← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 10/10/25
00:44:25
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer
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Hey, I'm Kramer. Welcome to Man Money. Welcome to Crame America. People make friends. I'm just trying to save a little money. My job is not just entertain but to put a day like today into context. So call me 1-873CBC tweet me at Jim Cramer Happy third anniversary of the great bull market of the 2000s. Nothing like a major flare up in the trade war with China put an end to the celebration for it even started though. Dow plunging 879 points S&P plummeting 2.71% Nasdaq nosediving 3.56% it was a real ugly day and the sell off probably not done yet. Even with today's beatdown, it's been a huge run over the past few years. Tremendous move that's embraced many sectors and led to gigantic gains. You're much more likely to keep those gains, at least if you just take a little something off the table. Even up here, because we're way up. Do I think today marks the end of the multiyear rally? No. But I do think we've grown complacent and overly optimistic about President Trump's trade policy ever since the Post Liberation Day bottom in April. Trump's true social posting today shows that the China relationship is not good, with Trump canceling his meeting in two weeks with President Xi and just an hour ago calling him hostile and saying he's now going to impose 100, 100% additional tariffs on Chinese goods. That's almost all the way back to the initial level from Liberation Day, and it is sure to hurt many Chinese businesses. For good measure, by the way, is adding expert controls on critical software to try to rival Chinese husbanding of critical materials that that only they have in scale. It looks like a relationship that the president often called a good one wasn't all that good after all, and it just got a heck of a lot worse. Until today's vicious decline, we were far more focused on how much the Fed will cut rates to help jumpstart the economy. I went down to the Fed yesterday and led a panel of smaller banks. They all said the rates are too high and are stifling business, suffocating growth. It's a very constructive, enjoyable meeting, but one true social post obliterated those good vibrations. I do thank Vice Chair Bowman for the opportunity, though. Now, we bought a little bit of stock, not a lot for the Chapel Trust, say, and we only did so because there could be some of that art of the deal thing going on. Maybe something's resolved. Over the weekend, Trump was reacting to still one more trouble point, another squeeze on rare earth minerals by President Xi to show the west who's in charge. The timing of that action so close to the president's peace deal, Gaza didn't sit well with Trump. Still, I don't expect relations with China will sour to the point where all of today's declines can be justified. We need them and they need us. And they are. You know what? They're hit a lot harder than we are by these new tariffs. At the same time, I am conscious that we're heading into the seasonally strongest time of the year. I don't want to pass on these instant opportunities for companies that can benefit from rate cuts or from having their stocks rendered cheap because they are in the S&P 500, the big basket that takes down everything, the good, the bad, the ones that are hurt and the ones that aren't. Which brings me to our game plan for next week. Monday, we'll be coming to you from the San Francisco bureau as part of my annual pilgrimage to Dreamforce, Salesforce's tech extravaganza. We'll be sitting down with some of the most important people in tech, among others. It's going to be amazing. I expect to get some clarity on the 100% tariffs the president will slap on China the ripple from his comments turned into a torrent as the session went on and I'm guessing he doesn't want to see the stock market coming unglued here. The President likes things big and beautiful, not anemic and ugly. Tuesday it starts earnings season. Like I tell you in how to make money in any market available on Amazon, this is the period that defines most stocks the earnings season. Tuesday is a big day for earnings. Just in the morning we have three stocks we own for the Chapel Trust, BlackRock, Wells Fargo and Goldman Sachs. All three have had a good run for the year and they aren't exactly in the crosshairs of the trade wars. I think Goldman Sachs is liable to have the biggest upside surprise, I hope Wells Fargo CEO Charlie Scharf says he's willing to buy back more stock if it comes down at these prices. Not to be outdone, JP Morgan reports too. And it should be a usual superb quarter. You may wonder why we don't own that one for the Chaplain Trust. Too simple. One of the things you learn if you join the if you join the club, you can't own them all. You already have four financials in a 32 stock portfolio. We get results to Citigroup as well. And I got to take Close observers think that bank run by the Athena cerebral Jane Fraser will put up the best numbers of all. All beyond the banks, we hear from Johnson Johnson, which should have the strongest numbers of any pharmaceutical company. The stock