We recently published an article titled, Jim Cramer’s Latest Lightning Rounds: 15 Stocks to Watch. In this article, we are going to take a look at where Pure Storage, Inc. (NYSE:PSTG) stands against other stocks discussed by Jim Cramer during the latest lightning rounds.
Recently on Mad Money, host Jim Cramer stressed the necessity of staying updated on economic indicators, government actions, and industry developments to make informed investment choices. He emphasized that speculation should be approached with the mindset of a “pro” rather than a novice. Cramer mentioned that while he does not oppose speculation, it must be done with an understanding of the risks involved. He remarked:
“Otherwise, if things go south, you’ll be caught playing a game of endless musical chairs, led by me getting a huge number of lightning round calls about some very sketchy outfits that all belong to what I call the hot money segment.”
Cramer provided insight into this hot money segment, describing it as a segment with limited capital that cannot satisfy all the demand. He specifically pointed to China, explaining that the current policies from the Chinese government have created an environment where, for the moment, it seems nearly impossible to incur losses. He elaborated that the government is actively subsidizing stock purchases and promoting buybacks and insider buying through liquidity support.
It has led to significant price movements in the market. When considering investments in Chinese stocks, Cramer advised caution, suggesting that investors should focus on companies capable of withstanding market fluctuations. He pointed out that many people are tempted to buy Chinese auto stocks, especially given their impressive advancements in electric vehicle technology. Nonetheless, he warned that the electric vehicle market is becoming increasingly saturated.
Cramer added that with the limited amount of hot money available, speculative stocks now face competition from cryptocurrencies. He expressed his belief that Bitcoin and Ethereum are the only cryptocurrencies with a good chance of recovery, dismissing most others as “junk”.
He shared that he only invests in these two digital currencies and avoids common stocks tied to the cryptocurrency market, deeming them too risky compared to Bitcoin and Ethereum, which benefit from exchange-traded products backing them. Cramer concluded by mentioning that speculation should be done wisely, saying, “With any speculative trade, there’s a beginning and an endpoint.”
Our Methodology
For this article, we compiled a list of 15 stocks that were mentioned by Jim Cramer during the lightning rounds of his episodes of Mad Money on October 4 and October 7. 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).
Cramer Says To ‘Hold On To’ Pure Storage, Inc. (NYSE:PSTG)
Pure Storage, Inc. (NYSE:PSTG)
Number of Hedge Fund Holders: 38
Pure Storage, Inc. (NYSE:PSTG) is a provider of data storage and management solutions. The company’s Purity software stands out because it offers data reduction and protection across multiple storage protocols. The hardware portfolio includes the FlashArray, designed specifically for block storage, and the FlashBlade, which is optimized for handling unstructured data. In addition to these offerings, it provides cloud-native solutions like Portworx, tailored for Kubernetes environments, and Pure Fusion, which simplifies unified storage management.
Mentioning the company, Cramer said, “It does its job very well. It’s actually had a good run here. I think I would hold on to it.”
In the second quarter, Pure Storage (NYSE:PSTG) reported significant achievements in subscription revenue and overall operational performance. Subscription services revenue reached $361.2 million, which was a remarkable 25% increase year-over-year. It was largely fueled by the strong uptake of Evergreen//One, which provides on-demand, scalable storage solutions.
Pure Storage (NYSE:PSTG) also made progress in its initiatives surrounding hybrid cloud and artificial intelligence. New offerings like Portworx and Pure Fusion are experiencing growing acceptance in the market.
Management has largely reaffirmed its outlook for the fiscal year, projecting total revenue of $3.1 billion and a non-GAAP operating income of $532 million. However, the target for total contract value (TCV) sales has been adjusted to $500 million for the year, down from the previous forecast of $600 million.
Overall, PSTG ranks 4th on our list of stocks discussed by Jim Cramer during the latest lightning rounds. While we acknowledge the potential of PSTG 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 PSTG 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.