Analysis: NVDA AMD AEO WMT PYPL HON DD

In today's Daily Rundown, Jim Cramer discusses the markets, Nvidia (NVDA) and Advanced Micro Devices (AMD) , research on American Eagle Outfitters (AEO) , Walmart (WMT) , PayPal (PYPL) , our upgrades of Honeywell (HON) and DuPont (DD) , and more!

JEFF MARKS: Happy Thursday, everyone. This is The Daily Rundown show for Action Alerts Plus. I'm Jeff Marks, senior portfolio analyst for the charitable trust. I'm standing on the floor with Jim Cramer.

Jim, pretty broad rally today. Seeing strength all across the board. A lot of semiconductors are running. Nvidia, new all time high. AMD making a nice move higher. What do you think?

JIM CRAMER: That AMD is one to watch, because I do think that they're going to get approval next week for Xilinx. And then the whole story changes, OK? Cause you know I'm going to be talking about that versus Intel.

What's interesting to me, it's very rare that you see all-- you see restaurants running. You see banks running. You see transportation running. You see industrials running. Highly unusual, which says to me that there's an overall program to buy stocks. There are institutions that are underweighted.

And by the way, let's accept it. We've been saying this. Seasonally strong period. So you're seeing money being spent ahead of what's a seasonably strong period, in the same way that you saw stocks being sold ahead of a seasonably weak period. So it's almost like the market sees the game plan and has to get ahead of it.

JEFF MARKS: Yeah, and one stock that we recently bought was American Eagle Outfitters. We initiated position earlier in the week. We came in this morning. We see Jefferies increase their price target, to $44 from $42. They're saying that the momentum here has no signs of coming to an end.

JIM CRAMER: Yeah, I do wish-- it's funny, cause we sell Disney, it goes up $1. But I think this AEO can go up $20. And I hope we do get bigger. The other retailer that-- well, we have Costco. You know I love Costco.

But there was a very positive note about Walmart today, basically just trying to get people to buy the stock. Now, Walmart's been a dog. I accept that. But American Eagle Outfitters is because it's denim, because it has the right mill-- you know, it's got the right buyers.

26 quarters of double digit for Aerie? I want to urge people who are watching who have not bought American Eagle because on, remember, the trust basically recommended list, you got to buy it. I don't feel that way about Disney. I don't feel that way about Nike, which is another one that we sold. And they're good companies, those two.

I feel that way about AEO. It just doesn't have the baggage.

JEFF MARKS: Yeah, and American Eagle, they're going to start putting out product for back to school season just in a couple weeks.

JIM CRAMER: It's going to be huge.

JEFF MARKS: So we're obviously going to see a lot of good news here in the second half of the year.

JIM CRAMER: Oh, and Matthew Boss is talking about the child tax credit. That's something I've been trying to work into Mad Money. Haven't had a chance to do that yet.

But I do think that that one-- when you sell something, you're always trying to, as we do for this trust, we always say, listen, well, you're going to sell a Matisse to get a Cezanne. Or we're going to sell a Cezanne to get a Jasper Johns.

Now, I feel like that we sold a Nike that could go up. They're going to report this week. But that American Eagle Outfitters has far less hair on it, and could really roar.

JEFF MARKS: Now, you brought up Walmart earlier. And this is pretty interesting. The stock really, it's been a disappointment. I think that's very easy to say.

But Citi comes out today. They say that if you look at the stock's multiple, and they view it on a sum of the parts basis, it's trading at a roughly 10 time multiple when the peer group is at 13. And just by what we know from doing the homework on Walmart, from following Walmart, they're in a much stronger position today than they were, say, a year ago, and even before that prior to the pandemic.

JIM CRAMER: I think Walmart is a must buy. Also in that piece was an incredible analysis of if they decided to have a banking app, like a PayPal. We got 200 million people who go there. It would be a natural.

And I think that that's just still-- I mean, I don't think they wrote that idly. I think that they must know that that's the case. That piece is a great catalyst to buy the stock of Walmart, which is down substantially. And it's not rallied. It was at $140 just 10 days ago.

So I think even the traders out there should be interested in buying Walmart.

JEFF MARKS: OK, so banking app. They're also working on advertising, which we know with Amazon is a high margin business. There's subscription, Walmart+. We wish it was coming along faster, but I think there's still a lot of hope for the future.

JIM CRAMER: Totally.

JEFF MARKS: So I believe we have Walmart rated as a two right now. But I think it's time to upgrade it as a one, just by seeing how cheap it is.

JIM CRAMER: Yes, let's do it right now.

JEFF MARKS: So we'll work on that right after the call.

JIM CRAMER: I thought that that analysis about cheapness was really extraordinary. And you just never get Walmart this cheap. And so you have to kind of suspend your belief that they can't get the ecom right, and just go all in Walmart.

JEFF MARKS: All right, let's move on to Apple. Katy Huberty, Morgan Stanley, she covers the stock. She increased her price target by $1 this morning. Says great long term opportunity here. She said, don't really be concerned about a down cycle with the iPhone S. And she views the Mac and services as more of secular growth than cyclical, which is a big part of the bear case right now.

