- "Mad Money" host Jim Cramer searched for his ideal stock and found the major theme popping up in the market's hottest names.
- Cramer also spoke to the CEO of First Horizon National about positive themes in the banking sector.
- In the lightning round, Cramer endorsed a true "renaissance story."
Wherever CNBC's Jim Cramer looks, the most pervasive trait in the stock market's best performers is the cloud.
"If you were going to dream up the ideal stock for this particular environment, you'd want it to be an artificial-intelligence-based cloud company that can help further e-commerce, particularly in payments, while delivering a product the last mile to a house that's being rebuilt in Texas or Florida," the "Mad Money" host said.
When he reviewed the market's best stock charts over the weekend, Cramer found that, from Red Hat to Nvidia, every top-performing stock has some ties to the cloud, whether it be through the main part of its business, products that enable cloud connection or segments that use the cloud to further business.
And while other sectors like defense and industrials are running hot, Cramer said that there's one trend that really matters.
"Those are all minor chords. It's this: When you look at the hottest stocks in this environment, the major theme is the cloud. Everything else pales in comparison," he said.
When it comes to investing, Cramer maintains one key guideline: when the market gives you a chance to buy a high-quality stock, you must take advantage of it.
"You literally have to take action right into the knee-jerk negativity to get the best buys, and that confuses a lot of people," the "Mad Money" host said.
To clarify the strategy, Cramer turned to the stock of Apple, one of his favorite long term investments. In September, Apple's shares fell from $164 to $150 on worries that the new iPhone would not live up to expectations.
But the stock has recently regained momentum, surging to $159 on Monday on nothing but what Cramer saw as an obvious research note.
"So why did Apple's stock roar higher then? My conclusion: it never should've been knocked down in the first place," he said.
While Cramer hasn't exactly been a bull about major legislation passing through Congress, he can't deny that President Donald Trump's administration has been good for stocks.
"After eight years of democratic rule, businesses feel a lot more confident about an administration that wants to roll back every regulation in the book," the "Mad Money" host said. "Whether that's a good idea long term is debatable, but right now it's led to a surge in hiring and the lowest unemployment rate since 2001."
A higher employment rate paves the way for stocks like Cintas, the top supplier of uniforms and uniform rentals to U.S. businesses, to soar higher, Cramer said.
Shortly after the 2016 election, Cramer named Cintas "the ultimate Trump stock" for being positioned to surge if the administration pushed policies that urged companies to hire more workers.
Cramer said that made Cintas a "terrific" way to play job growth, and sure enough, since the beginning of the year, Cintas' shares have rallied nearly 31 percent, outpacing the 14 percent gain over the same time frame.
Cramer often sees the stock market as a fashion show in which stocks fall in and out of style depending on investors' sentiments at the time.
Few stocks embody this back-and-forth better than General Motors, the automaker whose shares were effectively unloved from 2014 to this August, when the stock suddenly broke out.
"Like wide ties, General Motors was out of style for years — until very recently, the skinny tie reigned supreme — but in 2017 the wide tie has made a comeback and so has the stock of GM," the "Mad Money" host said.
With shares up over 25 percent since the end of August, General Motors, once a low-growth, bond-like stock, has become "beloved" by the Wall Street analyst community, Cramer said.
Trump may be having trouble passing major legislation, but some of the president's quieter changes speak volumes to companies like First Horizon National Corp., according to Bryan Jordan, the bank's chairman and CEO.
"Regulatory reform has been important for the industry and you're starting to see that with the leadership changes at the Fed and the OCC," Jordan told Cramer in an interview on Monday. "You're starting to see the pendulum swing back more to the middle, and maybe we get some legislative change that comes out of amendment[s] to Dodd-Frank, but I don't think that's as necessary today with the regulatory reform coming from the OCC, the Fed, the FDIC and state regulatory agencies."
As business confidence and outlook improve at the tail-end of economic recovery and in light of the pro-business administration, banks like Jordan's Tennessee-based company are poised to grow, the CEO said.
"All in all, it's more balanced and I think that does make it an easier environment to serve your customer, serve your communities. Essentially, a bank like ours is a community-facing organization. It's a community bank with a larger balance sheet. In this environment, with this regulatory shift, it's going to be very positive for us and so I'm very encouraged by it," Jordan told Cramer.
In Cramer's lightning round, he gave his take on some callers' favorite stocks:
DTE Energy: "Oh, you're in a good one. That's a renaissance story and it's an absolutely great, great, great utility. I should have been behind it. I got behind ConEd. That's been a good one too. And Dominion. But you've got a good one."
Cisco Systems: "It is a buy long term. I'm glad you emphasized 'long term,' because the company's been saying that a lot of the changes really won't hit home until 2020. In the interim, you're paid a nice yield."
Disclosure: Cramer's charitable trust owns shares of Nvidia and Apple.