Jim Cramer explains why you should be looking at cult stocks in 2025

from CNBC Jim Cramer said Monday that fundamentals can sometimes hold investors back from buying stocks that, in hindsight, are obvious success stories, and used cult stocks as an example.

“What’s happening in business and what’s happening in stocks are two very different animals,” he said. “But unlike meme stocks, cult stocks have loyal shareholder bases that can trade independently of the business for years and years.”

Cramer said it is the most prominent example of a cult stock Tesla. The stock is up 86% for the year, but many investors didn’t see the promise early on because of doubts about the CEO. Elon MuskHis relationship with the president-elect Donald Trump and shrinking sales in China’s growing electric vehicle industry, he said.

The public, however, does not listen Wall Street investigation, Cramer said. He added that they knew two things that Wall Street didn’t know: that Musk was right about being the leader in EVs and that the relationship between Musk and Trump would be very profitable if Trump won the presidential election. Those who jumped on board won big after Trump’s victory and other news in the EV space, among others General Motorsannounced recently is leaving Of the self-driving taxi business, Cramer said.

He also named two other companies as examples of cult actions, Netflix and palantir. Cramer said that while many were skeptical of the streamer’s level of ad support, a number of hit shows and events have resulted in a loyal following, which has paid off as the company’s stock is up 89% year-to-date. Palantir, however, had a strong business model that was often overshadowed by the CEO Alex Karp‘s renegade attitude, he said. Many investors passed on the stock, but Cramer said those who liked Karp’s approach bought and profited as the stock is up 341% for the year.

“There’s a lesson here and it’s brutal,” Cramer said. “Sometimes conventional valuation methods don’t work, and you have to embrace the dynamics of cult stocks. The trick is to recognize that we’re in one of those moments. In 2025, let’s try to find stocks that challenge the orthodoxy.”