On Wednesday, Jim Cramer, the host of Mad Money, took a closer look at the state of the market and the stocks that saw gains and losses that day.
“It’s time to praise the winners, the ones that don’t need to wait until April 2nd to find out whether their business will be slammed by tariffs when President Trump announces whose earnings will be cut and who stay the same in a host of industries because tariffs are like taxes and they can cut deep into profits. Today, it all came together even as the averages got hit.”
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He noted that Wall Street, for the most part, chose to rally around domestic companies, especially those in the service sector. The trend, according to Cramer, made sense after the president revealed a 25% tariff on all cars made outside the U.S. The news came after the market closed, and while some had anticipated tariff increases, few had expected such a severe measure.
Cramer noted that he even predicted earlier in the day that it might happen, but he did not find many who agreed with him. Now, with a new tariff on 7.38 million cars coming into the U.S., he suggested it would create a significant disruption in the global market, possibly starting that very evening. Despite the uncertainties caused by these new tariffs, Cramer pointed out that there could still be winners in such a situation once the dust settles. He referenced the S&P leaderboard, highlighting stocks that had shown resilience. He added:
“I bet the data center build-out continues to pace, but very few people believe right now in my view. We’re in a curious moment here where any reassurances that the industrial revolution of AI is still on just won’t cut it. Every single stock in the sector is being mauled by the bears.”
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 26. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Jim Cramer Discussed These 9 Stocks Recently
9. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
Cramer pointed out that NVIDIA Corporation (NASDAQ:NVDA) was at the center of the recent market turmoil, which was reflected in its nearly 6% drop on the day. He noted that the company was the most affected by the events that unfolded. He went on to say:
“Let’s start with the White House. There has been a feeling among executives that strictures put on by President Biden against NVIDIA when he did it right on the way out, once that limited the countries that NVIDIA could sell its best chips to, they might be lifted by President Trump. Now all day, I’m hearing that that’s wrong…. This morning, the Financial Time penned a story saying that NVIDIA’s chips somehow ran afoul of Chinese pollution controls….. It sounded like the typical journalist hit job against NVIDIA…. Nevertheless, along with the rumor, the White House slap down, well, you could expect a stock to get hit.”
Cramer reaffirmed his belief in the importance of NVIDIA’s (NASDAQ:NVDA) GPUs in the AI-driven industrial revolution, stating his stance on the company has not changed. However, he also predicted that the stock could continue to decline, noting he has been saying it for some time. He added:
“It’s become a whipping boy, I’ve been saying that. It’ll only get worse with tonight’s tariffs… I think the stock trades like a wavy inflatable tube man, also known as an air dancer…. My advice, if you think NVIDIA’s cheap and… the data center, the chief home of NVIDIA chips is spent, well then what? You know, there’s nothing wrong with owning a tube man. Except when you see a move south like this, you have to give it some room. You have to let it come down.”
NVIDIA (NASDAQ:NVDA) offers graphics, computing, and networking products for global markets including gaming, data centers, and automotive, among others.
8. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 161
Cramer commented on Broadcom Inc. (NASDAQ:AVGO) during the episode and stated:
“Now what happened in the service side here that was actually difficult was Super Micro. They provide hardware, but they also provide services. They, along with Arista Networks and Broadcom, they were all part of the data center story that people seem to have cooled on.”
Broadcom (NASDAQ:AVGO) is a company known for its expertise in designing, developing, and supplying semiconductor devices, with a strong track record in semiconductor design. During Squawk on the Street’s Monday episode, Cramer said:
“Broadcom’s in the mix by the way. And Marvel’s in the mix. But they’re not at the, they’re moons. They’re moons. I’m talking suns. . .people have to stay focused on that.”
