Mad Money w/ Jim Cramer – Episode Summary (May 16, 2025)

Podcast Information:

• Title: Mad Money w/ Jim Cramer
• Host: CNBC
• Release Date: May 16, 2025
• Description: “Mad Money” offers listeners an inside look into Wall Street investing with Jim Cramer, featuring his dynamic insights and the popular Lightning Round where he provides buy, sell, and hold recommendations.

Market Overview

Jim Cramer kicks off the episode by highlighting a robust day in the stock market:

• Dow Jones Industrial Average surged by 332 points.
• S&P 500 increased by 0.7%.
• Nasdaq Composite rose by 0.52%.

Key Drivers:

• Absence of new tariffs.
• Gigantic tech quarterly results.
• Positive responses to strong earnings from Mideast markets.

Cramer poses critical questions about the market's bullish trend continuing amidst concerns over the recent downgrade of the U.S. credit rating by Moody's:

“Can the bullish procession continue? And maybe will it matter that after the close this very evening, Moody's, the important rating agency, downgraded the U.S. credit rating because of our government's debt increase.” ([02:20])

Despite this downgrade, Cramer remains optimistic, emphasizing the strength of business fundamentals and hinting at exciting developments from Nvidia’s CEO, Jensen Huang, at the upcoming Computex keynote ([05:15]).

Featured Stock Discussions

Nvidia (NVDA)

• Performance: Stock rallied 16% this week, reclaiming a market cap above $3 trillion.
• Future Outlook: Anticipation of new product announcements at the Computex keynote could propel Nvidia further.
• Quote:

  “I wouldn't be surprised if Nvidia has more room to run, particularly because there are a lot of people who felt that it should never been at $3 trillion in the first place, and they've been proven wrong.” ([04:10])

Capital One (COF)

• Performance: Gained almost 20 points this month.
• Strategy: Expected to see continued growth with potential analyst upgrades.
• Cramer's Take:

  “Capital One is my favorite stock right now in the charitable trust, even as it just gained almost 20 points this month alone. I think the move is far from over.” ([07:00])

Home Depot (HD) vs. Lowe’s (LOW)

• Home Depot:
  • Focus: Professional clientele and large-scale operations.
  • Cramer's View: “Home Depot stock is a great one to own because like Wal Mart, these guys have the scale to cope with the, with the tariffs that are going to be put on so many foreign made goods that they sell at Home Depot.” ([08:15])
• Lowe’s:
  • Focus: DIY customer base.
  • Upcoming Events: Reports earnings on Wednesday morning.
  • Cramer's Insight: “Both are excellent operators, although Home Depot is more about professionals and Lowe's has more of a do-it-yourself Customer base.” ([08:15])

Toll Brothers (TOL)

• Sector: High-end homebuilding.
• Performance: Down 2% for the year.
• Cramer's Take:

  “At 7 times earnings though, I think you want to own this one.” ([09:00])

Palo Alto Networks (PANW) & Snowflake (SNOW)

• Palo Alto Networks: Tends to drop post-earnings despite strong fundamentals.
• Snowflake: Strong performance with a "business on fire.”
• Recommendation: Wait until after earnings for Palo Alto Networks; maintain bullish stance on Snowflake.

Ralph Lauren (RL)

• Focus: Consistent delivery and strong market presence.
• Cramer's Recommendation:

  “I buy this one ahead of the quarter too.” ([11:00])

Cava Group (CAVA)

• Performance: After a volatile period, gained over 40% year-to-date.
• Future Expansion: Aiming for 1,000 restaurants by 2032.
• Cramer's Perspective: Views Cava as a long-term growth play similar to Chipotle.
• Quote:

  “If you don't yet own this stock, you might want to use this pullback on strong results as a chance to do some buying.” ([28:00])

Listener Calls

Caller: Rod from Florida

1. UnitedHealth (UNH)

   • Issue: Despite a 600% gain over 15 years, the stock plummeted 50% in the last six weeks.
   • Cramer's Advice:

     “I would sell, I would use strength to sell even more.” ([10:04])

2. Visa (V)

   • Question: Reaffirmation of buy rating.
   • Response:

     “I think Visa is sensational... MasterCard's actually growing a little bit faster. But they are both fabulous companies.” ([10:54])

3. Additional Recommendations:

   • Dutch Bros (BROS): Strong year-to-date performance; plans for continued expansion.
   • Cava Group (CAVA): Recommended despite recent stock volatility.
   • Ralph Lauren (RL): Suggested for its consistent delivery and expansion plans.

Caller: Hila from California

• Arista Networks (ANET)
  • Concern: Despite a better quarter, Cisco is outperforming.
  • Cramer's Take:

    “I'd rather have you go with Cisco, which is a much cheaper stock.” ([42:09])

Interviews

Christine Brun – President & CEO of Dutch Bros

Key Topics Discussed:

1. Company Culture & Philanthropy:

   • "Drink One for Dane": Annual initiative to honor co-founder Dane Boorsma and raise funds for ALS research.

     “72% of our transactions are with our Dutch Rewards members... it provides extraordinary value that keeps them coming back.” ([16:45])

2. Expansion Plans:

   • Geographical Growth: Increasing store presence in Texas, Florida, and California; potential new states like Indiana and Georgia.
   • Marketing Strategy: Targeted paid advertising to attract new customers and grow the Dutch Rewards program.