shrugged off a bad loss in one of those tack lawsuits where the plaintiff accused JJ of knowingly selling a product that contained a carcinogen, asbestos. I think that the stock didn't go down but actually went up. It's a sign of the stocks finally stopped being hostage to these interminable lawsuits. Domino's reports too. Now this is interesting. A lot of people think they're going to miss the quarter. We got to hear from more banks on Wednesday and I've got to tell you, bank of America tends not to do all that much, but Morgan Stanley has been surprisingly positive for this last several quarters. Ted Pick shooting the lights out over there. We also get results from one of the most reliable health care companies, Abbott Labs. We've owned Abbott for the trust for almost ever and I think it's just terrific. What else? Well, Salesforce holds its analyst meeting on Wednesday at Dreamforce, and this charitable trust holding has been under pressure. It is down an astounding 27% for the year. I think it's because I eat software, as they say. A twist on Software eating all tech not that long ago. I'll tell you how it is for what's becoming a brutal Stockton when I go out the Dreamforce there's also get this a dollar tree meeting. Okay now this stock has been under pressure too largely because of tariffs was barely down today which seems too positive given that our president threatened to put it these hundred percent tariffs from China I think they will get hurt and numbers have to come down and they'll do it. At the meeting Wednesday evening we get arguably the best possible read on this almost daedalus economy when trucking giant JB Hunt and United Airlines report JB on tells it like it is. They've been talking about a freight recession for ages. United can tell us the difference between the front of the plane corporate customers pay a lot of money and the back where regular people do their flying. Thursday morning Taiwan semi reports. I usually get up at 230 in the morning because that's when they report for evidence sake. This manufacturer of chips for both AMD and Nvidia and many others will give us an overview and I expect a very rosy picture. Schwab gives us his numbers too. And why do I want to look at this? Well, I like to look at retail participation in the market. I think more and more people are coming back to the stock to stocks. One of the reasons why I wrote my book and I hope today's meltdown doesn't drive those people right back out. They won't if they read it. After the close we're going to attempt to learn why CSX fired Jo Hendricks not that long after he was named Railroader of the Year by Railway Age. I don't know the details but I'll tell you something. It looks like Joe is railroaded. Finally Friday what we hear from American Express is this is one of the most reliable unreliable, reliably unreliable patterns. Amex has a tendency to decline right after reports. Then you have to pounce because a week later it turns out to be going much higher and you've lost your chance. I don't think it will be any different this time. We also get results from SOB the old Slumberger and I bet this oil service tighten tells it like it is. To me that means oil which has been which broke through $60 a level could break down below 60. I think it's. I mean I think you got a 55 and that's a distinct possibility. The bottom line, it's a wild week complicated by precipitous decline in treasury yields which normally would signal better times ahead, but today it's hard to think of anything positive that can happen and a lot of negatives that might definitely happen. Let's speak to Mark in Virginia. Mark.
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Oh, yeah, Jim. Long time.
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Thank you. What's up?
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I've been holding Ford stock for quite a while. It's been a tough week for Ford. I stayed invested even when it climbed rather than taking profits because I believe in the company. Appreciate the dividend. Do you think it's still a solid long term hold or is it time to reconsider my position?
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Okay. I was thrown by the impact that this fire had and it's caused me to recalibrate. I do think that Ford's good, but I think numbers might be too high. That fire hurt so many parts of their operation. I know today makes it hard to think about anything positive happening next week, but I believe after another little dip, perhaps some money that we could get some good news. We've got earnings coming up. Omad money tonight. If you break up with your girlfriend or wife, not great. But if you break a company up, well, it could be one of the greatest things to ever happen to you as an investor. I'm taking a closer look at Honeywell and dupont and give you my take on this blitz. Dan, if you're trying to get a read on Europe, there's no better place than Banco Santander. I'm sitting down with the company's CEO to get a grasp of what's going on. And next week, as I just mentioned, we head out west for Salesforce's Dreamforce conference and I'm giving you a preview of what we have on deck. So stay with Creighton.
