Mad Money w/ Jim Cramer 5/20/25
44:24 Share

As America's leading business lender, Bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn more at bankofamerica.com slash localbusiness. Bank of America, official bank of FIFA Club World Cup 2025. Copyright 2025 Bank of America Corporation. All rights reserved.

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. I'll do my friends. I'm just trying to save you money. My job is not just to entertain, but to explain how days like today happen. So call me at 1-800-743-CNBC or tweet me at Jim Kramer. 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.

Yep, the voting booth never closes around here, so you get days where the Bears turn out in droves. Dow shedding 115 points, S&P dipping 0.39%, NASDAQ losing 0.38%. Why is it like this? Why do stocks even gyrate so wildly when nothing's really happening? Well, the answer is a mischievous one.

On most days, stocks react to other stocks or the overall stock market. And the market itself tends to react to the gyrations of its much larger sibling, the bond market. The bond market certainly colored today's stock market, which reacted negatively to every tick down in bond prices because lower bond prices mean higher interest rates. When rates go higher, the bears almost always win the daily election.

Take the stock of Home Depot, which reported this morning. We all know the orange roof, right? This will really help you to understand. At first, that stock rallied hard. At one point, it was up almost 14 points in pre-market trading. Ooh, I like that. The trust owns it.

The gains shrunk to the single digits during the 9:00 a.m. conference call, even as the call was quite upbeat, as you'll hear later in the show. But as interest rates went up over the inability for Congress to find spending cuts, the stock wilted. Ordinately, it finished the day in the red. Makes sense.

Well, then, kind of. You see, Home Depot does best when there's strong housing turnover, which means higher rates are bad for business because they inhibit turnover. So the Home Depot referendum rigged by the bond market then turned negative in the most important stock of the day, lost the vote.

That crushed a host of retailers. Some had to do with housing. Others didn't. Of course, it didn't matter if there was a real connection. They might be joined by together by an ETF or simply by the zeitgeist that stems from Home Depot's importance in the retail firmament. Now, I don't want you to worry too much because there'll be another election tomorrow. And those reports, there's always another election these days because there are so many companies that matter to the overall market.

and because the bond market never stops moving. And if Congress passes this huge tax cut, which I think it actually will, the bond market will be moving against us. The cut in the end will not make up for the pain of higher interest rates and what they can do to your pocketbook and the economy. Does it have to be this way?

That's a great question. On the eve of tomorrow's noon CNBC Investing Club meeting, let me give you my answer. Some stocks are more hostage to the bond market than others. Stocks related to the fickle consumer are controlled by the bond market. For them, the daily referendum can get pretty wild. When rates go higher, the voters, big institutional money managers, have been electing the dollar stores, betting that times will turn grim with rates going higher and those stocks do well when the consumer is hard-pressed. The

Dollar General stock rallied 4% today despite Home Depot going down. Did it deserve to? It doesn't matter because we won't know how it's doing until the cut reports on June 3rd, which is light years away. It's just it fits the rate paradigm. That's all.

Bank stocks tend to rise and fall for the bond market, too, because when rates go higher, you usually get less economic activity. Banks need a stable environment to get deals done. Again, the bond market's in control here. Some real bargains are developing in the banks, but they're hard to pin down while interest rates are jogging higher. But then there are stocks and sectors that have no real connection to the bond market. And these are what I want to talk about for a second. These stocks are controlled by what I call powerful secular themes, so powerful that bonds simply can't bring it down.

Right now, I'm feeling bearish in the bond market. So these secular growth stocks are kind of what I want to bet on. It's what I'm focusing on my talk tomorrow to join the club. So let me give you an example of what's not up for election. What can override the daily plebiscite?

Boy, these stocks are not easy to find right now. But when you do, you got to hold on for dear life. At a time like this, when Congress is trying to come up with a budget, we're going to have to endure many suboptimal days where we have to expect upsets and reversals and defeats. But they will be nothing but distractions.

See, it's an okay time, not bad, not great. And there are plenty of stocks that can power through if they have secular themes pushing them. It's a little harder to find these winners given how much we've already run from the bottom, though. So I'm going to give you a textbook one so you know exactly what I'm talking about because it's so visible. We're going to talk about the stock of GE Vernova. That's the power division that was spun off from the old General Electric that so many of you like.

Right now, we've got several huge themes occurring at once. We know that we have a gigantic number of data centers being put up in the country, correct? Now, they require a tremendous amount of electricity. They're big drainers. Our most abundant source of power comes from burning of natural gas. We've got more natural gas than any other country. GE Vrnova makes the turbines. Those are huge machines, up to 700,000 pounds, that burn the natural gas, which then generate the electricity. Now, there's a theme for you, but that's not all.

