Mad Money w/ Jim Cramer 12/17/24
Mad Money w/ Jim Cramer
Deep Dive
Why did the Dow Jones Industrial Average experience a nine-day losing streak?
The Dow's nine-day losing streak is the longest since February 1978, a period marked by double-digit inflation and high interest rates. The current market conditions, while not as severe, reflect a similar sentiment of oversold conditions and investor caution.
What is the significance of the oversold market conditions in 2024?
The S&P 500 has been oversold twice in 2024, with the index rallying significantly after each instance. In April, the S&P bottomed at 4967 and advanced to 5668, while in November, it rallied from 5701 to 6090. These oversold conditions have historically provided strong buying opportunities.
Why is NVIDIA stock experiencing a pullback despite its strong performance?
NVIDIA's pullback is likely due to profit-taking after a massive run this year, up 163%. The stock has been under pressure as some investors speculate about potential competition from custom silicon solutions, but NVIDIA remains a leader in AI and is not being dethroned by competitors.
What is the AI super cycle and how does it impact NVIDIA?
The AI super cycle refers to the unprecedented growth in AI technology and its applications, including AI as a service and silicon demand. NVIDIA is at the forefront of this cycle, with its GPUs being critical for AI infrastructure. Despite recent pullbacks, the company remains a key player in the AI space.
What are the key factors driving Broadcom's recent stock surge?
Broadcom's surge is driven by its success in AI chips and custom accelerators (XPUs), which are in high demand from hyperscalers like Alphabet, Meta, and ByteDance. The company's AI revenue grew 220% in fiscal 2024, and management expects significant growth in this segment over the next three years.
Why is AMD stock underperforming despite its AI ambitions?
AMD is underperforming because investors are questioning its position in the AI chip market, especially as hyperscalers show interest in custom silicon solutions from companies like Broadcom and Marvell. AMD's AI chips have not yet gained the traction expected, leading to a 45% decline from its March highs.
What are the key opportunities in the healthcare sector for 2024?
The healthcare sector, particularly medical device and MedTech stocks, offers opportunities as many stocks are heavily discounted. Medtronic, Edwards Life Sciences, and IDEXX Laboratories are examples of companies that have been oversold but show potential for recovery.
Why is Medtronic a potential buy in the current market?
Medtronic is trading at a discount, with a price-to-earnings ratio of under 14 and a 3.4% dividend yield. The company has seen strong product launches and is expected to see earnings growth accelerate in the coming years, making it a compelling value play in the MedTech space.
What is the outlook for Edwards Life Sciences in 2025?
Edwards Life Sciences is expected to benefit from a catalyst-rich schedule in 2025 and 2026, with growth drivers in its transcatheter aortic valve replacement business. Bank of America upgraded the stock to a buy, raising its price target to $90, suggesting better days ahead for the company.
Why is IDEXX Laboratories a potential investment despite recent struggles?
IDEXX Laboratories, a leader in veterinary diagnostics, is trading at a significant discount after a post-pandemic slowdown in pet-related industries. The stock is now at 36 times next year's earnings estimates, offering a compelling entry point as pet adoption and vet visits normalize.
- Day trading involves high risk for minimal reward.
- Long-term investing focuses on the big picture and dollar gains.
- Modern traders utilize AI to identify correlations among stocks, unlike traditional methods.
Shownotes Transcript