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10 Stocks Jim Cramer and Hedge Funds Have In Common

In this article, we will be taking a look at 10 stocks Jim Cramer and hedge funds have in common. To see more of these stocks, you can go directly to see 5 Stocks Jim Cramer and Hedge Funds Have In Common.

"If You Use NVIDIA's Chips, You Can Speak In The Vernacular Of ChatGPT"

Avid viewers of Jim Cramer's Mad Money on CNBC will not be surprised to hear that Cramer is a huge fan of NVIDIA Corporation (NASDAQ:NVDA). On May 26, the Mad Money host recounted the shock felt by everyone monitoring the chipmaking and artificial intelligence sectors caused by NVIDIA Corporation's (NASDAQ:NVDA) "spectacular beat" in the first quarter of 2023. The company reported an adjusted EPS of $1.09 while the market had expected $0.92, making this a beat of $0.17. Revenues for the chipmaker also exceeded expectations, coming in at $7.19 billion, beating estimates by $669.47 million. Cramer noted that:

"Well, once again, Jensen Huang disrupted the world of technology. He came up with a new way of digital thinking, that enables accelerated computing and generative AI process using NVIDIA's proprietary H1 chips among others, that his team designed - and they're truly special."

"Moore's Law Is Dead"

While going over the potential NVIDIA Corporation (NASDAQ:NVDA) harnesses, Cramer mentioned Moore's law, a theory that implies that "chips will double in power every two years." This is a rule that has been governing the chip space for decades, placing limitations on what chip-makers can do. However, according to Cramer, NVIDIA Corporation's (NASDAQ:NVDA) Huang had told him years ago that "Moore's law was dead." He made this claim on the basis of the fact that "he came up with a way to make graphics cards that were more powerful and even more efficient, even if they were bigger because there was increasingly no benefit to shrinking semiconductors."

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Because of NVIDIA Corporation's (NASDAQ:NVDA) undeniable success and its superior chips, major big tech companies have begun relying on it alone for their chips, especially if artificial intelligence is a space they wish to venture into. This preference for the company may very well stem from the fact that NVIDIA Corporation (NASDAQ:NVDA) seems to have "zero competition in the chip space," as Cramer himself noted.

"You Stray, You Lose"

But apart from NVIDIA Corporation (NASDAQ:NVDA), Cramer is also heavily bullish on many other companies, such as ON Semiconductor Corporation (NASDAQ:ON) and Bristol-Myers Squibb Company (NYSE:BMY). In another Mad Money episode that aired May 31, Cramer went through several S&P 500 sectors, sifting through the winners and the losers for his audience to be better prepared for this market. He noted that the S&P 500 technology sector has been winning in May, rising by 34.81% year-to-date as of May 31. The communications services sector also managed to pull through, rising by 32.25% over the same period. The consumer discretionary sector was also a winner, rising by 19.25% year-to-date as of May 31.

While going through the winners of 2023 so far, Cramer noted that these sectors included companies that "are a who's who of artificial intelligence and friends," implying that those sectors that didn't stray from the "tech complex" managed to rise and continue rising all through May. On the flip side, we have the losing sectors which Cramer uses as examples of "what happens if you do stray from tech." Losers in the S&P 500 include the energy sector, down 11.23% year-to-date as of May 31. Cramer stated that "oil and natural gas have been terrible investments this year."

Over the same period, the utilities sector declined by 9.38%. This sector's downfall, in particular, may shock many investors since it offers primarily dividend stocks. However, Cramer notes that "these dividends now look less attractive versus bonds." Even the healthcare sector hasn't managed to make it out of May unscathed, falling by 7.05% year-to-date as of May 31. The financials sector has also seen its fair share of declines this year, being down 6.48% over the same period, "led by Comerica, KeyBanc, and Zions. Finally, Cramer notes that the fifth-worst performing sector in the S&P 500 by May was real estate, being down 3.55% year-to-date. These were merely the worst five sectors within the S&P 500 so far, but their examples seem enough to drive home the point that Cramer is trying to make: investing in tech is a must in 2023.

10 Stocks Jim Cramer and Hedge Funds Have In Common
10 Stocks Jim Cramer and Hedge Funds Have In Common

Our Methodology

To select our list of stocks, we went through Mad Money's Lightning Round episodes from May 31 and June 1, alongside an exclusive episode Jim Cramer did on NVIDIA Corporation (NASDAQ:NVDA) on May 26. These episodes highlighted the stocks Cramer believes investors should be buying today. We then used Insider Monkey's hedge fund data for the first quarter to check which of these stocks were also popular among hedge funds and ranked them based on the number of hedge funds holding stakes in them, from the lowest to the highest number.

Stocks Jim Cramer and Hedge Funds Have In Common

10۔ New Fortress Energy LLC (NASDAQ:NFE)

Number of Hedge Fund Holders: 28

In a Mad Money Lightning Round on June 1, Cramer noted that buying New Fortress Energy LLC (NASDAQ:NFE) is "the move" for investors looking to stay in the energy industry.

