The veritable manna from heaven that was the Cramer curse is tearing apart at the seams, considering the chronic underperformance associated with flipping Jim Cramer’s recommendations so far this year. This was bound to happen given the strategy’s popularity and the market’s relentless penchant for chewing out any money-making strategy over the long run. While the inverse Craner strategy worked, it would have been a no-brainer to initiate a short position on Jim Cramer’s latest recommendation: Adobe. Now, however, things are much more nuanced.
The inverse Cramer strategy found its market-beating strength in Jim Cramer’s unmatched ability to parrot the consensus opinion – a practice that rarely generates any alpha. However, ever since the launch of dedicated ETFs that track Cramer’s every move, the CNBC host has been forced to become much more circumspect with his garrulous stock recommendations. Concurrently, the strategy’s coverage here and at other publications has reduced its potency – if everyone assumes the flip side of Cramer’s recommendations, institutions would naturally find much more alpha by aligning with the CNBC host.
As a testament to the struggle that this strategy has had to wage this year, consider the fact that Inverse Cramer Tracker ETF (SJIM) is down 5.48 percent so far this year while the Long Cramer Tracker ETF (LJIM) is up 4.16 percent in the same period. Do note that the S&P 500 index is up 15 percent so far in 2023, which means that Cramer is still underperforming the market.
Jim Cramer just said he thinks Adobe $ADBE has the best artificial intelligence offerings among software companies right now “I think they’re No. 1”
— Evan (@StockMKTNewz) August 17, 2023
This brings us to the crux of the matter. Jim Cramer now thinks that Adobe currently has the best AI offerings among the leading software companies, going so far as to state:
“I think they are number 1.”
It is an undisputed fact that Adobe has been expanding its suite of AI products, which now include its Firefly generative AI tools under the Adobe Express package, allowing users the ability to create “social media posts, videos, images, PDFs, flyers, logos and more.”
While Adobe is clearly one of the leaders in the field of generative AI right now, it is by no means the sole contestant for the apex position in this category. Consider the fact that Palantir’s generative AI platform leverages Large Language Models (LLMs) similar to those employed by ChatGPT to provide natural-feeling responses to customer queries. What’s more, since Palantir’s AI is trained on customer-relevant data, it largely avoids the drift that often accompanies ChatGPT and other LLM models that have been trained on a more eclectic dataset.
For the benefit of those who might be unaware, Palantir is a consultancy firm of sorts for the defense sector, with its software-based products having the ability to sift through raw data, aggregate information, find useful patterns, and then present the results in an easy-to-digest format. The firm’s AI products make it easier to get precise answers to real-time problems, as shown in a YouTube demo video where Palantir’s AI chatbot helps identify a battlefield tank and then suggests ways to destroy it.
The market certainly thinks that Palantir has a much clearer shot at taking the AI leadership mantle. Consider the fact that Palantir shares are up 126 percent so far this year, while Adobe shares are up 53 percent in the same timeframe.
So, the real question emerges: do you follow Jim Cramer’s recommendation on Adobe or take the opposite side? In our opinion, and given the market’s penchant to reward everything AI-related, a short position on Adobe would be folly. At the same time, the odds of Adobe clinching the apex position in the AI sphere are quite long. Nonetheless, moderate exposure to Adobe, Palantir, and other AI-focused stocks can still generate significant gains.
WccftechContinue reading/original-link]
