Mad Money w/ Jim Cramer 5/20/25

Summary

Mad Money w/ Jim Cramer – Episode Summary (May 20, 2025)

Hosted by CNBC’s Jim Cramer, "Mad Money" delves into the complexities of Wall Street, offering listeners insightful analysis, stock picks, and expert interviews to navigate the ever-changing financial landscape. In the May 20, 2025 episode, Cramer addresses the interplay between the stock and bond markets, provides a deep dive into Home Depot’s quarterly performance, engages with industry leaders from Palo Alto Networks and Wyndham Hotels and Resorts, and concludes with the high-energy Lightning Round featuring listener calls.

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1. Market Overview: The Bond-Stock Relationship

[01:08 – 08:34]

Jim Cramer opens the episode by dissecting the turbulent relationship between the stock market and the bond market. He explains how daily stock fluctuations are often a reflection of bond market movements.

• Key Points:

  • The stock market responds to the bond market’s changes; declining bond prices (indicating rising interest rates) generally lead to bearish stock behavior.
  • Home Depot’s stock performance is used as a prime example of this dynamic.
  • Cramer emphasizes the continuous "referendum" nature of stock trading, where daily votes can sway market sentiment unpredictably.

• Notable Quote:

  “On most days, stocks react to other stocks or the overall stock market. And the market itself tends to react to the gyrations of its much larger sibling, the bond market.” [03:15]

2. Deep Dive: Home Depot’s Quarterly Performance

[12:41 – 29:53]

Cramer provides an extensive analysis of Home Depot’s latest quarterly results, highlighting both the strengths and weaknesses revealed in the report.

• Key Points:

  • Despite mixed quarterly results, including a 3.6% decline in same-store sales for February, Home Depot shows underlying strength with a 0.2% increase in U.S. same-store sales and a 9.4% year-over-year revenue increase.
  • The company’s strategic acquisition of SRS Distribution, a building materials distributor, is noted as a positive move enhancing its core business.
  • Cramer remains optimistic about Home Depot’s long-term prospects, citing President Trump’s tariff policies as a temporary setback rather than a long-term threat.

• Notable Quote:

  “Even as the stock sold off during the day, the reported quarter was mixed, but I thought there was more good than bad.” [18:10]

3. Expert Insight: Interview with Nikesh Arora, CEO of Palo Alto Networks

[29:53 – 21:31]

Cramer engages in a detailed conversation with Nikesh Arora, delving into the future of cybersecurity and Palo Alto Networks' strategic direction.

• Key Points:

  • Arora discusses the critical transition to AI-driven security, emphasizing the need for real-time protection against fast-evolving cyber threats.
  • The acquisition of Protect AI and Prisma Air is highlighted as pivotal for enhancing Palo Alto Networks’ AI security capabilities.
  • Arora underscores the company’s commitment to long-term growth, aiming to reach $15 billion in revenue by 2030 through strategic platformizations and acquisitions.

• Notable Quotes:

  “Three to five years from now, when you look back, you will say, I remember that point. That was a turning point in cybersecurity.” [14:31]

  “We went and looked. Protect AI was doing the best work in the market. Ian and his team are fantastic.” [17:00]

4. Insider Buying: Builders First Source

[21:31 – 29:53]

Cramer shifts focus to Builders First Source, noting significant insider buying as a bullish signal despite the company’s recent struggles.

• Key Points:

  • Builders First Source’s chairman, Paul Levy, purchased 500,000 shares at $111 each, increasing his stake by 43%.
  • Cramer interprets this insider buying as a strong vote of confidence in the company’s future, countering the stock’s recent downward trend.
  • The discussion highlights the importance of insider actions in gauging a company’s potential recovery and growth.

• Notable Quote:

  “I always tell you that executives sell their stock for all sorts of reasons... But they only buy their own stock in the market for one reason, because they think it's going to go higher.” [27:05]

5. Interview with Jeff Lotti, President of Wyndham Hotels and Resorts

[29:53 – 38:27]

Cramer converses with Jeff Lotti about the travel and leisure sector, focusing on Wyndham Hotels’ resilience and growth strategies.

• Key Points:

  • Wyndham’s franchise model is lauded for its recession resilience, outperforming the industry during downturns like 9/11 and COVID-19.
  • The company’s expansive global presence, particularly in India, is identified as a significant growth driver.
  • Introduction of Wyndham Rewards Experiences aims to enhance customer loyalty by offering exclusive experiences like behind-the-scenes access to major events.

• Notable Quotes:

  “The franchise model, Jim, always outperforms in any downturn.” [33:08]

  “We have so many experiences that we're excited about. We want to keep this program the number one program in the industry.” [34:36]

6. Lightning Round: Rapid Fire Calls and Stock Picks

[38:27 – 42:33]

In the high-energy Lightning Round, Cramer fields several listener calls, offering quick takes on various stocks.

• Key Points:

  • Dollar General: Cramer expresses strong support, citing insider approval and positive market positioning.
  • Mosaic: Advises against buying due to overvaluation and hype.
  • Zim Integrated Shipping: Views the stock as "dead money" and discourages investment.
  • Other Stocks: Brief mentions without extensive analysis, maintaining the rapid pace of the segment.

• Notable Quotes:

  “Dollar GENERAL… it's got the zeitgeist. It's the right stock for the right time.” [30:39]

  “Don't buy [Mosaic] because it's just up too much.” [41:19]

7. Critical Analysis: Tax Cuts and the Bond Market Reaction

[42:33 – 46:42]

Cramer concludes the episode with a comprehensive analysis of recent political developments affecting the bond and stock markets.

• Key Points:

  • President Trump's proposed tax cuts and tariffs have triggered a negative reaction in the bond market, leading to rising interest rates and stock market volatility.
  • Cramer criticizes the administration’s approach, highlighting the potential long-term economic consequences of increased deficits and higher borrowing costs.
  • He underscores the bond market as the ultimate arbiter of fiscal policies, emphasizing its current stance against the administration’s fiscal strategies.

