In this article, we will take a look at the stocks that Warren Buffett and Jim Cramer love. To see more such companies, go directly to Warren Buffett and Jim Cramer Love These 5 Stocks.
We are nearing the end of 2023 that was a rollercoaster ride for investors. Analysts were painting a gloomy picture when the year started but the AI-fueled rally gave a boost to major tech stocks that kept gaining value, defying market expectations. Looking ahead, many analysts expect we might see the end of the euphoria that kept the markets elevated in 2024. BNP Paribas analysts said in the bank’s 2024 outlook report that the catalysts that gave a boost to the stock market in 2023 might lose steam in 2024 as consumer savings dry up. BNP Paribas’ Chief Market Strategist, Daniel Morris, said that among the factors responsible for market optimism in 2023 was fiscal stimulus under the Biden administration, which caused an increase in government spending due to Inflation Reduction Act.
Recession Delayed Not Cancelled
Morris said that the recession that was expected in 2023 was delayed not canceled, and he’s expectating the economy to enter a recession in 2024. The analyst said that the pessimistic expectations were realized in Europe in 2023 and he’s expecting the continent to continue to face challenges this year.
Morris also shared some important thoughts on China. He believes the country has been unable to deal with the real estate crisis. He said that unlike the US, where government-backed stimulus was strong after the coronavirus outbreak, government support in China was modest. That’s why when the economy re-opened, the country could not get back to its pre-COVID level of growth as many were expecting.
The 2024 outlook report from UBS is more optimistic. UBS Chief Investment Officer Mark Haefele believes while growth is expected to slow down, “lack of recession” would enable to companies to grow earnings in the year.
Methodology
For this article we first watched several programs of Jim Cramer on CNBC and listed down the stocks he has been bullish on throughout the year 2023. We then scanned Warren Buffett’s latest portfolio and picked stocks owned by him that are also loved by Cramer. Some top names in the list include Apple Inc. (NASDAQ:AAPL), The Coca-Cola Company (NYSE:KO) and Chevron Corporation (NYSE:CVX).
10. Snowflake Inc. (NYSE:SNOW)
Warren Buffett’s Stake Value: $935,773,692
A couple of months ago Jim Cramer in a program on CNBC praised Snowflake Inc. (NYSE:SNOW) CEO Frank Slootman and said the executive is using AI to his advantage. Cramer said that Snowflake Inc. (NYSE:SNOW) is making a big move. Cramer was talking in context of Snowflake Inc. (NYSE:SNOW)’s quarterly report. Cramer also praised Snowflake Inc. (NYSE:SNOW)’s business model and said enterprise software and Cloud were making a comeback.
Like Snowflake, Cramer and Buffett like Apple Inc. (NASDAQ:AAPL), The Coca-Cola Company (NYSE:KO) and Chevron Corporation (NYSE:CVX).
Warren Buffett’s latest 13F filings show that Berkshire Hathaway owns a $936 million stake in Snowflake Inc. (NYSE:SNOW).
ClearBridge Multi Cap Growth Strategy made the following comment about Snowflake Inc. (NYSE:SNOW) in its Q2 2023 investor letter:
“While the ClearBridge Multi Cap Growth Strategy has limited mega cap exposure, which has been a recent headwind to relative performance, we own several companies that stand to benefit from the explosive growth in generative AI. These holdings play key roles in building out the necessary infrastructure and helping customers leverage capabilities enabled by this emerging technology.”
During an August earnings call, Snowflake management talked about AI and its future plans:
Generative AI is at the forefront of customer conversations. However, enterprises are also realizing that they cannot have an AI strategy without a data strategy to base it on. We have a head-start in this race, with the epicenter of highly curated, optimized and trusted enterprise data. We now have a presence was 639 Global 2000 customers.
AI reaches beyond enterprise boundaries. Models need external data to answer challenging questions. Data sharing makes Snowflake uniquely positioned to enable AI workloads. As of Q2, 26% of Snowflake customers are data sharing, up from 20% in the same period last year. Approximately 70% of customers with more than $1 million in trailing 12-month product revenue are data sharing with an average of six stable edges. For years, we focused on the programmability of our platform via Snowpark. We are seeing momentum. In Q2, we added more than 400 Snowpark customers and our consumption grew approximately 70% quarter-over-quarter. The 63% of our Global 2000 customers are using Snowpark on a weekly basis. Document AI is now in Private Preview. With Document AI, customers can use natural language to ask questions of unstructured data.
Read the full earnings call transcript here.