Today, the Tennessee Valley Authority, remember them, announced that it's going to submit a construction permit for a small modular nuclear reactor. Again, because we need more power for the data centers. Who makes those? GE Vernova. And we know that the Empire Offshore Wind Project off the coast of New York just got re-greenlighted by the Trump administration. According to a 2022 press release, GE Vernova will be responsible for designing and building the high voltage electrical system connected to this infrastructure.

It's a huge multi-year project that would be fantastic for, yes, G.E. Vrnova. Oh, and if you are a country with a trade surplus for the U.S., the best way to get it down and then lose the ire of the president, get rid of the wrath, well, it's always been to buy a Boeing plane, but...

I don't think that works as much anymore. You know what you got to do? You got to buy a turbine from G.E. Vrnova. It takes a lot to buck the bomb voters, but G.E. Vrnova is not one, not two, not three, but four secular trends going for it. That's what you need. That's belt suspenders and suspenders and then belting it.

Or take the stock of Tesla, which you know I like here. Today, my colleague David Faber interviewed Elon Musk. He crushed it. I don't know if you caught it. Elon Musk, the man behind Tesla. I'm very proud of David. He's my partner. Musk reminded us that his machines will soon be on the road driving autonomously, one million of them, and the numbers have gotten better for the traditional business. Now, the latter, it can be verified. The former sounded a little bit like the hubris talking.

Still, that kind of thing can allow Tesla to buck the bond market. Now, unfortunately, at the very moment, the bonds are so in charge that Tesla stock could only go up while David was asking most positive questions about the business. The stock would

stock would go down when David talked about Musk government work and the impact it might have on car sales. Still, it managed to finish the session up a buck and change. I guess that's a victory. But I think it would have been up quite a bit if we had a more benign backdrop of bonds. Boy, this bond market, what a tough opponent.

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 treasuries.

I need to go to Spars in California. Spars. Booyah, Jimmy Ski. First on Long Time from sunny SoCal. Nice. Great you called in. What's going on? I wanted to shout out to Mama, if you would. She's hanging out in Westlake Village and she had a question. Sure. Let's do that. Pin action on arm. You think with all the changes we're going to see anything go on there?

Look, I think that the pin action arm, look, we got arm out there. AMD's starting to feel a little better. We know NVIDIA's there. But I am going to give you a little curveball here. I think that Broadcom, which went down really hard, is the one that I think can go up. It was up today. At one point, I was thinking about maybe I had to do a little ka-ching, ka-ching. But Jeff Marks, my partner...

I think he feels otherwise, and I'm going to go with him. I need to go to Greg in my home state of New Jersey. Greg. Booyah, Jim. Greg in Union County. Good to have you down the block from me. You're down the block from me. I like that.

I know. My question is, I love the dividend stocks now that I'm 68, and I'm slowly buying some, but I need a food group. And I think that Wendy's is attractive and has a good dividend. What are your thoughts? Well, I'm going to go against you because they cut it.

Okay. And you know what? Once you, once the dividend gets cut, I don't then go seeking to see if they're going to value. I hope that things are fine. Now. Um, I didn't like, I, that last quarter was not so good. Yeah. Look, uh, everybody knows that my wife was loves Wendy's, uh,

But that's not enough to buy the stock. All right. Anyway, if rates keep moving higher, we're going to have to have more days like today where it looks real good and then it goes bad. And the president's got to be careful. We don't want him saying we want the biggest tax ever. Just make it so that we're doing OK in the country and we'll be happy.

On Man Money Tonight, Palo Alto's on the move after earnings and not in the direction I like since my trust owns it. Then could Home Depot build higher after what I just talked about? I don't know. I'm digging in even deeper so you get what's really going on. Plus, could Wyndham Hotel Resorts be your ticket to the travel sector? We haven't had them on the show in ages. I'm going to talk to the CEO. So stay with F. Kramer.

Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. Hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

I needed relief. It helped me move better.

Cosentix Secukenumab is prescribed for people two years of age and older with active psoriatic arthritis. Don't use if you're allergic to Cosentix. Before starting, get checked for tuberculosis. An increased risk of infections and lowered ability to fight them may occur, like tuberculosis or other serious bacterial, fungal, or viral infections.

Some were fatal. Tell your doctor if you have an infection or symptoms like fevers, sweats, chills, muscle aches, or cough. Had a vaccine or plan to, or if inflammatory bowel disease symptoms develop or worsen. Serious allergic reactions and severe eczema-like skin reactions may occur. Learn more at 1-844-COSENTIX or cosentix.com. Ask your rheumatologist about Cosentix.

Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson report.