• Notable Quotes:

  “The bond market was hoping that someone, anyone, any party, would decide to take up the challenge of shrinking the deficit. But I don't see it happening.” [42:40]

  “In the end, it's in charge… the bond market can't be embarrassed because in the end, it's in charge.” [42:48]

8. Closing Thoughts

[46:42 – End]

Cramer wraps up the episode by reiterating the impact of fiscal policies on market dynamics and the importance of strategic investment amidst political uncertainties.

• Key Points:

  • Emphasis on the necessity for Congress to reach a balanced budget deal to stabilize interest rates and support stock market growth.
  • Cramer reiterates his commitment to providing actionable insights and encourages listeners to stay informed and engaged with market developments.

• Notable Quote:

  “If we can take this business and triple the next generation security era by 2030, we're going to be a large company.” [20:34] (Note: This quote appears earlier in the interview with Nikesh Arora but underscores the episode’s theme of long-term strategic growth amid short-term market volatility.)

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Conclusion

In this episode, Jim Cramer offers a multifaceted analysis of the current market landscape, intertwining macroeconomic factors with specific company performances. Through insightful interviews with industry leaders and dynamic discussions on pivotal stocks, Cramer equips listeners with the knowledge to navigate complex financial terrains. The episode underscores the intricate relationship between bond markets and stock performance, the significance of insider actions, and the profound impact of political decisions on economic health.

Key Takeaways:

• Stock and Bond Interdependence: Understanding how bond market movements influence stock market sentiment is crucial for informed investing.
• Long-Term Growth Strategies: Companies like Palo Alto Networks and Wyndham Hotels illustrate the importance of strategic acquisitions and resilient business models in achieving sustained growth.
• Insider Confidence: Significant insider buying, as seen with Builders First Source, serves as a strong indicator of a company’s future prospects.
• Political Impact on Markets: Fiscal policies and political decisions play a pivotal role in shaping market dynamics, emphasizing the need for investors to stay attuned to political developments.

Listeners are encouraged to stay engaged with future episodes for ongoing insights and actionable investment strategies.

Transcript

[Schwab Representative]

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[Jim Cramer]

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people make friends. I'm just trying to save you a little money. My job is not just to entertain, but to explain how days like today happen. So call me at 1-800-743- CNBC or tweet me imKramer. Every day around here we have a referendum on stocks and you can't let it get you down because tomorrow's vote can always be different from today's. Yep, the voting booth never closes around here, so you get days where the bears turn out in droves. Dow shedding 115 points SB dipping 0.39% Nasdaq losing 0.38% why is it like this? Why do stocks even gyrate so wildly when nothing's really happening? Well, the answer is a mischievous one. On most days, stocks react to other stocks or the overall stock market. And the market itself is tends to react to the gyrations of its much larger sibling, the bond market. The bond market certainly colored today's stock market, which reacted naive to every tick down in bond prices because lower bond prices mean higher interest rates. When rates go higher, the bears almost always win the daily election. Take the stock of Home Depot, which reported this morning. That's somebody we all know. The orange roof, right? This will really help you to understand at first that stock rallied hard. At one point it was up almost 14 points in premarket trading. I like that the trust owns it. The gains shrunk to the single digits during the 9am conference call, even as the call was quite upbeat, as you'll hear later in the show. But as interest rates went up over the inability for Congress to find spending cuts, the stock wilted audibly. It finished the day in the red. Makes sense. Well then kind of you see, Home Depot does best when they're strong housing turnover which means higher rates are bad for business because they inhibit turnover. So the Home Depot reference rig by the bond market then turn negative and the most important stock of the day lost the boat that crushed a host of retailers. Some had to do with housing, others didn't of course didn't matter if there was real connection they might be joined by it together by an ETF or simply by the zeitgeist. That stems from Home Depot's importance importance in the retail firmament. Now I don't want you to worry too much because there'll be another election tomorrow and those reports there's always another election these days because there are so many companies that matter to the overall market and because the bond market never stops moving. And if Congress passes this huge tax cut, which I think it actually will, the bond market will be moving against us. The cut in the end will not make up for the pain of higher interest rates and what they can do to your pocketbook and the economy. Does it have to be this way? That's a great question on the eve of tomorrow's noon CNBC investing club meeting. Let me give you my answer. Some stocks are more hostage to the bond market than others. Stocks related to the fickle consumer are controlled by the bond market. For them, the daily referendum can get pretty wild. When rates go higher. The voters big institutional money managers have been electing the dollar stores betting the times will turn grim with rates going higher. And those stocks do well when the consumer is hard pressed. Dollar general stock rallied 4% today despite home Depot going down deserve to. It doesn't matter because we won't know how it's doing until the reports on June 3, which is light years away. It's just it fits the rate paradigm, that's all. Bank stocks tend to rise and fall for the bond market too because when rates go higher you usually get less economic activity. Banks need a stable environment to get deals done. Again, the bond markets in control here, some real bargains developing in the, in the banks but they're hard to pin down while interest rates are jogging higher. But then there are stocks and sectors that have no real connection to the bond market. And these are what I want to talk about for a second. These stocks are controlled, what I call powerful secular themes. So powerful the bonds simply they can't bring it down. Right now I'm feeling bearish in the bond market. So these secular growth stocks are kind of what I want to bet on. It's what I Am focusing on my talk tomorrow to join the club. So let me give you an example what's of what's not up for for election. What can override the daily plebiscite? Boy, these stocks are not easy to find right now. But when you do, you got to hold on for dear life. At a time like this, when Congress trying to come up with a budget, we're going to have to endure many suboptimal days where we have to expect upsets and reversals and defeats. But they will be nothing but distractions. See, it's an okay time. Not bad, not great. And there are plenty of stocks that can power through if they have secular themes pushing them. It's a little harder to find these winners given how much we've already run from the bottom though. So I'm going to give you a textbook once you know exactly what I'm talking about because it's so visible. We're going to talk about the stock of GE Vernova. That's the power division that was spun off from the old General Electric that so many of you like. Right now we've got several huge themes occurring at once. We know that we have a gigantic number of data centers being put up in the country. Correct. Now they require a tremendous amount of electricity. They're big drainers. Our most abundant source of power comes from burning of natural gas. We got more natural gas than any other country. GE Vernova makes the turbines. Those are used machines up to £700,000 that burn the natural gas which then generate electricity. Now there's a theme for you, but that's not all. Today the Tennessee Valley Authority, remember them, announced that it's going to submit a construction permit for a small modular nuclear reactor. Again because we need more power for the data centers. Who makes those? G.E. vernova. And we know that the Empire Offshore Wind project off the coast of New York just got re greenlighted by the Trump administration. According to a 2022 press release, G. Vernova responsible for designing and building the high voltage electrical system connected to this. It's a huge multi year project that will be fantastic for yes, GE Vernova. Oh, and if you are a country with a trade surplus for the US the best way to get it down and then you lose the ire of the President. Get away or get rid of the wrath. Well, it's always been to buy a Boeing plane, but I don't think that works as much anymore. You know what you got to do? You got to buy a turbine from GE Vernova. It takes a lot to buck the bond voters. But G. Vernova is not one, not two, not three. Before secular trends going for it, that's what you need. That's belt suspenders and suspenders and then belt again. Or take the stock of Tesla, which, you know, I like here. Today, my colleague David Faber interviewed Elon Musk. If you caught Elon Musk, the man behind Tesla, I'm very proud of David. He's my partner. Musk reminded us that his machines will soon be on the road, driving autonomously. One million of them. And the numbers have gotten better for the traditional business. Have a ladder, it can be verified. The former said a little bit like the hubris talking. Still, that kind of thing can allow Tesla to buck the bond market. Now, unfortunately, at the very moment the bonds are so in charge that Tesla stock could only go up. While David was asking most positive questions about the business, the stock would go down when David talked about Musk's government work and the impact it might have on car sales. Still, it managed to finish the session up a buck and change. I guess that's a victory, but I think it would have been up quite a bit if we had a more benign backdrop of bonds. Boy, this bond market, what a tough opponent. So here's the bottom line. The good news is that rates can also go up, and not just down by the time we get a budget deal. The bad news is that rates are starting to break out to the upside. And if they can't stay calm, if they jump to a new, higher level while Congress works on the budget bill, we're liable to have more days like today where you need a plethora of positive themes for any given stock to break free from the gravitational pull of these darn miserable treasuries. I need to go to Spars in California. Spars.

