On Monday, Jim Cramer, the host of Mad Money, told viewers that they should not be too surprised by President Donald Trump’s decision to impose steep tariff hikes, a move Trump had promised during his campaign. Cramer emphasized that just because there were numerous announcements coming from the president does not necessarily mean the world was falling apart. Trump had been clear about his intentions, including putting tariffs on countries like Mexico, Canada, and China.
Cramer addressed the widespread panic that gripped many investors when Trump announced the tariffs. The tariffs were steep: 25% on Mexico, 20% on Canada (with an exception for oil, which would be hit with 10%), and 10% on China. Cramer found it surprising that so many people were caught off guard by these moves, given that they were in line with Trump’s campaign promises.
“Yet that’s all I heard last night and this morning where once again we heard that the world was ending with the market looking like it’s about to fall apart only to rebound when we got an amenable statement from the president of Mexico, Claudia Sheinbaum.”
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“Sheinbaum said that she had a good 30-minute conversation with respect and that “It’s about collaboration, coordination without losing sovereignty.” I like that… I know that a month from now, everything could change.”
Cramer further explained that while Mexico does face a $162 billion trade deficit with the U.S., Trump’s focus on halting illegal immigration and combating fentanyl smuggling was still central to his agenda. In Cramer’s view, this initial agreement with Sheinbaum was a victory for Trump, even if it was just a preliminary step. The market, which had been in turmoil before Sheinbaum’s comments, reacted positively to her peace offering. Cramer highlighted that Trump could now claim a win, as the agreement likely involves Mexico purchasing more American goods.
“So here’s the bottom line: Stop panicking when Trump does something you think is crazy, and remember that he promised to do most of this stuff before he was elected, and he still won. Many might say this is a precarious moment. I heard that again and again. I simply say you got what your country voted for, whether you like it or not, really it doesn’t matter. So get used to the turmoil. You don’t have to enjoy it. Remember that in the end, the president sure does.”
Cramer on These 9 Stocks Rallying Despite Tariff Worries
Our Methodology
For this article, we compiled a list of 9 stocks that were discussed by Jim Cramer during the episode of Mad Money on February 3. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the third quarter of 2024, which was taken from Insider Monkey’s database of 900 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
9. IDEXX Laboratories, Inc. (NASDAQ:IDXX)
Number of Hedge Fund Holders: 42
Talking about IDEXX Laboratories, Inc. (NASDAQ:IDXX), Cramer said:
“Less crazy? Healthcare, easy. Many of them report this week and they’re down pretty hard from their highs. What an easy group to buy, safety stocks, if tariffs cause a recession. Medical devices rallied big, IDEXX Labs, the vet supplier, reported an amazing quarter and it roared.”
IDEXX (NASDAQ:IDXX) creates and supplies diagnostic products and services for the veterinary, livestock, poultry, dairy, and water testing industries. The company released its full-year 2024 results on February 3. In 2024, IDEXX (NASDAQ:IDXX) reported a strong performance, with revenue of $3.898 billion, a 6% increase driven by a 7% rise in CAG Diagnostics recurring revenue, which remains a main business driver. The company also reported EPS of $10.67, marking a 6% increase. For 2025, it expects revenue growth of 4% to 7% on a reported basis, with CAG Diagnostics recurring revenue projected to grow 3% to 6% reported. Meanwhile, its 2025 EPS guidance is between $11.74 and $12.24.
8. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 88
Cramer highlighted that Walmart Inc. (NYSE:WMT) stock recently inched upwards despite the fact that it carries vegetables from Mexico.
“How about Costco? They got a big tomato field near me in Mexico, Walmart, they both really rallied, even as they do sell a lot of Mexican vegetables.”
Walmart (NYSE:WMT) is a leading retail brand offering a wide variety of products, such as groceries, health supplies, electronics, clothing, and private-label items. Cramer has been bullish on the company before as he expressed in November 2024:
“Our loyalty to value means that if you wanna buy Dixie paper bowls, Kellogg’s Fruit Loops, Dawn dish soap, and Tide Pods and then have them delivered, we’d much rather pay $48 and 13 cents from Walmart than $62 and 96 cents at Target. Yes, those are actual prices. Actual goods that were bought today and that’s too big a differential. Walmart’s scale and smarts are simply besting Target in the price arena… I am loyal to value and Walmart is offering me value and that’s why Walmart stock could be up 66% for the year and still climbing.”
