We recently compiled a list of the Jim Cramer’s Latest Game Plan: 15 Stocks to Watch. In this article, we are going to take a look at where Affirm Holdings, Inc. (NASDAQ:AFRM) stands against the other stocks in Jim Cramer’s latest game plan.
Jim Cramer, host of Mad Money, recently weighed in on the factors that will shape market movements this week, pointing to the Federal Reserve’s upcoming meeting and a slew of corporate earnings reports as key developments. However, despite the importance of these earnings, Cramer believes that the presidential election will take center stage and dominate the market’s attention.
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While acknowledging the significance of the election, Cramer emphasized that the Federal Reserve’s next decision is perhaps even more crucial for the markets. He noted that the bond market has been moving in an unfavorable direction, with the situation further complicated by a disappointing non-farm payroll report.
Though this report was skewed by hurricanes and labor strikes, it initially sparked a positive reaction in the bond market, pushing rates lower. Cramer had hoped that this would signal a positive shift, but the optimism was short-lived, as bond sellers quickly drove rates back up to their highest levels since early July.
“In my opinion, the Fed needs to cut rates again. In the last couple weeks, we’ve heard from too many businesses that have made it clear that we have a real slowdown on our hands. Economy’s a little shaky.”
Cramer also reflected on the Fed’s decision to reduce rates in September. He acknowledged that the bond market reacted negatively to the rate cuts at the time despite an economy that appeared relatively strong and a healthy labor market. Cramer discussed the possibility that if the Fed were to cut rates again, the market could see another unfavorable response. However, he remained unconcerned about this potential backlash, arguing that a rate cut could help to generate optimism in certain sectors.
“At this point in my view, if the Fed cuts rates next week, psychologically there’s some hope that we could see a pickup, particularly in housing and autos, two industries that seem to be losing strength by the day.”
Cramer highlighted that both presidential candidates appear willing to expand the federal budget. His main concern, however, was whether either candidate would be able to push their proposed agendas through Congress, a process he described as extremely difficult. Cramer noted that, in his opinion, presidential candidate Trump would likely be a bigger proponent of increasing the budget deficit than presidential candidate Harris, particularly due to the tax cuts Trump favors, which tend to result in larger deficits.
Stating his bottom line, Cramer said:
“… At the end of the day, the market’s still going to be hostage to the election, and perhaps more important, to the Fed meeting.”
Our Methodology
For this article, we compiled a list of 15 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 1. 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).
An entrepreneur launching her new brand on the company’s platform, looking confident and joyful.
Affirm Holdings, Inc. (NASDAQ:AFRM)
Number of Hedge Fund Holders: 34
Cramer discussed affiliate plays, noting that he believes they occupy a strong niche for advertisers aiming to reach hard-to-target audiences. He also mentioned that he thinks that Affirm Holdings, Inc. (NASDAQ:AFRM) will report similar great numbers as Reddit.
“… and Affirm drops this numbers too. And we know this buy now pay later enabler has been crushing it. Stock’s been almost straight up since it reported last time.”
Affirm (NASDAQ:AFRM) is a fintech company that specializes in providing Buy Now, Pay Later (BNPL) services, offering consumers flexible and transparent repayment options. The company’s core product allows consumers to make purchases immediately and pay over time in installments. Its model gives borrowers more control and transparency over their debt, with loans underwritten on a per-transaction basis.
Unlike many of its competitors, it does not charge late fees, and if borrowers opt for a longer repayment period, the company applies simple interest, rather than the more common compound interest. Founded with the goal of helping businesses increase sales while offering consumers responsible spending solutions, the company has grown to become a leader in the BNPL space. It partners with a range of major retailers, including e-commerce giants like Shopify and Amazon, and has more than 18.6 million users.
It also serves over 303,000 merchants. The company generates revenue from both interest-bearing loans and merchant fees, and it has seen significant growth in the number of transactions processed through its platform. One of its key innovations is the Affirm Card, launched in 2021, which allows users to split payments into BNPL loans either at the time of purchase or retroactively. This card has been well-received, attracting around 1.2 million users.
Affirm (NASDAQ:AFRM) has also expanded its services through partnerships with major players like Apple, which teamed up with Affirm for its BNPL offering in 2024. Additionally, in November, it was announced that it is continuing its expansion beyond its domestic market, with plans to offer its fast-credit options in the UK, marking a significant step in its international growth strategy. The move to the UK reflects the company’s ongoing push to increase revenue and reach more consumers globally.
Overall AFRM ranks 13rd on our list of the stocks in Jim Cramer’s latest game plan. While we acknowledge the potential of AFRM 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 AFRM 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.