[Caller]

Booyah. Jimmy Ski, first time, long time from sunny SoCal.

[Jim Cramer]

Nice. Glad you called in. What's going on?

[Caller]

I wanted to shout out to Mama, if you would. She's hanging out in Westlake Village and she had a question.

[Jim Cramer]

Sure, let's do that.

[Caller]

Pin action on arm. You think with all the changes we're going to see anything go on there?

[Jim Cramer]

Look, I think the pin action arm. Look, we got AAM out there. AMD starting to feel a little better. We know Nvidia is there, but I'm going to give you a little curveball here. I think that Broadcom, which went down really hard, is the one that I think can go up. It was up today at One point I was thinking about maybe I had to do a little ka Ching kaching. But Jeff, Jeff Marks, my partner, I think he, I think he feels otherwise. I'm going to go with him. I need to go to Greg in my home state of New Jersey. Greg.

[Caller]

Booyah, Jim. Greg in Union County.

[Jim Cramer]

Good to have you down the block for me. You're down the block for me. I like that.

[Caller]

I know. My question is I love the dividend stocks now that I'm 68 and I'm slowly buying some. But I need a food group. And I think that Wendy's is attractive and has a good dividend.

[Jim Cramer]

What are you. I'm going to go against you because they cut it. Okay. And you know what? Once you want to dividend gets cut, I don't then go seeking to see if they're going to hope that things are fine now. I didn't like that. Last quarter was not so good. Yeah. Look, everybody knows that my wife loves Wendy's. She loves Wendy's, but that's not enough to buy the stock. All right? Anyway, if rates keep moving higher, we're going to have to have more days like today where it looks real good and then it goes bad. And the president's got to be careful. We don't want him saying we want the biggest tax ever. Just make it so that we're doing okay in the country and we'll be happy. Well, man, by tonight, Palo Alto's on the move after earnings and not in the direction I like since my trust owns it. Then could Home Depot build higher? After what I just talked about, I don't know. I'm digging in even deeper so you get what's really going on. Plus, could Wyndham Hotel Resorts be your ticket to the travel sector? We haven't had them on the show in ages. I'm going to talk to the CEO, so stay with Kramer. Don't miss a second of Mad Money.

[Nikesh Arora]

Follow imKramer on X.

[Jim Cramer]

Have a question.

[Nikesh Arora]

Tweet Kramer.

[Hotels.com Representative]

Madmentions.

[Nikesh Arora]

Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC.

[Hotels.com Representative]

Missed something.

[Nikesh Arora]

Head to madmoney.cnbc.com.

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[Jeff Lotti]

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[Hotels.com Representative]

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[Jim Cramer]

Some stocks of some of my absolute favorite companies tend to sell off in response to earnings, even when the numbers are actually real good. Take Palo Alto Networks as the cybersecurity kingpin has been a major long term winner for my Chapel Trust. Long term, this stock is in the habit of pulling back after reports, then rallying right back and then some. Sure enough, so far it's true to form tonight. Stocks down big in after hours. Why? Well, because Palo Alto beat the numbers but didn't raise a couple of key lines in the forecast. Not that bothers people. We're going to go over that. My gut says you want to buy the stock on weakness because it's always been right. But my brain says we need to do the homework first. So let's check in with Nikesha. Roy is the Chairman CEO of Palo Alto Networks. Get a better read in the quarter. Mr. Roy, welcome back to Bear Money.