It is worth noting that Walmart (NYSE:WMT) stock has seen a gain of over 75% over the last year.
7. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 75
Discussing Costco Wholesale Corporation (NASDAQ:COST), Cramer said:
“How about Costco? They got a big tomato field near me in Mexico, Walmart, they both really rallied, even as they do sell a lot of Mexican vegetables.”
Costco (NASDAQ:COST) operates a membership-based warehouse model, offering a variety of branded and private-label products in bulk at lower prices, making it a popular choice for shoppers looking for value in larger quantities. Before the election results came out in November 2024, Cramer mentioned the company among those who would do well regardless of the administration change.
“I like Costco… These retailers have done tremendous work pushing back against inflation by using their scale to push costs down then passing on the savings to you, the customer. Neither candidate can mess with that proposition… Costco’s got a business model where they make most of their money off the membership card. The model’s about getting as much volume as possible, not taking as much price as possible and that’s why everybody loves it. That and of course, the free samples… All three of these retailers work. Even if President Trump installs high tariffs, none has any meaningful foreign exposure that can hurt them even as they all have overseas operations.”
Since the election, Costco (NASDAQ:COST) stock has gained nearly 11%.
6. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 69
Cramer was surprised to see Chipotle Mexican Grill, Inc. (NYSE:CMG) stock doing well on Monday and commented:
“Hey, even Chipotle, which could have a real avocado problem, did quite well today and they’re about to report their quarter tomorrow. Wow, this group made no sense to me at all. Tariffs can make dinners more expensive, but the market was indifferent because they’re domestic operations.”
Recently, Cramer recommended buying Chipotle (NYSE:CMG) on weakness as he explained:
“Now, we’ve been focused on a handful of great restaurant chains lately, especially the incredible rally of Brinker, which you know as Chili’s. The premier growth stock in the group though has always been Chipotle, but somehow it’s been lost in the shuffle here.
Now maybe this is a chance to get back in before the next big move higher. Buying Chipotle on weakness is generally the right call, like forever. Of course, it has a new CEO Scott Boatwright, but he is an old Chipotle hand, and the rest of the crew’s intact, including friend of the show Jack Hartung, former CFO, now president and chief strategy officer. It might be time to start a position.”
5. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 76
Starbucks Corporation (NASDAQ:SBUX) is a well-known international brand that specializes in roasting, marketing, and selling coffee, along with a wide range of beverages, coffee beans, and food products in its locations. Talking about the company, Cramer said:
“There’s some real crazy stuff that happened today. If you offered a value meal, your stock went up higher. Brinker, Darden, Dutch Bros, McDonald’s, Starbucks, they all moved higher.”
Cramer recently highlighted Starbucks (NASDAQ:SBUX) as one of the best-performing stocks of the S&P 500 in January and explained:
“Hey, by the way, let’s have an honorable mention for Charitable Trust holding Starbucks, that was sixth in the S&P 500 last month. It gained 18% primarily because of a big move last Wednesday after the company reported a better-than-feared quarter with positive commentary from new CEO, Brian Niccol, formerly of Chipotle. While the stock moved a lot since Niccol was announced its new CEO last August, I’d still much rather bet with him than bet against him even up here.”
4. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 60
McDonald’s Corporation (NYSE:MCD) is a global brand that operates and franchises restaurants with a wide variety of food and drinks. Cramer noted that despite the tariff worries, MCD stock went up recently.
“There’s some real crazy stuff that happened today. If you offered a value meal, your stock went up higher. Brinker, Darden, Dutch Bros, McDonald’s, Starbucks, they all moved higher.”
In July 2024, while Cramer appreciated McDonald’s (NYSE:MCD) efforts to lower the prices, he also mused on the fact that it has become discretionary:
“If you listen to McDonald’s conference call from earlier in the week, you can tell what’s going on in America. As Joe Erlinger, the president of McDonald’s USA said, ‘Our restaurants in upstate New York have been running a local $5 meal deal that was highly successful, performing well with lower income customers and driving overall incremental sales.’ He goes on to say, ‘By leveraging learnings from within our system, we brought this to life for customers across the US. We’ve seen a lot of enthusiasm and the number of $5 meal deals sold are above expectations. Trial rates in the deal are highest among lower income consumers and sentiment towards the brand around value and affordability has begun to shift positively.’