7. Arista Networks Inc (NYSE:ANET)
Number of Hedge Fund Holders: 78
Noting that Arista Networks Inc (NYSE:ANET) is part of the “data center story”, Cramer remarked:
“Now what happened in the service side here that was actually difficult was Super Micro. They provide hardware, but they also provide services. They, along with Arista Networks and Broadcom, they were all part of the data center story that people seem to have cooled on.”
Arista Networks (NYSE:ANET) provides advanced networking solutions designed for data centers, campuses, and routing, focusing on AI-driven switches and software built for automation, monitoring, and security. It is worth noting that Cramer was recently bullish on ANET as he said on March 13:
“No, Arista’s been an amazing stock for many years and that’s because Jayshree Ullal is such a fantastic executive. Right now, it’s caught up in the data center negativity. At this point, this stock is now down 50 straight points. I’m gonna bet on Jayshree here. I would buy it.”
6. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 45
Super Micro Computer, Inc. (NASDAQ:SMCI) was mentioned by Cramer as he discussed that people have cooled on the data center theme.
“Now what happened in the service side here that was actually difficult was Super Micro. They provide hardware, but they also provide services. They, along with Arista Networks and Broadcom, they were all part of the data center story that people seem to have cooled on.”
Super Micro (NASDAQ:SMCI) focuses on the design and manufacturing of advanced server and storage solutions. On March 7, when Cramer was asked about the company, he commented:
“There are still remedies that are needed. Until all the remedies happen, I am not going to approve it. In the meantime, that industry has become very cutthroat. Look at HPE today. If you want to know the winner in that space, it’s going to be Michael Dell and I do say at this level that it would be a good idea to buy Michael Dell’s company. It is so low, it sells, it’s nine times earnings and Michael Dell is fantastic at what he does and also probably one of the most charitable people I’ve ever met.”
5. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 44
Highlighting yesterday’s losers, Cramer mentioned Moderna, Inc. (NASDAQ:MRNA) and said:
“Now, let’s consider the other side of the trade, the biggest losers, all of which were somehow connected to the data center except Moderna, which plunged 7% because of Financial Time’s story. It says they might… be targeted by RFK Junior at Health and Human Services and it’s certainly possible.”
Moderna (NASDAQ:MRNA) is a biotechnology company dedicated to developing messenger RNA-based therapies and vaccines for a range of diseases. Cramer was bearish on MRNA in January when he commented:
“No Moderna’s been one of the biggest disappointments of the year. I think, Stephane Bancel, he would be very good more on science, maybe if they had more of a, somewhat CEO in there, that would be terrific.”
4. Molina Healthcare, Inc. (NYSE:MOH)
Number of Hedge Fund Holders: 48
Cramer, explaining the rally behind Molina Healthcare, Inc. (NYSE:MOH) stock yesterday, said:
“Finally, look at a little outfit called Molina Healthcare, again, I’m looking at the leaderboard, the domestic health insurer that works with state governments to give people healthcare while trying to keep costs down. These guys have no exposure to tariffs whatsoever, one reason why the stock rallied more than 4% today. That’s an ideal service business when you’re talking about 25% tariffs on foreign cars.”
Molina Healthcare (NYSE:MOH) offers managed healthcare services to low-income individuals and families through Medicaid, Medicare, and state insurance marketplaces. In 2017, when a caller inquired about the company, Cramer stated:
“Let’s understand each other that I am only recommending one in that group, and that stock is UnitedHealth, UNH, which I think will go up 10 points while Molina meanders.”
Since then, Molina Healthcare (NYSE:MOH) stock climbed more than 453%, while UNH stock gained more than 217%.
3. Dollar Tree, Inc. (NASDAQ:DLTR)
Number of Hedge Fund Holders: 64
Mentioning Dollar Tree, Inc. (NASDAQ:DLTR), Cramer said:
“There’s also Dollar Tree, that’s the all-American dollar store. They reported very good numbers today, but mercifully dumped Family Dollar. Now that was an ailing business. It never should have been bought in the first place…. Now I know a very significant portion of Dollar Tree’s merchandise comes from China, but on their conference call, they said they’d be able to mitigate a lot of the cost. Now that is great news. No wonder, the stock’s rallied more than 3%.”
