We recently published an article titled, Jim Cramer’s Best Performers List: Top 10 Picks. In this article, we are going to take a look at where Palantir Technologies Inc. (NYSE:PLTR) stands against other stocks in Jim Cramer’s best performers list.
During Mad Money’s episode on October 1, host Jim Cramer urged investors to remember the market’s strong performance over the past quarter, making note of the rising tensions in the Middle East, which led to a decline in major stock indices on Tuesday.
He pointed out that the landscape has shifted beyond just the major technology companies, and shed light on the top performers of the S&P 500. Cramer observed that the last three months have witnessed what he described as “the revenge of the little guy companies.” He said:
“When you look at the 10 best performers of the third quarter, we discover that this formerly narrow market has totally changed its stripes.”
Cramer emphasized that the current market rally is driven by companies that are often overlooked. He said:
“It is a remarkable list that represents a real broadening out of the winners. Some would say it’s a sign of where we’re headed. I might not go that far, but clearly, we need to start digging a lot deeper to find winners going forward.”
In his recent commentary, Cramer highlighted that the major winners of the third quarter were unexpectedly obscure, primarily comprising a group of ten stocks focused on power generation and interest rate cuts.
He pointed out that these stocks diverged from the well-known Magnificent Seven and traditional FAANG names, with an absence of fast-growing medical or cybersecurity companies, many of which have faced challenges recently.
Cramer suggested that investors look to the bottom of the S&P 500 for insights into market trends. He noted that Super Micro finished last for the quarter, plummeting 49%. It serves as a reminder that backing the wrong AI investment can lead to significant losses. Despite this, Cramer emphasized the need for the market to focus on new stocks for long-term growth rather than relying on past leaders.
Our Methodology
For this article, we compiled a list of 10 stocks that Jim Cramer mentioned during his episode of Mad Money on October 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).
Cramer on Palantir Technologies Inc. (NYSE:PLTR): It ‘Put Up Some Good Numbers’
Palantir Technologies Inc. (NYSE:PLTR)
Number of Hedge Fund Holders: 44
Palantir Technologies Inc. (NYSE:PLTR) develops and deploys software platforms primarily for the intelligence community. Introducing the company, Cramer said:
“Palantir Technologies is a data analytics company that put up some good numbers but it’s better known as the stock with a huge following among individual investors.”
One of its key offerings, Palantir Gotham, is designed to help users uncover patterns that lie hidden within complex datasets. The company also provides Palantir Foundry, a platform that redefines operational processes for organizations across various sectors.
Another critical tool is Palantir Apollo, which manages software delivery and updates, alongside the Palantir Artificial Intelligence Platform (AIP), which grants users access to a variety of large language models.
Cramer expounded on Palantir (NYSE:PLTR), saying:
“Now, a little more than two weeks ago, the Wall Street Journal published this incredible piece headlined “ The Fanatic Amateur Investors Behind Palantir”, which gave some great insight into the avid fan base that rejoiced when this stock joined the S&P 500 last month. Yeah, they came in on top of the admission and helped the stock soar 46.9% for the quarter.”
Palantir (NYSE:PLTR) has invested considerable time and resources into developing sophisticated AI systems that assist government agencies in navigating vast amounts of data, allowing them to make informed choices.
Although a significant portion of revenue is generated from government contracts, the company has also made strides in extending its AI applications into the commercial sector in recent years. In the second quarter, revenue from U.S. government contracts reached $278 million. Moreover, revenue from the commercial segment surged by 33% during the same period, representing approximately 45% of the company’s total sales.
Overall, PLTR ranks 6th on our list of Jim Cramer’s best performers. While we acknowledge the potential of PLTR 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 PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.