We recently compiled a list of the Jim Cramer Talked About These 11 Stocks Recently. In this article, we are going to take a look at where Netflix, Inc. (NASDAQ:NFLX) stands against the other stocks Jim Cramer recently talked about.
On Thursday, Jim Cramer, host of Mad Money, discussed the current state of the market following the election, noting that it has been marked by extreme volatility, with some sectors experiencing massive gains while others have faced significant losses. Cramer observed a recurring pattern in the market:
“When it’s loved in this market, it’s really loved, but when it’s hated, I mean just forget about it. That’s been the dynamic ever since the election.”
READ ALSO Jim Cramer on Microsoft and Other Stocks and Jim Cramer’s Best Performers List: Top 10 Stocks
Cramer identified certain industries that have seen notable growth, explaining that these sectors have thrived for specific reasons. However, he cautioned that investors should be wary of jumping in too quickly, as these stocks need time to cool off before they become attractive again. In particular, he mentioned how companies with subscription-based models have been seeing a lot of attention, largely because of their steady revenue streams.
Another sector Cramer highlighted as being in the midst of a strong rally is enterprise software. He explained that companies in this space, particularly those providing essential products to large corporations, have been soaring.
While some sectors are riding high, Cramer also pointed to two areas that are currently undervalued but could see a rebound: pharmaceuticals and semiconductors. He speculated that the pharmaceutical sector has been dragged down in part due to concerns over Robert F. Kennedy Jr.’s controversial appointment as the head of the Department of Health and Human Services. However, Cramer suggested that these concerns may already be priced into the stocks.
Similarly, Cramer noted that semiconductor stocks have struggled. He said that the hatred comes from doubts surrounding the adoption of artificial intelligence-powered PCs. In his closing remarks, Cramer stressed that while there are plenty of stocks that are currently over-loved, many of them genuinely deserve the attention they’re receiving, but not necessarily at their current inflated prices.
As for sectors that seem to be in a perpetual decline, Cramer said he would be interested in buying them, but only after seeing signs that they’ve stopped falling. He added that any potential rebound will depend on greater clarity from President-elect Trump, who he believes could have a significant impact on the market, particularly with his potential to cause turbulence for many stocks.
“We need to see the floor of the abyss, unless, of course, we’re bouncing off it already. And for the overly loved, don’t look for Trump for support. He can surprise you with what concerns him. Do not get too cocky. Do not get too smug. It will hurt you for certain.”
Our Methodology
For this article, we compiled a list of 11 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 14 and listed the stocks in the order that Cramer mentioned them.
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 home theater with family members enjoying streaming content together.
Cramer likes Netflix, Inc. (NASDAQ:NFLX) but mentioned the constant increase in stock price because of a stream of analyst price target increases.
“[The] second group that’s getting maybe too much love: This market is nuts for subscription products. I like these stocks too… They all have huge recurring revenue streams and membership dues, and their stocks are huge winners. All these are benefiting from endless positive research calls, they just appear each morning as if by magic. Netflix has the most fanboys and analysts will come out and raise its price target based on the new ad model, which is going so well. Then the stock goes higher, and then another analyst will come out the next day and raise her price target for the same reason. It just won’t stop, always on the same piece of information. That is not cricket.”
Netflix (NASDAQ:NFLX) is a leading global provider of streaming entertainment, offering a vast array of movies, TV shows, and original content to millions of subscribers worldwide. In the third quarter of fiscal 2024, the company reported a strong financial performance, with revenue growing by 15%, driven primarily by a 14% increase in its subscriber base. A key factor contributing to this growth is the rise in subscription prices, particularly in its core markets of the U.S. and Canada, where users are now paying an average of 5% more than the previous year.
As of September 30, the company’s subscriber count reached an impressive 283 million, a number that continues to climb each quarter. Spencer Neumann, the company’s CFO, noted that there are still “hundreds of millions of households that aren’t members,” suggesting significant potential for further growth. Looking ahead, Netflix (NASDAQ:NFLX) is projecting between $6 billion and $6.5 billion in free cash flow for fiscal year 2024.
Overall NFLX ranks 4th on our list of the stocks Jim Cramer recently talked about. While we acknowledge the potential of NFLX 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 NFLX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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