We recently compiled a list of the Jim Cramer is Talking About These 7 Stocks. In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against the other stocks Jim Cramer is currently talking about.
Jim Cramer, the host of Mad Money, recently delved into the complexities of disappointing quarterly earnings, emphasizing the importance of transparent communication from management. He pointed out that during each earnings season, evaluating companies can vary significantly in difficulty. Cramer remarked that when grading these results, investors seek clarity and simplicity, wanting reports that are easy to understand rather than muddled and confusing.
Last Wednesday, Cramer posed a thought-provoking question, noting that while stocks have the potential to generate substantial profits, the recent earnings reports have made it clear that not all results are straightforward.
“Stocks can make you a lot of money, can’t they? But after another day full of earnings where the Dow fell 92 points, S&P dipped 0.33% and Nasdaq declined 0.56%, it is worth remembering that most of these quarterly report cards aren’t that clean, not that simple.”
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Cramer likened the reporting process to navigating a complicated landscape where quick, headline-driven summaries often fail to capture essential nuances, which can lead to significant misunderstandings and even crises in interpretation.
He explained that many companies faced a series of challenges in their earnings reports, asserting that every disappointing quarter has its unique characteristics, complicating the assessment process. Cramer illustrated this by comparing the situation to a criminal trial, where a defendant who is clearly guilty but refuses a plea deal might face severe consequences. He emphasized that for CEOs, acknowledging mistakes is crucial; failing to address poor results could lead to a perception that they do not take the reporting process seriously.
“Bottom line, memo to CEOs everywhere: each gutter ball, every strike out, must be explained or we’ll be concerned that you simply don’t take the process seriously. If you don’t want to face the music, then you need to give us the happy family of good results and a sunny forecast. When you can’t do that, you at least need to straightforwardly admit that you were wrong.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money on October 30. 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 team of developers working in unison to create the company’s messaging application.
Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 219
Cramer delved into Meta Platforms, Inc.’s (NASDAQ:META) third-quarter earnings report that was released on October 30. Here’s what he had to say about it:
“Meta stock instantly plunged about 20 bucks when it reported because there was no beat and raise lingo. Remember we like that stuff spoon-fed because we’re lazy. I had to bat this one around for a while with the crew because there are puts and takes to the guidance. That’s another technical term, puts and takes… And I still can’t be sure that it should be down so much. It’s coining money for heaven’s sake. Again, hard to pin down. A non-beaten, non raiser that made the numbers.”
Meta (NASDAQ:META) is a global leader in connecting people through a variety of products that allow for sharing and interaction on mobile devices, personal computers, virtual reality headsets, and wearables. The company boasts an audience of 3.29 billion daily active users across its platforms. The majority of its revenue comes from selling advertising space to businesses looking to reach this extensive audience. As users engage more with platforms like Facebook and Instagram, the number of advertisements they encounter increases, driving revenue growth.
In Q3, Meta’s (NASDAQ:META) advertising revenue climbed nearly 19%, totaling $39.9 billion. The company has projected its fourth-quarter revenue between $45 billion and $48 billion. Additionally, a notable rise in capital expenditures is expected in 2025, as CEO Mark Zuckerberg emphasized the importance of investing in artificial intelligence and infrastructure for future growth.
Management mentioned that AI plays a crucial role in boosting user engagement and time spent on its platforms, while also providing tools for advertisers to improve the effectiveness of their campaigns and boost conversion rates. The company highlighted advancements in its Llama large language model, which has seen significant growth in tokens, aiding in AI computations. Training for Llama 4 is currently underway, utilizing a cluster that is bigger than 100,000 H100 graphic processing units.
Overall META ranks 2nd on our list of the stocks Jim Cramer is currently talking about. While we acknowledge the potential of META 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 META 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.