Some stocks are some of my absolute favorite companies tend to sell off in response to earnings, even when the numbers are actually real good. Take Palo Alto Networks as the cybersecurity kingpin has been a major long term winner for my travel trust. Long term. This stock is in the habit of pulling back after reports and then rallying right back. And then some, sure enough, so far, it's true to form tonight. Stocks down a billion after hours. Why? Well, because Palo Alto beat the numbers, but they didn't raise a couple of key lines in the forecast. Not bad.

bothers people. We're going to go over that. My gut says you want to buy the stock on weakness because it's always been right. But my brain says we need to do the homework first. So let's check in with Nikesh Arora. He's the chairman and CEO of Palo Alto Networks. He's got a better read in the quarter. Mr. Arora, welcome back to Bad Money. Nice to see you again, Jim. Okay, so Nikesh, you start off by talking about an inflection point. We're finally there. It looks like that the AI business is really powering your growth now.

Well, Jim, I was saying I was at a conference this morning. I was at a conference last night. Everybody wants to talk AI. Everybody wants to talk agentic AI.

What's fascinating is that when people talk AI, all the naysayers, all the companies that you're holding back on their technology transformations going to the cloud are suddenly trying to re-accelerate because you cannot deliver AI unless your data moves to the cloud. All the new models, whether it's Google's announcement from this morning, the new versions of Gemini or OpenAI, everything's on the cloud. If your data is not on the cloud, your company is not moving to the cloud, you're going to be left behind in this AI race.

over $300 billion committed to building large AI data centers in the world in the next 12 months. Everybody's got to go there. And when you go there, you've got to do it securely. So I think this is a perfect time for security companies to be out there working with our customers to make sure, as we say, deploy AI bravely. And it's going to be an inflection point. Well, let's talk about the Hitchhiker's Guide to the Galaxy.

Because you have a terrific unit 42, which I am just stung by the fact that they were able to simulate an entire ransomware attack in under 25 minutes using AI. Dikesh, we're dead. If that's the case, if those guys can do that, we're dead. You can't stop that stuff.

Well, Jim, I'm going to sound like a broken record. You and I have talked about this. We've come from an era where it took days to figure out you were breached. Now we're down to hours going to minutes. Now, if your attackers are working at minute speed and eventually real time, you have to be there yourself from a protection perspective. And I think that's where we're seeing tremendous success of our product, XIM. We have 270 customers, average million dollar ARR. It's the first product in the history of cybersecurity to average a

a million dollars a customer right out of the gate. We're only 30 months out. So we think that has huge potential. As that becomes more and more prevalent in the market, what you're going to see is you're going to see people start using that as the underpinning of their future AI security stack.

I'm telling you this today, three to five years from now, when you look back, you will say, I remember that point. That was a turning point in cybersecurity where it went back from being a passive, offline, slow perimeter protection business to being a real-time AI-driven business. Now, it's going to take a while to get

all these customers to move in that direction. But I think we're there. Well, Nikesh, you told me that I won't remember years from now that a lot of people feel that you should have raised because it's your last, there's only one quarter left. And sure enough, this was a terrific opportunity to take up your annual recurring revenue. And you didn't do that. You know what, Jim? We're here for the long game.

And the whole idea of the long game is we believe this was a tough quarter to execute in April, as you can imagine. We had all this tariff discussions, customers starting to get nervous. Thankfully, all that was behind us. But there was a few weeks of sort of uncertainty in the market, which we all had to power through. So I think these are phenomenal results in that kind of an execution environment. It once again tells you that we have a team that puts its

heads down and get power through things like pandemic, supply chain attacks, geopolitical tension. And that's what we want to do. We want to keep executing over the next many years to try and take the business and double it. Okay. So let's talk about these acquisitions, Protect AI, Prisma, Ayers. These are obviously very important for what you're doing. I'd like to know why people should be even more encouraged to buy the stock of Palo Alto down here because of these two acquisitions.

Look, Jim, we went through a whole cloud security revolution five years ago, and we were very indexed on making sure that people can deploy the cloud in a safe environment. Now, remember, our job in security is to anticipate the trend and try and figure out where the puck is going and say, I'm going to secure the future. That's hard work because we have to figure out what are the different ways the world can go from a technology perspective and build that capability. So the best compliment I heard the other day was,

A lot of the venture capitalists are Palo Alto's R&D lab because they're funding all these great founders who are out there working on great technologies. We have the privilege and the luxury of being able to look at all the development going on the market and say, I like this one. These guys are on the right track. Let's go partner with them. Let's make them part of our team. So we went and looked.

Protect AI was doing the best work in the market. Ian and his team are fantastic. We had a meeting of the minds. Ian's going to come over, bring his team, and he's going to run our AI security capabilities. So it's going to be great. We're going to double the number of people focusing on AI security at Palo Alto with Prisma Airs.

