Mad Money with Jim Cramer – Episode Summary (May 14, 2025)
Podcast Information:
- Title: Mad Money w/ Jim Cramer
- Host: CNBC (Jim Cramer)
- Release Date: May 14, 2025
- Description: “Mad Money” offers listeners an inside look into Wall Street investing with Jim Cramer, featuring his passionate insights and the popular Lightning Round where he shares his buy, sell, and hold recommendations.
1. Market Overview
Jim Cramer opens the episode by discussing the current state of the stock market amidst fluctuating interest rates. He emphasizes the impact of rising interest rates on both high-yield dividend stocks and aggressive growth stocks.
Notable Quote:
“When interest rates go up, even if they go up just a little, you can see lots of very good, well-known stocks with juicy dividends just get pummeled right now.”
[01:26]
2. Stock Analysis
A. Pharmaceutical Stocks
Cramer delves into the challenges faced by pharmaceutical companies due to rising interest rates and potential regulatory risks.
-
Bristol Myers Squibb (BMY):
- Issue: Facing significant patent cliffs threatening future profits.
- Strategy: Holding for dividends while awaiting new drug developments.
-
AbbVie (ABBV):
- Strengths: No immediate patent cliffs, strong franchises in neurology, oncology, and immunology.
- Concern: Yield of 3.7% amidst rising interest rates.
-
Johnson & Johnson (JNJ):
- Strengths: Triple-A balance sheet, diverse drug pipeline.
- Concern: Legal overhang related to talcum powder lawsuits impacting stock stability.
Notable Quotes:
“Why are the stocks of the tried and true companies getting crushed despite their solid dividends? Oh, there are a host of reasons.”
[03:15]
“Plenty of not so amazing stocks get hit too. And they deserve to have their stocks go down the drain.”
[02:05]
B. Consumer Goods
Cramer evaluates consumer packaged goods giants, highlighting their resilience but questioning the attractiveness of their current yields.
-
Procter & Gamble (PG):
- Strengths: Dividend aristocrat with over 70 years of payout increases.
- Concern: Current yield of 2.68% deemed insufficient at $158/share.
-
Colgate-Palmolive (CL):
- Strengths: Leading toothpaste and pet food businesses.
- Concern: Yield of 2.37% at $128/share.
-
PepsiCo (PEP):
- Strengths: Strong global franchises in beverages and snacks.
- Concern: Yield of 4.4% amidst potential regulatory scrutiny on products like excess salt in snacks.
Notable Quotes:
“If you're nervous, if you fear Bobby Kennedy Jr., would you fear the ten-year? Nah. But you might fear General Mills.”
[07:45]
3. Reddit Stock Analysis
One of the episode's highlights is an in-depth analysis of Reddit's stock performance, exploring its recent earnings beat, growth prospects, and challenges from changing Google algorithms.
Key Points:
- Earnings Performance: Reddit reported a 61% revenue growth and a significant earnings beat, yet the stock declined due to perceived slowing growth rates and concerns over Google’s algorithm changes.
- User Growth: Daily active users grew by 31% year-over-year, but management remains cautious.
- Advertising Revenue: International ad revenue surged by 83%, with significant room for monetization.
- AI Partnerships: Collaborations with AI companies like OpenAI for data API access present high-margin revenue opportunities.
- Valuation: Trading at 54 times next year's earnings, deemed reasonable given the projected 85% earnings growth.
Notable Quotes:
“Most companies would kill for that growth. 61% may look great, but that's down from 71% the previous quarter.”
[18:22]
“With Reddit, we're talking about unadjusted numbers. That's reasonable.”
[25:10]
4. Listener Calls
A. Howard from Maryland – Lockheed Martin Investment
Howard seeks advice on whether to buy more, hold, or sell his investment in Lockheed Martin amidst criticism about drone superiority over the F-35.
Jim Cramer's Response:
- Recommendation: Buy More
- Rationale:
- Valuation: Sells for 16 times earnings.
- Leadership: Positive view of CEO Jim Taiglit.
