Cramer Identifies Four Winners From Easing Trade Tensions

CNBC’s Jim Cramer highlighted four specific stocks poised to benefit substantially from improving U.S.-China trade relations during Monday’s episode of “Mad Money.” Following the weekend announcement of a pause in tariff escalations between the world’s two largest economies, Cramer identified companies with significant Chinese exposure that he believes are best positioned to capitalize on reduced trade tensions, according to CNBC.

The market broadly responded positively to the trade developments, with major indexes posting significant gains. However, Cramer emphasized that investors should focus on companies with direct exposure to Chinese markets or supply chains rather than indiscriminately buying the broader market based on improving sentiment.

Apple Leads Technology Beneficiaries

Topping Cramer’s list was Apple (AAPL), which he described as “the quintessential U.S.-China trade barometer.” The iPhone maker gained 3.2% on Monday as investors recognized the dual benefits of reduced supply chain disruption risks and improved prospects for Chinese consumer sales.

“Apple represents the perfect storm of U.S.-China trade exposure,” Cramer explained. “They manufacture extensively in China, sell billions of dollars worth of products to Chinese consumers, and previous tariff threats directly impacted their cost structure and pricing power.”

The CNBC host noted that Apple had been forced to absorb previous tariff costs to maintain competitive pricing, directly impacting profit margins. With those pressures potentially easing, Cramer suggested the company could see meaningful earnings improvement. Technology analyst Ming-Chi Kuo told AppleInsider that Apple could accelerate product introductions in China following the trade developments.

Nike’s Dual Market Exposure

Athletic apparel giant Nike (NKE) ranked second on Cramer’s list, gaining 4.1% during Monday’s session. The company exemplifies the evolution of U.S.-China business relationships, having transformed from viewing China primarily as a manufacturing base to recognizing it as a crucial growth market.

“Nike has moved beyond just manufacturing in China to making it their second-largest market globally,” Cramer noted. “Any reduction in trade tensions directly benefits both their supply chain economics and their growth narrative.”

The financial host highlighted Nike’s extensive retail footprint in China and its cultural relevance with Chinese consumers as key advantages in capitalizing on improved trade relations. He noted that the company had been carefully navigating geopolitical tensions while continuing to invest in its Chinese operations.

Semiconductor Exposure Through Broadcom

Semiconductor company Broadcom (AVGO) featured prominently in Cramer’s analysis, with the chip designer rising 5.3% as investors recognized its significant exposure to both Chinese manufacturing and end markets. Cramer emphasized that semiconductors represent a critical industry in U.S.-China trade dynamics.

“Broadcom sits at the intersection of several important trade considerations,” Cramer explained. “They design chips used in smartphones including those manufactured in China, they have Chinese customers, and they’ve been directly impacted by previous export restrictions.”

The CNBC host noted that approximately 35% of Broadcom’s revenue comes from China, making it particularly sensitive to developments in trade policy. Semiconductor industry analysts at Semiconductor Intelligence have projected that improved trade relations could add 8-10% to industry-wide revenue growth in the coming year.

Starbucks’ China Growth Story

Rounding out Cramer’s list was Starbucks (SBUX), which gained 3.8% on renewed optimism about its expansion plans in China. The coffee giant has identified China as its most important growth market, with plans to operate 9,000 stores in the country by 2026.

“Starbucks’ long-term growth story is increasingly tied to their success in China,” Cramer noted. “While they’ve faced challenges including local competition and COVID disruptions, their commitment to the market remains unwavering.”

The CNBC host emphasized that Starbucks’ premium positioning aligns well with the growing Chinese middle class and their increasing preference for Western brands with prestige value. The company’s recent initiatives to incorporate Chinese cultural elements into store designs and product offerings further strengthen its position in the market.

Investment Strategy Considerations

While highlighting these four stocks as prime beneficiaries, Cramer cautioned against chasing them after significant one-day gains. Instead, he recommended investors consider establishing positions during potential pullbacks, suggesting that the positive trade developments represent a longer-term catalyst rather than a one-day event.

“The smart approach isn’t to rush in after a big up day,” Cramer advised. “It’s to identify the companies with the clearest, most sustainable benefits from improved trade relations and build positions thoughtfully over time.”

He emphasized that trade relations between the U.S. and China would likely remain dynamic, with potential for both progress and setbacks. Companies with proven ability to navigate these complexities, Cramer suggested, would be best positioned for long-term success regardless of short-term fluctuations in the relationship.

Broader Market Implications

Beyond the four highlighted stocks, Cramer discussed the broader market implications of improving U.S.-China relations. He noted that reduced trade uncertainty benefits the overall market by allowing companies to make more confident capital allocation decisions and long-term strategic plans.

“Certainty is what markets crave most,” Cramer explained. “While these four stocks have the most direct exposure, the positive ripple effects extend throughout the global economy.”

Economic analysts at Goldman Sachs have estimated that the reduction in trade tensions could add 0.3 percentage points to global GDP growth in the coming year, with particularly strong benefits for export-oriented economies throughout Asia.