[Nikesh Arora]

Nice to see you again, Jim.

[Jim Cramer]

Okay, so Nick Cash, you start off by talking about an inflection point. We're finally there. It looks like that the business is really powering your growth now.

[Nikesh Arora]

Well, Jim, you know I was saying, I was at a conference this morning. I was at a conference last night. Everybody wants to talk. Everybody wants to talk. Agent ok. And what's fascinating is that when people talk, all the naysayers, all the companies that you're holding back on their technology transformations, going to the cloud are suddenly trying to reaccelerate because you cannot deliver AI unless your data moves to the cloud. All the new models, whether it's, you know, Google's announcement from this morning, the new versions of Gemini or Open Air, everything's on the cloud. So if your data is not on the cloud, your company is not moving to the cloud, you're going to be left behind in this air race. And with over $300 billion committed to building large data centers in the world the next 12 months, everybody's got to go there. And when you go there, you got to do it securely. So I think this is a perfect time for security companies to be out there working with our customers to make sure, as we say, deploy AI bravely and it's going to be an inflection point.

[Jim Cramer]

Well, let's talk about the Hitchhiker's Guide to the Galaxy because you have a terrific unit 42, which I am just stung by the fact that they were able to simulate an entire ransomware attack in under 25 minutes using AI Nick Cash. We're dead if that's the case. If those guys can do that, we're dead. You can't stop that stuff.

[Nikesh Arora]

Well, Jim, you know, I'm going to sound like a broken record. You and I have talked about this. You know, we've come from an era where it took days to figure out you were breached. Now we're down to hours, going to minutes. Now, if your attackers are working at minute speed and eventually real time, you have to be there yourself from a protection perspective. And I think that's where we're seeing tremendous success of our product exam. We have 270 customers. Average million Dollar is the first product in the history of CyberSecurity to average $1 million a customer right out of the gate. And we're only 30 months out. So we think that has huge potential. As that becomes more and more prevalent in the market, what you're going to see is you're going to see people start using that as the underpinning of their future security stack. So I'm telling you this today, three to five years from now, when you look back, you will say, I remember that point. That was a turning point in cybersecurity, or it went back from being a passive, offline, slow perimeter protection business to being a real time, AI driven business. Now it's going to take a while to get all these customers to move in that direction, but I think we're there.

[Jim Cramer]

Well, Nikesh, you told me that I won't remember years from now that a lot of people feel that you should have raised because it's your last loads. Only one quarter left. And sure enough, this was a terrific opportunity to take up your annual recurring revenue. And you didn't do that.

[Nikesh Arora]

You know, Jim, we're here for the long game. And the whole idea of the long game is we believe it was, this was a tough quarter to execute. In April, as you can imagine, we had all the startup discussions, customers starting to get nervous. Thankfully, all that was behind us, but there was a few weeks of sort of uncertainty in the market, which we all had to power through. So I think these are phenomenal results in that kind of an execution environment. It once again tells you that we have a team that puts its heads down and get power through things like pandemic, supply chain attacks, geopolitical tension. And that's what we want to do. We want to keep executing over the next many years to try and take the business and double it.

[Jim Cramer]

Okay, so let's talk about these acquisitions. Protect AI Prisma airs. These are obviously very important for what you're doing. I'd like to know why people should be even more encouraged to buy the stock of power out there down here because of these two acquisitions.

[Nikesh Arora]

Well, Jim, you know, we went through a whole cloud security revolution five years ago, and we were very indexed on making sure that people can deploy the cloud in a safe environment. Now remember, our job in security is to anticipate the trend and try and figure out where the puck is going and say, I'm going to secure the future. That's hard work because we have to figure out what are the different ways the world can go from a technology perspective and build that capability. So, you know, the best compliment I heard the other day was a lot of the venture capitalists are Palo Alto's R and D lab because they're funding. All these great founders are out there working on great technologies. We have the privilege and the luxury of being able to look at all the development going on the market, say, I like this one. These guys the right track. Let's go partner with them. Let's make them part of our team. So we went and looked. Protect AI was doing the best work in the market. Ian and his team are fantastic. We had a meeting of the minds. Ian is going to come over, bring his team, and he's going to run our AI security capabilities. So it's going to be great. We're going to double the number of people focusing on AI security at Palo Alto with Prisma airs. And this allows us to go to every customer and say, listen, I know you're concerned about AI. There's so many concerns. What is it going to do my workforce, what is it going to do? My processes? But more importantly, what if bad actors take over my AI and all these agents? Then we will be in the control of somebody else. Now that's what we need to scenario. We need to Protect against. And that's what AI Security is going to do and that's what Prisma is going to help our customers.

[Jim Cramer]

Is there ever a level where we just say, you know what, maybe we shouldn't have a Gentex because we can't control them and we should just go back to two people.

[Nikesh Arora]

Well I think Jay, we're going to see, you know, there's a lot of conversation agents and I'm sort of eyes wide open on the agent topic. A lot of people have agents doing tasks which are non regrettable. You know, go find me this research, tell me what I've got there. I think eventually you're going to have to give these agents true agency. You know, and I've said this before to you, you know, for me Vemo is an example of giving it agency. The car drives itself, there's no human controlling it. And at some point these agents will have to get agency. And that's where real paranoia will strike. When customer, when customers are going to say oh my God, you mean there's going to be this thing running around my production system and deciding how many widgets to produce and it's going to manage the manufacturing capability by itself? Oh my God, what if this goes wrong? Please can you help me? Can you give me a solution that allows me to protect myself in the case these things go wrong? And that's what AI Security is about got is protecting for the rules where agents are going to go and possibly get hijacked by somebody.