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Don't miss a single second of Mad Money. Follow imKramer on X. Have a question? Tweet Kramer, madmentions. Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC. Missed something. Head to madmoney.cnbc.com on Fox 1. You can stream your favorite news, sports and entertainment live all in one app. It's raw in unfiltered.
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Phew.
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Regular viewers know that I love corporate breakups. Breakups between people. Tragic. Tough to see. You'll have to trust me on that one. But when a company breaks up, it can often unlock value and generate big gains for shareholders. That's been on my mind a lot lately because not one but two of our holdings in the Chapel Trust are currently going to proof breakups. Dupont, the specialty chemicals company, is spinning off its electronics business and Honeywell is doing a three way breakup, starting by spinning off its advanced materials division. That's going to happen later this month. More on that in a moment. For now, I want to talk about dupont. Even though dupont has a long history found it as a gunpowder mill in Delaware in 1802. The current DuPont is itself the product of a complex merger breakup. Back in 2017, the original Dupont merged with the old Dow Chemical. Then they split up into three separate companies, Dow for commodity chemicals, Cord Teva for agriculture, and the remaining specialty chemicals business sticking around as the new dupont, which is what my trust is. Unfortunately, the new dupont. It's been kind of a disappointment. Didn't help that the breakup finished not long before COVID hit, but even after the stock rebounded from its pandemic lows, it's basically been trading sideways since early 2021. We bought this one for the Chapel Trust in summer 2020 when it was still very cheap and only sold most of position early 2021 for real big profit. But you know what, we kept some on. Always want to see what would happen and it's been a real slog. You could argue a mistake. We are long termers though if we see value and I wanted to stick around because of a fellow by Novette Breen, DuPont's current executive chairman, who's a breakup specialist dating back to his days running Tyco International 20 years ago. Breen helped orchestrate the original Dow Dupont merger breakup too. Even though he's not the CEO anymore. I figured it was worth owning this one because well, given his track record Breen would be able to find some way to extract value. And about 18 months ago we learned how that was going to happen. In May of last year, dupont announced plans for a three way breakup by spinning off its electronics and water units, both of which are leaders in their respective fields, leaving behind a pure play on specialty chemicals. But then this January the company changes mind, saying that it would actually retain the water business, only spinning off its electronics unit. They wanted to keep water focused on unloading the electronics business as fast as possible. Once they get it done, it'll be called Cunity Electronics with the ticker symbol Q. Last month the process started to pick up steam. In mid September, DuPont held investor day events for both QD, that Security Electronics and the remaining DuPont business. On September 24th they set a record date for the community spin off. It's going to be October 22, not far from now. DuPont shareholders at that date will be distributed Q shares, though the exact ratio hasn't been decided yet and QD will start trading independently at the beginning of November. So what are you getting with each of these companies? Let's start with CUNY Electronics. Unlike some spin offs where a slower growing, less exciting part of the business being jettisoned, this is actually the more exciting part of DuPont's business. Most of CO D is tied to the semiconductor industry. About 65% of the sales are chip related. Their customer list includes the world's leading semiconductor fabs like Samsung, Taiwan Semi, as well as chip makers like Nvidia, Micron and Intel. Familiar names for you. Beyond chips, they do things like advanced interconnect and thermal management products. Q3 technology includes materials used for the actual polishing and etching of semiconductors, complex product as well as advanced packaging and thermal solutions. And management insisted this stuff is all integral for the development of leading edge chips. It's a great value proposition. I've checked it out, I really like it. And hey, the numbers for Community look pretty darn good. Okay, so net sales are going to expect to grow 7% year over year in 2025. And that's driven by the boom which is driving demand for the most advanced types of chips that cunity helps with. The company also expects to see its earnings for interest, tax, depreciation, amortization margin grow by 100 basis points to 30%. That's a great number for an industrial type company put all together and I am a fan of this one. As for dupont itself, I think the company's doing its best in a very tough economic environment. But you need a bit of faith to believe in their outlook for the future. Looking back a few years, even though DuPont sales growth has been basically in line with other specialty chemical makers, its stock has had a much, much low, really reduced valuation I would call it. Yeah, some