Mad Money w/ Jim Cramer – Episode Summary (February 27, 2025)

Release Date: February 28, 2025

In this episode of CNBC’s "Mad Money" hosted by Jim Cramer, viewers are taken on a comprehensive journey through the current investment landscape, focusing on the ramifications of President Trump’s tariff policies, identifying resilient stocks amidst economic turbulence, and offering in-depth analyses of specific companies based on listener inquiries. The episode is structured into several key segments, each delving into different facets of Wall Street and providing actionable insights for investors.

1. Navigating Tariffs and Market Volatility

[00:47]
Cramer opens with his mission to empower investors:

"My mission is simple, to make you money. I'm here to level the playing field for all investors."

He delves into the impact of President Trump’s tariff strategies on the stock market, highlighting significant downturns:

"Today's giveaway prices with the Dow dipping 194 points. SB totally 1.5. Numbers at NASDAQ plunging 2.78%. Bargains galore. These prices, they're positively insane."

Cramer criticizes the administration's approach to combating inflation through stock market interventions, suggesting that the burden falls on sectors like quantum computing, AI, nuclear power, and companies imported from China.

2. Identifying Protected Stocks Amid Tariff Pressures

Cramer emphasizes the importance of selecting stocks that are insulated from the volatility caused by tariffs. He categorizes these stocks into various sectors:

• Technology:
  He dismisses major tech giants like Apple, Amazon, Alphabet, Nvidia, and Microsoft due to their significant exposure to international supply chains and dependency on foreign manufacturing.

  "Nothing that can be sold to China has a chance to get out of this thing unscathed."

  However, he points out cybersecurity firms as viable options:

  "So in tech, the cybersecurity plays, of course. Before you buy Crowdstrike after reading their threat assessment paper today..."

• Healthcare:
  Cramer suggests investing in healthcare stocks that are less affected by tariffs, mentioning:

  "I say buy a healthcare stuff. Lots of tariff immunity..."

• Consumer Packaged Goods and Food:
  He cites companies like Clorox and Coca-Cola as potential investments due to their domestic focus.

  "They couldn't make enough money here. We'd have to find one that didn't diversify internationally. Perhaps because it didn't know how to do it. Maybe that makes it immune."

• Energy and Utilities:
  Energy stocks, especially those related to pipelines and utilities, are recommended for their stable yields and minimal exposure to tariffs.

  "Oil and gas tempting. I can make a strong case that you can own the pipeline stocks with good yield going to see interest rates go lower..."

• Banks:
  Banks like Wells Fargo are highlighted as solid investments due to their strong domestic footing.

  "The number one is Wells Fargo. It's American, it's well run."

• Restaurants:
  Cramer recommends American-centric restaurant chains like Texas Roadhouse for their limited reliance on imports.

  "I like Brinker got hit barely today Texas Roadhouse later may be the most American of any restaurant chain."

3. In-Depth Analysis: Vital Farms Under Scrutiny

[08:19]
A significant portion of the episode focuses on Vital Farms, a pasture-raised egg producer, based on a call from Brett in California.

Financial Performance and Stock Movement:
Vital Farms had been lauded as a growth stock, with its shares experiencing substantial fluctuations:

"Vital Farms surged to $48 last summer for pulling back to the low 30s."

Despite strong earnings reports boasting:

• 30% Revenue Growth
• 280 Basis Points Gross Margin Expansion
• Earnings Per Share (EPS) of 23 Cents

The stock plummeted by 9% following disclosures of accounting irregularities.

Accounting Issues:
Cramer explains that Vital Farms reported a material weakness in their internal controls over financial reporting:

"Material weakness? Accounting issue. Accounting related to how Vital Farms tracks orders and invoices its customers."

Although the company claims that these deficiencies did not lead to a material misstatement, the lack of trust in the financials prompted Cramer to take a cautious stance.

Government Intervention and Market Impact:
The Trump administration’s $1 billion plan to combat bird flu aimed at stabilizing egg prices indirectly affected Vital Farms:

"If the Trump administration's new plan to fight bird flu actually works, well, that's bad news for Vital Farms."

The stabilization of egg prices could erode Vital Farms’ competitive premium, making their products less attractive.

Conclusion:
Cramer advises selling Vital Farms stock due to the accounting issues, emphasizing his principle:

"Accounting irregularities equals selling, sell."

He acknowledges the company's potential but remains cautious until the financial discrepancies are resolved.

4. Listener Callers and Their Stock Questions

The episode features multiple callers seeking Cramer’s insights on various stocks:

• Gary from Nevada on Crowdstrike:
  Positive outlook due to increasing cybersecurity threats and strong software fundamentals.

• Tyler from Florida on Texas Roadhouse:
  Endorsed as a robust investment given its American roots and minimal import dependence.

• Frank from New York on Dutch Brothers:
  Despite rapid stock appreciation, Cramer advises caution, suggesting the stock may cool off before further investment.

