Jim Cramer Thinks AI Revolution Can Boost These 10 Stocks
In this article, we will take a detailed look at Jim Cramer Thinks AI Revolution Can Boost These 10 Stocks. For a quick overview of such stocks, read our article Jim Cramer Thinks AI Revolution Can Boost These 5 Stocks.
Jim Cramer continues to focus on AI and the new investing opportunities it is creating. During his March 7 program on CNBC, Cramer wondered “how big is AI” and said the AI-led “technological revolution” is “crossing all barriers” and could potentially become the “heart” of the American national security apparatus. Jim Cramer said that AI could be key to making the “biggest amount of money” over the next five years.
AI "Bubble Busters" Drive Jim Cramer "Crazy"
Jim Cramer yet again took a swing at AI naysayers who he called “bubble busters.” Cramer said these AI bears are “all around” him and it drives him “crazy.” After discussing Nvidia’s dominance in the AI industry and how the company is expected to remain at the top of the AI food chain because of its high performance chips, Jim Cramer started discussing stocks that would benefit from the AI revolution. Some of these companies would benefit from AI directly while others would see a huge demand for their products and services indirectly.
Cramer Picks Under-The-Radar AI Stocks
Jim Cramer also attended the recently-concluded Nvidia GTC conference and televised his program directly from there. Cramer said that there are many non-tech companies in partnership with Nvidia and keeping an eye on these companies could unlock huge opportunities for investors. Cramer believes these non-tech partners should “represent the best opportunities” since these companies usually stay under the radar.
Cramer often talks about mega-cap tech stocks like NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL) that will grow because of AI. But in this article we decided to take a look at some of the lesser known and under-the-radar stocks Jim Cramer believes would grow thanks to the AI revolution. Most of these are non-tech companies that would benefit from the AI wave directly or indirectly due to the AI ecosystem that is forming as companies begin to develop generative AI applications for hundreds and thousands of use cases.
10. Getty Images Holdings Inc (NYSE:GETY)
Number of Hedge Fund Investors: 15
Jim Cramer is excited about Getty Images Holdings Inc (NYSE:GETY) after the company revealed its partnership with Nvidia. Cramer recently admitted he hasn’t been a fan of Getty Images Holdings Inc (NYSE:GETY) in the past because the company became public via a SPAC. Most of the SPAC IPOs, according to Cramer, were “garbage.” However, Cramer said it’s time to open the books on Getty Images Holdings Inc (NYSE:GETY) since he believes Nvidia’s partnership could infuse a “life” in the stock.
In addition to GETY, Cramer also recommends NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ: MSFT) and Apple Inc (NASDAQ:AAPL).
During the company's Q4 earnings call Getty Images Holdings Inc (NYSE:GETY)'s management talked about partnership with Nvidia:
"In partnership with NVIDIA, we announced and launched a truly unique generative image offering, an offering that is trained on licensed and released data and rewards content creators for the training, and offering that respects third-party intellectual property rights and a social and responsible and that it cannot produce deepfakes, an offering that is commercially safe and indemnified, an offering that produces high-quality outlets.
We launched Getty Images Holdings Inc (NYSE:GETY) and VA-API in Q4, a nice stock in January of this year. Of course, with all things AI, the pace of innovation is break-neck. In recent weeks, we have already introduced expanded controls and capabilities such as in-panning and out-panning. We’ll be releasing a newly trained model soon and we will also enable AI capabilities across our entire pre-shop creative library. We also have big plans for video and partnership with NVIDIA and Runway, which we expect to launch later this year aligned to the commercial needs of our customers. While we continue to face macro challenges, as always we remain focused on delivering real value to our customers and long-term returns to our shareholders. At the core of Getty Images is high-quality content and coverage that is derived from top-notch talent, exclusive access, extensive research and rare expertise.
We pair this with world-class customer service across committed and long-standing relationships and the delivery of technology that truly enhances the creativity, productivity and efficiency of our customers without risks. With our solid foundation and clear vision and focus, we’re excited to return to growth in 2024."
Read the entire earnings call transcript here.
9. Nextracker Inc (NASDAQ:NXT)
Number of Hedge Fund Investors: 33
Nextracker Inc (NASDAQ:NXT) is among the list of companies that are set to benefit from the rising demand of clean energy amid the AI-based data centers wave. Cramer thinks companies deploying massive data center resources for generative AI applications would need to power their systems via cheap energy, which should also be clean. Nextracker Inc (NASDAQ:NXT) provides solutions to enhance the efficiency of solar energy systems. That’s why Nextracker Inc (NASDAQ:NXT) is poised to benefit in the coming days.