that's because the margins are a bit below average, but generally it's just been very cheap. So to start, there's a value argument to be made for dupont right here, right now, even if it's the wrong point in the business cycle to own most chemical companies. And it is most definitely wrong. Looking forward though, dupont is supposed to some very strong end markets like health care, the water that they kept, diversified industrials, and they have some strong leadership positions in each base. Now at this investor day, DuPont put out some medium term financial targets. They're talking 3 to 4% organic sales growth, 150 to 200 basis points of EBITDA margin growth and a compound earnings growth of 8 to 10%, all while sustaining a high level of free cash flow generation. And you know what, those numbers sound great. In fact, you could say they sound incredible. I use that word. If you look at dupont's recent results, these mid term, medium term financial targets might be a little hard to believe, frankly. This latest quarter Dupont had just 2% organic growth. Much of that coming from the very strong community business which they're about to spin off. So can they hit those targets? Look, we own dupont for the Chapel Trust I mentioned. So you know, I'm a believer in the story. However, they won't be able to hit those numbers without a series of rate cuts. 14, these rate cuts for the Fed are, they're really helping the quarters of something like Honeywell. I think we'd get the rate cuts of the stocks and DuPont. I think the cuts in the stocks certainly are they're cheap, but you need to know what you're betting on in the end. I'm very bullish on the community spin off. It should keep doing keep doing pretty well. Semiconductors stay hot thanks to the boom, despite the tariff news that we got this very evening. But as for dupont itself, the bottom line is that right now what this company has got going for it is a cheap valuation. Without some rate cuts, it's going to be tough to own. That said, I still believe that Executive Chairman Ed Breen can unlock a lot of value here, just like he did with Tyco and Dow dupont in the past. Stick around and I'm going to give you the juicy details of the other breakup that I like, the one I just mentioned, the Honeywell break. That money is back after the break.
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What what is Brutal session, but we carry on because we know that even when it's tough, we can indeed make money in any market. How could I not miss this opportunity? So let's get to work. Tonight we're talking about one of my favorite subjects, about breakups. In real life, not a fun topic, but in the stock market, breaking up a business can unleash a tremendous amount of value if you're patient, I'm always talking about the Wall street fashion show. You know that because stock prices are usually set by a relatively small number of money managers who are tastemakers, let's call them that. And for the most part, these institutional money managers, they like simplicity. They like stories that are straightforward and easy to get your head around. That's why these corporate breakups can be so profitable as you work through them. A lot of big companies are simply worth more than once or split into two or three different pieces. Earlier, I walked you through one of my absolute favorite dupont is planned spin off of its electronics division. Now I want to highlight the most unheralded Honeywell breakup. The spin off of its advanced materials division as solstice, followed by the spin off of its automation business. And I really like this one. My Chapel Trust is on Honeywell for more than five years. Initially it was a big winner running from $150 where we bought it to well over $200. And we took some off the top of that. By early 2020, one had already gotten there. But then the stock became a battleground and only it has been pure struggle. It's been, it's been consistently underperforming for us. But we have held on to it precisely because the company is now committed to bringing out the value through a breakup plan that we wholeheartedly endorse. During this period, Honeywell's been held back by lingering supply chain issues that underperforming side divisions. There always seemed to be some snag that prevented them from blowing away the numbers. Now a lot of investors throw in the towel, giving up on this big industrial conglomerate. You argue that could be right. I think there's much more ahead. See, I stuck with it though, in part because Honeywell kept growing and because some of its core businesses like aerospace seem incredibly undervalued. For the past couple of years, I've been trying to give the benefit of the doubt to Vimal Kapoor, who took over CEO in June of 2023. Came on the show back then, but only really got the control when he became chairman of the board a year later. And I think he's doing a fantastic job. A few months after that, he announced his plan to break up Honeywell by spinning off its advanced materials business. That was a core business. About a month later, the activist hedge fund Elliott Investment Management got involved. They took a $5 billion position in Honeywell that was the largest investment ever in a single stock. Elliot's got a great track record and they urged Kapoor to go even further with his breakup plans. You know what? To his credit, what did he do? He listened. In