We can't be as bullish as we'd like to be, Jim Cramer admitted to his Mad Money viewers Wednesday. While the comments from Federal Reserve chairman Jay Powell were exactly what we wanted to hear, those words may soon be tempered by President Trump, who was hoping for a lot more.
The stock market doesn't care about the past, it only cares about the future, Cramer reminded viewers. So with the Fed likely to begin cutting interest rates as early as July, that means we've entered the rate-cut cycle, which makes the economy stronger and stocks more valuable.
Typically, that would mean buying aggressively into retail, housing and the financial stocks, Cramer added, because the Fed told us they are "closely monitoring" the slowdown in business investment to ensure it won't bleed over into the consumer sector.
Unfortunately, this is not a typical environment, Cramer cautioned. Powell's refusal to cut rates immediately and roll back his ill-timed December hike will likely anger Trump, which will only add uncertainty to the markets. That's why Cramer said he can't be overly bullish, even though he typically would be.
Cramer and the AAP team are poring over the Fed's interest rate decision. 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.
Know Your IPO
In his "Know Your IPO" segment, Cramer looked into last week's IPO of the cybersecurity company Crowdstrike (CRWD) , which came public at $34 a share and rocketed to over $77.
Cramer said there are a lot of cybersecurity companies out there, but what makes Crowdstrike unique is its cloud computing component using data from all of its customers, combined with artificial intelligence, to predict threats and help prevent them.
Crowdstrike is a fast-growing company with 110% sales growth last year and a high retention rate for existing customers. The company is aggressively investing into its business, making it not profitable at the moment.
Cramer said there's a lot to like with Crowdstrike and he should have been more focused on the deal initially. However, at $77 a share, the stock now trades for over 70 times sales -- an astronomical number that no investor should pay. Cramer said even Okta (OKTA - Get Report) and ZScaler (ZS - Get Report) trade for a fraction of what Crowdstrike is currently selling for.
And Then There's Slack
There's another red-hot IPO coming this week and it's the enterprise communications company, Slack. While not technically a traditional IPO, Slack will be issuing shares as a direct listing, similar to that of Spotify (SPOT - Get Report) .
Slack is replacing email with team chat channels that are becoming indispensable at many companies. Slack has a freemium model to encourage adoption and pay as you grow and the service now sports over 10 million active daily users.
But for as good as Slack is, Cramer said, he's not a fan of the company's dual share structure that gives no real voting power to those investing now. The company is also forecasting slower revenue growth in 2020.
That said, Cramer said he'd bless buying shares of Slack up to $40 a share.
The Adobe Transformation
We're entering the golden age of creativity, Cramer told viewers, and that's perfect for a company like Adobe Systems (ADBE - Get Report) , a stock that rose 5.2% Wednesday after reporting another spectacular quarter.
Adobe is all about helping companies thrive online, Cramer explained and nowhere is that trend more visible than in retail. Bricks-and-mortar retailers continue to struggle against their online competition, he said, which is when even great department stores like Macy's (M - Get Report) and Nordstrom (JWN - Get Report) are having a tough time. Just about everything you can buy at Gap Stores (GPS - Get Report) or L Brands (LB - Get Report) you can find online for less, Cramer said, and that's why Adobe's software and platforms are so valuable.
When it comes to the digital transformation, Cramer said he's sticking with Adobe.
On Real Money, Cramer takes a closer look at how Adobe (ADBE - Get Report) is changing the retail landscape. Get more of his insights with a free trial subscription to Real Money.
Executive Decision: Wix
Abrahami said Wix was able to add 6.6 million new free users last quarter and over 180,000 paid subscribers. The reason for their growth is simple, he said, there are still a lot of small and midsize businesses that need online services. He said the market potential for Wix remains enormous.
Wix offers a lot more than just websites, Abrahami added. They can also help small businesses design their sites with professional designers and help them with advertising, promotion, social media and more. Wix is even expanding into data tools with new offerings that will be coming in the next six months.
In the Lightning Round, Cramer was bullish on American Tower (AMT - Get Report) , Kohlberg Kravis Roberts (KKR - Get Report) , Seagate Technology (STX - Get Report) , Micron Technology (MU - Get Report) and LendingTree (TREE - Get Report) .
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