On Tuesday, Mad Money host Jim Cramer discussed the market dynamics that have emerged following President Donald Trump’s recent shift away from his previously aggressive stance on tariffs.
“All day, I heard that the market went higher because we had a cooler-than-expected Consumer Price Index number. Okay, it’s true, inflation only increased by 2.3%, less than expected. That’s right where the Feds should be willing to cut rates if the economy softens. But long-term interest rates actually went up today, not down, so clearly nobody’s betting on rate cuts.”
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Cramer pointed out that it suggests market participants are not positioning themselves for rate cuts just yet. The sharp rally also created a logistical problem for short-sellers, who were caught in a bind. Cramer noted that the size of the market was insufficient to allow those betting against stocks to both cover their positions and buy in quickly enough to benefit from the upswing. He said that it is a pivot from “Trump Two”, the version of the president focused heavily on tariffs, to “Trump One,” who, while still advocating for tariffs, appears more interested in using them as negotiating tools rather than fully enforcing them in a way that could tip the economy into recession.
By stepping back from the brink of imposing sweeping tariffs, Cramer argued, the risk of unchecked inflation has been reduced. He noted that this, in turn, makes it easier for the Federal Reserve to lower interest rates down the line if needed. He commented that it can lead to “a far more positive backdrop in the future”.
“The bottom line: The bears are paying the price while the individual investors who held on are basking in the glory of one of the greatest rallies ever, as the president ultimately made the extremely rational decision to not destroy the entire stock market. Maybe more of us should have seen that coming, especially when he told us it was a great time to buy, and indeed it was. What a call.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on May 13. We listed the stocks in ascending order of their hedge fund sentiment 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 Put These 8 Stocks Under a Microscope Recently
8. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Holders: 37
When a caller asked Cramer about Roku, Inc. (NASDAQ:ROKU), he commented:
“Alright. You know, there’s been a bunch of people who don’t like Roku. I’m not going to join that gaggle. I think the stock has some upside because they are doing some pretty terrific things in streaming, so I’m okay with it.”
Roku (NASDAQ:ROKU) runs a streaming platform that provides access to a broad selection of content. The company provides advertising and subscription services, sells streaming devices, Roku-branded TVs, smart home items, and audio products. It also enters licensing deals with service providers. JDP Capital Management stated the following regarding Roku, Inc. (NASDAQ:ROKU) in its Q4 2024 investor letter:
“Roku, Inc. (NASDAQ:ROKU) was down 15% in 2024 closing at $77.38 per share, about 20% above our cost basis. The company has an enterprise value of about $9 billion, no debt, and trades for a little over 2x estimated 2025 platform revenue (hardware revenue excluded).12 Roku has been undervalued and under-owned for so long that a positive re-rating of the stock to an acquisition value would justify a multi-bagger return…
Roku has not been able to shake its reputation as a posterchild for the COVID-era stock boom. What started as a slowdown in platform revenue in 2022 morphed into a bearish narrative that the company lacks a competitive advantage and pricing power in Connected TV advertising (a narrative that plagued Spotify’s stock for years).
The way we consume TV has changed dramatically over the last few years. When I first started researching Roku in 2016, most TVs were not connected to the internet. The consensus view at the time was that streamed TV content could only be a niche at best compared to cable TV…” (Click here to read the full text)
7. SoFi Technologies, Inc. (NASDAQ:SOFI)
Number of Hedge Fund Holders: 43
Praising SoFi Technologies, Inc. (NASDAQ:SOFI), a caller inquired about it, and Cramer replied:
“Oh, I like SoFi. We’ve been back, you know, Anthony Noto knows we have been behind this thing the whole way, and you know what? It gets thrown back at this level, I am not concerned. I think it goes to new highs.”
SoFi (NASDAQ:SOFI) provides lending, banking, insurance, and investment services, which are all accessible through a single digital platform. When Cramer was asked about the company in March, he advised investors not to panic, as he commented:
“Let’s not worry. Let’s not worry. Okay, this is run by Anthony Noto. He is doing a super job. I know that right now, stocks are for sale. I don’t want you to sell it. It can come down a little bit more. Do not panic. The company’s in good hands and the stock was up a great deal not that long ago. I think you’re fine. I’m not saying it can’t go to $10, I am saying that Noto’s money.”