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In a recent segment, we examined Amazon.com, Inc. (NASDAQ:AMZN) in light of stocks mentioned by Jim Cramer, the host of Mad Money. This follows our previous listing of 12 stocks Cramer discussed.
On Thursday, Cramer characterized the 145% duty on goods imported from China as more akin to an embargo than a traditional tariff, describing it as excessively high. He stated, “With such a steep number, it creates a situation where paying that markup becomes untenable. It’s a surefire strategy to incur losses.”
He elaborated that former President Trump seems more vexed with prior administrations for allegedly allowing China to exploit U.S. trade policy than with President Xi Jinping directly, with whom Trump has shown a degree of respect. While Cramer expressed some understanding of Trump’s frustrations, he highlighted the nation’s disconnection from its dependence on affordable Chinese imports. “As a nation, we’ve shamefully become reliant on these low-cost goods,” he remarked.
Cramer noted, “Today’s developments suggest a sorting process is underway between companies with and without ties to China. Unfortunately, the firms that do engage with China tend to employ many individuals and are generally strong companies, yet they may struggle to survive in this shifting landscape.”
Cramer maintained that while the U.S. could potentially sever economic ties with China, the repercussions would result in significantly higher domestic costs, increased unemployment, and a shift towards other international partners. He stated, “The stakes are incredibly high. Yes, we must confront them now or risk losing our chance, but the public may not be ready for the associated pains.”
Regarding whether the pain inflicted is justifiable, Cramer concluded, “It’s a matter of perspective. While some immediate discomfort may be acceptable for a robust trade agreement, it would be reckless to think we can transition from $439 billion in imports to nothing.”
In our examination, we collated a list of 12 companies that Cramer spotlighted in the April 10 episode of Mad Money, ordered as he mentioned them, and included hedge fund sentiment for each as sourced from Insider Monkey’s database, which covers more than 1,000 hedge funds.
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“Screw the Chinese or Get Screwed!” – Jim Cramer’s Bold Take on Amazon (AMZN)
Hedge Fund Holders: 339
Cramer’s comments during the segment reflected on Amazon, asserting:
“There are three retailers positioned to thrive, and they are Amazon, Walmart, and Costco. In comparing them to other retailers, many appear to be in jeopardy, potentially on their way to closure. Excluding a couple of significant hardware chains, the prospects for competitors against these giants seem bleak.”
Providing diverse services such as e-commerce, subscription options, and advertising, Amazon remains a pivotal player. Cramer further noted:
“Right now, negotiations are likely happening involving Amazon. The company has numerous branded products that might be impacted, leading to speculation that shipments may be halted until agreements are reached. Amazon faces significant challenges, navigating a potentially adversarial relationship with China, where both sides may have much to lose.”
Overall, Amazon ranks 10th in our analysis of stocks discussed by Cramer. While its investment potential is recognized, our perspective leans toward the belief that AI stocks present superior opportunities for growth and returns within a shorter time frame. For those seeking alternative investments, an AI stock that has outperformed recently despite a wider industry decline could be promising. For insights on an undervalued AI stock with potential, refer to our report about this most affordable 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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finance.yahoo.com