[Jim Cramer]

You know, I think that's a terrific explanation because I don't want to back away. I think that the future is Agentix and we can't go. There's just too many companies that want to do it and we need it. We don't have enough people, 50 million people short, been about five years from now. But I do want to issue one thing. There was a time when your stock was down really big and you came on, you talked about platformization and I thought it sounded really good. I said that makes sense. And, and then of course it turned out to be a great idea. Where are we now in platformization? Because now everyone else is saying hey, you know, I got a great idea. Platformization. Where, where are we?

[Nikesh Arora]

Well Jim, you know, I discovered after we talked about platformization that actually wasn't real words. So I'm delighted that we were able to make it Happen. We did 90 platformizations this quarter. We're on track to get to our two and a half to three and a half thousand patronizations by 2030 that allows us to be a $15 billion air company. We just crossed our $5 billion mark this quarter. So we're very excited. All the signs project towards us being able to get to $15 billion by 2030. And as I said, we're in it for the long term. So if we can take this business and triple the next generation security era by 2030, we're going to be a large company.

[Jim Cramer]

Well, it doesn't sound like you're sitting here thinking, oh my, my Stock is down 3 and 3/4 percent. What did I do wrong? I'm not getting that flavor from you.

[Nikesh Arora]

You know Jim, I think more sellers and buyers this afternoon. We'll find out what happens tomorrow.

[Jim Cramer]

You know what? You are in the end, a sage by friend. And it has been right to buy every time. Hasn't it been right to buy every single time?

[Nikesh Arora]

Well, I'm in it for the long term, Jim, so I hope the shareholder, your shareholders and your, your club investors are in looking at it from the same length.

[Jim Cramer]

Well, we don't want to sell because the capital gain would be too big for us. We have to take, we are capital gains we have to take out of the trust, so to speak. That gives me less opportunity to make more money with charity from owning the stock of Palo Alto Networks. That's the case. Roar. Chairman CEO of Palo Alto Networks. You think he's thinking, you see, he's thinking a little bit longer term than tomorrow morning. I think that's the way I want my CEOs to be. Thank you, Nikash.

[Nikesh Arora]

Thank you, Jim. Love to see you again.

[Jim Cramer]

Back after the break. Coming up, Premier's putting his hard hat.

[Hotels.com Representative]

On and breaking down where companies tied to the housing sector stand.

[Jim Cramer]

Next.

[Schwab Representative]

Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn [e-mail] trading Are you still quoting.

[Jim Cramer]

30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted?

[Hotels.com Representative]

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[Jim Cramer]

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[Hotels.com Representative]

Welcome to the now it pays to Discover.

[Jim Cramer]

