“Mad Money” TV show host Jim Cramer is a popular, though somewhat over-the-top showman. His “Lightning Round” segment, where the investment guru calls out buy-sell-hold recommendations on stocks, is arguably the one viewers like the most.
What’s fascinating is how Cramer is seemingly just as often wrong as he is right, if not more so. There was once an exchange-traded fund called the Inverse Cramer ETF that followed Cramer’s picks, but did the exact opposite of what he said, and there is still an unrelated Inverse Cramer account on X.
Yet when the investing personality gets it right, he hits a homerun. For example, a year ago, Cramer picked Apple (NASDAQ:AAPL) stock as one to stick with despite worries about a weakened Chinese economy. The stock has soared 25% since the bold call was made compared to an 11% gain by the S&P 500.
Below are two stock picks the Mad Money host recently made that could have just as impressive returns and you should buy in May.
Marvell Technology (MRVL)
While Nvidia (NASDAQ:NVDA) grabs virtually all the headlines when it comes to artificial intelligence chips, Marvell Technology (NASDAQ:MRVL) is a solid runner-up. Last year, the chipmaker said AI revenue would double in 2024 as generative AI rapidly drove “new applications and changing investment priorities for cloud customers.” CEO Matt Murphy forecasted AI revenue would continue growing rapidly in the coming years as it benefits from the ongoing AI infrastructure buildout.
Moreover, Marvell got a big vote of conscience from Amazon (NASDAQ:AMZN) with the e-commerce and cloud computing leader contracting with the chipmaker to keep making custom AI accelerator chips for its growing data center footprint. Additionally, Marvell makes custom AI chips for rival hyperscalers like Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT).
Yet MRVL stock is down 44% so far this year, something that strikes Cramer as ludicrous. He notes the tech stock’s price “is the same as before it got into AI. This is ridiculous.”
I have to agree. Despite Marvell Technology beating analyst earnings expectations for the last three quarters, its stock keeps falling.
Data centers are a key expansion area for AI going forward, and Marvell’s technology is also widely used in the automotive industry, telecommunications, and enterprise networking. Behind data centers, which saw sales surge 78% in the fourth quarter, telecoms was the second-fastest growing business with a 25% sequential increase in revenue.
Because AI will be the driving force behind what will be Marvell’s future growth trajectory, its stock should be on your short-list of ones to buy this month.
Lam Research (LCRX)
Lam Research (NASDAQ:LRCX) is the second stock Cramer likes that you should be putting in your portfolio. Although a caller into the Lightning Round portion of the program was asking about Applied Materials (NASDAQ:AMAT), Cramer said he liked Lam much better in the space. It’s not hard to see why.
The semiconductor equipment manufacturer’s fundamentals remain solid as revenue and profits continue to grow sharply. Like Marvell, Lam Research has handily beaten analyst expectations in the fiscal year. While LRCX stock isn’t doing as poorly as MRVL, shares are up only 3% year-to-date, but down 14% over the past 12 months.
Lam’s expertise in etch and deposition processes positions it to capitalize on the transition to advanced nodes like 3 nanometer and 2 nanometer, where precision equipment is essential. This technological edge ensures sustained demand from major chipmakers like Taiwan Semiconductor Manufacturing (NYSE:TSM), Intel (NASDAQ:INTC), and Samsung.
The equipment maker’s focus on research and development, spending over $1.5 billion annually, drives innovation, letting Lam maintain its competitive moat. Additionally, its commitment to shareholder value is evident through consistent dividend increases (it raised the payout 15% last year), share buybacks, and a 10-for-1 stock split, offering investors a balanced return profile.
Lam Research’s leadership in a high-growth industry, its robust financials, and alignment with technological megatrends makes its stock a buy today.
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