Mad Money w/ Jim Cramer – Episode Summary (02/05/25)

Release Date: February 6, 2025
Host: CNBC – Jim Cramer

Market Overview

Jim Cramer kicks off the episode by highlighting the day's market performance:

• Dow Jones Industrial Average: Gained 3,17%
• S&P 500: Advanced 0.39%
• Nasdaq: Climbed 0.19%

Despite a sluggish morning appearance, Cramer emphasizes opportunities within growth stocks, which often suffer overreactions to minor setbacks.

Jim Cramer [01:03]: "This market has the memory of a mayfly that creates a ton of opportunities."

Stock Picks and Market Insights

Dissecting Market Overreactions

Cramer discusses how minor news often triggers disproportionate stock sell-offs:

• Disney (DIS): Despite a strong quarter in theme parks, Disney's stock dipped due to a 1% subscriber loss in its streaming service following a price hike.

  Cramer [02:10]: "Sell, sell, sell, sell, sell. These wise men and women sold Disney down into oblivion."

  He contrasts Disney's resilience with Netflix, asserting Disney's undervaluation and potential for recovery.

• Uber Technologies (UBER): Cramer praises Uber's robust performance, noting extraordinary numbers but observes that negative analyst comments provide buying opportunities.

  Cramer [06:50]: "I think this is a good one."

• Tesla (TSLA): Criticizes the ongoing sell-offs over unrelated issues, such as CEO Elon Musk's political stance, insisting Tesla's core innovations remain strong.

• Spotify (SPOT): Argues against analysts' pessimism, highlighting consistent growth and presenting recent stock dips as entry points.

Resilient Stocks and Teflon Qualities

Cramer identifies several "Teflon" stocks—companies that consistently recover from setbacks:

• Abbott Labs (ABT): Despite losing a $500 million lawsuit, ABT's stock surged over 30 points post-event.
• American Express (AXP) and Marriott International (MAR): Both experienced temporary declines followed by significant recoveries.
• Costco (COST) and Walmart (WMT): Consistently rebound from short-term setbacks, maintaining their status as retail giants.
• CyberSecurity Stocks: Companies like CrowdStrike (CRWD) and Palo Alto Networks (PANW) rebounded from technical glitches and market skepticism.

Cramer [07:45]: "Are you ever going to keep them down... you buy them when they're down because they won't stay down for long."

In-Depth Analysis: Alphabet Inc. (GOOGL)

Cramer delves deep into Alphabet's recent performance and investor reactions:

• Earnings Report: Alphabet reported a disappointing quarter, primarily due to a massive $75 billion increase in capital expenditures (CapEx) intended for growth.

  Cramer [08:00 - 11:59]:
  "Alphabet, parent company of Google, reported a seemingly disappointing quarter and their stock just got slammed down 7%."

• Market Reaction: Investors reacted negatively to the aggressive CapEx, viewing it as overinvestment which contrasts with other tech giants like Microsoft and Meta, whose similar investments were well-received.

• Competitive Landscape: Introduction of Deep Seek, a Chinese generative AI tool, heightened market fears about excessive spending on AI infrastructure.

• Future Outlook: Cramer questions whether this marks a shift in investor sentiment toward tech CapEx:

  Cramer [11:59]: "So, we're gone pretty quickly from a world where major investments in infrastructure are cheered... to a less certain world where it seems that investors don't like it."

Caller Interactions

Chevron (CVX) and Salesforce (CRM) Recommendations

• Caller: Interested in adding Chevron to the portfolio.

  Cramer [08:03 - 08:17]: "Mike Worth is just the CEO. He's committed to that dividend like no other. That's one of the safest dividends I know. I bless that investment."

• Caller: Inquires about Salesforce's upcoming report.

  Cramer [08:32 - 09:10]: "I think you stay in the stock and if it gets hit, I would buy more. That's how much I believe in their Agent Force."

Marriott International (MAR) Analysis with Caller Lonzi

• Caller Lonzi: Questions Marriott's standing in the hotel industry.