Learn more@discover discover.com credit card based on the February 2024 Nelson Report this morning we got results from Home Depot which, full disclosure is an important holding in my child trust. Even though the quarter was far from perfect and the stock in the afternoon gave up some very big gains from the morning, I thought it was strong in the places that matter. The closing price, remember, isn't always the the best judge of things. First, let me set the scene. See, Home Depot has been a battleground stock for the last six months. We first bought it in the mid-3007 last September. It initially was a huge winner. It ran all the way up to 440 in late November, but since then it has been clobbered by housing weakness, tariff worries and plummeting consumer confidence. Even its actual consumer spending has held up pretty well. We stuck with Home Depot though, in part because when I spoke to CEO Ted Decker in mid March, he was very confident about his ability to mitigate whatever tariffs might come our way. And he told a great story about how the despots ability to hold up in a tougher economy is unparalleled. He emphasized the long term view and reminding us that the US is still short several million housing units and also noted that while home prices have gone up significantly. Good for him by the way, because that gives you the ability to be able to wanting to add value into your house. Our existing housing stock is very aged historically, which means more business for the repair remodel market. That is a really good thing for Home Depot's business. Of course that was a couple of weeks before the draconian Liberation Day tariff announcements which sent this stock all the way down to 326 at its bottom April 9th. A lot of other stocks bottom then too, but since then the most extreme tariffs have actually been rolled back or paused. So Home Depot stock has rebounded nicely from its lows. Still, coming into today's quarter there were a lot of questions that that needed to be answered. Questions about how they're handling the tariffs and what it means for them that interest rates are creeping higher. Again, as I said at the top of the show, what we got from what was a slightly complicated set of results, but only I thought there was more good than bad. Even as again as the stock sold off during the day, the reported quarter was mixed. Home Depot same store sales fell.3%. That's worse than expected. But same store sales for the United states were up point two. That's better than expected. Total revenue was up 9.4% year over year higher than what the analysts were looking for, but the earnings came in a tad light. The despot also took a gross margin hit from its acquisition of SRS Distribution, which is a building materials distributor. They bought this show that they think is working out fabulously. So the core business is mostly fine, but it's not, let's say, beautiful. Still, I'm feeling more confident about Home Depot after these results. So now I'm going to tell you why, even though again, it looked like it's going to look like I'm on the wrong side of the trade for a moment. But hear me out first. There's what we call the cadence, the way the quarter unfolds from month to month for Home Depot. Total same store sales were down 3.6 in February, but that was when weather around the country was quite bad. Then they were up 0.6% in March, a little bit better weather, and then up 1.1% in April. That's very encouraging as the company clearly had momentum going despite spring gardening season, which as you can imagine is huge for the whole industry. As Home Depot's EVP of merchandising Billy Bastick said on the Today's Call quote, this is our super bowl season, end quote. I like that because it really captures the gravitas of the moment for this company. Plus, despite the mixed first quarter results, Home Depot reaffirmed its entire full year forecast. They're not talking about any real deterioration here. In general, management gave a very encouraging outlook for the future. They got into tariffs, explained that more than half of their purchase already sourced in the United States and they're working with vendors to diversify the supply chain away from countries that are hit hardest by the tariffs. CEO Ted Decker explained that 12 months from now, no single country outside the US represent more than 10% of Home Depot's purchases. I like the way they're approaching this. Unlike Wal Mart, Home Depot doesn't expect broad based price increases for customers going forward. I'm sure President Trump will be happy to hear that. And don't forget Home Depot's got a lot of heft and scale to it. It's not just Wal Mart. They can make some people take eat a little more than you and I can make them eat. Company also remains very bullish on the home improvement market is 55% of the homes are now 40 years or older. Now Decker also sounded very positive when the company's pro business, meaning sales to professional contractors and homebuilders. Big ticket. And that's what the Srs acquisition was all about and apparently they're seeing, quote, tremendous results here. I like that too. Now, the stock industry, as I mentioned, roared in response report hitting a high of $393. That's up 3.6% from yesterday's close in premarket trading for opening the mid-3880s. But the stock pulled back further to the open and that was probably because we got that spike in interest rates after President Trump indicated that he's not particularly interested in reining in the deficit. He just wants some big tax cuts that roiled the whole market. Again, I'm going to finish with a little talk about that too. And I didn't like it, but that's why Home Depot finished point down 0.61% today. I think it's worth buying in the weakest though, because I think it would have been up if it weren't for the fact that President Trump made those comments. Hey, by the way, while we're talking about building materials, can we not forget about Builders First Source, which is a major consolidator in what used to be a highly fragmented industry. This stock's been a huge long term performer, but it's peaked early last year and the stock has been tumbling ever since because it's tied not too directly to a not so odd housing market. And that's because of interest rates. Unlike the rest of the market, Builders First Source didn't recover from much in April. Then when the company reported May 1 stock went lower still because management lowered their full year forecast. They're just not feeling good about single family housing market. I don't blame them. It's not, it's stagnant with things looking so bleak for Builders First Source. It caught my attention last week though, when the company disclosed that its chairman, Paul Levy had bought a staggering 500,000 shares in the open market for an aggregate purchase price of $55.5 million dollars. That's about $111 per share. I got to tell you, I love to see insider buying, especially when the stock's been doing badly and the insiders committing a significant amount of money. Davis, the founder of JLL Partners, that's a private equity firm that established Builders for Source in the late 90s. So he's been there from the get go. He knows the business as well as anyone could and he just increased his stake in the company by 43%. Now, I always tell you that executives sell their stock for all sorts of reasons. Syndicated, college, buy another home, divorce, capital contribution, whatever. But they only buy their own stock in the market for one reason, because they think it's going to go higher. So that's certainly an encouraging thing to see from Mr. Levy at Builders First Source. Consider me intrigued. In the end, much of the housing market and many related companies like home improvement retailers and building materials distributors have been choppy of late. But today we got a big update from Home Depot. And even if the headline numbers weren't great, we heard many more positives than and negatives. And while we're looking at this corner of the market, the big insider buying at Builders for Source feels like the first positive bit of news from the company in quite some time. We will talk about this again. We talk about Home depot again tomorrow, 12 o' clock for the CMGC Investing Club where, you know, I like to do my monthly meetings and pack some punch. One of them will be for Home Depot. So here's the bottom line. It's probably too early to start pounding the table in this group, especially since they got clobbered today based on the action in the bond market. But all in all, when we get this budget deficit thing done, when we get a deal, I think you're going to have to start thinking about buying Home Depot and I know I'm willing to stick with it. Stay tuned though, because we hear from their chief rival Lowe's tomorrow morning. Let's take some calls. Why don't we start with Robert in New York?

[Caller]

Robert well, thank you very much, Jim, for having me. And I just want to say that this next stock that I'm about to tell you about, but you already told us about it, has been gaining momentum and hit their highest level today at 102. Goldman Sachs raised their price target to 96 and maintains a buy rating. This retailer focuses on the low cost everyday essentials for the regular person. This stock is up nearly 30% now. Jim, this is very important to the listeners because I don't think you do enough of this and remind them how much money you make us back on December 6, 2024 in the morning with favor. You said stop trading this stock. This thing is going higher down the road. Leave it alone and stop trading it.

[Jim Cramer]

Dollar GENERAL yeah, well, I said that because I never very good Dollar General and I've been following. I go there, I like it, it's in Pennsylvania. So 611A terrific store. And I just said I've been going there, I'm going there and going there. Each time it's better and better and better and the numbers look good. Todd Bassett's back doing a good job. And 102, I did mention the stock earlier. It's got the zeitgeist. It's the right stock for the right time. I agree with you and thank you for the boisterous approval of what we're up to. Anyway, I like what I heard from Home Depot overall today. Between that and the action of builders first source, which includes that huge insider buy, I'm feeling good about a space nobody else's, which is the home building space. Now, much more man money ahead, including my Susan's wind of hotels and resorts ahead of the summer travel season. And as Trump pushes to get his one big beautiful bill through Congress, I'm breaking down how the bond market could scuttle any potential tax cuts. And of course, all your calls, rapid Fire, tonight's edition of the Lightning Round. So stay with creep. How worried should we be about the travel and leisure sector? For years in the wake of the pandemic, consumers were short on time but long on money. And that fueled this fantastic wave of travel spending. This year the trend seems to be slowing up. Which brings me to Wyndham Hotels and resorts. With over 9,000 mostly franchise locations across more than 95 countries. These guys have their finger on the pulse of the industry. And when the last report at the end of April, management some encouraging commentary in the conference call. So let's take a closer look. We don't have these guys on much with this. I love this with Jeff Lotti. He's the presidency of Wyndham hotels and resorts. Ms. Bloody. Welcome back to Mad Monday.

[Jeff Lotti]

Thank you very much for having us back, Jim. We're here at Caesars Forum at the 2025 Wyndham Hotels and Resorts Global conference, which is the largest global conference we've ever had. You point out we're in 95 countries. Most of them are here. We have 9200 hotels franchise, we're 100% franchise. We're a pure play company when it comes to franchising. And the mood here is really optimistic.

