• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Consumer Discretionary

Cramer: Here Are the Ideal Stocks Now

All the great stocks have artificial intelligence and e-commerce in common.
By JIM CRAMER Oct 16, 2017 | 05:51 AM EDT
Stocks quotes in this article: RHT, ADSK, ADBE, NVDA, TTWO, UPS, FDX, BABA, COR, PYPL, V, GPN, MU, LRCX, AMAT, TXI, LDOS, HRS, LMT, NOC, GD, RTN, TMO, ROP, SWK, HD, AMZN, WMT, TJX, EMR, ETN, PH, ITW, CAT, CMI, HPQ, WYN, INTU, IFF, EL

If you want to create the ideal stock in this environment, you want it to be an artificial intelligence-based cloud company that can help further e-commerce, particularly in payments, while delivering a product the last mile to a house that's being rebuilt in Texas or Florida.

It is eerie how those characteristics keep coming up in all the great charts I look at this weekend.

Let's go over some of them. Red Hat (RHT) has burst onto the scene as one of the most exciting companies when it comes to every entity, from retail and government to universities, moving on to the cloud, from the private cloud to the public cloud and any switch from one web services company to another. It's become the roadmap and the handyman, the company that can make everything seamless. In many ways, it remains the unsung winner in the cloud wars.

Autodesk (ADSK) is the Adobe (ADBE) for the designer, integral to the creation of any product, and its move to the cloud is ongoing and positive. Its biggest problem has been pirated software, and it has cracked down on that, causing earnings per share upside. You can't see any top to this one any time soon.

When you look at Nvidia (NVDA) , you think: is there anything this company's not into? Its chips are used for anything voice, which we know is the rage. The chips work at the highest level of gaming. Take Two (TTWO) , which in many ways is the best designer of games, has actually kept back games to take advantage of what Jensen Huang is developing. The Nintendo Switch could sell 20 million units this year, and it is based on Nvidia chips.

Meanwhile, it is rolling out autonomous driving chips that can make trillions of calculations instantly, which makes them best in class. Its cards are used for crypto-currency mining, and its new devices will storm the data center, because there's more computing power at the same time there's less heat. That's the whole shooting match, which is why the stock keeps blowing through levels, even as we know its hundred billion-plus market capitalization seems absurd.

I worry about the stock of Nvdia, because it tracks the price of bitcoin way too closely, and bitcoin is in the stratosphere, where the air is too thin. There could be another shake-out coming.

Then there's the Amazon complex, which includes UPS (UPS) and Fedex (FDX) . The troika seems unstoppable here, and Amazon seems ready to go off over $1000. Don't forget Alibaba (BABA) , which has been resting comfortably and seems it could lift big. The data center companies, so integral to e-commerce, are all poised, but I love CoreSite (COR) best, with that 3% yield.

I struggle daily with how I let PayPal (PYPL) and Visa (V) go for the trust, Action Alerts PLUS. Just thought I was being a pig, but that was so stupid, and all three seem to have no resistance. Is there anyone who doesn't want to see a pullback in any of these? All three have fintech going for them, but PayPal has the Venmo upside. Global Payments (GPN) is trying to crack into that elite group and seems like it will succeed.

I don't have to tell you how hot the semis are. You know that the Micron (MU) breakout led the way, but be careful of Lam Research's (LRCX) report on Oct. 17, as that semi-equipment behemoth led the group down on an excellent quarter. Applied Materials (AMAT) has been so impressive post that New York analyst day, that on a shelling, that one could come up aces. Texas Instruments (TXI) just keeps getting it right. As I said last week on Mad Money, it's the sleep-at-night semi.

Away from this internet of things complex, the defense stocks just keep going higher, and the outside choices, Leidos (LDOS) and Harris (HRS) , just want to join the Lockheed (LMT) , Northrop (NOC) , General Dynamics (GD) , Raytheon (RTN) foursome.