And this allows us to go to every customer and say, listen, I know you're concerned about AI. There's so many concerns. What is it going to do to my workforce? What is it going to do to my processes? But more importantly, what if bad actors take over my AI and all these agents, then we will be in the control of somebody else.

Now, that's what we need to scenario, we need to protect against, and that's what AI security is going to do, and that's what Prisma Air is going to help our customers. Is there ever a level where we just say, you know what, maybe we shouldn't have a Gentex because we can't control them and we should just go back to people?

Well, I think, Jay, we're going to see, you know, there's a lot of conversation on agents, and I'm sort of eyes wide open on the agentic topic. A lot of people have agents doing tasks which are non-regrettable. You know, go find me this research. Tell me what I've got there. I think eventually you're going to have to give these agents true agency. And I've said this before to you. You know, for me, Waymo is an example of giving it agency. The car drives itself. There's no human controlling it.

And at some point in time, these agents will have to get agency. And that's where real paranoia will strike when customers are going to say, oh, my God, you mean there's going to be this thing running around my production system and deciding how many widgets to produce? And it's going to manage the manufacturing capability by itself? Oh, my God. What if this goes rogue?

Please, can you help me? Can you give me a solution that allows me to protect myself in the case these things go wrong? And that's what AI security is about. It's protecting for the real scenarios where agents are going to go and possibly get hijacked by somebody. You know, I think that's a terrific explanation, because I don't want to back away. I think that the future is agentics and we can't go. There's just too many companies that want to do it and we need it. We don't have enough people. We're 50 million people short and they're up.

five years from now. But I do want to ask you one thing. There was a time when your stock was down really big and you came on, you talked about platformization, and I thought it sounded really good. I said, that makes sense. And then, of course, it turned out to be a great idea. Where are we now in platformization? Because now everyone else is saying, hey, you know, I got a great idea of platformization. Where are we? Well, Jim, you know, I discovered after we talked about platformization that actually it wasn't real words. I'm delighted that we were able to make it happen.

We did 90 platformizations this quarter. We're on track to get to our 2,500 to 3,500 platformizations by 2030. That allows us to be a $15 billion ARR company. We just crossed our $5 billion mark this quarter. So we're very excited. All the signs project towards us being able to get to $15 billion by 2030. And as I said, we're in it for the long term. So if we can take this business and triple the next generation security ARR by 2030, we're going to be a large company.

Well, it doesn't sound like you're sitting here thinking, oh, my, my stock is down three and three quarters percent. What did I do wrong? I'm not getting that flavor from you. You know, Jim, I think more sellers than buyers this afternoon. We'll find out what happens tomorrow. You know what? You are in the end a sage, my friend. And it has been right to buy every time, hasn't it? Been right to buy every single time.

Well, I'm in it for the long term, Jim. So I hope your shareholders and your club investors are looking at it from the same lens. Well, we don't want to sell because the capital gain would be too big for us.

We have to take our capital gains. We have to take out of the trust, so to speak. That gives me less opportunity to make more money with charity from owning the stock of Palo Alto Networks. That's the guest, Chairman, CEO of Palo Alto Networks. You think he's thinking you see he's thinking a little bit longer term than tomorrow morning. I think that's the way I want my CEOs to be. Thank you, Nikesh. Thank you, Jim. Love to see you again. Money's back after the break.

Coming up, Kramer's putting his hard hat on and breaking down where companies tied to the housing sector stand. Next.

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson report.

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. The closing price, remember, isn't always the best judge of things. First, let me set the scene.

See, Home Depot has been a battleground stock for the last six months. We first bought it in the mid-300s last September. It initially was a huge winner. It ran all the way up to $440 in late November. But since then, it has been clobbered by housing weakness, tariff worries, and plummeting consumer confidence. Even its actual consumer spending has held up pretty well. We

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. And he told a great story about how the despot's ability to hold up in a tougher economy is unparalleled. He emphasized the long-term view and reminding us that the U.S. is still short several million housing units. And also noted that while home prices have gone up significantly in value, good for him, by the way, because that gives you the ability to be able to money deck.

add value into your house. Our existing housing stock is very aged historically, which means more business for the repair and remodel market. That is a really good thing for Home Depot's business. Of course, that was a couple weeks before the draconian Liberation Day tariff announcements, which sent this stock all the way down to 326 at its bottom on April 9th. A lot of other stocks bottomed them too. But since then, the most extreme tariffs have actually been rolled back or paused. So Home Depot's stock has rebounded nicely from its lows.