February, Honeywell announced that instead of just spinning off the advanced materials business, which is a small part of the company, it would break up into three pieces. Aerospace, automation and advanced materials. Now, it's not going to happen by tariff warriors, but after the big Liberation Day washout, this thing rebounded all the way back to the 240s in July. This was some move, just some move. I mean every, it seemed like every hedge fund, his brother was in there. Unfortunately, when they reported their most recent quarter, the aerospace numbers came in a tad light. And since then, the stock has just been hammered, sinking back to $200 and change as of today. We almost pulled the trigger on buying some, but we knew it was such an ugly day. We said let's see what happens Monday. But a week and a half ago, we learned that the breakup has arrived. Honeywell announced it is ready to complete the spin off the advanced materials unit as Solstice. Advanced Materials with the tickler symbol S O L S will get one share of Solstice for every four shares of Honeywell. And Solstice will start trading independently on October 30th. Quite exciting. Well, if you're into stocks like I am, then two days ago, management held an investor day event for Solstice and gave Wall Street a closer look at what the new businesses will look like. Okay, so get this. Solstice will be a mid sized specialty chemical business with nearly $4 billion in sales. One third of the the business comes from the regular refrigerants. They sell it to heating, ventilation and air conditioning companies. H Vac along with appliance makers like Whirlpool, they've got a large portfolio of building solutions and intermediary products for construction. They provide alternative energy services and sell in the nuclear industry. They even make chemicals for other chemical companies, including DuPont, which I just talked about before the break. At this week's investor meeting, Solstice emphasized that the company selling into some attractive end markets. Markets with strong secular trends, including the growth of advanced computing, the evolving energy landscape as well as health care, personal safety and defense. All secular growers as far as I'm concerned. In terms of sources numbers, this used to be a pretty strong business, but more recently it's been less than stellar. You can understand why Honeywell is happy to spin it off. Sales growth has slowed dramatically over the past few years and set to be pretty much flat for 2025. That is not good. Their EBITDA margin expected to dip too, although that's mostly thanks to higher cost stemming from the breakup. I don't hold against them overall Sources is a solid business in an industry that's currently challenged. I've talked a lot about the two economies, the booming economy for anything connected the data center and the not so hot economy that includes virtually everything else. Solstice has a little bit of exposure to data center, but that's not really fair to call it that. It's. It's not big enough to offset the weakness in the company's more cyclical markets. So I wouldn't be surprised to see the stock dip after it starts trading independently. But that's what usually happens when you spin off a stock to existing shareholders. Many Honeywell investors simply won't want Solstice. The S and P funds have to kick it out. However, once the economy stabilizes, ideally after we get some rate cuts. You know what? This is going to be a winner. Maybe a huge winner. It's just that we were wrong in the wrong place. Part of the business cycle to own something like this. At the moment, I'm glad they're getting rid of it. I need the stock of H1 to go up from my trust. As for Honeywell, I am optimistic that with this breakup finally happening, they can start unlocking real value. Keep in mind there's a second step to the breakup. They're planning to spin off their automation business by the second half of the year. It's next year I'm talking about. At that point, the remaining Honey will be almost a pure play on aerospace. And aerospace is space is a phenomenal business. Phenomenal. Look at how GE Aerospace has done since it spun off its health care and power divisions. The stock's been a giant winner. It wasn't when they had those other divisions. Sometimes the spin offs do even better. Look at G Renova, their power business we own for the Chapel Trust that stocks run from the low 100 to the low 600 since it became public independent in April of last year. So let me give you the bottom line on a complex story that he's going to make you money. But you got to be patient. The age of conglomerates ended a long time ago. These days we've seen so many breakups create immense value for investors. And now Honeywell is about to join the club as it spins off its advanced materials business as Solstice later this month. I can't be too enthusiastic about Solstice until we get more rate cuts from the Fed, but it might be Worth buying on weakness somewhere down the road. As for Honeywell, the Chapel trust is in this one for the long haul because Bimo could force three way breakup plan will finally unshackle the company's phenomenal aerospace business. I think that will be worth a heck of a lot more once the other divisions get spun out. As this stock goes down, all I can say is opportunity beckons. Let's take, let's take questions. Why don't we go to Jason in Florida. Jason.
