Jim Cramer says Advanced Micro Devices Inc. (AMD) is “dominant”

We recently published a list 10 Large-Cap Stocks Jim Cramer Can’t Stop Talking AboutIn this article, we’ll take a look at where Advanced Micro Devices Inc. (NASDAQ:AMD) stacks up against the other large-cap stocks that Jim Cramer won’t stop talking about.

In a recent episode of Mad Money, Jim Cramer highlights a critical gap in the American education system that often overlooks financial literacy, even though it’s important. While students may graduate with extensive knowledge in subjects like chemistry, history, and languages, they rarely receive a practical education in managing personal finances. Cramer points out that financial planning, retirement readiness, and investing are rarely covered, leaving many people without knowledge of key money management skills.

“There’s a huge hole in the American education system, though I hesitate to call it a system. When you get to high school, they teach you chemistry, geometry, and physics. You have English, history, and foreign languages. You can graduate from college speaking three languages and having a deep understanding of quantum physics or ancient philosophy. But you know what they almost never teach you in middle school or high school, let alone college? Financial literacy.

And I’m not talking about economics—you can be an economics major and still learn nothing about financial planning or retirement planning, let alone investing. Money is simply not talked about. Frankly, it has become the third rail of American education. You’re a thousand times more likely to read Marx’s Capital than anything about budgeting or stock picking.

Cramer’s mission is to bridge that gap through CNBC Investing Club, where he and the Charitable Trust provide practical financial advice. He emphasizes the importance of retirement planning, noting that while 401(k) plans and individual retirement accounts (IRAs) are key saving tools, many people lack a comprehensive understanding of their benefits and limitations.

“That’s why I’m constantly trying to teach you how to manage your money, which is what we do every day at CNBC Investing Club, and Charitable Trust provides us with a constant source of examples. When it comes to managing your money, nothing is more important than retirement. Sooner or later, you’re going to stop working—I hope sooner rather than later, unless you really love your job. I bet most of you, even if you don’t own any individual stocks, still have some money in your 401(k).

Decades ago, corporate pensions began to go the way of the dodo, and now 401(k)s are the primary way Americans save for retirement. They’re offered by your employer and are among the best tax-deferred investment vehicles available, next to IRAs. And I’m not talking about the Irish Republican Army—I’m not even talking about the Inflation Reduction Act. I’m talking about the individual retirement account.

Cramer points out that while contributing to a 401(k) is widely recommended, it’s not always the best strategy for everyone. Despite the tax benefits and ability to defer taxes on contributions, 401(k) plans can have drawbacks, such as hidden fees that reduce returns.

“Listen to me, damn it—you need to know this stuff. Your future self will thank you for getting your retirement funds in order. While you may think you know everything there is to know about these tax-advantaged accounts, the truth is there are a lot of things that so-called experts don’t tell you or don’t want you to know. For example, conventional wisdom says that you absolutely must invest in your 401(k)—you’d be a fool not to.

Many experts will even advise you to max out your 401(k) contributions every year if you can afford it. The current maximum contribution is more than $20,000, with room for an extra $7,000 if you’re over 50. It typically grows gradually over time, usually a bit faster than inflation. In 2004, it was $13,000; in 2023, it was $22,500. Either way, it’s a serious amount, even if those contributions come out of your pre-tax income.

He says understanding both the benefits and drawbacks of these retirement accounts is essential to making informed financial decisions. Cramer encourages individuals to educate themselves about these investment options to ensure they are effectively managing their retirement savings.

“But sometimes I think that might be the wrong approach. I’m not going to sing the praises of the splendid 401(k) plan or say that it’s the key to your financial salvation, because 401(k) plans can be a real mixed bag. Sure, they have some really great features, but they also have a lot of bad ones, and those bad features will eat into your returns — sometimes through fees that are almost completely hidden from you. I don’t like that. So let me break down the good, the bad, and the ugly of 401(k) plans. Then I’ll tell you whether it makes sense for you to put more money into your own 401(k) — maybe there’s a better way to invest for retirement.”

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Is Advanced Micro Devices Inc. (AMD) the large-cap stock Jim Cramer can't stop talking about? — Is Advanced Micro Devices Inc. (AMD) the large-cap stock Jim Cramer can’t stop talking about?

Close-up of a complex PCB with several integrated semiconductor components.

Advanced Microprocessor Devices Inc. (NASDAQ:AMD)

Number of hedge fund investors: 108

Market capitalization: 221.6 billion

Jim Cramer emphasizes that Advanced Micro Devices Inc. (NASDAQ:AMD) is not only competing with NVIDIA Corporation (NASDAQ:NVDA), but actually dominates the market. According to Cramer, Advanced Micro Devices Inc. (NASDAQ:AMD) is gaining significant market share, but the performance of NVIDIA Corporation’s (NASDAQ:NVDA) high-end chips is not significantly limited by AMD’s offerings. This underscores Advanced Micro Devices Inc.’s (NASDAQ:AMD) strong position and influence in the semiconductor industry.

“AMD is not chasing them. AMD is dominating. In fact, it is taking a huge share of the market.”

Advanced Micro Devices Inc.’s (NASDAQ:AMD) latest earnings report shows solid results, with revenue up 9% year over year to $5.84 billion, driven by a rebound in chip demand. Advanced Micro Devices Inc.’s (NASDAQ:AMD) adjusted earnings per share rose to $0.69, boosted by improved efficiency and a 53% higher gross margin, up from 50% last year. Advanced Micro Devices Inc.’s (NASDAQ:AMD) strength in high-performance computing is evident, as its EPYC processors and Instinct GPUs have powered the world’s fastest supercomputer for three years in a row. The introduction of the Ryzen 9000 series processors, built on the new “Zen 5” architecture, further expands Advanced Micro Devices Inc.’s (NASDAQ:AMD) competitive advantage in gaming, productivity, and content creation.

Looking ahead, Advanced Micro Devices Inc. (NASDAQ:AMD) is forecasting a strong third quarter of 2024 with projected revenue of approximately $6.7 billion, up 16% year-over-year. Advanced Micro Devices Inc. (NASDAQ:AMD) is expanding its presence in AI and data centers, with new customers and product launches expected to capitalize on growing demand for advanced computing.

AMD Total takes 6th place on our list of large-cap stocks that Jim Cramer can’t stop talking about. While we recognize AMD’s potential as an investment, our belief is based on the belief that AI stocks that are out of reach offer a better chance of achieving higher returns, and in a shorter time frame. If you’re looking for an AI stock that has more promise than AMD but is trading at less than 5 times earnings, check out our report on cheapest AI action.

READ MORE: $30 Trillion Opportunity: The 15 Best Humanoid Robot Stocks to Buy, According to Morgan Stanley AND Jim Cramer says NVIDIA has ‘become a wasteland’.

Disclosure: None. This article was originally published on Insider Monkey.