"Wal-Mart's being re-rated. This is an important term and I want everyone to understand it," the "Mad Money" host said. "This company is actually doing something that's supposed to be theoretically impossible: it's upping its spending on e-commerce; developing systems that will make Jet.com, one of its subsidiaries, a formidable competitor; it's increasing its buyback by $20 billion; it's paying people more while improving the store experience and it's increasing earnings, plus possibly even beating Amazon."
Even better, Wal-Mart shares are trading at only 19 times earnings, Cramer said, adding that his only regret is not pounding the table more on the big-box retailer's story.
Cramer was mainly stunned by Wal-Mart's demonstrated ability to take on Amazon. Scores of companies like Nordstrom have spent billions to compete with the e-commerce giant to no avail, yet Wal-Mart has the cash to buy back $20 billion worth of stock.
Wal-Mart CEO Doug McMillon's decision to pay his employees more has also been bearing fruit, the "Mad Money" host said.
Cramer said one of his recent trips to Wal-Mart proved much better than usual: the workers were friendlier and more helpful, the store was clean and organized and the products were bountiful and sold at a bargain.
"This is not the Wal-Mart we're used to," he said.
Moreover, the company has scale. Amazon may have its lucrative cloud business, but Wal-Mart's 5,000 U.S. locations far outnumber Amazon's 400 Whole Foods stores, particularly when it comes to shoppers who prefer pick-up to delivery.
"I don't think anyone can really put a dent in Amazon Web Services ... but I will say this: by virtue of its huge network of stores, Wal-Mart can do plenty of damage to Amazon's retail business," Cramer said.
And now that Wal-Mart's management is beginning to flex its muscle, cutting millions of dollars in costs and touting 30-second returns in stores, Cramer said few brick-and-mortar retailers will be able to compete if they don't have a niche like high-end jewelry or specialty clothing.
"It's a two-man race now, but one stock sells for 234 times earnings [and] the other sells for 19 times earnings," Cramer said. "Granted, no major money manager is going to sell Amazon; it's too hot, it's too good. But there's a world of portfolio managers looking for another potentially dominant retailer with a cheap stock and a great balance sheet. Which is why I think the stock of Wal-Mart, even after this miraculous run, is not finished going higher."