9. Amazon.com, Inc. (NASDAQ:AMZN)
Warren Buffett’s Stake Value: $1,271,200,000
Jim Cramer has made several bullish comments on Amazon.com, Inc. (NASDAQ:AMZN) throughout this year. Earlier this year Cramer said that Amazon.com, Inc. (NASDAQ:AMZN) has been “fantastic” for the consumer. He was talking in the context of FTC’s lawsuit against Amazon.com, Inc. (NASDAQ:AMZN) for allegedly maintaining a monopoly. A couple of months ago, Cramer praised Amazon.com, Inc. (NASDAQ:AMZN) CEO Andy Jassy and said Jassy is “back” and he’s in his “prime.”
Warren Buffett’s hedge fund owns a $1.3 billion stake in Amazon.com, Inc. (NASDAQ:AMZN) as of the end of the third quarter of 2023.
Here is what Polen Global Growth has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2023 investor letter:
“Amazon continues to showcase it’s place as one of the most competitively advantaged companies in the world. The company has made significant progress in managing costs and better leveraging existing capacity, driving a strong recovery in its profitability. We think there’s additional room for improvement.
AWS growth seems to be stabilizing even while management continues to work with clients to optimize their infrastructure spend. Roughly 90% of global IT spending remains on premise. We believe this will eventually flip, with most IT spending ultimately moving to the cloud over time. We think AWS will be a significant beneficiary of this transition.
Further, our investment case on company profitability driven by AWS and advertising continues to unfold, delivering nearly $8 billion in free cash flow over the trailing twelve months and a net margin of 5%. We expect both to move higher with the mix shift of more profitable businesses growing fastest continuing to take effect.
At Amazon’s current price, we believe the company is well positioned to deliver a mid-teens or higher total shareholder return for our clients over the next five plus years without a Herculean effort from the business. It simply needs to continue executing on current businesses and growing into the capacity it built during and immediately after the pandemic.”
8. Mastercard Incorporated (NYSE:MA)
Warren Buffett’s Stake Value: $1,578,353,810
Earlier this month, while answering a question about Block, Cramer said that he prefers Mastercard Incorporated (NYSE:MA) over Block.
Warren Buffett owns a $1.6 billion stake in Mastercard Incorporated (NYSE:MA) as of the end of the third quarter of 2023.
Here is what Baron FinTech Fund has to say about Mastercard Incorporated (NYSE:MA) in its Q3 2023 investor letter:
“Performance in Payments was bolstered by gains from Mastercard Incorporated. Shares of global payment network Mastercard were up modestly after reporting a continuation of double-digit earnings growth and resilient payment volumes.”
7. Visa Inc. (NYSE:V)
Warren Buffett’s Stake Value: $1,908,498,775
Jim Cramer said in a program this month that he prefers Visa Inc. (NYSE:V) over Block since the stock represents the new fintech era.
Berkshire Hathaway owns a $1.91 billion stake in Visa Inc. (NYSE:V) as of the end of the September quarter.
Ensemble Capital Management made the following comment about Visa Inc. (NYSE:V) in its Q3 2023 investor letter:
“Mastercard is a company that pretty much everyone has heard of. In fact, when we meet with Ensemble’s clients, we occasionally tell them that we’re nearly certain that they are carrying a Mastercard in their wallet or purse as we speak, and if not, they are carrying a Visa Inc. (NYSE:V). Most people carry both.
People carry Mastercard and Visa because they are accepted nearly everywhere in developed markets. And they are accepted in most emerging economies, at least at locations where higher income people spend money. As a shopper you can show up at a bodega in Peru, a high end hotel in Tokyo, a truck stop in Alabama, or an ice cream cart in Milan, show them a piece of plastic and they’ll let you walk away with goods and services without any worry that they aren’t going to get paid…” (Click here to read the full text)
6. The Kroger Co. (NYSE:KR)
Warren Buffett’s Stake Value: $2,237,500,000
In March 2022, Jim Cramer said that The Kroger Co. (NYSE:KR) was a safety stock that could withstand inflation storms. Cramer also praised The Kroger Co. (NYSE:KR)’s digital investments and its partnerships with Starbucks, Bed Bath & Beyond, Instacart, DoorDash, among other companies. Investors are watching The Kroger Co. (NYSE:KR) amid its $25 billion acquisition deal of Albertsons which is awaiting final clearance from US authorities. Federal Trade Commission Chair Lina Khan recently said a decision about the deal could come next year.
As of the end of the third quarter of 2023, Warren Buffett had a $2.24 billion stake in The Kroger Co. (NYSE:KR).
Like Apple Inc. (NASDAQ:AAPL), The Coca-Cola Company (NYSE:KO) and Chevron Corporation (NYSE:CVX), The Kroger Co. (NYSE:KR) is a stock loved by both Cramer and Buffett.
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Disclosure: None. Warren Buffett and Jim Cramer Love These Stocks is originally published on Insider Monkey.