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Cramer's Mad Money Recap: Marvel, Nvidia, Salesforce

Jim Cramer says investors should focus on the sector and the company -- and then follow the bulls.
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You can listen to the Fed-obsessed experts, Jim Cramer told his Mad Money viewers Wednesday but it's a lot easier just to follow the bull market and stick with what's working. There are only two things you need to look at in order to pick a winning stock, he said, the sector and the company.

Case in point: the semiconductors. We all know there's a huge shortage of semiconductors, and companies like NXP Semiconductor  (NXPI) , Qualcomm  (QCOM) , Marvell Technologies  (MRVL) , Nvidia  (NVDA)  and Advanced Micro Devices  (AMD)  are all fantastic companies. That makes any one of them a great investment.

Over on Real Money, Cramer says investors "want sectors that are in bull market mode, even if they are microclimate markets. You want to stay away from the battlegrounds and the under-performers." Read more about his investing strategies and the stocks he says "run with the bulls."

There's also a bull market in housing, and the best companies in the space are Lennar  (LEN)  and Toll Brothers  (TOL) . Cramer said both of these companies are not only well run, they have tons of land on which to build so they can keep capitalizing on our country's decade-long shortage of homes.

Other bull markets include the financials, with Goldman Sachs  (GS) , JPMorgan Chase  (JPM)  and Morgan Stanley  (MS)  among Cramer's top picks. He was also bullish on retail, with Best Buy  (BBY)  and Bed Bath and Beyond  (BBBY)  being among the standouts in that sector.

Finally, investors can look into the bull market in agriculture and the bull market in environmentally-friendly energy. Cramer was bullish on Agco  (AGCO)  and Deere & Co.  (DE) , along with Devon Energy  (DVN) , Pioneer Natural Resources  (PXD)  and last night's guest, Denbury  (DEN) .

Get more trading strategies and investing insights from Cramer and the other contributors on Real Money.

Executive Decision:

In his first "Executive Decision" segment, Cramer spoke with Marc Benioff, chairman and CEO of  (CRM) , which just closed on its acquisition of the business communications platform Slack.

Benioff said Salesforce had another terrific quarter that included a 23% rise in revenues and saw the addition of new customers like Ikea and insurance giant GEICO. Salesforce also expanded its gross margins and saw solid cash flow improvements according to Benioff.

When asked how companies like Ikea are using Salesforce, Benioff explained that like so many other companies, Ikea is undergoing a digital transformation and it needed tools like sales, service, commerce and marketing clouds, all of which will soon be integrated with Slack to ease communications.

Turning to the topic of COVID, Benioff said that we're entering the new normal and business looks to be quite different in this world. Employees are opting to stay at home and not return to the office. But the good news is, over the past 18 months, they've proven to be more productive when they're working remotely.

Cramer and the AAP team are looking at everything from earnings and politics to the Federal Reserve. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts Plus.

Executive Decision: Toll Brothers

For his second "Executive Decision" segment, Cramer also spoke with Doug Yearley, chairman and CEO of Toll Brothers  (TOL) , the home builder that just delivered a 33-cents-a-share earnings beat that helped send shares up 11% over the past week.

Yearley started off by saying that low interest rates continue to drive sales as more and more renters discover they can afford to own a home. Additionally, with more people working from home, they're able to live where they want to live and upgrade to the home they've always wanted. That's why new homes continue to see strong demand.

Yearley added that while the housing market isn't as "crazy hot" as it was last year, demand is still very strong.

When asked about affordability, Yearley noted that home prices at Toll rose 20% over the past year, but the company continues to be cautious when it comes to affordability. Nearly 40% of their homes fall into the "affordable luxury" category, he said, which is aimed at millennials and first-time home buyers.

Yearley noted that Toll's future depends on their land bank, and they continue to be astute land buyers that are getting more and more capital efficient with every passing year.

Finally, when asked about commodity pressures, Yearley explained that lumber prices have fallen $40,000 per home from their peak, but other commodities continue to put pressures on their margins. Supply constraints and labor shortages have also added two weeks to the construction of a Toll Brothers home.

Executive Decision: Snowflake

For his final "Executive Decision" segment, Cramer checked in Frank Slootman, chairman and CEO of data and analytics software provider Snowflake  (SNOW) , another company helping enterprises move their digital transformations forward.

Slootman explained that Snowflake doesn't create demand for their products, they enable it. Legacy data systems simply couldn't do what customers wanted and with Snowflake, a lot more is possible and the technology is no longer holding companies back.

Snowflake is also on the frontlines of the online privacy debate, creating new products that allow companies to share data while still protecting data privacy and complying with all privacy regulations.

Slootman stood by Snowflake's plans to achieve 1,400 customers paying over $1 million a year and overall revenues of $10 billion by 2028. He said the company is building strong teams to turn those goals into reality.

Snowflake's efforts are being aided by COVID, which is demanding more than ever that companies use data to determine what's actually going on with their business rather than just guessing.

The Fed Doesn't Forecast the Future

In his No-Huddle Offense segment, Cramer urged viewers to stop trying to forecast the future using the Federal Reserve and interest rates. He said these economic metrics worked before the pandemic, but in the new world, we have little visibility into the future and the pandemic has proven to be insanely unpredictable.

We've already seen four phases of this pandemic and each one brought with it new challenges. First there was the lockdown with stimulus checks. Then there were the vaccines and hopes of a strong reopening. That was soon followed by faltering demand for the vaccines and political rhetoric. And finally, the phase we're in now, breakthrough cases and a surge in the Delta variant we could have prevented.

What's important in a situation like this is to focus on great companies and great management. What you really want to invest in are companies that can navigate these changing phases and flourish no matter what the world throws at them. Finding these companies, Cramer concluded, has nothing to do with the Federal Reserve or bond yields.

Lightning Round

Here's what Jim Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening:

Applied Materials  (AMAT) : "I love the quarter. That quarter is excellent and this one is buyable."

Coinbase Global  (COIN) : "I think this is inexpensive, but I'm not a fan of management. I am a believer in crypto, though."

Match Group  (MTCH) : "I think this company is worthwhile. I've liked this one for quite some time."

Royalty Pharma  (RPRX) : "This stock is so cheap. You should buy it."

Mitek Systems  (MITK) : "This company is doing incredibly well."

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At the time of publication, Cramer's Action Alerts PLUS had a position in MRVL, NVDA, AMD, MS, CRM.