We recently compiled a list of the Jim Cramer’s Latest Game Plan: 20 Stocks to Watch.In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other stocks featured in Jim Cramer's latest game plan.
Jim Cramer, the host of Mad Money, recently advised investors to maintain composure as major companies release their earnings this week. Additionally, he highlighted the significance of the upcoming nonfarm payroll report, set to be released on Friday, which he believes will have considerable implications for interest rates.
He said that weak hiring figures could prompt the Federal Reserve to continue cutting rates. Last Friday, Cramer noted a mixed performance in the markets: the Dow dropped by 260 points, the S&P fell slightly by 0.03%, while the Nasdaq managed a gain of 0.56%. Cramer characterized the current market conditions as a preparatory phase for an eventful week ahead, urging viewers to pay close attention.
Cramer emphasized the importance of the employment data released on the first Friday of the month, particularly in light of the forthcoming Fed meeting.
“Speaking of employment, on the first Friday of the month, we get the nonfarm payroll report. I can't stress how important this number is. We have an upcoming Fed meeting and we're now seeing [that] cyclicals really missed their numbers because of higher interest rates. A lot of them are rolling over. But if employment stays as strong as it's been, then we're going to hear that there will be no November rate cut.”
Throughout his commentary, Cramer conveyed a clear message: while it may be tempting to sell, this period aligns with a cycle of Fed rate cuts, suggesting that buying could be the more prudent strategy. He reminded viewers that this week feels charged with significance, likening it to a playoff atmosphere where the stakes are exceptionally high.
In his concluding remarks, Cramer said:
“Bottom line, huge week, huge opportunity. Just please remember, the first move’s been the wrong move, I'd say probably maybe, almost half the time since this earnings season began. Wait to process the numbers, listen to the conference call before you pull the trigger.”
Our Methodology
For this article, we compiled a list of 20 stocks that were discussed by Jim Cramer during his episode of Mad Money on October 25. 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).
A development team working together to create the next version of Windows.
While Cramer has previously highlighted Microsoft Corporation’s (NASDAQ:MSFT) enormous position multiple times, on Friday, he highlighted that Copilot’s performance did not turn out the way we all thought. Here’s what he had to say:
“After the close, we got… Meta Platforms and Microsoft… Let's talk about how Copilot may not be as strong as we thought. Somehow, they have to put that story to rest or it's going to dog the stock until they come up with a new narrative.”
Microsoft’s (NASDAQ:MSFT) offerings include enterprise software, consumer applications, cloud services, gaming, social media, and hardware. A celebrated product in its lineup is Microsoft 365 Copilot, which functions as a personal assistant designed to improve productivity. Since its general release less than a year ago, approximately 60% of Fortune 500 companies have started using this tool to some extent, with the daily user count nearly doubling in the latest quarter.
In the most recent quarter, Microsoft’s (NASDAQ:MSFT) Chief Financial Officer, Amy Hood, revealed that the company allocated $19 billion for capital expenditures, which includes finance leases primarily focused on artificial intelligence and cloud-related initiatives.
However, it should be noted that recently, Salesforce CEO Marc Benioff publicly critiqued the tool, suggesting that the rebranding of Copilot as "agents" indicates a level of distress within Microsoft. He characterized Copilot as lacking essential data, metadata, and enterprise security features necessary for creating effective corporate intelligence.
Furthermore, Benioff described the tool as inaccurate, claiming it risks exposing corporate data and compelling users to develop their own large language models. Referring to Copilot, he drew a parallel to Clippy, the infamous paperclip assistant from the 1990s, suggesting that Copilot has not yet lived up to its potential.
Overall MSFT ranks 2nd on the list of stocks featured in Jim Cramer's latest game plan. While we acknowledge the potential of MSFT 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 MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