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Mr. Kramer, as a blue collar guy who was not brought up learning strong financial fundamentals, I want to truly thank you for the work you do to help the educate all of us. I read the book and I'm diving.
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You did? Of course.
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I loved it. I thought you wrote it for me. So I'm diving into the homework I wanted to ask you. With the worldwide demand to replace agent fleets and its backlog of orders, what do you think about Boeing as a candidate?
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C
Boeing is a must buy. I think Boeing is a must buy. I have looked the the CEO in the eye. I think he's a terrific guy. Or and I will tell you this, this company just gave up a huge percentage of the gain it has had. And why buy anything at the top when you get something near the bottom? That's Boeing. Thank you for the kind comments about my teaching. I can't be too bullish on Solstice yet but I can be all in on Honeywell. I think this breakup will make it worth a heck of a lot more. Remember it was in the 240s, not that long ago now. Much more man money. Even on a tough day like today. It's worth keeping an eye on the banks as they have some of the hottest in this market. We've got the hottest. Almost my exclusive Spanish bank Banco Santa there. Then whether it be nuclear bitcoin derivatives or quantum, there will be a piper paid for the exuberance. In this tape I'm showing you why I think the froth is going to cause problems. And of course all your calls. Rapid fire lighting around stable crap. Even on a bad day like this. It's worth keeping an eye on the banks as they become some of the hottest stocks in this market. That includes the big international players like Banco Santander you know, I like very much. It's doubled since we saw the CEO last. They have been on the cutting edge focused on AI and the future of banking. Earlier today I sat down with Anna Boutine. She's the executive chair of bank of Santander. So take a look before we get into the nitty gritty. I do want to say people stop me all the time about Nvidia. They should be stopping me about Banco Santander because your bank stock is more than double this year versus Nvidia.
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Hi, Jim. It's great to be back. I think I was here a year ago and yes, we have basically doubled. I say this is an overnight success, then years in the making.
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C
Well, I don't want to be tawdry by talking about it, but I think in the end it's important to know that you are probably the best creator of value in your group. Now, you're also in the, I think the most difficult because you are in. You've committed yourself to 10 countries, some of which are always in flux. You are the world banker, and I want to know what you're seeing. Strongest loan demand, weakest. And how your AI strategy is working, because that was something I basically think you introduced on our show at one point.
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F
So, Jim, those are, those are many questions. Let me, let me take the.
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C
Well, you're able to handle many things at once. How about that?
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F
Well, that's my job. Absolutely. So, you know, we, we are a. Today, we. We have become a global financial powerhouse with 175 million customers. But the focus 80% are Europe and America. So most of our markets are in Europe and Americas. If you think about what are the strongest ones by global businesses, we are growing more in corporate banking, wealth management, payments by geographies. I would say Mexico, US and Spain. I think those are the strongest geographies in the last 12 months and looks like going forward now.
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C
You're also in areas that are affected by nationalism, by political turmoil. Somehow you've been handling these as if they are just the same as a slower or faster economy. These are difficult things to manage. But you do that one. I want to know how you do it and to where is it most problematic.
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So one of the great strengths of Santander is its diversification, again by global business and by geographies. This allows us to allocate capital dynamically across businesses and geographies on a weekly basis so we can go where the best risk return is. And this is a huge strength at times like these because again, if you go back two decades, our results are the most predictable, the least volatile, volatile among our peers. And this is a huge strength. And again, going to the best risk return on a very dynamic basis means I can maximize returns for my shareholders through the cycle.
- [33:31]
C
Now, Mexico is strong, we talk about that. But Brazil, you've got A huge presence in Brazil and I've always felt that Brazil was so called dicey as I did Mexico. Maybe I and many Americans have the wrong vision and view of these two countries which are making you a lot.
- [33:49]
F
Of money if you ask me. Looking forward. So our share price is up 100% but I think the best is yet to come and this is the reason why I have huge confidence we will again deliver. And it's all based on what I call going from a federation of banks to a global financial powerhouse. So our global businesses and the structural change in the business model will help us be more profitable in every single market. And this is really important. How are we going to do it? By leveraging our scale to build global platforms. And Open bank which we launched here last year is just one more example of that.
