We recently published a list of Jim Cramer’s Latest Calls: 10 Stocks You Should Not Miss. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOG) stands against other Jim Cramer’s latest stock picks you shouldn’t miss.
Jim Cramer in a latest program on CNBC talked about earnings results from some of the top consumer and retail companies and said, as a compliment, that America has become a nation of “cheapskates” where consumers are unwilling to pay more when there’s little or no value.
“There’s something happening here, and what it is is exactly clear: we’ve become a nation of cheapskates. I say that as a compliment. Nobody gets away with charging too much anymore—not in this country, no matter the industry, perhaps even the drug industry. It’s happening now, it’s happening fast, and many companies are being left behind by the change. I see it everywhere I go—in the grocery store, online, in the mall, and, of course, in the stock market.”
Cramer talked about how restaurants that offer cheaper but quality meals are seeing a surge in their stock prices amid rising revenues. He also discussed how weight-loss drugs are impacting companies that sell alcohol products.
“American people are tired of paying up. They feel gou, they feel betrayed, they feel that the only thing about brand loyalty is that it isn’t worth a dime. They want a better deal. They’ll eagerly switch lifetime habits in order to save some money because prices are up so much that you feel like an idiot if you’re paying up.”
For this article we watched latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. With each company we have mentioned the number of hedge fund investors. 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).
Jim Cramer Agrees With Famous Analyst’s Latest Bull Thesis on Alphabet (NASDAQ:GOOG)
Number of Hedge Fund Investors: 165
Jim Cramer in a latest program on CNBC said he agrees with the latest bull case thesis on Alphabet (NASDAQ:GOOG) from Michael Nathanson of MoffettNathanson, who said the stock is undervalued. Nathanson also believes fears around Alphabet’s (NASDAQ:GOOG) search business amid threats from ChatGPT and Perplexity are overstated.
During an interview with CNBC, the analyst said:
“We also thought that the fears about competition from ChatGPT or Perplexity were overdone.. So, Alphabet’s doubled their efforts over the past year, rolling out new products. But if you look at what they’re doing now in search with AI overviews, it seems to be working.”
Alphabet (NASDAQ:GOOGL) reported strong quarterly results recently. The results show that the market has been ignoring the company’s key secondary businesses and the stock remains undervalued despite concerns around AI search and regulatory onslaught.
Google’s secondary ventures in AI, autonomous driving, and other areas are making solid progress, especially in the Waymo robotaxi segment. Currently, Google’s stock trades below 20 times forward earnings, offering potential upside as EPS and other financial metrics strengthen in coming years. For next year, the consensus EPS estimate sits around $9. However, Google has consistently beaten projections, delivering $7.54 in trailing twelve-month EPS compared to the expected $6.79—a roughly 11% outperformance.
With the 2025 EPS forecast at around $9, Alphabet (NASDAQ:GOOGL) could realistically achieve earnings closer to $10 if it maintains its historical outperformance rate. At a projected $10 EPS, Google’s forward P/E multiple would be approximately 17, a relatively low valuation for a diversified market leader.
Polen Focus Growth Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q3 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) and Amazon were also top absolute detractors. Alphabet’s better-than-expected results were overshadowed by an adverse ruling related to the U.S. Department of Justice’s (“DoJ”) anti-trust case against the company. We expected an adverse ruling and are monitoring potential remedies recommended by the DoJ and subsequently ruled on by the judge. This will likely take a few years to play out; in the meantime, we see many mitigating factors that the company can pursue to protect its competitive position and growth. We trimmed our positions in Alphabet and Microsoft by 1.5% each to fund the purchase of Oracle. They both remain top five holdings at the new weights.”
Overall, GOOG ranks 3rd on our list of Jim Cramer’s latest stock picks you shouldn’t miss. While we acknowledge the potential of GOOG, our conviction lies in the belief that under the radar 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 GOOG but that trades at less than 5 times its earnings, check out our report about thecheapest AI stock.