So coming into today's quarter, there were a lot of questions that needed to be answered. Questions about how they're handling the tariffs and what it means for them that interest rates are creeping higher again, as I said at the top of the show.

What we got from what was a slightly complicated set of results, but ultimately I thought there was more good than bad, even as, again, as the stock sold off during the day. The reported quarter was mixed. Home Depot's same-store sales fell 0.3%. That's worse than expected. But same-store sales for the United States were up 0.2%. That's better than expected. Total revenue was up 9.4% year-over-year, higher than what the analysts were looking for. But the earnings came in a tad light.

The despot also took a gross margin hit from its acquisition of SRS Distribution, which is a building materials distributor they bought. They show that they think it's been working out fabulously. 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 looked like it's going to look like I'm on the wrong side of the trade for a moment. But hear me out.

First, there's what we call the cadence, the way the quarter unfolds from month to month. For Home Depot, total same store sales were down 3.6 in February. But that was when weather around the country was quite bad. Then they were up 0.6 percent in March, a little bit better weather, and then up 1.1 percent in April. That's very encouraging as the company clearly had momentum going into spring gardening season, which, as you can imagine, is huge for the whole industry.

As Home Depot's EVP of merchandising, Billy Bastic, said on today's call, quote, this is our Super Bowl season, end quote. I like that because it really captures the gravitas of the moment for this company. Plus, despite the mixed first quarter results, Home Depot reaffirmed its entire full year forecast. They're not talking about any real deterioration here.

And general management gave a very encouraging outlook for the future. They got into tariffs, explaining that more than half of their purchases are already sourced in the United States. And they're working with vendors to diversify the supply chain away from countries that are hit hardest by tariffs. CEO Ted Decker explained that 12 months from now, no single country outside the U.S. will represent more than 10 percent of Home Depot's purchases. I like the way they're approaching it.

Unlike Walmart, Home Depot doesn't expect broad-based price increases for customers going forward. I'm sure President Trump will be happy to hear that. And don't forget, Home Depot's got a lot of heft and scale, too. It's not just Walmart. They can make some people eat a little more than you and I can make them eat. The company also remains very bullish on the home improvement market, as 55% of the homes are now 40 years or older. Now, Decker also sounded very positive when the company's pro-business, meaning sales to professional contractors and home builders, big ticket.

And that's what the SRS acquisition was all about. And apparently they're seeing, quote, tremendous results here. I like that, too. Now, the stock industry, as I mentioned, roared in response to the report hitting a high of $393. That's up 3.6 percent from yesterday's close in pre-market trading for opening the mid-380s. But 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 reining in the deficit.

He just won some big tax cuts. That roiled the whole market. Again, I'm going to finish with a little talk about that, too. And I didn't like it. But that's why Home Depot finished down 0.61% today. I think it's worth buying in the week or so because I think it would have been up if it weren't for the fact that President Trump made those comments.

comments. Hey, by the way, while we're talking about building materials, can we not forget about Builders First Source, which is a major consolidator in what used to be a highly fragmented industry? This stock's been a huge long-term performer, but it's peaked early last year and the stock has been tumbling ever since because it's tied not too directly to a not so odd housing market. And that's because of interest rates.

Unlike the rest of the market, Builders First Source didn't recover much in April. Then when the company reported May 1st, the stock went lower still because management lowered their full year forecast. They're just not feeling good about single family housing market. I don't blame them. It's stagnant. With things looking so bleak for Builders First Source, it caught my attention last week, though, when the company disclosed that its chairman, Paul Levy, had bought a staggering 500,000 shares in the open market for an aggregate purchase price of 55.5 million dollars.

That's about $111 per share. I got to tell you, I love to see Insider buying, especially when the stock's been doing badly and the Insider's committing a significant amount of money. Levy's the founder of JLL Partners. That's a private equity firm that established builders for source in the late 90s. So he's been there from the get-go. He knows the business as well as anyone could, and he just increased his stake in the company by 43%.

Now, I always tell you that executives sell their stock for all sorts of reasons, send a kid to college, buy another home, divorce, charitable contribution, whatever. But they only buy their own stock in the open market for one reason, because they think it's going to go higher. So that's certainly an encouraging thing to see from Mr. Levy at Builders First Source. Consider me intrigued.

In the end, much of the housing market and many related companies like home improvement retailers and building materials distributors have been choppy of late. But today we got a big update from Home Depot. And even if the headline numbers weren't great, we heard many more positives than negatives. And while we're looking at this corner of the market, the big insider buy-in, Builders First Source, feels like the first positive bit of news from the company in quite some time. We will talk about this again. We'll talk about Home Depot again tomorrow, 12 o'clock for the...

