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Boring Home Depot Saves Cramer From AI Stock Plunge
10 Oct
Summary
- Jim Cramer credited Home Depot for protecting his portfolio.
- AI stocks declined significantly, impacting investor confidence.
- Home Depot showed resilience as Treasury yields eased.
Jim Cramer's investment strategy, typically focused on momentum, took a surprising turn as artificial intelligence stocks plummeted. On October 8, 2026, Cramer revealed that Home Depot, a company he has frequently criticized, was the key to salvaging his portfolio during the AI sell-off. He emphasized that diversification is essential for maintaining stability in volatile markets.
During the AI downturn, stocks such as Oracle and Broadcom saw significant declines. Meanwhile, beaten-down names like Home Depot experienced a rally, partly due to easing Treasury yields. Cramer's Charitable Trust holds positions in both Broadcom and Home Depot, with the latter serving as a crucial buffer against the broader market instability.
Despite its recent struggles, with shares down over 13% year-to-date as of midday Friday, Home Depot's underlying business shows resilience. Second-quarter revenue increased by 5.71% year-over-year, reaching $47.86 billion, and adjusted EPS exceeded consensus estimates. The company also maintained its full-year guidance, with comparable sales rising 1.7% and online sales surging 11%.
The company's commitment to dividends remains strong, with a quarterly payout of $2.33 per share, yielding approximately 3.10%. This marks its 156th consecutive quarterly cash dividend. While the stock's performance has been lackluster over the past year, its consistent dividend payouts and demonstrated ability to gain market share underscore its role as a stabilizing force in a diversified portfolio.
