Jim Cramer Says This Retail Giant's 18% Drop Is a Buying Opportunity

Walmart's stock has given back much of its recent rally, and shareholders sitting on gains from the past two years have watched a chunk of that cushion disappear. Shares closed at $111.54 on July 7, 2026, down roughly 18% from a record close of $135.16 on May 19, according to CNBC. That kind of move in a defensive giant tends to get investors' attention.

CNBC Mad Money host Jim Cramer sees an opening rather than a warning. On his July 7 show, he called the sell-off overblown, pointing to three shifts he says have quietly improved Walmart's setup even as the share price slid. If you have been using this pullback to check up on your financial health, here is how his case breaks down.

The 18% pullback in context

Walmart Inc. (NYSE:WMT) traded roughly flat on the year as of early July 2026, trailing a basket of retail stocks and the broader market, according to CNBC. Cramer argued the decline overshot the actual results, saying the stock's "biggest worries have started to fade away." He acknowledged the latest quarter was not perfect but said a drop of that magnitude did not match what the business delivered. His broader point was that the sentiment moved faster than the underlying story.

Falling fuel prices ease a major cost drag

Higher fuel costs squeezed Walmart in the first quarter and hit consumers at the pump. The national average for regular gasoline peaked at $4.56 on May 21, 2026, before sliding to $3.83 by early July, according to AAA. Cramer said that shift removes a key overhang, arguing Walmart's stock deserves a reprieve now that oil has returned to more reasonable levels. If you drive to shop, that easing at the pump could also free up a little of your own household budget.

A value-seeking consumer could shop Walmart's way

When money is tight, shoppers tend to hunt for value, and Cramer said that plays to Walmart's strengths, calling it a "trade-down play" where wealthier customers have found value alongside budget-conscious ones. On the Q1 fiscal 2027 earnings call, CFO John David Rainey said "the high-income customer is spending with confidence" while lower-income shoppers appear more cautious, according to NPR. Cramer's view is that both groups end up in Walmart's aisles when the outlook feels shaky.

Tariff refunds could fund another round of price cuts

The U.S. government began refunding tariff payments after the Supreme Court struck down most of the tariffs at the center of the case, according to NPR. Walmart may be eligible for about $2.4 billion in refunds, less than half of 1% of its U.S. annual sales, Rainey told analysts, per CFO Dive.

Rainey said Walmart would "definitely bias and try to prioritize" using tariff refunds on price cuts, per CFO Dive. None of the potential refund is reflected in Walmart's current guidance, meaning any recovery could show up as either a profit boost or as lower prices for shoppers, depending on how the money is deployed.

The quarter beneath the sell-off

Walmart's fiscal 2027 first quarter, ended April 30, 2026, arguably held up better than the market reaction suggested. According to the company's earnings release:

• Total revenue of $177.8 billion, up about 7.3% year over year
• Walmart U.S. comparable sales up 4.1%, excluding fuel
• Global eCommerce sales up 26%
• Global advertising revenue up 37%

Operating income rose 5.0%, though higher fuel costs in distribution shaved about 250 basis points off that growth, per Walmart. That is the drag Cramer expects to fade.

Where Cramer's case could still stumble

No thesis is bulletproof, and Cramer himself said he does not know whether Walmart's price-to-earnings multiple is too high, according to CNBC. Gas prices have started climbing again, too, with the national average rising 5 cents overnight to $3.84 in early July on renewed worries around the Strait of Hormuz, per AAA. Any delay in the size or timing of tariff refunds could also blunt one of the key catalysts, leaving the story to rest on a consumer that Rainey described as uneven across income tiers.

Bottom line

Cramer argues that the fundamentals held up better than the stock's reaction suggested, while several near-term concerns have begun to ease. Whether that thesis plays out may hinge on where fuel prices settle and how much of any tariff refund reaches Walmart's income statement.

If you are ready to start investing, weighing both the argument and the risks may matter more than the size of any single pullback. Walmart authorized a fresh $30 billion buyback in February 2026, with $28.2 billion remaining at the end of the first quarter, per the company. That may support the share price over time, though broader market conditions could shape how meaningful it turns out to be.