CMCC Investing Club, where you know I like to do my monthly meetings and pack some punch. One of them will be for Home Depot. So here's the bottom line. 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. Stay tuned, though, because we hear from their chief rival, Lowe's.

Tomorrow morning. Let's take some calls. Why don't we start with Robert in New York? Robert. Well, thank you very much, Jim, for having me. And I just want to say that this next stock that I'm about to tell you about, but you already told us about it, has been gaining momentum and hit their highest level today at 102. Goldman Sachs raised their price target to 96 and maintains a buy rating. This retailer focuses on the low market.

cost everyday essentials for the regular person. This stock is up nearly 30%. Now, Jim, this is very important to the listeners because I don't think you do enough of this and remind them how much money you make us. Back on December 6th, 2024, in the morning with Faber, you said, stop trading this stock.

This thing is going higher down the road. Leave it alone and stop trading it. Dollar General. Yeah, well, I said that because I have a very good Dollar General and I've been following it. I go there. I like it. It's in Pennsylvania. It's a 6-Eleven. It's a terrific store.

And I just said I've been going there and going there and going there. Each time it's better and better and better. And the numbers look good. Todd Bassett is back doing a good job. And at 102, I did mention this stock earlier, it's got the zeitgeist. It's the right stock for the right time. I agree with you.

And thank you for the boisterous approval of what we're up to. Anyway, I like what I heard from Home Depot overall today. Between that and the action of Builders First Source, which includes that huge insider buy, I'm feeling good about a space nobody else is, which is the home building space. Now, much more mad money ahead, including my sense of the wind of hotels and resorts ahead of the summer travel season. And as Trump pushes to get his one big, beautiful bill through Congress...

I'm breaking down how the bond market could scuttle any potential tax cuts. And of course, all your calls rapid fire tonight's edition of The Lightning Round. So stay with me. How worried should we be about the travel and leisure sector?

For years in the wake of the pandemic, consumers were short on time but long on money. And that fueled this fantastic wave of travel spending. This year, the trend seems to be slowing down, which brings me to Wyndham Hotels and Resorts, with over 9,000 mostly franchise locations across more than 95 countries.

These guys have their finger on the pulse of the industry. And when the last report at the end of April, management had some encouraging commentary in the conference call. So let's take a closer look. We don't have these guys on much. I love this. With Jeff Blotty, he's the president and CEO of Wyndham Hotels and Resorts. Mr. Blotty, welcome back to Mad Money. Thank you very much for having us back, Jim. We're here at Caesars Forum.

at the 2025 Wyndham Hotels and Resorts Global Conference, which is the largest global conference we've ever had. You point out we're in 95 countries. Most of them are here. We have 9,200 hotels. We're 100% franchise. We're

a pure play company when it comes to franchising. And the mood here is really optimistic. Well, maybe you can tell people the difference, because one, I think, is recession resilient, which is the franchise model. And frankly, you have a lot of data in your deck, which shows that the traditional hotel model not as strong for shareholders as a recession resistant, resilient one that you have.

The franchise model, Jim, always outperforms in any downturn. We're not saying we're going into a downturn, but if we look back to the last three, during 9/11, this business outperformed the industry by 300 basis points in terms of REVPAR, revenue per available room. GFC, 500 basis points versus the overall industry of outperformance. And no better test

than during COVID, where our business outperformed the overall industry by 2,500 basis points because these select service, small business owners behind me

that rely a lot on blue-collar travel can break even often at 30% occupancy and never had to shut their doors. Well, that is fabulous, and it's one of the reasons why I've known your company, of course, from the Steve Holmes day, remembers a family friend and just built a great, great company. Who is still chair of our board, the company that Steve built. Nobody likes Steve, but let me ask you something. I think it's very important when I'm in your position to have a great rewards program.

that really get people excited. Wyndham, the central locator, can do that. What are you doing for rewards? Because that seems to be a determinant for the blue car. Well, I shouldn't even. No, for everybody, actually. We all want good rewards. What are you guys doing to stand out?

Year in, year out, USA Today readers have nominated and elected Wyndham Rewards as the number one loyalty program in their world. U.S. News and World Report now has been just year in, year out, selecting Wyndham Rewards. We're driving 50 percent of the occupancy for our small business owners, our franchisees here in the United States. It's coming, to your point,

from loyalty. And just today on the main stage, we launched Wyndham Rewards Experiences. Think about it, Jim. Everybody wants great experiences. We're providing great experiences with Madison Square Garden this summer and the best concerts that they have to offer, giving our members access behind the velvet rope, allowing them to ride Zambonis during New York Rangers games or

do high kick rocket routines with over at Radio City. We have so many experiences that we're excited about. We want to keep this program the number one program in the industry and keep it contributing that direct contribution that's so important to our owners here on the floor. Okay, now...