- [34:27]
C
Well, let's talk about that because you are at the forefront of something that I felt that no one else recognizes. Getting Gen Z people to invest and a lot of us because one, your digital offering is superior to every of the, every one of the traditional banks and second, you offer the best rate and they understood it and it looks like they're saving and not spending as much because of what you offer.
- [34:52]
F
So this is, you know, in today's world, either you're very big or you're very specialized. And we have the scale to be one of the big global platforms to deliver for Gen Z. But to you, also to everybody, the best products, best customer experience at competitive prices. And this is really important why? Because we are building our own platforms. Okay. Open bank is our own ip, our own software. Gravity is our backend. And this is what will allow us to deploy the same platform, same user experience across all our platforms. And hopefully in the next 12 months we'll be able to, for example to connect Open Bank US with Open Bank Mexico, Santander also. But this will allow you to tell.
- [35:36]
C
Me that it could be fluid.
- [35:37]
F
Yes, instant, I mean literally seconds with an account with Santander in the U.S. open Bank U.S. open Bank Mexico, you're able to transfer instantly.
- [35:47]
C
That had always been a major stumbling block. You were talking about something that has kept our two countries separate, happened for a long time. I know that there are issues in Washington separate but financially we'd be very much together.
- [35:59]
F
So we're going to be on both sides in the US and Mexico. We can onboard customers to the level and the trust of a bank and we can allow you to actually work cross border as an individual, as a company during 2026.
- [36:13]
C
Now I also think people should Understand that you've embraced AI to the point where you have brought in open AI in a very, very aggressive way. And I think it's probably kept that efficiency ratio to be as spectacular as it is.
- [36:28]
F
So I say AI is everywhere at Santander. We're on a journey where every decision, every process, every customer interaction should be data and intelligent analysis driven. This means that by the end of this year we're going to have 30,000 open air users inside Santander. But there's a lot more to be done. So there is a huge potential because once you have your own global platforms, getting AI inside is much easier. So this is really the journey we're on. Massive opportunity ahead and just two numbers to prove that this is happening. In the last 12 months we grew 8 million customers. That's a population of New York City in 12 months. And our cost a flat to down.
- [37:16]
C
Across the group right now.
- [37:18]
F
And our efficiency 41.5. That's best in class among the best banks.
- [37:22]
C
Okay, so no bank is doing other than propsure. So really want to understand this. We're supposed to be using these as basically digital assistance so that we can get twice the productivity out of a banker. I'm afraid that what people do is fire half the bankers, which is the same, get the same result old, but it's very short sighted. Are you using a digital assistance to get more productivity out of bankers right now?
- [37:45]
F
That's how we see it. We see AI as helping us do better for our customers and better for our shareholders. And this is the key. If you look at our track record, 10 years since I took over, we have more than tripled profits. We have multiplied by six shareholder remuneration over the last two years. Our EPS is up 19% and a lot of this is investment. So we give great returns to shareholders. But we're investing and we see it as making us do things of more value added to you as a customer. And I can give you examples of.
- [38:18]
C
How this is happening because you're the only one doing it. I need to know how you're able to do it.
- [38:24]
F
Well at the end it's a cultural issue. So you know, I have personally programmed, we have an alliance with Cognition, it's a San Francisco company, they have an agent called Devon. So as part of our latest management meeting, you know, everybody including myself used this agent to program and you realize how it really helps you. If you understand the business and you have the right partners, you can build amazing tools not just for productivity but for growth.
- [38:52]
C
Well, I think people should understand that you basically have a shadow board of directors too where you have very high level people. For instance, George Kurtz from CrowdStrike that you brought him in. I think I've been waiting for people to say, you know what, he's a genius about cybersecurity. Well, you. He's on this board that I'm talking about.
