A sharp sector rotation knocked down some of the market’s steadiest names, and Jim Cramer told CNBC viewers this week that the resulting dislocations are exactly the kind of setup patient investors should welcome. On the July 6 episode of Mad Money, Cramer framed the pullback this way: “These rotations create dislocations that seem to come out of nowhere. And sometimes those dislocations can give you incredible opportunities to high quality companies at a discount that shouldn’t even exist. And it wouldn’t if it weren’t for the rotation.”
Cramer named three specific dip-buy candidates on the following night’s show.
Walmart: Fuel Fears Fade as the Stock Slides
On the July 7 Mad Money, Cramer said “Walmart’s down nearly 18% from its recent highs. I think you’re getting an incredible buying opportunity here because the stock’s been getting pummeled right as Walmart’s biggest worries have started to fade away.” His thesis centers on gasoline prices: “Six weeks ago, everybody was terrified that Walmart and many other retailers would be laid to waste in a world where consumers had to spend fortunes at the pump. That world is gone, people.”
Walmart (NYSE:WMT | WMT Price Prediction) trades around $113, off more than 6% over the past month against a 52-week high of $135.16. The fundamentals came through clearly in the Q1 FY27 report: revenue of $175.68 billion grew 6.1% year over year, global eCommerce jumped 26%, and Walmart Connect ad revenue rose 44% excluding VIZIO. Management reaffirmed full-year adjusted EPS guidance of $2.75 to $2.85 and authorized a fresh $30 billion share repurchase program in February. The company’s next earnings release is scheduled for August 20, 2026.
Johnson & Johnson: A Pure-Play Pharma Cramer Says Was Sold by Mistake
Cramer’s July 6 pitch on Johnson & Johnson (NYSE:JNJ): “Johnson & Johnson is now a pure-play pharma business with no consumer exposure. It already spun off its over-the-counter business and it’s parting with Orthopedics. Even though they’re being taken down by mistake, that’s why I think you have to pounce.”
Since Cramer’s call, Johnson & Johnson has reported Q2 2026 results that validated his bullish read. Quarterly revenue rose 6.6% to $25.3 billion, adjusted EPS came in at $2.90, and management raised full-year adjusted EPS guidance to a midpoint of $11.68 — up from the prior range of $11.45 to $11.65. The company is now tracking toward $100 billion in annual revenue for the first time in its 140-year history. Key growth drivers in Innovative Medicine include oncology franchises such as DARZALEX and CARVYKTI, as well as TREMFYA, which crossed $2 billion in quarterly sales for the first time. On the Q1 2026 call, the board raised the quarterly dividend 3.1% to $1.34 per share, extending a 64-year streak of consecutive annual increases. Forward P/E stands at roughly 21x on updated guidance.
PepsiCo: A 4% Yield After a Mixed Earnings Report
On the same July 6 show, Cramer said of PepsiCo (NASDAQ:PEP): “PepsiCo dropped nearly a buck, sinking to a level where it sports a dividend yield north of 4%. I think the rotation has given you a terrific place to start a position ahead of Thursday’s report.”
Earnings are now out. PepsiCo’s Q2 2026 results were mixed: revenue of $24.18 billion rose 6.4% year over year and topped Wall Street’s estimate of roughly $23.95 billion, but adjusted EPS of $2.20 fell just short of the $2.21 consensus. Shares fell roughly 3% on the print. The headline shortfall masked genuinely encouraging operating trends: international divisions posted organic volume gains across snacks and beverages, global food volume grew 3% and beverage volume grew 2%, and management reaffirmed full-year guidance calling for organic revenue growth of 2% to 4% and core constant-currency EPS growth of 4% to 6%. North American beverages remained the weak spot, with volume declining 4% in the quarter. After the 4% annualized dividend increase that took effect with the June 2026 payment, the quarterly rate stands at $1.48 per share, marking PepsiCo’s 54th consecutive annual raise and cementing its status as a Dividend King. For income-focused readers, our team has flagged similar setups in the 10 Dividend Kings to Buy Now and Hold Forever report.
A Selective, Stock-Specific Call
Cramer has been cautious in other market pockets this summer, so these three ideas should be read as targeted, stock-specific dip-buying calls tied to a rotation. They are his opinions delivered on Mad Money and reported here for context, not endorsed as recommendations. Readers should weigh valuation, position sizing, and their own timelines before acting.
The Throughline
The connective thread across Cramer’s three picks is defensive quality with rising cash returns. Walmart compounds retail dominance with a fast-growing, high-margin advertising business. Johnson & Johnson is leaning hard into a pharma pipeline that has now delivered back-to-back quarterly beats with raised guidance. PepsiCo defends a yield near 4% while international volumes accelerate and U.S. foods show early signs of recovery. Whether the rotation is truly a gift will show up in the earnings reports ahead and in how quickly the market rewards fundamentals over sentiment.
Editor’s note: This update adds Johnson & Johnson’s Q2 2026 earnings (revenue up 6.6% to $25.3 billion, adjusted EPS $2.90, raised full-year guidance to a midpoint of $11.68) and PepsiCo’s Q2 2026 results (revenue $24.18 billion, adjusted EPS $2.20, full-year guidance reaffirmed), and revises the JNJ forward P/E from 23x to 21x to reflect the updated consensus. The PepsiCo section heading has been updated to reflect that the quarterly report is now public.
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