JIM CRAMER: Right, I thought that one of the things that people have to know about Katy Huberty is that she actually signals. That $1 price target is a signal that she feels more confident. And I know people say, well, like $1, so what?

That's how Katy Huberty works. And I think that she's an excellent analyst. She's the ax in Apple. I felt really good about the stock after reading that.

JEFF MARKS: Yeah, and I read the note. Just a couple things that I thought too that people might have been overlooking too is she brings up the extended cycles, and how people might upgrade a little bit later. But she thinks it's not going to really be the case. Because you can trade in your iPhone now and get a great deal on an upgrading to a new phone. You also have 5G. With that moving across the country, that could entice people to upgrade their cell phones as well. So I felt better about Apple after reading that.

JIM CRAMER: Yeah, I mean, as a Verizon subscriber, yesterday they pushed it to you. They pushed the deal. The deal's rather remarkable, because Verizon doesn't want to lose anybody. We know they're trying to pick up share. If you do get Verizon, you know about the deal.

And I just think that the naysayers continue to not understand the power and love of the customer for the product.

JEFF MARKS: All right, so earlier we talked about Walmart's digital banking, fintech ambitions. Might be a little bit underappreciated. But the king of fintech as we know it is PayPal. And DA Davidson, they come out. They initiate coverage, buy rating. A $325 price target I think they said.

Really this is just one that we believe-- we talked about this last week on the call. A lot of room to run here.

JIM CRAMER: Right, I mean, what happened, if you go back what we said was, OK, we sold the stock. We had made good money. But that we are not going to sit here and let ourselves be beaten up when we have a stock that we sold that is moving.

I mean, let's say Disney clarified what's going on. Think we wouldn't go back to Disney? Absolutely we would. PayPal, we made a mistake selling it. But you don't really call a big gain a mistake.

We went right back in when we felt that there was a downturn in high growth. We got there. Good prices. It's going higher.

JEFF MARKS: Yeah, so that's another one to keep our eye on, especially, as you pointed out earlier on your show today and on Real Money, we've really seen this huge rotation back into growth, really dating back to May 12, May 13. What do you think is the main driver of that?

JIM CRAMER: Well, I mean, that's when we realized that the Fed had to slam on the brakes. Now, a lot of times what happens is you can't wait for the Fed to say it. The Fed does seem to be saying let's pull it forward. But they still don't have the employment that they want.

But the market spoke that day and said, you know what? The cyclicals, it's going to be a peak in price in copper, peak in price in lumber. I mean, it really did matter. That day was very significant. And that was the day when I think a lot of investors realized, you know what? The cyclicals are going to have a very hard time in 2022 because of the Fed.

JEFF MARKS: And now the cyclicals have come out of favor. However, a lot of them are down significantly off their recent highs. And we actually viewed that as an opportunity to buy two of those stocks yesterday, Honeywell, DuPont. We upgraded our rating back to a one on both. Honeywell has just lagged significantly this year. Up 1%, 2%.

It's really because it's an aero, and aero, it might be more of a 2022 story for them if you think about the recovery there.

JIM CRAMER: Right, I mean the stock was at $240. Came down a lot. I thought that was a good opportunity to buy. Honeywell, of course, has building products. They've got climate controls. They've got so much good stuff.

JEFF MARKS: A lot e-commerce, warehouse industry.

JIM CRAMER: Oh, my God.

JEFF MARKS: Huge business for them.

JIM CRAMER: Oh, yeah.

JEFF MARKS: The comps were extraordinary last quarter.

JIM CRAMER: Oh, I know. So my take is that when you get a high quality one that is underperforming like that, it's not 3M. It's better than 3M. You should just buy some, even if it violates your basis, because it is down so much.

So I was really, really glad we did the Honeywell. I think that was very, very strong. I feel like that any one that we do that is down a lot, like a Union Pacific, is great. I mean, I just feel strongly that you got to go over your portfolio. You got to see what got knocked down that's doing well. And you got to buy, even if it's above your basis.

JEFF MARKS: Yeah, and DuPont, we love what Ed Breen's doing there.

JIM CRAMER: DuPont was [INAUDIBLE].

JEFF MARKS: Their electronics business doing well. Autos making a strong comeback. And electrification, that's going to be a tailwind for them, because they have more content in electrified cars than they do in combustion engines.

JIM CRAMER: Yeah, I'm a buyer of DuPont here. I mean, DuPont we sold some in the high--

JEFF MARKS: In the low $80s.

JIM CRAMER: Low $80s. Get a chance to buy it back here. Now, are we traders? No, but we recognize that when a stock comes down of that kind of quality, and we've made sales higher, that's a clarion call to buy more. And that's what we're doing.

JEFF MARKS: All right, so a couple of those stocks to look out for. Walmart we're going to upgrade as well shortly after the show. And that's the show for today. I'm Jeff Marks. We'll see you tomorrow.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long NVDA, AMD, AEO, WMT, PYPL, HON, DD.