In a challenging market, investors simply can't ignore the FANG stocks or pull away, Jim Cramer told his Mad Money viewers Wednesday, especially after Federal Reserve chairman Jerome Powell did an excellent job making a quarter-point rate hike seem like nothing. The fact remains that higher interest rates will slow the economy, which makes the fast-growing FANG stocks all the more attractive.

Wall Street often makes the mistake of valuing FANG -- Cramer's acronym for Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOGL)  -- based on what the companies are today. That's a mistake. These companies are constantly evolving, which only makes them move valuable.

Cramer said that Amazon has evolved from just a retailer into a cloud juggernaut that few, if any, can compete with, and the company is only getting started. Netflix has defied the skeptics forever and continues to surge higher every quarter.

Cramer added Apple (AAPL) , another Action Alerts PLUS holding, to the "FANG" mix, along with chipmaker NVIDIA  (NVDA) . Apple's stock has been divorced from its fundamentals for ages, but it continues to grow and innovate, despite its ridiculous valuation of 15 times earnings. Meanwhile, NVIDIA has evolved from just making the best gaming chips, to also making the best data center chips, the best AI chips and the best machine learning chips, to name a few.

Cramer was still upbeat on Alphabet/Google, because the company has cleaned up YouTube and still has yet to monetize self-driving cars.

Then there's the elephant in the room -- Facebook, another Action Alerts PLUS position. Cramer said Mark Zuckerberg's statement today was, well, a start. But the fact remains that people simply have no other place to go, which makes Facebook a long-term win.

Over on Real Money, Cramer breaks down, in detail, the business dynamics of Facebook, Amazon, Apple, Netflix, NVIDIA, and Alphabet. Get more of Cramer's insights with a free trial subscription to Real Money. 

A Second Look at Ulta 

When a stock surges on bad news, investors need to pay attention, Cramer reminded viewers, as he took a fresh look at an old friend that fell out of favor last year, Ulta Beauty (ULTA) .

Ulta was beloved on Wall Street, surging 1,566% from $5 to $314 a share. That was until 2016, when the company's same-store sales slowed from 16.6% to just 10.3% by 2017. That, along with declining gross margins, was enough to send momentum investors heading for the hills.

But on Thursday, Ulta posted lighter-than-expected revenues with in-line same-store sales, and the stock surged from $206 to $221 a share. Cramer said that's a classic tell that the weak hands have left the stock and it's poised for a recovery.

Ulta is more than just a valuation story, however. The company continues to make operational improvements and just announced a well-timed $625 million share buyback, which equates to 5% of the company's market cap.

McDonald's: The Long-Term View

We may be in a more challenging stock market, but that doesn't mean that great companies, like McDonald's (MCD) deserve to trade near bear-market territory, Cramer told viewers. Shares of the fast-food giant are off 11% from their January highs and were down 18% earlier this month.

Cramer said the long-term story remains intact at McDonalds. With CEO Steve Easterbrook at the helm, shares have risen 60% and gross margins at the chain have soared from 38.5% in 2015 to 46.5% in 2017. Additionally, the company's share buyback has reduced the share count by a whopping 17%.

So what has investors rattled? Cramer said the CFO's comment this quarter about a possible "choppy" 2018, along with disappointment that the company plans to use its tax breaks to reinvest and not increase the dividend, are to blame.

But those reasons alone are not enough to give up on McDonald's, Cramer concluded. Easterbrook has the franchisees on board with his plan and the chain only gets stronger with every passing quarter. The fears, he said, are overblown.

Am I Diversified? 

In his "Am I Diversified?" segment, Cramer spoke with callers and responded to tweets sent via Twitter to @JimCramer to see if investors' portfolios have what it takes for today's markets.

The first portfolio included Goldman Sachs (GS) , Apple, Netflix, Raytheon (RTN) and Honeywell (HON) .

Cramer blessed this portfolio as perfect diversification.

The second portfolio's top holdings included Netflix, Apple, Facebook, Bank of America (BAC) and General Dynamics (GD) .

Cramer said he liked this portfolio as well.

The third portfolio had Fastenal (FAST) , SS&C Technologies (SSNC) , FLIR Systems (FLIR) , Becton Dickenson (BDX) and Alaska Air Group (ALK)  as its top five stocks.

This portfolio was diversified, Cramer said, but he's not a fan of the airlines.

Cramer and the AAP team take a close look at the Fed's dot chart that provides clues into its sentiment on future rate hikes. 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.

The Lightning Round

In the Lightning Round, Cramer was bullish on Dollar General (DG) , Honeywell, Marathon Petroleum (MPC) and Canada Goose (GOOS) .

Cramer was bearish on Dollar Tree (DLTR) and ZAGG (ZAGG) .

Can Kudlow Sway Trump?

In his "No-Huddle Offense" segment, Cramer pondered what the real impact of Larry Kudlow, who was just appointed Director of the National Economic Council, will be on trade policy, given that his predecessor Gary Cohn was not able to sway President Trump.

Cramer said if you want to hear the case for free trade, investors must listen to FedEx (FDX) CEO Fred Smith, who laid it all out on a Tuesday conference call. Smith, a long-time proponent of free trade, noted that the U.S. trade deficit has declined in recent years, from 4.9% of GDP to just 2.9% of GDP. That's due to the rise of oil exports and services, like FedEx. Smith said tariffs have proven to be counter-productive to economic growth.

That's why Kudlow's opinions will be crucial, as his views mirror that of Smith. Is that enough to sway the President? That remains to be seen.

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At the time of publication, Cramer's Action Alerts PLUS had a position in FB, AMZN, GOOGL, AAPL, NVDA, GS, RTN, HON.

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