We recently published a list of Jim Cramer On 9 Stocks That Are Rallying Despite Tariff Worries. In this article, we are going to take a look at where McDonald’s Corporation (NYSE:MCD) stands against other stocks that Jim Cramer discusses as rallying despite tariff worries.
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.”
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).
A cook in a busy kitchen assembling cheeseburgers for orders.
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.”
Overall, MCD ranks 4th on our list of stocks that Jim Cramer discusses as rallying despite tariff worries. While we acknowledge the potential of MCD 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 MCD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.