… Rather than being a value staple for those who can’t afford to eat out elsewhere, Mickey D’s has incredibly now become what Wall Street elite calls the discretionary category. Something that’s discretionary is something that’s no longer essential, something you can do without. It’s right up there with vacations, travels, and hobbies. The fact that this happened, that McDonald’s food got so expensive that it could be done without, wasn’t something anybody expected, but it’s a reality that many companies are now fretting about.”
3. Dutch Bros Inc. (NYSE:BROS)
Number of Hedge Fund Holders: 37
Dutch Bros Inc. (NYSE:BROS) operates and franchises drive-thru locations across the United States under various brands, including Dutch Bros Coffee, Dutch Bros Rebel, and more. Cramer recently mentioned the company and commented:
“There’s some real crazy stuff that happened today. If you offered a value meal, your stock went up higher. Brinker, Darden, Dutch Bros, McDonald’s, Starbucks, they all moved higher.”
Cramer has previously been bullish on Dutch Bros (NYSE:BROS) as in early January, he remarked, “I think Christine is doing a remarkable job at Dutch Bros. Yes, this stock is all the way up.”
Dutch Bros (NYSE:BROS) stock has gained more than 145% over the past 12 months.
2. Darden Restaurants, Inc. (NYSE:DRI)
Number of Hedge Fund Holders: 28
Darden Restaurants, Inc. (NYSE:DRI) runs full-service restaurants and is home to popular brands like Olive Garden and LongHorn Steakhouse. Cramer noticed the company stock’s recent gain as he said:
“There’s some real crazy stuff that happened today. If you offered a value meal, your stock went up higher. Brinker, Darden, Dutch Bros, McDonald’s, Starbucks, they all moved higher.”
In December 2024, discussing Darden (NYSE:DRI), Cramer said:
“Take a look at the stock of Darden today, the parent of Olive Garden and Longhorn Steakhouse, it’s up almost 15%. Now, these places are not cheap… One of my favorites is not cheap… Despite the prices, Darden numbers are outstanding and that’s because all of these prices… they actually represent premium value. 14 bucks for an endless pasta bowl is a good deal. 35 smackers for a dynamite porterhouse cut? I know it sounds like a lot, but go compare it to other steakhouses, you’ll find it is a steal.”
1. Brinker International, Inc. (NYSE:EAT)
Number of Hedge Fund Holders: 41
Brinker International, Inc. (NYSE:EAT) owns and operates casual dining restaurants, primarily under its two brands, Chili’s Grill & Bar and Maggiano’s Little Italy, as well as through franchising. Here’s what Cramer said about the company:
“There’s some real crazy stuff that happened today. If you offered a value meal, your stock went up higher. Brinker, Darden, Dutch Bros, McDonald’s, Starbucks, they all moved higher.”
Cramer recently praised Brinker’s (NYSE:EAT) CEO and said:
“I want to start with someone we had on the show last night. He’s making more money for you than any company I’m talking about. I’m talking about Kevin Hochman. He’s the CEO of Brinker. Hey, just because it’s small doesn’t mean you can’t make money, there’s no rule. You may know them as the parent of Chili’s… It’s a chain of 1200 casual dining restaurants in the U.S.… A few years ago, Hochman departed a high-level job at Yum Brands where he ran KFC in order to take the helm of Brinker…
I always liked the price point… But I never liked the stock, nothing special, marginal, meaningless, and then less than three years ago, Hochman came roaring in as CEO and it’s never been the same. He simplified the menu that’s too hard… He gave you a value meal dinner under 11 bucks, an inexpensive, terrific mixed drink with real good tequila, special management, and… by the way, and a delicious dinner for everybody… The result? The stock’s now up more than 340% in just the past year.”
While we acknowledge the potential of Brinker International, Inc. (NYSE:EAT) 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 timeframe. If you are looking for an AI stock that is more promising than EAT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article was originally published at Insider Monkey.
