Jim Cramer on Home Depot (HD): "I'm Willing to Stick With It

We recently published a list of Jim Cramer Talked About These 10 Stocks Recently. In this article, we are going to take a look at where The Home Depot, Inc. (NYSE:HD) stands against other stocks that Jim Cramer discussed recently.

On Tuesday, Jim Cramer, host of Mad Money, broke down the day’s market movements as he pointed to rising bond yields as the main force behind a series of notable shifts in stock performance.

“Every day around here, we have a referendum on stocks, and you can’t let it get you down because tomorrow’s vote can always be different from today’s… Why is it like this?… Well, the answer is a mischievous one.”

READ ALSO Jim Cramer’s Recent Thoughts on These 15 Stocks and Jim Cramer Put These 12 Stocks Under the Spotlight

Cramer offered a broader perspective and explained that on most days, individual stocks respond either to the movements of other stocks or to the overall direction of the market. He said that the market, in turn, often takes its cues from the bond market, which he described as its “much larger sibling.”

On Tuesday, he noted that the bond market heavily influenced stock prices. He highlighted that every downward movement in bond prices, which translates to higher interest rates, was met with negative reactions from the stock market. According to Cramer, such a relationship meant that rising rates handed the advantage to the market bears and tipped the scales in their favor during daily trading.

“So here’s the bottom line: The good news is that rates can also go up and not just down by the time we get a budget deal. The bad news is that rates are threatening to break out to the upside. And if they can’t stay calm, if they jump to a new, higher level while Congress works on the budget bill, we’re liable to have more days like today, where you need a plethora of positive themes for any given stock to break free from the gravitational pull of these darn miserable Treasurys.”

Our Methodology

For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episodes of Mad Money aired on May 20. 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).

The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 88

Discussing the impact of high bond yields on the housing market, Cramer commented on The Home Depot, Inc. (NYSE:HD) as he said:

“This morning, we got results from Home Depot, which, full disclosure, is an important holding in my Charitable Trust. Even though the quarter was far from perfect and the stock in the afternoon gave up some very big gains from the morning, I thought it was strong in the places that matter… We stuck with Home Depot, though, in part because when I spoke to CEO Ted Decker in mid-March, he was very confident about his ability to mitigate whatever tariffs might come our way…

So the core business is mostly fine, but it’s not, let’s say, beautiful. Still, I’m feeling more confident about Home Depot after these results. So now I’m going to tell you why. Even though again… It’s going to look like I’m on the wrong side of the trade for a moment, but hear me out… There’s what we call the cadence, the way the quarter unfolds from month to month…

The stock pulled back further after the open, and that was probably because we got that spike in interest rates after President Trump indicated that he’s not particularly interested in reigning in the deficit. He just wants some big tax cuts that roiled the whole market… I think it’s worth buying on the weakness, though, because I think it would’ve been up if it weren’t for the fact that President Trump made those comments…

It’s probably too early to start pounding the table in this group, especially since they got clobbered today based on the action in the bond market. But all in all, when we get this budget deficit thing done, when we get a deal, I think you’re going to have to start thinking about buying Home Depot. And I know I’m willing to stick with it…”

Home Depot (NYSE:HD) is a home improvement retailer that sells building materials, home décor, garden products, and maintenance supplies. The company also offers installation services and rents out tools and equipment.

Overall, HD ranks 5th on our list of stocks that Jim Cramer discussed recently. While we acknowledge the potential of HD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than HD and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.