On a recent episode of Mad Money, Jim Cramer took a moment to celebrate the two-year anniversary of the current bull market. He mentioned that this particular bull market has been quiet and gentle, which he attributes to the unusual circumstances surrounding its rise. “The whole first year of this bull’s life was an anomaly. That’s because the Fed was furiously tightening and the market went up anyway,” Cramer explained.
He emphasized that for the past two years, opportunities have been evident, stating, “Every night I say there’s always a bull market somewhere, and for the last two years, well, it’s been right in front of you.”
Cramer then went on to discuss the lead performing stocks and ended the segment, saying:
“The bottom line, if you're going to buy these stocks, I’d go first with Nvidia, then with Broadcom, and finally Fair Isaac, if only because we need something that's not connected to the data center, even as we know, it will remain a strong story for the ages.”
Cramer also advised investors to shift their focus away from the consumer price index (CPI) report, suggesting that its significance has diminished since the Federal Reserve began cutting rates.
“We had to be concerned about this stuff when the Fed was on the warpath, either raising rates or leaving them higher for longer. Now, though, the Fed is your friend, so I wouldn't obsess about the details.”
He did emphasize, however, that the monthly labor report remains important in the current climate. He remarked on the tendency for many to become “Fed watchers,” suggesting that this reliance on government data can detract from the deeper analysis of individual companies. Cramer referenced Austan D. Goolsbee, president of the Chicago Fed, who advised against an overemphasis on CPI data, as the Fed is unlikely to base decisions on it. Cramer explained:
“When the Fed's raising rates in order to stamp out inflation, it can be very important. When we're in a rate hike cycle, you're trying to figure out when that's going to end. But we're not in that kind of cycle anymore. We're in a rate cutting cycle.”
Cramer explained that last month the Fed implemented a double rate cut, setting a downward trend that is expected to continue. He added:
“Sure, if we had a huge spike in the CPI this morning, then maybe the Fed would change its stance. But that would have to be an extreme reading. And there's nothing extreme about today's 2.4% inflation number, just a tick above the expected 2.3, still down from the 2.5% reading from the prior month.”
Cramer concluded with a strong reminder about the nature of investing. “Forget the macro, people. It’s not that meaningful when the Fed’s cutting rates. And keep your eyes on the prize: Earnings,” he urged. Ultimately, he reinforced that earnings dictate stock prices in the long run, and that’s where the focus should be for those looking to make money in the market.
Our Methodology
For this article, we compiled a list of 12 stocks with the biggest gains over the past 2 years that were mentioned by Jim Cramer during his episode of Mad Money on October 10. 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).
A row of utility poles and power lines, showing the reach of the electric utility operations.
Talking about how GE Vernova Inc. (NYSE:GEV) is a result of General Electric splitting, Cramer said:
“GE Vernova was supposed to be the lagger because it represented GE's long-suffering power business. But with power generation suddenly in incredible demand thanks to, yes, the data center, Vernova's natural gas turbines are flying off the proverbial shells. Wind’s not bad either as long as it's onshore and one day, nuclear plants will be built in great number. They know how to build small-form-factor nukes. That's all Vernova.”
GE Vernova Inc. (NYSE:GEV) operates as an energy company that offers a variety of products and services associated with electricity generation, transfer, orchestration, conversion, and storage. Recently, the company was chosen to enter into award negotiations with the U.S. Department of Energy’s Hydrogen and Fuel Cell Technologies Office to lead a project focused on facilitating permitting and safety for hydrogen deployment. This initiative is backed by $1 million in federal funding from the DOE, with the terms and scope of the project still to be finalized.
A key component of the program involves H2Net, which is set to develop an AI Assistant tailored specifically to the critical documents necessary for safe hydrogen handling and permitting.
Additionally, on October 8, GE Vernova Inc. (NYSE:GEV) announced an order for three of its advanced 7HA.03 gas turbines to be installed at The Kansai Electric Power Company’s Nanko power station in Osaka, Japan. These turbines will replace older conventional LNG power generation assets, improving the overall efficiency of the plant while simultaneously reducing carbon dioxide emissions. According to Ramesh Singaram, President and CEO of GE Vernova’s Gas Power division in Asia, this plant is anticipated to deliver up to 1.8 gigawatts of electricity to the grid, positioning it among the most efficient power plants in Japan.
Overall GEV ranks 4th on Jim Cramer's list of best performing stocks. While we acknowledge the potential of GEV 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 GEV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
