CNBC host Jim Cramer has been urging young investors to put their money in individual stocks instead of limiting themselves to index funds if they want to earn substantial profits. He said in a recent program that he is not against "wise" speculation in stock picking, as it can deliver investors outsized gains.
"Speculation itself is not bad," Cramer said. "I actually encourage speculation, especially for young people. You can have one [speculative stock] when you’re older, north of 25, say, and two out of five if you’re even younger than that. A solid speculative pick can change your entire life."
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However, Cramer advised investors to be cautious even when speculating, recommending they focus only on companies with a clear path to profitability and avoid those with big stock gains without decent fundamentals or revenues. He believes investing in stocks that have already seen "parabolic" moves could be a "recipe for disaster."
Let's take a look at some of the top artificial intelligence stocks Cramer has been recommending recently.
Apple
Jim Cramer has long been bullish on Apple Inc. (NASDAQ:AAPL) despite recent market concerns about a slowdown in iPhone demand and the company's AI strategy. Cramer once again recommended the stock in a recent program:
"Despite the myriad bears, and there are endless haters, this company always comes up with the best there is, the most beloved products on earth, and that's why you can't trade it," Cramer said. "That's why you must own it."
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Nvidia
Cramer has consistently recommended Nvidia Corp. (NASDAQ:NVDA) as a top AI stock over the past few years. In a latest program, Cramer reiterated his praise for Chief Executive Jensen Huang, saying there may "never be a stock as incredible as Nvidia."
"I tell the story of how Nvidia changed so many people’s lives," according to Cramer. "From the day in 2017 when I renamed Everest, my rescue dog, Nvidia, simply as a frustrating way to get the word out about the greatness of this company and the man behind it. Turns out I succeeded beyond my wildest dreams."
Nvidia remains among the top holdings of Cramer's investing club.
Broadcom
In early October, a caller asked Cramer during his program about the semiconductor company Ambiq Micro Inc. (NYSE:AMBQ), but Cramer recommended they buy Broadcom Inc. (NASDAQ:AVGO) instead.
"Look, we got to be careful that there are so many good semiconductor companies out there. I’d rather see you in Broadcom, " Cramer said.
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Dell
Dell Technologies Inc. (NYSE:DELL) shares recently jumped after the company increased its long-term growth targets amid strong demand for its AI servers. The stock is up 23% over the past month.
Jim Cramer recently told a caller to buy Dell and sell Super Micro Computer Inc. (NASDAQ:SMCI).
"I know they keep saying things are great, but I’m going to tell you something. I want you to sell [Super Micro Computer], and I want you to buy the stock of Dell right here tomorrow morning. Buy Dell."
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