[Jim Cramer]

Well, maybe you can tell people the difference because one I think is recession resilient, which is the franchise model. And frankly you have a lot of data in your deck which shows that the traditional hotel model not as strong for shareholders as a recession resistant, resilient one that you have.

[Jeff Lotti]

The franchise model, Jim, always outperforms in any downturn. We're not saying we're going into a downturn, but if we look back to the last three, during 9 11, this business outperformed the industry by 300 basis points in terms of RevPAR revenue per available room GFC 500 basis points versus the overall industry about performance and no better test than than during COVID where our business outperformed the overall industry by 2500 basis points. Because these select service small business owners behind me that rely a lot on blue collar travel can break even often at 30% occupancy and never had to shut their doors.

[Jim Cramer]

Well, that is fabulous and it's one of the reasons why I've known your company of course from the, from the Steve Holmes day remembers a family friend and just to build a great who.

[Jeff Lotti]

Is still chair of our board, the company that Steve built.

[Jim Cramer]

Yes, nobody likes Steve. But let me ask you something. I think it's very important when I'm in your position to have a great rewards program that really get people excited. Wyndham, the central locator can do that. What are you doing for awards? Because that seems to be a determinant for the blue car. Well, I shouldn't even know for everybody actually. We all want good rewards. What are you guys doing to stand out?

[Jeff Lotti]

You're in year out. USA Today readers have nominated and elected Wyndham Rewards as the number one loyalty program in their world. US News and World Report now has been just year in, year out selecting Wyndham Rewards. We're driving 50% of the occupancy for our small business owners, our franchisees here in the United States. It's coming to your point from loyalty and just today on the main stage we launched Wyndham Rewards experiences. Think about it, Jim. Everybody wants great experiences. We're providing great experiences with Madison Square Garden this summer and the best concerts that they have to offer offer giving our members access behind the velvet rope, allowing them to ride Zambonis during New York Rangers games or do high kick rocket routines over at Radio City. We have so many experiences that we're excited about. We want to keep this program the number one program in the industry and keep it contributing that direct contribution that's so important to our owners here on the floor.

[Jim Cramer]

Okay, now I know that we do have a bunch of people who are saying, you know what, it's getting a little gloomy out there. Obviously I do not detect that from where you are, but your people are boots on the ground. Tell me what people are saying about right now in the market for for travelers.

[Jeff Lotti]

Well, I mean right now let's look at the weekend ahead. Triple A is predicting that over 45 million Americans will travel at least 50 miles from home. They're predicting that that will be up 3% to last year. The previous record was set all the way back in 2005. So to your point, look, gas prices are low. 90% of our businesses drive to our booking trends right now are holding steady. We're not seeing any uptick in cancellation rates and consumer confidence is, is, is what it is it right now, the trends, those trends for us are our friend.

[Jim Cramer]

And I can't help but ask because 56% of your 900,000 branded rooms located in the US but you have a huge, huge look at international too. What are you seeing outside here? You called out India recently on an earnings call as being exciting place to be.

[Jeff Lotti]

We have a big contingent of Indian developers here. It is a lot of what is going on in this country with infrastructure development. The commitment to rebuild India's our nation's highways, roads and bridges is going on over there in India. And these developers are looking for that economy mid scale, select, service consistent lodging accommodation that Indian travelers could pull off their highways which are being built by Prime Minister Modi and find affordable, consistently high quality accommodation. So yeah, we are today the largest franchisor in India. Nobody franchises more hotels than Wyndham does today. It was our fastest country of growth last year in terms of our European, Africa, India, the Middle east pipeline. So we're seeing a lot of optimism. I certainly felt that we have a big team in Gurgaon and the developers that are here today are talking to so many institutional developers here in the United States that are asking is now the time for me to get in to develop in India.

[Jim Cramer]

Well, I like what you're saying, I like what I'm hearing and I think your upbeat attitude has always been infectious and has made shareholders a great deal of money. Jeff Lalotti, presidency of Wyndham Hotels Resorts, great to see you again. It's been too long, sir. Way too long.

[Jeff Lotti]

Thank you for having us on, Jim.

[Jim Cramer]

Absolutely. Nice. Back after the break. Coming up, Kramer takes your calls and.

[Nikesh Arora]

The sky's the limit.

[Hotels.com Representative]

It's a fast fire Lightning round next.

[Jim Cramer]

It is time. It's the lightning rounds with radio by Tulsa Saltier Pinot Congo serves my staff. First of grapes will be blended out and then the lightning round is over. Are you ready, Skinny? That time the lightning round comes up with Jared in Arkansas. Jared.

[Caller]

Hey Jim. I wanted to ask you about a newly listed stock on the NASDAQ DeFi.

[Jim Cramer]

I've not done the work on it. I've not done the work on it yet. And you are owed a real answer, not a hey that looks interesting because that's not the way I play it. I will come back and I appreciate the interest. Let's go to Alex in Oregon. Alex.

[Caller]

Hey, Jim, thanks for taking my call. Also, of course, getting back to me about lmat. And so the company I'm calling about today, actually, they kind of have three segments of business that seem to all have kind of tailwinds going on right now. There's no analyst coverage on it. And they just acquired a new company to kind of bolster their aerospace business. Tree I'm looking at ese.

[Jim Cramer]

Wow, two in a row. It happens. Something somebody the other day said, how do you know all those? And the answer is, I don't. It's another question. One I got to do more. Welcome. Let's go. Thank you for the kind words. Let's go to Yuri in California. Yuri, good afternoon, Mike.

[Caller]

How are you?

[Jim Cramer]

I am good. How are you, partner?

[Caller]

Wonderful. Thank you for taking my question. My question today is Zim Integrated Shipping.

[Jim Cramer]

Zim Integrated. No, I don't like that. And that dividend is a sucker's play. I don't want you in that stock. Let's go to Richard in Nevada. Richard.

[Caller]

Richard Blue Yaski. Daddy.