New Fortress Energy LLC (NASDAQ:NFE) was spotted in the portfolios of 28 hedge funds in the first quarter, with a total stake value of $352 million.

On April 10, Chris Robertson at Deutsche Bank initiated coverage of New Fortress Energy LLC (NASDAQ:NFE) shares with a Buy rating and a $60 price target.

Fortress Investment Group was the largest stakeholder in New Fortress Energy LLC (NASDAQ:NFE) at the end of the first quarter, holding 13.4 million shares in the company.

9. A. O. Smith Corporation (NYSE:AOS)

Number of Hedge Fund Holders: 28

A. O. Smith Corporation (NYSE:AOS) had 28 hedge funds long its stock in the first quarter. Their total stake value was $528 million.

For Cramer, when dealing with "heating, ventilation, thermostats, boilers," A. O. Smith Corporation (NYSE:AOS) is a "terrific kind of play."

Matt Summerville holds a Buy rating on A. O. Smith Corporation (NYSE:AOS) shares as of May 1. The analyst also raised his price target on the stock from $80 to $82.

In its fourth-quarter 2022 investor letter, TimesSquare Capital Management mentioned A. O. Smith Corporation (NYSE:AOS):

“We trimmed our position on that strength. Added to the strategy this quarter was A. O. Smith Corporation (NYSE:AOS), the leading global manufacturer of residential and commercial-grade water heaters and boilers. The company saw a rebound in orders after a period of steady inventory destocking, which added to our assessment that A.O. Smith was poised to benefit from increased sales and improving margins. In addition, its sales in China have stabilized.”

A. O. Smith Corporation (NYSE:AOS), like ON Semiconductor Corporation (NASDAQ:ON), Bristol-Myers Squibb Company (NYSE:BMY), and NVIDIA Corporation (NASDAQ:NVDA), is one of Cramer's favored stocks.

8. Moderna, Inc. (NASDAQ:MRNA)

Number of Hedge Fund Holders: 40

Moderna, Inc. (NASDAQ:MRNA) is Cramer's preferred play in the vaccine space, according to his lighting round on Mad Money from June 1.

The largest stakeholder in Moderna, Inc. (NASDAQ:MRNA) at the end of the first quarter was Coatue Management, holding 6.5 million shares. In total, 40 hedge funds held stakes in the company, with a total stake value of $2.6 billion.

Morgan Stanley analysts see Moderna, Inc. (NASDAQ:MRNA) as an Equal Weight stock, and they have placed a price target of $153 on the shares as of May 5.

Baron Funds made the following comment about Moderna, Inc. (NASDAQ:MRNA) in its first-quarter 2023 investor letter:

Moderna, Inc. (NASDAQ:MRNA) is a leader in the emerging field of mRNA-based vaccines and therapeutics and was one of the three main producers of the COVID vaccine. Shares fell during the quarter. We believe as COVID shifts away from pandemic status and becomes an increasingly commercial market (rather than government funded), there is increasing investor uncertainty around what a booster market could look like, which is pressuring shares. Looking beyond COVID, we think Moderna has the potential to disrupt the biopharmaceutical industry, from infectious disease vaccines to oncology, and we remain shareholders.”

7. Jazz Pharmaceuticals Plc (NASDAQ:JAZZ)

Number of Hedge Fund Holders: 40

On May 11, Daniel Busby at RBC Capital placed a $202 price target on Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) shares while holding an Outperform rating.

As of the end of the first quarter, 4o hedge funds were long Jazz Pharmaceuticals Plc (NASDAQ:JAZZ). Their total stake value was $1.2 billion.

Cramer holds that Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) is a "great growth company" and "the kind of stock right now that there will be no bottom for."

Like ON Semiconductor Corporation (NASDAQ:ON), Bristol-Myers Squibb Company (NYSE:BMY), and NVIDIA Corporation (NASDAQ:NVDA), Jazz Pharmaceuticals Plc (NASDAQ:JAZZ) is a stock that Cramer and hedge funds both like.

6. Carrier Global Corporation (NYSE:CARR)

Number of Hedge Fund Holders: 41

We spotted Carrier Global Corporation (NYSE:CARR) in the 13F holdings of 41 hedge funds in the first quarter, with a total stake value of $837 million.

Julian Mitchell at Barclays holds an Overweight rating and a $48 price target on Carrier Global Corporation (NYSE:CARR) shares as of April 28.

Cramer sees Carrier Global Corporation (NYSE:CARR) as an even better play than A. O. Smith Corporation (NYSE:AOS), considering the company's acquisition of Viessmann Climate Solutions in Europe.

Balyasny Asset Management was the most prominent shareholder in Carrier Global Corporation (NYSE:CARR) at the end of the first quarter, holding 6.7 million shares.

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Disclosure: None. 10 Stocks Jim Cramer and Hedge Funds Have In Common is originally published on Insider Monkey.