Mentioning that their “stock is in the hole,” a caller asked if they should stay with QXO, Inc. (NYSE:QXO) or leave during the September 11 episode of Mad Money. Jim Cramer replied:
I am very surprised. Brad Jacobs is a winner. This is a loser. I don’t think Brad, I don’t want to give up on Brad, but I’ll tell you, it’s the same thing as Home Depot, except for Home Depot’s got a yield. And people in the club, you know, they feel like I’m wrong at Home Depot. QXO feels very wrong, but it’s Brad Jacobs. I don’t want to bet against him.
Building Products Scale and Aggressive Acquisition Strategy
QXO, Inc. has moved rapidly to assemble a massive operating footprint, highlighted by major transactions including acquisitions of Beacon Roofing Supply, Kodiak Building Partners, and TopBuild. During its second-quarter financial report, QXO posted total revenue of $3.25 billion, highlighting roughly 70% year-over-year growth, driven by QXO’s expanded scale following the Beacon acquisition and the addition of Kodiak, which contributed $595 million during the quarter. Management is targeting long-term annual revenues exceeding $50 billion by using a playbook focused on procurement efficiencies, technological integration, and disciplined market consolidation.
Growth Pains and Integration Complexities
Merging large distribution networks simultaneously introduces substantial operational friction, temporary margin compression, and significant capital allocation requirements. Furthermore, softening demand across certain non-residential construction sectors and broader macro volatility have weighed heavily on sentiment for QXO, Inc.. Translating massive revenue scale into sustainable bottom-line earnings remains a major variable when navigating high expectations and fluctuating borrowing costs.
Smart Money Positioning and Market Sentiment
According to Insider Monkey’s database, 83 hedge fund portfolios held a stake in the company compared to 65 in the prior quarter. Of those hedge funds, Orbis Investment Management was the largest shareholder of the company during Q2 with nearly 74 million shares. Meanwhile, short interest data indicates notable bearish positioning, with the short percentage of float standing around 11.5%.
Cramer’s hesitation highlights the challenge of backing an aggressive roll-up strategy. Trusting an experienced businessman like Jacobs gives shareholders a reason to look past current losses, but riding out the short-term drop takes serious staying power. At the end of the day, success depends entirely on whether QXO, Inc.’s management can cleanly integrate these large deals and prove that the long-term payoff justifies the transition.
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