Last month Nextracker Inc (NASDAQ:NXT) posted strong quarterly results. J.P. Morgan increased its price target on the stock to $73 from $61.
During its Q3 earnings call Nextracker Inc (NASDAQ:NXT) talked about data center-driven demand and opportunities:
"Over the last few years however, energy usage has increased dramatically driven by growth and data centers, electrification of appliances and transportation and reindustrialization across the United States. At the same time there has been a significant retirement of legacy power plants.
The combination of these factors has caused the U.S. Energy Information Administration to forecast a 5% annual increase need for new power generation capacity in the grid over the next five years. The result is that almost 300 gigawatts of new power plants are needed over the next five years and about 500 gigawatts of new power is needed over the next decade. Where is this massive amount of new power going will come from? The U.S. CIA historically very conservative on renewables is forecasting that solar and wind power will comprise the vast majority of new power generation. Solar is expected to have a 26% compound annual growth over the next five years and within 10 years be the number one source of electric generation in the United States comprising almost a quarter of all electric energy.
Naysayers point to the intermittency of renewable power as an impediment to its large scale adoption in the grid. We believe this issue will improve. Sharp decreases in battery costs have enable steep ramping of battery storage, power plants in the grid both co-located with renewable power and standalone project."
Read the full earnings all transcript here.
8. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Investors: 48
Jim Cramer, who has been bullish on Caterpillar Inc. (NYSE:CAT) for the past several months, thinks the huge rise of datacenters after the AI wave could further boost Caterpillar Inc. (NYSE:CAT) since the company would play a key role in AI infrastructure building.
In January, Cramer grilled Caterpillar Inc. (NYSE:CAT) bears, who, according to the analyst, were talking about “bogus” concerns about inventory slowdown problems for the company. Cramer, whose charitable trust owns a stake in Caterpillar Inc. (NYSE:CAT), said he held onto the stock and got rewarded. Caterpillar Inc. (NYSE:CAT) shares are up by about 58% over the past one year.
Diamond Hill Large Cap Strategy made the following comment about Caterpillar Inc. (NYSE:CAT) in its Q3 2023 investor letter:
“Caterpillar Inc. (NYSE:CAT), the world’s leading manufacturer of construction and mining equipment, also performed well this quarter. Caterpillar has managed to leverage increased capital investment from various end markets, contributing to better than expected fiscal results for Q2. The company is poised to be one of the largest beneficiaries of several government funding initiatives, including the IRA (Inflation Reduction Act) bill, CHIPS Act and infrastructure bill. These measures are expected to support construction spending for several years, providing a robust backdrop for Caterpillar’s continued growth.”
7. Constellation Energy Corp (NASDAQ:CEG)
Number of Hedge Fund Investors: 41
Jim Cramer recently said that the rise of generative AI applications are creating huge demand for data centers, which in turn creates demand for power and energy management solutions. Cramer said AI data centers have to be connected to the grid that have low energy costs and “for many” this energy has to be clean. This is where companies like Constellation Energy Corp (NASDAQ:CEG) come into play, according to Cramer. Cramer said that Constellation Energy Corp (NASDAQ:CEG) is helping major companies become carbon neutral as it provides clean energy.
6. Medtronic PLC (NYSE:MDT)
Number of Hedge Fund Investors: 56
Jim Cramer is bullish on Medtronic plc (NYSE:MDT) because the company has a partnership with Nvidia. Cramer believes the new AI wave could revolutionize the medical diagnostics systems. In a latest program, Cramer said Medtronic plc (NYSE:MDT) could create a more effective endoscopy module to better detect colorectal cancer.
In addition to MDT, Cramer is also bullish on NVIDIA Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT) and Apple Inc (NASDAQ:AAPL).
Polen International Growth Strategy stated the following regarding Medtronic plc (NYSE:MDT) in its fourth quarter 2023 investor letter:
“Medtronic plc (NYSE:MDT) is the largest medical technology company in the world. Despite a few tough years characterized by post-COVID supply chain issues, Chinese market payment changes, and diabetes business challenges, the company has continued to invest aggressively in its R&D pipeline. Because of this long-term mindset and commitment to product innovation, the company is in a position today where it has numerous significant new product launches across the business, helping to accelerate growth and improve profitability. More recently, the market’s infatuation with the promise of GLP-1 drugs has resulted in valuation de-ratings across the medtech industry broadly, to which Medtronic was not immune. The combination of all of these factors has resulted in Medtronic shares trading at their lowest valuation in a decade. Given the emerging business momentum, we felt the valuation offers a compelling chance to increase our weight in the world’s largest medtech company.”
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Disclosure. None. Jim Cramer Thinks AI Revolution Can Boost These 10 Stocks was initially published on Insider Monkey.