[Jim Cramer]

What's going on, partner? What's happening? What's happening?

[Jeff Lotti]

Yeah.

[Caller]

Well, I want to say, you know, I think I remember seeing you prior to Kudlow and Kramer on cnbc, maybe some special appearances or something. But I, you know, that's been a long time, so memory's not perfect.

[Jim Cramer]

They that this is the period before they invented color TV where they had just black, white. I remember that. It was Sarno. It was amazing. It was incredible. I look good. It was like Edward R. Murrow and me. How can I help you?

[Caller]

I went to the microfiche. Hey, all right. Recently we struck a deal with Britain on the tariff front. And Britain agreed to open their markets to more ethanol. Beef and poultry, it takes corn and grain to make ethanol. And to feed livestock, it takes fertilizer to grow corn. What do you think about buying leaps on Mosaic?

[Jim Cramer]

We are not. Early this weekend, when I was at Total Wine and More up there in Norwalk, I was shocked. Someone came to me and said, what do you think about Mosaic? I said, well, you know. Know what? I think it's just. It's killer. It's killer. But it is hype. It's just like a parabolic move. If I come in now, I think I am too late. A 52 week guy. I'm going to have to say, don't buy. Don't buy because it's just up too much. It's up too much. I'm sorry. Let's go to John in Florida. John, Jim, thanks for taking my call. The stock is the widest.

[Caller]

It seems to be dead money. You have it on. Having to have.

[Jeff Lotti]

Have not had them on the show.

[Jim Cramer]

Does seem to be dead money. It does seem. But I still like, look, I've got to tell you, it is dead money. I'm not going to change my view right here on the fly. I don't see much happening in the veterinary or livestock market at this very moment that's going to help them. And that, ladies and gentlemen, the conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. So this is the biggest tax cut.

[Nikesh Arora]

In the history of our country, or.

[Jim Cramer]

You'Ll get a 68% tax increase. And if that happens, I mean, what.

[Nikesh Arora]

Republican could vote for that to happen? Because they wouldn't be a Republican much longer.

[Jim Cramer]

They would get.

[Nikesh Arora]

They would be knocked out so fast.

[Jim Cramer]

And with that quote, the stock market just took a header. Just a nasty reversal that sent down a host of stocks, especially the banks and many retailers. What a bummer. Look, let me start by saying that I got nothing against tax cuts. I mean, who doesn't want a lower tax rate? And of course, Nobody wants a 68% tax increase, although I have no idea where the President actually got that number. But let's put that aside. Trump's right that he can probably destroy the career of any Republican in Congress who votes against this bill. That includes the blue state Republicans who want to fill the. Want to lift that cap on the state and local tax deduction and the genuine deficit hawks who can't justify cutting taxes without major spending cuts. So those legislators either fall in line or, yes, indeed, they are done. That's unfortunate because we really can't afford for Congress to keep blowing up the deficit. This bill passes as is, interest rates probably will rise, maybe even dramatically, and that's bad for everyone. And believe me, neither the Fed chairman nor the president can get those longer rates down without Congress cutting spending and, yes, raising some taxes. Look, I get all the President feels. He just raised a bunch of money from overseas to restore our economy to greatness. I love that he believes he's put us on a tariff path that will raise hundreds of billions, if not trillions. And the Doge contingent will also cut trillions in cost to. Now, I'm a little less optimistic, to put it lightly, but I won't quibble about the numbers. You Know why? Because my opinion does not matter. There's only one arbiter, one entity that can render judgment here, and it's either Democrat or Republican. It's the darn U.S. treasury market. And that decides whether the President's right or wrong. Right now, the bond market is saying he's wrong. In fact, it's calling him names. Treasury market's not running for office. And worse, the treasury market actually would love a 68% tax increase. I wish it would. I wish it did matter. But it does. Short term, the President can browbeat members of Congress in his own party who used to worry about the deficit. That means we'll likely get a budget deal that lowers taxes without doing too much to cut spending. However, the bond market can eat right through that tax cut by raising our borrowing costs, both from the bank and from your credit card. That's just the short term. Over the long term, the government to pay ever higher interest rates. If the President's wrong about the trillions and trillions of dollars or the tariffs increase cost savings from Doge, that will ultimately devalue the dollar, devalue your savings, potentially give us such severe inflation that whatever money we put in the bank from a tax cut right now will be worth a fraction of what we think it is a few years from now. The bond market was hoping that someone, anyone, any party, would decide to take up the challenge of shrinking the deficit. But I don't see it happening. Even though there are still enough Republican holdouts in the House to prevent the bill from passing, I don't take that seriously, because they're always going to fall in love with the President. So Trump wins if his tariffs raise trillions and higher growth, generates trillions in new tax receipts, and the dose cuts save trillions. I wouldn't take that bet. But if he loses, he'll be out of office by the time the bill comes due. Which is why no President has ever taken the deficit seriously since the 90s. We always hear that our kids will be losers if we keep borrowing money like this. They'll be the ones who are knocked knocked out so fast, not us. But at this pace, we may turn out to be the losers, too. I want the bond market to be wrong. I want to poke fun at, embarrass it, even run against it. But the bond market can't be embarrassed because in the end, it's in charge. And right now it's saying that there aren't trillions and trillions coming in. There's just a higher interest rates coming down the pike, which will obliterate the benefit of tax cut. Listen, we just got through four years of elevated inflation in part because the Biden administration borrowed like crazy, something I was very much against. The Trump administration keeps doing the same thing. Believe me, the bond market will take no prisoners. We deserve a government that thinks a little longer than the next year or two or the next election out. If it did, we could reach a compromise that cuts the deficit. We get that. We will have both lower interest rates and much higher stock prices. Now that's a budget bill this country deserves. Alex, as always, bull markets problems are fine. Just for you right here man Money I'm Drew Kramer. See you tomorrow.

[Hotels.com Representative]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer trading@schwab is now.

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