I know that we do have a bunch of people who are saying, you know what, it's getting a little gloomy out there. Obviously, I do not detect that from where you are. But your people are boots on the ground. Tell me what people are saying about right now in the market for travelers.

Well, I mean, right now, let's look at the weekend ahead. AAA is predicting that over 45 million Americans will travel at least 50 miles from home. They're predicting that that will be up 3% to last year. The previous record was set all the way back in 2005. So to your point,

Look, gas prices are low. 90% of our businesses drive to our booking trends right now. We're holding steady. We're not seeing any uptick in cancellation rates. And consumer confidence is what it is. Right now, the trends, those trends for us are our friend. And I can't help but ask, because 56% of your 900,000 branded rooms located in

in the U.S., but you have a huge, huge look at international, too. What are you seeing outside here? You called out India recently on an earnings call as being an exciting place to be.

We have a big contingent of Indian developers here. It is a lot of what is going on in this country with infrastructure development, the commitment to rebuild India's, our nation's highways, roads and bridges is going on over there in India. And these developers are looking for that economy, mid-scale, select service, consistent lodging,

accommodation that Indian travelers could pull off their highways, which are being built by Prime Minister Modi, and find affordable, consistently high-quality accommodation. So yeah, we are today the largest franchisor in India. Nobody franchises more hotels than Wyndham does today. It was our

our fastest country of growth last year in terms of our European, Africa, India, and the Middle East pipeline. So we're seeing a lot of optimism. I certainly felt that. We have a big team in Gurgaon.

And the developers that are here today are talking to so many institutional developers here in the United States that are asking, is now the time for me to get in to develop in India? Well, I like what you're saying. I like what I'm hearing. And I think your upbeat attitude has always been infectious and has made shareholders a great deal of money. Jeff Belotti, president and CEO of Wyndham Hotels of Georgia. It's great to see you again. It's been too long, sir. Way too long. Thanks for having us on, Jim. Absolutely. We'll be right back after the break.

Coming up, Kramer takes your calls. And the sky's the limit. It's a fast-fire lightning round. Next. It is time. It's time for the lightning round. And then the lightning round is over. Are you ready? It's time for the lightning round. It's time for Jared and Arkansas. Jared.

Hey, Jim. I wanted to ask you about a newly listed stock on the NASDAQ, BESP. I've not done the work on it. I've not done the work on it yet. And you are owed a real answer, not a, hey, that looks interesting because that's not the way I play it. I will come back and I appreciate the interest. Let's go to Alex in Oregon. Alex.

Hey, Jim. Thanks for taking my call. Also, thanks for getting back to me about LMAT. And so the company I'm calling about today, actually, they kind of have three segments of business that seem to all have kind of tailwinds going on right now. There's no analyst coverage on it. And they just acquired a new company to kind of bolt through their aerospace defense industry. I'm looking at ESE. Wow. Two in a row.

It happens. Somebody the other day said, how do you know all those? And the answer is, I don't. It's another question. I've got to do more work on them. Thank you for the kind words. Let's go to Yuri in California. Yuri. Good afternoon, Mike. How are you? I am good. How are you, partner? Wonderful. Thank you for taking my call. My question today is Zim integrated shipping. Bye.

Zim integrated? No. I don't like that. And that dividend is a sucker's play. I don't want you in that stock. Let's go to Richard in Nevada. Richard. Richard. What do you have for me, Daddy? What's going on, partner? What's happening? What's happening? Yeah. Well, I want to say, you know, I think I remember seeing you prior to Kudlow and Kramer on CNBC, maybe some special appearances or something. But I...

You know, that's been a long time. So memory's not perfect. This is the period before they invented color TV, where they had just black and white. I remember that. It was sawn up. It was amazing. It was incredible. I look good. It was like Edward R. Murrow and me. How can I help you? I went to the microfiche. Hey, recently we struck a deal with Britain on the tariff front. And Britain agreed to open their markets to more ethanol, beef, and poultry.

It takes corn and grain to make ethanol and to feed livestock. It takes fertilizer to grow corn. What do you think about buying leeks on Mosaic? We are not early. This weekend when I was at Total Wine & More up there in Norwalk, I was shocked. Someone came to me and said, what do you think about Mosaic? I said, well, you know what? I think it's killer. It's killer. But it is hype. It is just like...

move. If I come in now, I think I am too late. 52 week guy. I'm going to have to say don't buy. Don't buy because it's just up too much. It's up too much. I'm sorry. Let's go to John in Florida. John.