  Cramer [09:23 - 09:32]: "They are the top dog when it comes to lodging in hotels."

  Advises a strategic buy approach:

  Cramer [09:32]: "You buy some and then you let it go down 30 times earnings. That is a high multiple for Marriott."

Featured Segment: Columbia Sportswear with Tim Boyle

Cramer hosts Tim Boyle, Chairman, President, and CEO of Columbia Sportswear, for an in-depth discussion.

Corporate Performance and Strategy

• 2024 Performance: Columbia Sportswear fell short of growth and profitability goals, particularly in North America despite strong performance in China.

  Tim Boyle [29:30]: "When we're not operating at a high level in the upper quartile of our competitors, that's a problem for me."

• Inventory Management: Successfully reduced excess inventory accumulated during COVID, focusing on maintaining lean operations.

  Cramer [31:20]: "I think the stock is very interesting here."

• Market Positioning: Plans to enhance brick-and-mortar presence in high-traffic malls and bolster online and mass media marketing to increase product adoption.

Challenges and Future Plans

• Tariffs Impact: High import duties on Columbia's products create financial strain and uncertainty in planning.

  Tim Boyle [34:35]: "We need some surety about what is going to happen, what's the future."

• Strategic Initiatives: Emphasizes the "Accelerate" strategy to revitalize North American operations and improve growth metrics.

Cramer [36:39]: "I think the stock is very interesting here."

Lightning Round: Rapid Fire Stock Opinions

Cramer engages in the popular Lightning Round, offering quick buy, sell, or hold recommendations on various stocks based on caller inquiries. Highlights include:

• Work Management Platforms (e.g., Monday.com): Positive outlook due to user-friendly features and AI integration.
• SoundHound (SOUN): Approaches with skepticism despite some analyst support.
• Bitcoin (BTC): Strong endorsement as a belief-driven investment.
• Consumer Packaged Goods (CPG) Stocks: Mixed feelings due to rising costs, health trends, and competition from private labels like Costco's Kirkland brand.

Cramer [40:35]: "I am a huge believer in bitcoin. Okay. I think it should just buy bitcoin."

Final Thoughts and Closing Remarks

Cramer wraps up by expressing concerns over the current sentiment in consumer packaged goods (CPG) stocks, citing challenges like rising ingredient costs, health-conscious consumer trends, and intense competition from private labels.

Cramer [45:00]: "These used to be safety stocks, for heaven's sake, but they're safe no more."

He concludes by reaffirming his commitment to helping investors navigate the volatile market landscape.

Cramer [46:24]: "I like to say, as always, more markets somewhere. I promise I've been just for you right here, Money. I'm Jim Cramer. See you tomorrow."

Notable Quotes with Timestamps

• Jim Cramer [01:03]: "My mission is simple to make you money. I'm here to level the playing field for all investors."
• Jim Cramer [02:10]: "Sell, sell, sell, sell, sell. These wise men and women sold Disney down into oblivion."
• Jim Cramer [07:45]: "If you buy these every time they get hit, you'll do well because they shouldn't be hit in the first place."
• Jim Cramer [08:00]: "Alphabet got hit because it's investing too heavily in growth. And that represents a huge change from what we've been seeing very lately."
• Tim Boyle [29:53]: "We've worked diligently on those areas. We've seen growth. And frankly, we need to be putting the same sort of rigor around our North America business."
• Jim Cramer [36:39]: "I think the stock is very interesting here."

Conclusion

In this episode of "Mad Money," Jim Cramer provides a comprehensive analysis of current market trends, stock performances, and investment strategies. He emphasizes the importance of recognizing overreactions in growth stocks, identifies resilient "Teflon" stocks, and offers insightful discussions with industry leaders like Tim Boyle from Columbia Sportswear. Through his energetic and informative commentary, Cramer aims to equip investors with the knowledge needed to capitalize on market opportunities and navigate potential pitfalls.