We recently compiled a list of the Jim Cramer on the Magnificent Seven Stocks Plus Netflix. In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against the other magnificent stocks in Jim Cramer’s list.
On Monday, Jim Cramer, host of Mad Money, discussed the ongoing success of major technology stocks, particularly the Magnificent Seven. He noted that these companies are proving their resilience in the market, no matter the circumstances, likening their performance to having a unique “Poltergeist 2 magic.”
Cramer pointed out that this latest rally for the Magnificent Seven differs from previous ones, as it is not merely a zero-sum game where gains for one group come at the expense of another. Instead, other sectors are also thriving, likely due to the influx of capital into the market.
“Unlike previous Mag 7 rallies, this one’s definitely not a zero-sum equation where the rest of the market does nothing. Other groups can roar, too, in this market, perhaps because there’s just a lot of money going around.”
He noted that the Federal Reserve’s rate cuts mean that cash is losing value, creating an environment ripe for growth. He mentioned that the staying power of the Magnificent Seven is truly unbelievable.
“We know these stocks will once again be hit by endless worries, giving you more opportunities to buy and more weakness before they snap right back and start climbing all over again.”
Cramer highlighted that this week marks the beginning of a crucial four-week earnings season, emphasizing that these quarterly reports hold significant weight for investors and the broader stock market. He acknowledged the current climate of anxiety, especially following the market’s impressive rally. He added:
“Why stress about how quickly the Fed will cut rates, Oh? God, I’m sick of that. What matters is they’re giving vast swaths of the economy a big boost and I doubt they’ll stop anytime soon.”
Cramer also observed that investors often gravitate toward underdogs in the market, suggesting that banks could be the next promising sector. In addition to banks, Cramer also mentioned the potential in pharmaceutical stocks, suggesting that investors might want to consider major players in that sector as well.
Our Methodology
For this article, we compiled a list of stocks that were discussed by Cramer during his episode of Mad Money on October 14. 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).
A wide view of an Apple store, showing the range of products the company offers.
Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 184
Cramer discussed insights from JPMorgan and Evercore regarding why investors should consider buying Apple Inc. (NASDAQ:AAPL) stock, arguing that negativity surrounding the company might be overblown ahead of its earnings report.
“Today, two firms, JPMorgan and Evercore, talked about why you need to buy Apple. Both pieces stress that maybe people have gotten too bearish on the stock ahead of the earnings. So we might need to rethink all that negativity and just buy the darn thing. I mean, it’s bizarre that so many people are so eager to hate the stock of one of the greatest companies in history, especially when the stock’s been such a great long-term performer. Quizzical, isn’t it?
Yet this happens whenever they launch a new phone. It feels like almost every day we come in and some analyst lowers their estimates because of tracker work that showed iPhone 16 lead times were short and there’s not much demand, right? I mean blah, blah blah.”
Cramer noted that the analysts from JPMorgan and Evercore are taking a more optimistic stance. He also emphasized the importance of owning the stock for the long term rather than trading it.
“So many analysts have now shaded down their estimates for Apple that, get this, if business is simply okay, the estimates will prove to be too low. So these two bold analysts at JP Morgan [and] Evercore wanted to take the other side of the trade, the positive side. Plus, many of the objections to Apple may not hold as much water as they did even a couple [of] weeks ago. For example, we know a lot of people were worried about Chinese demand, but get this, if the Chinese government’s actually able to stimulate, right, the stimulus plan starts working well, don’t you think that China’s issues are a smaller concern, more money for consumers in China means more orders for the prestigious iPhone.
This is why I always say own it, don’t trade it. The analysts always try to scare you out of Apple based on incomplete data and from a long-term perspective, think about it, they’re always wrong. If you sell Apple in the most recent bout of negativity, you miss a tremendous run over the past week. And then, you did it before that you missed another run, then another and another. No wonder they call this stock the Teflon Don or at least Ben Reitzes over at Melius, a big Apple supporter calls it that, and I like it.”
Apple (NASDAQ:AAPL), known primarily for its iconic iPhone, remains one of the most reputable companies in history and is on the brink of a significant upgrade cycle driven by advancements in artificial intelligence. In September, the company introduced a suite of AI-powered features branded as Apple Intelligence. The new offering aims to advance the functionality of the latest iPhones, iPads, and Macs, providing users with tools that facilitate quick writing and summarizing of texts and emails, photo editing, and the creation of personalized images.
While the new features were not ready for public release at the launch of the iPhone 16 and iPhone 16 Pro last month, anticipation is building for the upcoming iOS 18.1, which is expected to be available on October 28. The latest operating system will integrate Apple Intelligence, further expanding the capabilities of Apple devices and promising to improve the user experience significantly.
Overall AAPL ranks 5th on Jim Cramer’s list of magnificent stocks. While we acknowledge the potential of AAPL 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 AAPL 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.