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The Charles Schwab Corporation (NYSE:SCHW) was among Jim Cramer’s Mad Money stock calls as he urged investors to exercise caution when it comes to red-hot AI stocks. Cramer commented on the stock’s decline after a good run, as he remarked:

Okay, how could the stock of Charles Schwab get its groove back, especially as just a few months ago, this retail brokerage firm seemed unstoppable, with the stock hitting a new all-time high in early February. That seemed right to me. But then it got knocked down during the recent AI displacement sell-off, even though it’s really not an AI victim at all. Then the stock got hit again last month when Schwab reported, even though the numbers were better than expected. It was a very good quarter. Today, the company hosted an institutional investor day where they raised their full-year revenue growth forecast pretty substantially, went from 10% to more like 14 to 15%. Yet the stock actually got hit again, down 1.9% in part because management also predicts higher expense growth. Look, I think the market’s misjudging this one and not valuing this incredible franchise correctly at all.

Photo by Brendan Church on Unsplash

The Charles Schwab Corporation (NYSE:SCHW) provides wealth management, brokerage, banking, and advisory services, providing trading platforms, investment products, and financial planning solutions.

While we acknowledge the potential of SCHW as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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