Dollar Tree (NASDAQ:DLTR) operates discount retail stores offering a broad range of products, including consumables, household items, seasonal goods, clothing, and electronics. Last Friday, Cramer somewhat extensively commented on the company as he said:
“Wall Street used to love the dollar stores because, unlike most retailers, they kept putting up stores and generating good growth. They went in neighborhoods, other retailers steered clear of, carrying what looked like inexpensive merchandise. Well, that changed during the pandemic. They raised their prices and raised them and raised them in order to pass on the value proposition and it’s never been the same, right? There is no value proposition. These days, the reduced sizes often give you the appearance of value, but people know when they’re getting had. That’s why I’d stay away from Dollar Tree. This thing does not represent the kind of value that we want or that I used to get when we used to go there all the time. By the way, even Walmart’s struggling. So when Dollar Tree reports Wednesday, I’m not thinking it’s gonna be great.”
2. Paychex, Inc. (NASDAQ:PAYX)
Number of Hedge Fund Holders: 36
Paychex, Inc. (NASDAQ:PAYX) was mentioned during the episode, and here’s what Cramer had to say:
“Another’s Paychex… Paychex works with small and medium-sized US businesses… and they offer all sorts of services, services being precisely the kind of thing that won’t be hit by tariffs. Remember, you may think that’s a low bar, but think again. So many of our major companies have expanded overseas that the sea of the S&P 500 is pretty much blanketed with mines and we have very pure public service companies.”
Paychex (NASDAQ:PAYX) provides comprehensive human capital management services, such as payroll, HR, benefits, insurance, and retirement plan administration, primarily catering to small and medium-sized businesses. In January, Cramer discussed the company as he said:
“I had John Gibson on recently. He’s the CEO of Paychex. And this is the largest payroll processor for small to medium sized businesses. Here’s what the Fed did wrong. Here’s what the Fed did wrong. Here’s what the Fed did wrong. They didn’t, he just got, a Fed advisor, John. The small business outlook post the election was astonishing. And the amount of hiring post the election was incredible. But that was not in any of the models. What J Powell [inaudible] sit around and say, listen if Trump wins we gotta stop, stop cutting? But that was the key fulcrum. What small business, the backbone of the US economy I may add, and we got that wrong. Everyone got it wrong except for Gibson because he was looking at the Paychex stubs. And he saw the hiring explosion.”
1. Cintas Corporation (NASDAQ:CTAS)
Number of Hedge Fund Holders: 56
Cramer highlighted Cintas Corporation (NASDAQ:CTAS) as a top performer on the S&P leaderboard, calling it an “old Cramer favorite”. He praised the company’s strong and consistent performance.
“It’s the uniform rental play. It aids more than a million companies, mostly small, and medium-sized businesses with much more than their clothes. Used to be just uniforms, now they got natural accessories, mats, mops, first aid equipment, all sorts of restroom supplies. Cintas crushed the numbers today with much better than expected revenue growth, the highest gross margins the company’s ever had.
CEO Todd Schneider reached out to me to tell me, ‘There is some uncertainty in the marketplace, which we are carefully monitoring, but our value proposition continues to resonate.’ See, service business, small-cap, not worried about tariffs. Now, I was bummed to hear that they’re no longer pursuing a merger with UniFirst, but the target didn’t want to play ball. Too bad, could have been an unassailable giant that we’d all be talking about. But after looking at this quarter’s book of business, I know that Cintas can live without them and is not impacted by tariffs.”
Cintas Corporation (NASDAQ:CTAS) provides business uniforms along with a range of associated services, as well as products and solutions for first aid, safety, and fire protection.
While we acknowledge the potential of Cintas Corporation (NASDAQ:CTAS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CTAS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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