comes to preparing for retirement, hence he laid out a few lessons for his viewers.
“So I’m betting most of you, even if you don’t own individual stocks, still have some money in a 401k plan… They’re offered by your employer and they’re among the greatest tax-deferred investment vehicles out there along with the IRA.”
READ ALSO 17 Best Stocks for Kids According to Jim Cramer and 13 Stocks Jim Cramer Recently Talked About
However, Cramer was quick to clarify that he does not view the 401k as a perfect solution for everyone. While it does offer valuable tax benefits, including tax-deferred growth, it can also be somewhat of a mixed bag. Explaining what 401k is, he said:
“In plain English, that means you pay no taxes on what you put in and then you never pay a penny of capital gains taxes on the profits you make within your 401k, which allows your gains to compound year after year, decade after decade, totally tax free until you decide to start making withdrawals.”
While this can be a great advantage, Cramer cautioned that there are instances where other retirement options might be more beneficial. He pointed out that in some cases, an Individual Retirement Account (IRA) might be a better option than a 401k, as it offers the same tax-deferred advantages. He also advised that when changing jobs, it is a smart move to roll over your 401k into an IRA.
Cramer advised that individuals should do this whenever they switch employers or find themselves between jobs, ensuring that their retirement savings stay under their control. Cramer recommended opting for a self-directed IRA through a full-service discount brokerage like Fidelity as this gives individuals more direct oversight of their money. He added:
“The bottom line on retirement investing: If the company you work for matches your 401k contributions up to a certain point, take them for all they’re worth. But other than that, an IRA is the superior way to go, especially if your 401k plan doesn’t give you any good investment options.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on January 24. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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).
A software engineer manipulating a vast network of code on virtual monitors.
Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders: 43
Discussing Palantir Technologies Inc. (NASDAQ:PLTR) during the episode, Cramer stated:
“Palantir’s going higher. All right. Palantir’s going higher. That’s the way it is. I think that it’s a meme stock. I think it goes to $100. They push it up every day. I think when you get a down day, you just buy it. That’s what they’re gonna do. And I gotta tell you… it is really an unbelievable thing. This is GameStop except for, it has actual revenues and earnings.”
Palantir Technologies Inc. (NASDAQ:PLTR) is a provider of software solutions focused on complex data integration and supporting decision-making processes. Cramer has previously outright called PLTR a cult stock whilst emphasizing its very real revenue. He recently said, “Oh, and, let’s not forget the ontologists at Palantir. Those guys can do no wrong, especially in the eyes of their buddy-buddy investors.”
Overall, PLTR ranks 8th on our list of stocks on Jim Cramer’s radar. While we acknowledge the potential of PLTR 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 PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center