Jim Cramer says these stocks show why you need to trade on fundamentals, not fear

In a recent discussion on CNBC's 'Mad Money', Jim Cramer emphasized the importance of trading based on company fundamentals rather than succumbing to fear during stock sell-offs. He acknowledged that while downturns in the market can be distressing for investors, they often present opportunities for those willing to maintain a long-term perspective. Cramer pointed out that even after a challenging trading day, such as the recent drop of approximately 0.6% across major U.S. indexes, there are notable examples of stocks that have rebounded after being initially dismissed by Wall Street. One such case is CrowdStrike, which faced a significant decline in 2024 due to a problematic software update that affected millions of Microsoft systems worldwide. The stock plummeted by over a third in just one month amid fears of long-term reputational harm. However, by late 2024, it had regained its losses and continued to rise. Cramer acknowledged that in late 2025, concerns regarding competition from AI firms, particularly following Anthropic's announcement of its new Mythos model aimed at detecting software vulnerabilities, spooked investors again. Yet, he argued that selling CrowdStrike based on these AI advancements was misguided, suggesting that instead of threatening cybersecurity companies, AI could actually lead to increased security investments. This perspective gained momentum when KeyBanc upgraded CrowdStrike to a buy rating, resulting in a 3.8% stock increase even as the overall market struggled. Microsoft also showcased a similar trajectory. After reaching an all-time high above $555 in late July, the stock retreated to $356 by late March amid doubts over its AI capabilities and overall software demand. Cramer maintained that the company’s core strengths, such as its Azure cloud services and robust enterprise software, remained strong. A recent positive report from Citi regarding sustained demand helped boost the stock to a closing price of $424.16. Cramer also discussed Blackstone, which faced a steep decline from around $130 to nearly $100 amid worries about private credit risks and weak software investments. However, the stock quickly rebounded, closing at $128.50 despite earlier trading as high as $133.25. Finally, he highlighted UnitedHealth Group, which suffered a drop last year due to high medical costs and management challenges. The return of former CEO Stephen Hemsley in May 2025 helped restore confidence among investors, leading to a positive earnings report that Cramer believes will mark the beginning of a series of favorable surprises. Cramer concluded by emphasizing that while not every faltering stock will bounce back, investors who can differentiate between flawed narratives and genuinely troubled businesses often find themselves rewarded in the long run. He anticipates that in a few months, skeptics will question their earlier decisions, realizing their fears led them astray.