- Market Position: Despite recent volatility, Lockheed remains a strong defense stock.
Notable Quote:
“I would have no problem buying a stock that Jim takes, but is in charge of and that has sells for only 16 times earnings.”
[10:10]
B. Bill from Florida – Healthcare REIT Concern
Bill is concerned about the safety of his 9% yield investment in Omega Healthcare Investors amidst potential Medicaid cuts.
Jim Cramer's Response:
- Recommendation: Exercise Caution
- Rationale: Expresses similar concerns as the listener and suggests alternatives with lower risk yields.
Notable Quote:
“I think you're right to be worried. I think you're right to be worried.”
[40:42]
C. AJ from Florida – EdTech Company Inquiry
AJ inquires about Stride Inc., an edtech company experiencing significant revenue growth.
Jim Cramer's Response:
- Recommendation: Further Research Required
- Rationale: Acknowledges the growth but indicates the need for more information before providing a definitive stance.
Notable Quote:
“I would tell you about it if I knew it and I don't.”
[42:09]
5. Speculative Stocks Discussion
Cramer voices his concerns over the sustainability of rallies led by speculative stocks versus traditional blue-chip tech stocks.
Key Points:
- Speculative Stocks Highlighted: Palantir, Applovin, Quantum Nuclear, Coinbase, Robinhood, Hims & Hers, Archer Aviation, Pony AI.
- Concerns:
- Valuation: Extremely high price-to-earnings ratios (e.g., Palantir at 220x earnings).
- Sustainability: Speculative rallies are often driven by momentum rather than fundamental strength, making them vulnerable to sudden drops.
- Investor Behavior: Lack of discipline among buyers, leading to potential bubbles.
Notable Quotes:
“A rally led by speculative stocks is a rally that is just not sustainable.”
[43:01]
“If you own one of these speculative stocks, do this for me. Trim some, take as much of your basis out as you can, then let the rest run.”
[44:30]
6. Lightning Round
In the Lightning Round segment, Jim Cramer provides quick buy, sell, and hold recommendations on various stocks based on listener calls and his analysis.
Highlights:
- Lockheed Martin (LMT): Buy more due to strong fundamentals and attractive valuation.
- Reddit (REDDIT): Buy despite volatility, emphasizing long-term growth potential.
- Cardinal Health, Sancora, McKesson: Cautious on drug distributors due to regulatory risks despite strong earnings.
Notable Quotes:
“Why take the risk? There are so many potential winners in this market. I say why take the risk.”
[36:50]
“Let’s take calls. Start with Tim in Kansas.”
[39:26]
7. Guest Interview: Andrew Devgan of Cadence Design Systems
Cramer interviews Andrew Devgan, President and CEO of Cadence Design Systems, discussing the company's strong performance and strategic partnerships.
Key Points:
- Earnings Growth: Q1 saw a 23% revenue increase and a 34% EPS growth.
- AI Integration: Essential role in AI-driven chip design and digital twin technologies.
- Partnerships: Strong collaborations with Nvidia and potential synergy with Intel under new leadership.
- Business Model: Recurring software revenue with high gross margins and diversified client base.
Notable Quotes:
“We deliver a fabulous quarter in Q1. We are up 23% revenue and 34% EPS.”
[14:30]
“We are part of the R&D cycle. The customers are innovating for products that will be released years from now.”
[17:48]
8. Closing Remarks
Jim Cramer wraps up the episode by urging listeners to approach speculative stocks with caution, highlighting the importance of disciplined investing and the potential risks associated with high volatility stocks.
Notable Quote:
“Play with the house’s money. Take some profits. Because I'm betting you that you won't regret it.”
[46:25]
Conclusion: In this episode of "Mad Money," Jim Cramer provides a comprehensive analysis of various sectors, particularly focusing on pharmaceuticals, consumer goods, and speculative stocks like Reddit and Cadence Design Systems. Through listener interactions and expert interviews, Cramer emphasizes the importance of understanding market dynamics, valuing stocks based on fundamentals, and maintaining disciplined investment strategies amidst market volatility.