A couple of oddities that have to be flagged. As good as the biotechs act, it's Thermo Fisher (TMO) that's getting it done. What a fabulous company, and it is distancing itself from the others, save Roper Technologies (ROP) .

Stanley Black & Decker (SWK) just keeps going higher, and we have to believe that's Houston/Florida along with Home Depot (HD) which has shaken off the Amazon (AMZN) demons. Only Walmart (WMT) , away from that, can be trusted in retail. I keep thinking TJX Companies (TJX) will join that elite group, because of all of the department store closings and I keep on thinking wrong.

It's industrial time. Emerson (EMR) , Eaton (ETN) , Parker-Hannifin (PH) , Illinois Tool Works (ITW) , Caterpillar (CAT) , Cummins (CMI) , and anything that looks like them, can work. It's incredible what scarcity value there is in the industrial sector. You find one, you have to hold on for dear life.

Finally, some one-offs. HP Inc. (HPQ) coming off that analyst meeting where 3D claims could turn into 3D earnings in 2018. Wyndham (WYN) seems to be getting the respect for the split that Marriott and Marriott Vacation Worldwide have given you. Intuit (INTU) just keeps breaking free. International Flavors and Fragrances (IFF) is getting it done. As is Estée Lauder (EL) . No common ground, just companies that have caught the fancy of many.

Now, I would be remiss if I didn't point out whole sectors that seem strong: transports, biotechs, auto and auto-related, save Ford F.

But it's the e-chain that this market's smitten with, and I think that's going to be the fourth quarter's sweet spot.

_________________  

Join Jim Cramer, CNBC's Jon Najarian and Other Experts Oct. 28 in New York

Jim Cramer will host CNBC's Jon Najarian, TD Ameritrade's JJ Kinahan, famed analytics expert Marc Chaikin and other market mavens on Oct. 28 in New York City to share successful strategies for active investors.

You can join them as they discuss how smart investors can make the most of options trading, futures contracts, fundamental and quantitative analysis and great ETFs to buy right now. Participants will also get a chance to meet Jim and other panelists and take photos.

When: Saturday, Oct. 28, 8 a.m.-3 p.m.

Where: The Harvard Club of New York, 35 West 44th St., New York, N.Y.

Cost: $250 per person.

Click here for the full conference agenda or to reserve your seat now.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long ITW, NVDA, TJX.

TAGS: Investing | U.S. Equity | Transportation | Consumer Discretionary | Technology | Industrials | Markets | How-to | Jim Cramer | E-Commerce | Risk Management | Stocks

More from Consumer Discretionary

I'm Warming Up to Carnival, but Not Ready to Climb Aboard Yet

Jonathan Heller
Jun 27, 2022 10:00 AM EDT

The stock price of a cruise line operator is becoming more reasonable, but its heavy debt load remains a huge concern.

There's No Clear Sailing Ahead for Carnival: Here's How to Play It

Stephen Guilfoyle
Jun 24, 2022 11:32 AM EDT

CCL did lose a lot of money, much more than anticipated, but there are positives.

Bearish Bets: 3 Well-Known Stocks You Should Consider Shorting This Week

Bob Lang
Jun 19, 2022 10:30 AM EDT

These recently downgraded names are displaying both quantitative and technical deterioration.

Beyond Meat Gives Investors Something to Chew On

Bruce Kamich
Jun 15, 2022 1:50 PM EDT

This veggie name is rallying sharply after a summer promotion announcement, but here's my beef with the charts.

Tapestry's 50% Correction Makes the Stock More Stylish

Bruce Kamich
Jun 15, 2022 10:16 AM EDT

Let's check the charts of TPR.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 12:04 AM EDT PAUL PRICE

    Two Good Signs -- Especially for Small-Cap Investors

  • 12:10 AM EDT PAUL PRICE

    More Insider Buying in American Woodmark (AMWD)

    American Woodmark , which I've discussed here fr...
  • 08:55 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 10 personality traits of successful traders an...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login