We recently compiled a list of the Jim Cramer Discusses These 10 Stocks & Comments On OpenAI's Valuation.In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against the other stocks Jim Cramer recently discussed.
In his latest appearance on CNBC's Squawk on the Street, Jim Cramer continued to comment on the DeepSeek fallout. He shared that while the performance of the Chinese AI model was impressive, especially as it had managed to match models such as OpenAI's o1, there were other factors to consider particularly when gauging the demand for high-end Blackwell GPUs. These GPUs are made by Wall Street's favorite AI GPU firm, and Cramer is increasingly starting to tilt towards the fact that their true magic might lie in enabling the proper functioning of humanoid robots.
As for the stock, the CNBC TV host continued to assert that there is a large chunk of traders that do not properly understand the company. Cramer shared "I was in a bar last week, person to the right said I bought [the GPU stock] because of you. A person left said I bought [the GPU stock] cause of you." He added that in response he asked does "anyone know what [the GPU stock] does?" Yet, instead of outlining the firm's business model, "They said yeah! It's something that you recommend!" he added.
While the GPU company might have lost close to $600 billion in value during the selloff, another AI news caught Cramer's attention. This was a Reuters report that claimed that OpenAI was seeking to raise $40 billion in capital on a $400 billion valuation. When asked how such valuation was possible, particularly after Monday's havoc, Cramer replied "So I was just being like you. It is, without a doubt, a time not of inflation, but of a recognition." He added that this 'recognition' is why he likes the GPU firm as well. So what is the recognition that's got Cramer enamored? Well, according to him "it's a recognition that it is a new industrial revolution. And anybody who's in it is a worth lot more than the people that aren't!"
He also sardonically targeted co-host David Faber and said "Look I'm sure that when they discovered the cotton gin, and you're a weaver, you're saying you know what, that's ridiculous!" Not satisfied, Cramer continued "Remember the steam engine? Are you still liking the wheel and the pulley? Are you the wedge? You're the wedge!"
Cramer also commented on the market moving higher during the day after the week's devastation. He mentioned a couple of non-tech sectors that had particularly done well. In his words:
"I was surprised that there were a lot of areas yesterday that were very very good. And people were very focused obviously, on DeepSeek, but then there was a whole another group people were saying, you know what, healthcare really back. Uh, industrials. I'm looking at industrials, there's something from [an industrial firm providing motion control products] yesterday that was really fabulous."
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down the stocks he mentioned during CNBC’s Squawk on the Street aired on January 31st.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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).
Jim's Stance On Taiwan Semiconductor (TSM): "This Company Is the Biggest and the Best,"
A close-up of a complex network of integrated circuits used in logic semiconductors.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders In Q3 2024: 158
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the most consequential firms in the semiconductor industry. It is one of two leading edge contract chip manufacturers in the world and is the market leader in terms of product quality. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)'s latest manufacturing processes are used by all of the world's biggest chip manufacturers. In his previous remarks about the firm, Cramer shared that even if lower AI costs mean more GPUs, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) will nevertheless benefit from greater demand. His latest remarks were more telling, particularly in the context of the DeepSeek selloff:
"Actually Taiwan Semi's really diverged from NVIDIA big time. And Taiwan Semi's putting a lot of orders."
Overall TSM ranks 5th on our list of the stocks Jim Cramer recently discussed. While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that some 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 TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
