Cramer’s Mad Money Recap 4/4: Peloton, Qualcomm, Zoom, Roku
The pandemic stocks have suddenly caught fire again, but that doesn’t mean you should be buying, Jim Cramer told his Mad Money viewers Monday. Now that Covid appears to be fading into the rearview mirror, investors need to look at the pandemic winners on a case-by-case basis.
Stocks like Peloton (PTON) – Get Peloton Interactive, Inc. Class A Report saw peaks near $170 a share at the height of the pandemic, but has since plunged to just $20. With a new CEO focused on subscription revenue, Peloton is now poised to make a comeback.
That’s not the case with Zoom Video (ZM) – Get Zoom Video Communications, Inc. Class A Report. The video conferencing giant changed everyone’s lives two years ago, but at the end of the day, it’s still just a conferencing tool. Zoom will likely be used a little less as some people return to work, yet the stock still trades for 35 times earnings.
DocuSign (DOCU) – Get DocuSign, Inc. Report and Roku (ROKU) – Get Roku, Inc. Class A Report are two other high-value pandemic names that cannot justify their current valuations. DocuSign is a great tool, but not a great stock at 56 times earnings. Roku trades for a ridiculous 79 times earnings.
Cramer would have been bullish on DoorDash (DASH) – Get DoorDash, Inc. Class A Report, expect the company doesn’t make any money and therefore cannot be bought. Meanwhile, a stock like Shopify (SHOP) – Get Shopify, Inc. Class A Report makes money and can grow into its rich valuation. Cramer was also bullish on PayPal (PYPL) – Get PayPal Holdings, Inc. Report and Advanced Micro Devices (AMD) – Get Advanced Micro Devices, Inc. Report, which is a heavy hitter in a lot more than just PCs and laptops.
Executive Decision: Qualcomm
In his first “Executive Decision” segment, Cramer spoke with Christiano Amon, president and CEO of Qualcomm (QCOM) – Get Qualcomm Inc Report, the semiconductor maker that’s down 18% from its highs, trading at just 13 times earnings.
Amon touted Qualcomm’s recent acquisition of Arriver, which completes Qualcomm’s “digital chassis” for autos that include autonomous driving. He said Qualcomm aims to provide automakers with the whole package, including the smarts for assisted driving, but also the tech needed for a fully digital cockpit, 5G connectivity and a cloud platform to provide real-time data and software updates. Qualcomm’s digital chassis is expected to become a $2.5 billion product for the chipmaker.
Outside of autos, Qualcomm is also making big strides in other areas, including 5G wireless chips for cell phones and processors for the data center.
Now that the first quarter is behind us, what were the biggest takeaways? Well, all of the major averages were down big for the quarter, but they were also well off their lows, with the Nasdaq bouncing the most, up 13.6% from the bottom.
The markets were driven by fear last quarter, starting with the fear of inflation, then ending on fears of what Russia might do next. It’s no surprise that in the Dow Jones Industrial Average, energy and utilities were the biggest winners, with consumer discretionary names faring the worst.
Names like Chevron (CVX) – Get Chevron Corporation Report and American Express (AXP) – Get American Express Company Report topped the Dow, while Occidental Petroleum (OXY) – Get Occidental Petroleum Corporation Report and Halliburton (HAL) – Get Halliburton Company Report were the biggest winners in the S&P 500. Among the biggest losers were venerable names like Home Depot (HD) – Get Home Depot, Inc. Report and PayPal (PYPL) – Get PayPal Holdings, Inc. Report.
Over on the Nasdaq, the biggest winners included Splunk (SPLK) – Get Splunk Inc. Report and Activision Blizzard (ATVI) – Get Activision Blizzard, Inc. Report, while Netflix (NFLX) – Get Netflix, Inc. Report and Zoom (ZM) – Get Zoom Video Communications, Inc. Class A Report were the among the biggest losers.
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What does all of this mean for your portfolio? If the economy cools on its own, the Fed won’t need to raise interest rates. But if inflation continues to soar, it will. That means stocks will continue to gyrate until we know which camp is winning.
Off the Tape
In his “Off The Tape” segment, Cramer sat down with Marc Lore, founder, chairman and CEO of the privately-held Wonder Group, which is pioneering mobile restaurants to take on traditional food delivery services.
Wonder currently has 17 different mobile restaurant concepts that make the food right in your driveway and deliver it fresh, right to your door. Lore said Wonder can provide everything from steaks to pizza, Mexican food to Ramen noodles.
Wonder currently serves 20 towns in New Jersey, with the driver also acting as the cook. There’s only an eight minute drive between stops, and the food can be prepared in just minutes thanks to meal prep provided at a central location.
Because Wonder doesn’t require expensive real estate, the company can serve areas that traditional restaurants can’t. The company has 80 engineers and food scientists making its service better every day and it’s adding 10 new vans every week.
In the Lightning Round, Cramer was bullish on KLA Corp (KLAC) – Get KLA Corporation Report, Lam Research (LRCX) – Get Lam Research Corporation Report, Aurinia Pharmaceuticals (AUPH) – Get Aurinia Pharmaceuticals Inc. Report and Alphabet (GOOGL) – Get Alphabet Inc. Class A Report.
Cramer was bearish on Kulicke & Soffa Industries (KLIC) – Get Kulicke & Soffa Industries, Inc. Report, Prospect Capital (PSEC) – Get Prospect Capital Corporation Report and Pubmatic (PUBM) – Get PubMatic, Inc. Class A Report.
No Huddle Offense
In his “No Huddle Offense” segment, Cramer said no matter what you think of bankers, Jamie Dimon’s annual letter to JPMorgan Chase (JPM) – Get JPMorgan Chase & Co. Report shareholders is a “must read.”
Dimon’s annual letter is always well thought out and full of good ideas. Among this year’s highlights was a call for regulations and policies that foster growth and innovation, not in a short-term political way, but rather in a long-term, consistent way that companies can rely on.
Dimon also called for a new framework for our allies and trading partners, especially China. We need to take a harder line with China, Dimon felt, and if the country isn’t willing to send weapons to support Ukraine, we should pressure them to provide humanitarian aid.
Among other points, Dimon also called for energy security, urging the U.S. to step up in providing Europe with natural gas until everyone can fully convert to renewable energy sources.
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