Jim, thanks for taking my call. The stock is the widest. It seems to be dead money. You have not had them on the show. It does seem to be dead money. But I still like it. Look, I've got to tell you, it is dead money. I'm not going to change my view right here on the fly. I don't see much happening in the veterinary or livestock market at this very moment that's going to help them. And that, ladies and gentlemen, is the conclusion of the lightning round.

The Lightning Round is sponsored by Charles Schwab. So this is the biggest tax cut in the history of our country. Or you'll get a 68% tax increase. And if that happens, I mean, what Republican could vote for that to happen? Because there wouldn't be a Republican much longer. They would be knocked out so fast. And with that quote, the stock market just took a hitter. Just a nasty reversal that sent down a host of stocks, especially the banks and many retailers. What a bummer.

Look, let me start by saying that I got nothing against tax cuts. I mean, who doesn't want to lower the tax rate? And of course, nobody wants a 68% tax increase.

Although I have no idea where the president actually got that number. But let's put that aside. Trump's right that he can probably destroy the career of any Republican in Congress who votes against this bill. That includes the blue state Republicans who want to lift that cap on the state and local tax deduction and the genuine deficit hawks who can't justify cutting taxes without major spending cuts. So those legislators should either fall in line or, yes, indeed, they are done.

That's unfortunate because we really can't afford for Congress to keep blowing up the deficit. This bill passes as is. Interest rates probably will rise, maybe even dramatically. And that's bad for everyone. And believe me, neither the Fed chairman nor the president can get those longer rates down without Congress cutting spending and, yes, raising some taxes. Look, I get how the president feels. He just raised a bunch of money from overseas to restore our economy to greatness.

I love that. He believes he's put us on a tariff path that will raise hundreds of billions, if not trillions. And the Doge contingent will also cut trillions in cost, too. Now, I'm a little less optimistic, to put it lightly, but I won't quibble about the numbers. You know why? Because my opinion does not matter. There's only one arbiter, one entity that can render judgment here, and it's either Democrat or Republican.

It's the darn U.S. Treasury market, and that decides whether the president's right or wrong. Right now, the bond market is saying he's wrong. In fact, it's calling him names. Treasury market's not running for office, and worse, the Treasury market actually would love a 68% tax increase. I wish it did matter, but it does.

Short term, the president can probably beat members of Congress in his own party who used to worry about the deficit. That means we'll likely get a budget deal that lowers taxes without doing too much to cut spending. However, the bond market can eat right through that tax cut by raising our borrowing costs, both from the bank and from your credit card. That's just the short term. Over the long term, the government will have to pay ever higher interest rates. The president's wrong about the trillions and trillions of dollars or the tariffs and cost savings from Doge.

That will only devalue the dollar, devalue your savings, potentially give us such severe inflation that whatever money we put in the bank from a tax cut right now will be worth a fraction of what we think it is a few years from now. The bond market was hoping that someone, anyone, any party would decide to take up the challenge of shrinking the deficit. But I don't see that happening, even though there are still enough Republican holdouts in the House to prevent the bill from passing. I don't take that seriously because they're always going to fall in line with the president.

So if Trump wins if his tariffs raise trillions and higher growth generates trillions in new tax receipts and the Doge cuts save trillions, I wouldn't take that bet. But if he loses, he'll be out of office by the time the bill comes due, which is why no president has ever taken the deficit seriously since the 90s. We always hear that our kids will be losers if we keep borrowing money like this. They'll be the ones who are knocked out so fast, not us. But at this pace, we may turn out to be the losers, too.

I want the bond market to be wrong. I want to poke fun at it, embarrass it, even run against it. But the bond market can't be embarrassed because in the end, it's in charge. And right now, it's saying that there aren't trillions and trillions coming in. There's just higher interest rates coming down the pike, which will obliterate the benefit of tax cuts.

Listen, we just got through four years of elevated inflation, in part because the Biden administration borrowed like crazy, something I was very much against. If the Trump administration keeps doing the same thing, believe me, the bond market will take no prisoners. We deserve a government that thinks a little longer than the next year or two or the next election out. If it did, we could reach a compromise that cuts the deficit. We get that, we will have both lower interest rates and much higher stock prices. Now that's a budget bill this country deserves.

Alex is always bull market summer. I promise I'll find it just for you right here on MadMoney. I'm Jim Cramer. See you tomorrow.

You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit cnbc.com forward slash madmoneydisclaimer.

Hey everybody, Conan O'Brien here with an ad about my podcast, Conan O'Brien Needs a Friend. I've had so many fantastic conversations with people I truly admire, people like Michelle Obama, Bruce Springsteen, Maya Rudolph, Tom Hanks. New episodes are out every Monday and we have a really good time. So subscribe and listen wherever you get your podcasts.