“Now the smart money is betting on a deal that I think would be good for everyone.”

“Contrary to popular belief, investing is about more than just monetary policy, and I wish everyone knew that. They don’t.”

On Friday, Cramer emphasized that personal consumption expenditure (PCE) inflation data will be released and will provide a first look at the latest inflation numbers.

“On Friday we will finally get a first look at the next inflation data, the number of personal consumption expenditures. Remember, I believe we will continue to talk endlessly about what the Fed may or may not do. So when this number runs hot, you’re going to hear a lot of doom and gloom, so why am I putting it there? Well, because it might be a good opportunity to buy when we’re weak, because other people will be panicked by what the prophets of doom say.”

In summary, Cramer believes we are entering a seasonally strong period for equities, although recent performance has been disappointing in some sectors. He noted that while Santa’s rally typically provides a boost towards the end of the year, it is important to wait for the conclusion of the Fed meeting before making any significant moves.

Our methodology

For this article, we compiled a list of 8 stocks that Jim Cramer discussed on the latest episode of Mad Money on December 13th. We’ve listed the stocks in ascending order of their third-quarter hedge fund sentiment, which was taken from Insider Monkey’s database of 900 hedge funds.

Why do we care about the stocks hedge funds invest in? The reason is simple: Our research shows that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, outperforming its benchmark by 150 percentage points (see more details here).

High angle view of a semiconductor chip in front of an array of electronic components.

Number of hedge fund owners: 38

Discussing the dispute between Arm Holdings plc (NASDAQ:ARM) and Qualcomm, Cramer said:

“Next week there will be a lot of normal corporate news. For example, a trial between Qualcomm and Arm Holdings begins in federal court in Delaware on Monday. People don’t talk about it, but I’m going to talk about it. It’s a patent battle over high-performance processors, and if Arm wins, Qualcomm’s license to use key chips as well as cell phones and laptops will be revoked. Now the smart money is betting on a deal that I think would be good for everyone.”

Arm (NASDAQ:ARM) is a major player in the semiconductor industry, specializing in the development and licensing of CPU products and related technologies. Although the company doesn’t make chips, its designs are used by semiconductor companies and manufacturers. The Company generates revenue by licensing its CPU architectures and charging royalties for products incorporating its designs.

In 2022, the company filed a lawsuit against Qualcomm after Qualcomm acquired Nuvia. The dispute arose because Qualcomm failed to negotiate a new licensing agreement that affected its chip designs. Arm claims that the technology for Microsoft’s Copilot+ laptops is based on Nuvia’s chip architecture, further exacerbating tensions.

Additionally, Arm (NASDAQ:ARM) plans to terminate Qualcomm’s architectural license, which allows Qualcomm to use Arm’s intellectual property in its chip designs. This termination, announced in October with 60 days’ notice, could significantly impact Qualcomm’s business, particularly in its chip division, a key revenue driver. A Qualcomm spokesman criticized Arm’s actions as unfounded threats aimed at pressuring Qualcomm to undermine its CPU performance and increase licensing fees.

As the December trial approaches, Qualcomm is arguing that Arm’s attempt to terminate the agreement is unwarranted and aimed at disrupting the legal process. Qualcomm is confident that its rights will be protected and criticizes Arm’s anti-competitive actions.

Overall, POOR takes 6th place on our list of stocks included in Jim Cramer’s game plan. While we recognize ARM’s potential as an investment, we believe AI stocks have more promise for delivering higher returns, and within a shorter time frame. If you’re looking for an AI stock that has more promise than ARM but trades at less than 5 times earnings, check out our report on it cheapest AI stock.

READ MORE: The 8 Best Wide Moat Stocks to Buy Now and the Top 30 AI Stocks According to BlackRock.

Disclosure: None. This article was originally published on Insider Monkey.