Late on December 9, the former hedge fund manager and energetic host of Mad Money, Jim Cramer, took to X to share his two cents on which sectors in the stock market are overrepresented and which are being overlooked.
Though lacking a detailed explanation of Cramer’s reasoning, the tweet, in no uncertain terms, opined that ‘we’ – either investors, analysts, or both – are being too ‘complacently bullish’ – probably assuming a continued rally without much analysis – on enterprise software and too ‘complacently bearish’ about drugs and healthcare.
While failing to specify which software stocks are receiving undue positive attention, Jim Cramer singled out Eli Lilly (NYSE: LLY) as an unjustly underestimated company in the wider medical sector.
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Why Jim Cramer is bullish on LLY stock
For anyone following Jim Cramer’s social media posts and television appearances, the Eli Lilly recommendation likely comes as no surprise. Indeed, the famous host has been fairly consistent in his bullishness about the healthcare giant.
Furthermore, he used LLY stock’s recent decline as an argument in favor of the company, stating in mid-November that it is ‘hated now’ but ‘was loved not that long ago’ and concluding that such a combination makes it an enticing buy.
More recently, he has been making the case that Eli Lilly’s Zepbound is in no danger from Novo Nordisk’s (NYSE: NVO) Wegovy or Amgen’s (NASDAQ: AMGN) MariTide due to its efficacy and the former’s incumbency advantage. Furthermore, on December 4, he explicitly stated that LLY shares are a buy, and NVO stock isn’t.
Finally, looking at Eli Lilly stock’s performance in 2024, it is easy to see where Jim Cramer is coming from. Despite the 6.71% decline in the last 6 months and the general period of, at best, sideways trading, LLY shares are up an impressive 36.15% in the green year-to-date (YTD).
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Such a stock market dynamic would indicate, provided the former hedge fund manager is correct about the fundamentals, that investors have a ‘buy the dip’ opportunity for the medical giant at press time on December 10.
Why Jim Cramer believes enterprise software bullishness is misplaced
Elsewhere, Jim Cramer’s apparent loss of confidence in enterprise software is less clear. For example, he also made an X post late on Monday that analysts like him are pleased by the results of one of the sector’s giants – Oracle (NYSE: ORCL) – effectively defending the company from its extended session and early Tuesday 8.32% drop to $174.61.
Additionally, despite his tweet juxtaposing the ‘complacent’ bullishness about software with the bearishness about healthcare, Cramer remains positive about the artificial intelligence (AI) industry – an industry that, as of late 2024, is permeating many facets of the economy but is nowhere as present as in the wider technology sector.
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