We recently published a list of Jim Cramer’s latest lightning round: Top 10 stocks. With Walmart Inc (NYSE:WMT) ranking second on the list, the company deserves a closer look.
Jim Cramer said on a recent CNBC show that the market has already priced in expected positive comments from Fed Chair Jerome Powell at the Jackson Hole event in Wyoming. Cramer said some bulls may be hoping for a hint of “multiple rate cuts,” but that’s “not going to happen.”
Cramer spoke about the market’s recent eight-day winning streak, which he called a “resurgence.” He said that almost “everything” was up these days. Even the companies with “poor” results were up because investors thought their situation would improve once the Fed starts cutting interest rates, Cramer said.
“But that was then, now is now. Since the winning streak ended, we have been in what I call buyer’s remorse. Stock prices had a nice run based on nothing but hope, and now they are plummeting.”
Jim Cramer also pointed out possible events in the coming months that could continue to put pressure on the markets:
“Perhaps the Fed is already too late and the economy is getting really ugly, or perhaps traders are already fearing the possibility of a Democratic victory in November, which could lead to higher corporate tax rates, which would hurt profits. And a possible witch hunt for price gouging on supermarket and drugstore shelves.”
For this article, we selected 10 stocks that Jim Cramer has talked about in his recent shows on CNBC. For each company, we mentioned the number of hedge fund investors. Why do we care about the stocks hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (Further details can be found here).
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Walmart Inc (NYSE:WMT)
Number of hedge fund investors: 95
Jim Cramer discussed Walmart’s recent quarterly results on a recent show, which were strong and showed the company is growing despite weakening consumer sentiment. Cramer highlighted Walmart’s growth in Flipkart in China and said while other retail companies in China are sinking, Walmart has been growing. Cramer also pointed to Walmart’s global e-commerce business growing by about 21%.
Jim Cramer said Walmart’s Conference call was “heavenly” and highlighted the following comment from the WMT CEO during the call:
So far, we’re not seeing a weaker consumer overall. Our customers and members around the world continue to want four things. They want value, they want a wide assortment of items and services, they want a convenient and enjoyable shopping experience, and they want to do business with a company they trust. Those four things are constant. But the way we deliver them is changing, and changing fast. The results we’re achieving are due to real progress on those dimensions. On value, we’re lowering prices. During the quarter, both Walmart US and Sam’s Club US were slightly deflationary overall.
Jim Cramer also highlighted how WMT is using generative AI to save money and improve efficiency, mentioning this quote from management during the conversation:
“We are finding concrete ways to use generative AI to improve the experience of customers, members and partners. We leverage data and large language models from others and build our own. One example is that we used generative AI to improve our product catalog. The quality of the data in our catalog impacts almost everything we do, from helping customers find and buy what they’re looking for, to how we store inventory across the network, to how we deliver orders. We have used several large language models to accurately create or improve over 850 million data elements in a catalog. Without the use of generative AI, this work would have taken nearly 100x the current headcount in the same amount of time.”
Here is what Cramer said about it:
“This is the best use case (for AI) I’ve heard so far… So who says generative AI doesn’t have a use case? Walmart just saved a fortune.”
Walmart shares are trending higher after the company hit home with its latest quarterly results and raised its full-year forecast, quashing any recession fears. Walmart executives noted no signs of weakness in August, with e-commerce losses declining and the number of high-income shoppers increasing. Chief Financial Officer John Rainey said Walmart is cautious but does not expect a recession and the back-to-school season is off to a good start.
Morgan Stanley’s Simeon Gutman highlighted solid comparable sales growth and better-than-expected EBIT growth, driven by core and alternative profit streams. Jefferies’ Corey Tarlowe continues to see upside potential, citing strong traffic and improved e-commerce, with automation and AI likely to play a key role.
Walmart is no longer just a big-box retailer. Omnichannel retail, e-commerce growth and advertising business are the new growth catalysts for Walmart. Wall Street expects Walmart’s EPS growth of 9% in fiscal 2025, followed by 10% and 12% in fiscal 2026 and 2027, respectively.
During the NYSE/Bank of America London Investor Conference, Walmart said it expects sales to grow 4% annually over the next five years, while operating profit is expected to grow 8% annually.
Overall, Walmart Inc (NYSE:WMT) ranks 2nd on Insider Monkey’s list with the title Jim Cramer’s latest lightning round: Top 10 stocks. While we recognize the potential of Walmart Inc (NYSE:WMT), we believe AI stocks promise higher returns and do so in a shorter time frame. If you are looking for an AI stock that is more promising than WMT but trades at less than 5 times its earnings, read our report on the cheapest AI stock.
READ MORE: Analyst sees a new $25 billion “opportunity” for NVIDIA And Jim Cramer recommends these stocks.
Disclosure: None. This article was originally published on Insider Monkey.
