Jim Cramer Says Core Scientific, Inc. (CORZ) Is ‘A Mini Palantir’
We recently published an article titled, Jim Cramer’s Latest Lightning Round: 12 Stocks to Watch. In this article, we are going to take a look at where Core Scientific, Inc. (NASDAQ:CORZ) stands against other stocks discussed by Jim Cramer during the latest lightning round.
On Tuesday, Jim Cramer, host of Mad Money, shared his thoughts on the market’s recent volatility and offered advice to investors regarding earnings reports. He cautioned against making trades based solely on immediate stock reactions following earnings announcements, as many of these movements might not be justified.
“The absurdity of earnings season has arrived. It didn’t take long, did it? People are already doing stupid things. And you know what? I gotta point them out to you so that you don’t make the same mistakes.”
Cramer emphasized his mission to guide individuals toward becoming more thoughtful investors, rather than impulsive traders. He noted that the Dow Jones Industrial Average dropped 325 points, while the S&P 500 declined by 0.76%, and the Nasdaq Composite fell 1.01%.
Cramer referred to this phenomenon as part of what he calls the quarterly repricing process, which is the earnings season. He explained that, typically, most stocks tend to move in tandem with the S&P 500 unless a significant event alters the market. In the absence of such an event, stock movements are often influenced by external factors that may have only a tenuous connection to a company’s actual future performance. He further clarified his perspective and stated:
“Now, I want to make one thing clear. I’m not saying that everybody’s a moron. I’m saying there are details that inform people are looking for benchmarks we’ve accepted going into earnings. Yet for the first few moments of trading, there’s just obviously oblivious action based on who knows what. It’s definitely not the key metrics. It’s definitely not the homework.”
Ultimately, Cramer described this chaotic trading behavior as a clumsy way for Wall Street to reassess stock prices in relation to their peers, driven by a flurry of parsed headlines during earnings season. He expressed relief that this sort of disorganized trading only occurs four times a year, even as he acknowledged that this is a crucial period when a stock can become detached from the S&P 500.
Concluding his thoughts, Cramer emphasized:
“Yet, if you’re not a professional, you should not be involved in this process. There are so many people playing with so much money, professionals who pay people fortunes to figure this stuff out. Let them fight to set the price. For regular investors like you, trying to trade that initial post-earnings action is just an easy way to lose money, four times a year, like clockwork.”
Our Methodology
For this article, we compiled a list of 12 stocks that were discussed by Cramer during lightning rounds of Mad Money’s episodes on October 14, 15, and 16. 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).
Cramer Says Core Scientific, Inc. (NASDAQ:CORZ) Is ‘A Mini Palantir’
Core Scientific, Inc. (NASDAQ:CORZ)
Number of Hedge Fund Holders: 53
Cramed called Core Scientific, Inc. (NASDAQ:CORZ) a cold stock because of its various services and solutions.
“Okay. This is a very big cold stock because it’s got blockchain and infrastructure, artificial intelligence. It’s a mini Palantir. So I think you should just go buy Palantir.”
Core Scientific (NASDAQ:CORZ) offers digital asset mining services across North America, providing a range of offerings that include blockchain infrastructure, software solutions, and operational support through its data centers. The company not only engages in mining digital assets for its own account but also extends its services to host large-scale Bitcoin miners. Additionally, it supplies electrical power and infrastructure services essential for maintaining operations, as well as selling mining equipment to its customers.
In early June, Core Scientific (NASDAQ:CORZ) entered into a 12-year agreement with AI cloud provider CoreWeave, aimed at delivering high-performance computing power. The contract has the potential to generate an estimated $3.5 billion in revenue over its duration, highlighting the company’s expanding role in the intersection of digital asset mining and AI computing.
The company reported achievements in September, including the self-mining of 345 Bitcoins for the month, which brought its year-to-date total to 5,621 Bitcoins, with 1,115 mined in the third quarter alone. Furthermore, clients utilizing its data centers earned approximately 66 Bitcoins during the same period. Adam Sullivan, the CEO, noted ongoing initiatives to support the company’s expansion into high-performance computing. Specifically, construction is underway for a 100-megawatt data center in Muskogee, Oklahoma, and the company is on track to complete a similar expansion in Pecos, Texas.
He said that Core Scientific (NASDAQ:CORZ) remains focused on developing advanced infrastructure equipped with state-of-the-art liquid cooling systems, tailored for AI GPU cloud workloads, with plans to begin service for its HPC customers in the first half of 2025.
Overall, CORZ ranks 5th on our list of stocks discussed by Jim Cramer during the latest lightning round. While we acknowledge the potential of CORZ 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 CORZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.