US stocks have been in a sharp uptrend since early April, but higher tariffs set to go live on August 1 could reverse some of the recent gains, potentially resulting in meaningful losses in the second half of 2025.
Still, famed investor Jim Cramer says some stocks are currently trading at a significant discount, not because of legitimate reasons, but due to misperceptions only.
Four of those, the former hedge fund manager particularly recommends buying, are: Starbucks, Home Depot, Costco, and McDonald’s – all major names within their respective sectors.
Let’s dive deeper into Cramer’s view on these four behemoths individually.
Costco Wholesale Corp (NASDAQ: COST)
Jim Cramer recommends owning Costco stock on the recent pullback primarily because the retailer relies heavily on a subscription model for revenue, enabling it oto ffer hard-to-beat prices even amid challenging times.
According to the Mad Money host, Issaquah-headquartered Costco will succeed in keeping prices low despite tariffs, potentially leading to an increased footfall over the next few quarters.
A 0.54% dividend yield on COST shares, while not much, is still an added reason to own them in the back half of 2025.
Starbucks Corp (NASDAQ: SBUX)
Starbucks stock has come under renewed pressure in recent sessions because the US announced a rather steep 50% tariff on Brazil, its primary supplier of coffee beans.
However, Cramer believes the related concerns are overblown, given Starbucks’ scale positions it better than rivals to find a cheaper source of coffee beans.
Moreover, he has immense confidence in the company’s chief executive, Brian Niccol’s, ability to turn this ship around.
Note that SBUX shares also currently pay a dividend yield of 2.56%.
Home Depot Inc (NYSE: HD)
Home Depot stock has been out of favour with investors primarily because the US housing market just isn’t showing any signs of a recovery.
Still, Jim Cramer recommends owning HD shares because its business isn’t confined to home sales – the retailer has also been making significant strides in remodelling and renovation via acquisitions.
It’s a crucial element of the company’s overall growth story that’s been discounted in 2025, but stands to drive the Home Depot stock price up over time.
McDonald’s Corp (NYSE: MCD)
Cramer disagrees with the broader narrative that McDonald’s stock has “lost its way,” even though it really hasn’t done much since the start of 2025.
According to the former hedge fund manager, this too shall pass as the fast food behemoth has the marketing and sheer scale to navigate the current macroeconomic environment.
Much like other names on his list, McDonald’s is also a dividend stock that currently yields 2.37%, making it all the more attractive to own at current levels, at least for the income investors.
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