• Jack from Ohio on Celestica:
  Recommended to wait for a price drop to 20 times earnings before investing.

• Tony from Illinois on Small Modular Reactors (SMR):
  Cramer remains skeptical about the viability and timeline of SMRs, projecting significant delays.

• Don from Tennessee on Power Corp (POWL):
  Cramer expresses confusion over the stock’s performance despite strong fundamentals, indicating a potential reassessment.

5. Expert Interview: Ward Nye on Martin Marietta Materials

[32:23]
An insightful dialogue with Ward Nye, Chairman, President, and CEO of Martin Marietta Materials, explores the future of the industrial sector, particularly infrastructure:

Public vs. Private Sector Outlook:
Nye emphasizes the positive impact of the Infrastructure Investment and Jobs Act (IIJA), with significant funds expected to be deployed by 2025-2026:

"Public looks good. We think private’s in a slow, steady recovery."

Housing Market Challenges:
The conversation touches on zoning issues and the underbuilding of single-family homes, which remain crucial for sustained demand in construction materials.

"Residential single-family housing is 7 million homes under built."

Future Projects and Domestic Supply Chains:
Nye assures that Martin Marietta’s operations are primarily domestic, minimizing the risk from international tariffs:

"Our supply chain is almost totally domestic. It might affect steel, but then we're going to supply more material to the domestic steel industry."

Cramer’s Takeaway:
Encouraged by the stability and growth prospects highlighted by Nye, Cramer reiterates his confidence in infrastructure-focused stocks:

"It is just nothing that should be meaningful to us. Our supply chain is almost totally domestic."

6. Lightning Round Highlights

In the fast-paced Lightning Round segment, Cramer offers quick insights into various stocks:

• Celestica:
  "It's coming into its own in a way that I cannot believe it. And everyone's piled in on it. Sell at 22 times earnings. Wait till it's at 20 times earnings below the S&P and pull the trigger."

• Key Corp (KEY):
  Recognized for its attractive dividends and sound fundamentals, Cramer supports adding shares cautiously.

• Nepius Holding (N BIS):
  Advises against investing, citing it as a "big money loser" within the cloud sector.

• Powell Industries (POWL):
  Acknowledges the company’s strong position but expresses confusion over its stock performance, indicating a need for further analysis.

• Small Modular Reactors (SMR):
  Remains skeptical about their commercial viability in the near term, signaling caution for investors.

• Dogtopia:
  Highlights the booming pet industry, recommending Dogtopia as a recession-resistant franchise opportunity.

7. Deep Dive: Nvidia’s Struggles and Potential

[44:17]
Cramer revisits Nvidia, dissecting the disconnect between the company's robust technological capabilities and its faltering stock performance:

Stock Performance Amid AI Hype:
Despite Nvidia’s critical role in AI chip development, the stock was heavily hit:

"Nvidia Lawn, one of my faves, is now wrongly regarded as a loser."

AI Use Cases and Future Potential:
Cramer illustrates Nvidia’s potential through imaginative scenarios, emphasizing the transformative impact of its chips on AI-driven applications:

"Nvidia's new black belt chips can solve the problem. It will apologize. It'll get the music right."

Challenges with Tariffs and Manufacturing:
He underscores the vulnerability of Nvidia’s supply chain to geopolitical tensions and tariffs, particularly concerning chip manufacturing in Taiwan.

"The tariff person in chief sets the price these days because the chips are manufactured in Taiwan..."

Conclusion:
Cramer remains optimistic about Nvidia’s technological advancements but cautious due to external economic pressures and geopolitical risks.

"There's always a bull market somewhere. I promise I'd find it just for you right here on Mad Money."

8. Closing Remarks and Final Insights

Cramer wraps up the episode by reiterating his commitment to helping investors navigate complex market dynamics. He emphasizes the importance of due diligence, especially when encountering companies with promising growth but underlying financial or operational challenges.

"These organizations are doing a lot of good. And we all have to base our decisions on that. We need to know what's going on beneath the surface."

With a blend of strategic advice, expert interviews, and real-time stock analysis, this episode of "Mad Money" equips listeners with the knowledge to make informed investment decisions amidst a fluctuating economic environment.

Notable Quotes:

• Jim Cramer on Market Impact:

  "Today's giveaway prices with the Dow dipping 194 points. SB totally 1.5. Numbers at NASDAQ plunging 2.78%. Bargains galore."

• On Protected Tech Stocks:

  "So in tech, the cybersecurity plays, of course. Before you buy Crowdstrike after reading their threat assessment paper today..."

• Vital Farms Advisory:

  "Accounting irregularities equals selling, sell."

• Ward Nye on Infrastructure Funds:

  "Public looks good. We think private's in a slow, steady recovery."

• On Nvidia’s Potential:

  "Nvidia's new black belt chips can solve the problem."

This comprehensive summary encapsulates the essential discussions and insights from Jim Cramer’s February 27, 2025, episode of "Mad Money," providing listeners and investors with valuable takeaways to guide their financial strategies.