We recently published a list of Jim Cramer is Discussing These 10 Stocks Ahead of Q1 Earnings Season. In this article, we are going to take a look at where Costco Wholesale Corp (NASDAQ:COST) stands against other stocks that Jim Cramer is discussing ahead of Q1 earnings season.

Jim Cramer in a latest program on CNBC talked about the winning sectors so far this year and said the trends show a “strange” pattern. Cramer specifically mentioned the oil and gas sector which he believed would underperform given President Donald Trump’s plan to keep energy prices lower.

“I thought this group would be down given that the president wants to expand drill and we have a slower economy, but the stocks aren’t expensive and demand for natural gas very strong,” Cramer said.

Cramer also talked about healthcare and other key sectors that performed well. He believes these patterns show that investors are turning to sectors that perform well during recessions. However, Cramer thinks the state of the economy is better than feared.

“The seven stocks that make up the S&P are too big to dismiss. You need at least some of them to put together a really positive tape. But the bottom line, it’s terrific to see such a broad mixture of stocks winning here, from ones that can run in a recession to ones that can rally hard in a robust economy. What it tells me is that the market may be far healthier than we think, and this backdrop simply isn’t as bad as many would have you believe.”

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In

For this article, we picked 10 stocks Jim Cramer recently talked about during his programs on CNBC. With each company, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Costco Wholesale Corp (NASDAQ:COST)

Number of Hedge Fund Investors: 75

A caller recently asked Jim Cramer about Costco Wholesale Corp (NASDAQ:COST). Here is what Cramer said:

“I care about profitability, I care about growth. Costco’s got them. Costco is a buy. Stock is way too low. I know people are thinking it’s rolling over, I think that’ll prove to be wrong. Buy some here, buy some next week.”

Aoris Investment Management stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q4 2024 investor letter:

“Firstly, I think we exercised good valuation discipline in our sales of Costco Wholesale Corporation (NASDAQ:COST) and Cintas. The share prices of these two companies had increased by more than 60% and 40% respectively in the year prior to our sale. It can be difficult as investors to remain objective and not ‘fall in love’ with an investment when it is performing well. A higher share price doesn’t make a business more valuable!

We sold both Costco and Cintas simply for reasons of valuation. These are exceptional businesses that we’d love to own again if valuation permits. Their sales allowed us to recycle portfolio capital into more attractively valued businesses.”

Overall, COST ranks 2nd on our list of stocks that Jim Cramer is discussing ahead of Q1 earnings season. While we acknowledge the potential of COST, our conviction lies in the belief that under the radar 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 COST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.