Jim Cramer Prefers Lam Research (LRCX) Over Applied Materials But Cautions About Risks
Jim Cramer in a latest program on CNBC said that President Donald Trump's new tariffs were much worse than expected. Cramer believes investors were getting 'tired' of worrying about the tariff threat and went into a 'bring it on' mode ahead of the Wednesday announcement.
'Regular viewers know that I've never been a huge fan of free trade. It would be fine if everybody plays by the rules, but we're the only country that plays by the rules. I want fair trade instead, which means tariff those who tariff us just as hard. Of course, I've been hoping for reciprocal tariffs, and that's what we allegedly got, even if they were far more severe than I'd hoped for. With reciprocal tariffs, we hammer specific countries for putting up specific trade barriers or subsidizing specific industries. While we got reciprocal tariffs, I never expected them to be this high, nor did many other people. From Wall Street's perspective, Trump might as well have used a meatax, which is what we were most afraid of. The term reciprocal meant nothing in the end; the term punitive is more accurate.'
Cramer Calls China an 'Insidious Octopus'
Cramer called China an 'insidious Octopus' and mentioned how the country used several 'loopholes' to enter the US and European markets. However, he believes the tariffs will result in higher prices for consumers. Cramer said Trump does not 'care' about falling stock prices or rising consumer prices.
'Trump doesn't seem to care about the stock market this time around. Why should he care about certainty, which I've said over and over again is what makes investors happy? He's not trying to make investors happy. He's not about happiness for us. He's about making these countries bend to his will, and if it causes inflation, then it causes inflation. He never promised you a rose garden stock market, and I sure didn't see one in the Rose Garden today.'
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 stocks Jim Cramer recently talked about during his programs on CNBC. With each company we have mentioned the number of hedge fund investors. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician operating an automated semiconductor processing machine with laser accuracy.
Number of Hedge Fund Investors: 58
Jim Cramer in a latest program on CNBC said that he prefers Lam Research Corp (NASDAQ:LRCX) over Applied Materials.
'All right, Applied Materials is number three. After, I like Lam Research, and then I like KLA, and then I like Applied Materials. They have a lot of China exposure that makes people very, very worried. I think Tim Archer from Lam is a better one if you want to be in capital equipment, but I've got to tell you, capital equipment is so tied up with China that I can't just get behind it anymore, even though I love these companies. We've got to straighten things out with China.'
Columbia Seligman Global Technology Fund stated the following regarding Lam Research Corporation (NASDAQ:LRCX) in its Q4 2024 investor letter:
'Lam Research Corporation (NASDAQ:LRCX) was a disappointing position for the fund during the quarter, despite strong long-term returns for the company stock. Escalating tensions between the United States and China have impacted Lam's returns as U.S. restrictions on high-technology exports to China, particularly advanced AI chips, have been a major negative for chip providers. The company was impacted by the U.S. election and a victory for former president Trump raised concerns around potential tariffs for semiconductor manufacturing equipment during his next term.'
Overall, LRCX ranks 4th on our list of top stocks on Jim Cramer's radar as Trump tariffs wreak havoc across global markets. While we acknowledge the potential of LRCX, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LRCX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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