3. Product Innovation:

   • New Beverages: Introduction of non-caffeinated options like Tiger’s Blood soda, appealing to customers seeking sweet and fun afternoon treats.
   • LTOs (Limited Time Offers): Successful launches of drinks like Brownie Batter Mocha and Birthday Cake Latte.

4. Tariff Management:

   • Cost Control: Despite rising coffee and shipping costs, Dutch Bros aims to maintain its value proposition without passing costs to customers.

     “Our plan is not to pass that [cost increase] on to our customers and to keep our great value proposition.” ([18:57])

5. Mobile Ordering:

   • Implementation: Launched nationwide in Q4 of the previous year, currently accounting for 11% of transactions.
   • Customer Experience: Ensuring seamless service while maintaining the personal connection with customers.

Notable Quote:

“72% of our transactions are with our Dutch Rewards members. And I think as you share, that's truly impressive given how quickly we're growing.” ([16:45])

John Vander Ark – President & CEO of Republic Services (RSG)

Key Topics Discussed:

1. Business Resilience:

   • Recession Resilience: Emphasizes a stable revenue base with high customer retention (94%).

     “We are not recession proof, but we're recession resilient.” ([32:01])

2. Sustainability Initiatives:

   • Polymer Centers: Investing $320 million across four centers to enhance recycling processes, aiming for profitable and environmentally sustainable operations.

     “We're putting about 320 million of capital across four polymer centers across the US and that's going to have kind of a double digit cash on cash return.” ([34:18])

3. Handling Tariffs:

   • Cost Management: Transparency with suppliers regarding tariff charges to prevent unexpected price hikes.

     “We're asking our suppliers to be very transparent on marking up what is a tariff or spelling out what is a tariff charge.” ([35:02])

4. Acquisitions Strategy:

   • Growth Through M&A: Conducting 20 acquisitions a year to integrate seamlessly into existing operations and enhance market density.

5. Economic Outlook:

   • Optimism in Construction: Believes in long-term growth despite short-term challenges in the construction sector.

     “More broadly, there's a lot of uncertainty and there's pockets of weakness... I think if we got stability in policy, I think there could be a lot of upside into this economy.” ([36:41])

Notable Quote:

“We like to say we're not recession proof, but we're recession resilient. So very recurring revenue base, very predictable.” ([32:25])

Lightning Round Highlights

Jim Cramer engages with callers in rapid-fire questions, providing succinct buy/sell/hold recommendations:

1. Gabe from Michigan on UTi (UTI)

   • Recommendation: Buy

     “I think it continues to go higher because it fits the thesis of what we expect in an era of AI.” ([38:28])

2. Travis from Minnesota on Sezzle (SZL)

   • Recommendation: Sell

     “Sezzle's in a crowded space... I do think it's gotten a little too hot.” ([38:58])

3. Lewis from California on Archer Aviation (ACHR)

   • Recommendation: Sell

     “Archer is just a little bit too far... I don't want to have too many of these kinds of stocks on my recommended list.” ([39:42])

4. Rich from Virginia on CoStar Group (CSGP)

   • Recommendation: Sell

     “Commercial real estate is not doing well... it's not for me.” ([40:25])

5. George from Arizona on Viper Energy (VNOM)

   • Recommendation: Sell

     “Mineral royalty reminds me of Texas Pacific Land Trust... not my cup of tea.” ([40:47])

Final Market Insights

Cramer's Analysis on Market Rally Drivers:

• Shift in Sentiment: The market experienced a strong rally as hedge funds shifted away from short positions amid reduced recession fears.
• Hedge Fund Influence: As hedge funds close short positions on economically sensitive stocks, it creates buying pressure, driving prices higher.
• Quote:

  “When hedge funds are poorly positioned, you get incredibly motivated buyers like the ones we saw all week that helped take us all the way almost back to even.” ([42:42])

Economic Outlook:

• Trade Relations: Improved trade talks with China alleviated tariff fears, supporting market confidence.
• Consumer Impact: Ongoing uncertainty about how much tariffs will affect consumers remains, depending on cost pass-through by suppliers and retailers.
• Bullish Stance: Despite overbought conditions, Cramer maintains a positive outlook, emphasizing contained economic downside and the absence of a looming recession.

Closing Remarks:

“There's always a bull market somewhere and I promise to try to find it. Just for you right here. Mad Money.” ([46:29])

Conclusion

In this episode of "Mad Money," Jim Cramer provides a comprehensive overview of the current market landscape, highlighting key stock performances and strategic recommendations. Engaging interviews with industry leaders like Christine Brun of Dutch Bros and John Vander Ark of Republic Services offer deeper insights into their companies' growth and resilience strategies. The Lightning Round delivers quick, actionable advice to listeners, while Cramer's final analysis underscores a bullish market outlook driven by shifting hedge fund strategies and improved trade relations.

Notable Quotes:

• On Market Resilience:

  “Unless we get news of new hostilities in the trade war with China, I think this market's propensity will still be to go higher even though we are overbought.” ([08:00])

• On Long-Term Investment:

  “I think it's a real good one. Certainly, better a lot of the restaurants that pile.” ([28:00])

• On Hedge Funds' Role:

  “When hedge funds are poorly positioned, you get incredibly motivated buyers like the ones we saw all week that helped take us all the way almost back to even.” ([42:42])

This detailed summary encapsulates the key discussions, insights, and recommendations from the May 16, 2025 episode of "Mad Money w/ Jim Cramer," providing valuable information for investors seeking to navigate the evolving Wall Street landscape.