- [39:13]
F
So when I took over 10 years ago, we had an advisory board which was basically everybody that left Santander was put into the advisory board. So the first thing I did is send them all home respectfully. And then I tried to look for the best people that understood technology and what was coming. So George Courts has been with us for 10 years. Jim Whitehurst, the founder of Red Hat. Fantastic, fantastic guys. Mike Rodin from IBM, he understands the deep tech. Sheila Baer. So the list is long as actually many Americans. Americans. Marty Chavez, ex CFO of Goldman Sachs. Sure. Who's a software developer. So these guys have been incredibly, incredibly helpful as we and they've always been available to, you know, to challenge us on our tech, on our product. So incredibly grateful, amazing advisory board.
- [40:03]
C
Now to go full circle. I want people to understand you can speak for obviously your commitment to shareholders both buyback dividend is extraordinary and is in every single document you produce. It seems front and center for you at all times.
- [40:20]
F
My goal is to be a compounder of tangible book value and dividends over time. That's my goal. And there's not many companies that can be compounders and we are one of them. You know, we're in markets with 1.5 billion people where we have 173 million customers. Latam number one bank with 100 million customers US. So being a compounder delivering tangible book value accretion over time in a sustainable way. And you know the one thing we still don't get is a premium for that. So we are now at the average. I don't like to be average in anything. I think we should deserve a premium because we continue to grow and we can deliver even greater profitability.
- [41:01]
C
I could not agree with you more. You deserve a premiere that premium for everything that you've accomplished. I want to thank Anna Boutine, the executive chair of Banco Santander and I want to thank all the shareholders who had the faith to be with her because they're none better. The performance states that. Thank you.
- [41:17]
F
So thank you for being an early believer.
- [41:28]
C
It is time to look right with her debut reference. Also this in this episode of Bob and Bite sales super durable course I'll talk to myself Missouri and Put us out and then the lightning round is over. Are you ready? Ski dashing right when conventional. Bobby. And you're Bobby. Hey, Jim.
- [41:44]
D
Bobby from Long island, first time.
- [41:47]
C
Good to see you again. All right, what's happening?
- [41:50]
D
Okay, first I want to mention an eagle from the 1960s. Tom Wooderschick.
- [41:56]
C
I love Tom Wooderschick. He happened to live about. He about a quarter mile from me and he lived on Paperdale Road. I lived on Shelton, I think. Yeah.
- [42:04]
D
He reminds me of Cam Scatterboat.
- [42:09]
C
Exactly. Same kind of runner. What a buzzkill. How about a stock?
- [42:15]
D
Okay.
- [42:16]
C
The stock I want to mention to you is uipath symbol. I'll tell you the truth, buddy, it just had such a big move. I can't recommend it. It's just. Just sword. It's not for me. Let's go to Michael in Kentucky boost.
- [42:29]
D
Michael, Mr. Kramer, hi. Longtime listener and first time caller and it's an absolute honor to speak with you, sir. It's an absolute honor. An old fashioned Kentucky booyah.
- [42:45]
C
That is definitely. I can't tell whether that's Lexington or maybe. I don't know where that might be. Might be Louisville. Go ahead. I'm gonna help.
- [42:52]
D
Oh yeah, I'll you let just real quick give a shout out to my loving wife who bought me your brand new book for my birthday. So shout out to her and on your way. I just wanted to ask you. I appreciate it. I just want to ask you real quick. I see a lot of potential in this and I was just wondering on your thoughts about maybe starting just a real small position in Archer Aviation.
- [43:15]
C
No, we're gonna let that come down. We're in a kind of speculative tsunami right now. Now I think you'll be able to get that cheaper. Just consider it like a maiden clayman race. Okay. And that, ladies and gentlemen, conclusion of the Lightning round.
- [43:30]
A
The Lightning round is sponsored by Charles Schwab.
- [43:40]
C
Next week I'm headed out west for my annual pilgrimage to Salesforce's Dream Force conference. It's a celebration of all things tech with an emphasis on AI. What an odd moment for the software as a service companies right now. Companies like Salesforce, these guys have expensive but valuable products that boost productivity. Products that some customers are trying to replicate or augment using their own AI so they don't have to be Salesforce. In other words, the Salesforce model is being challenged. Let's find out what they're doing about it. Of course, I'm not just going out there for tech. For example, we're going to sit down With Brian Nicholas, the CEO of Starbucks. See how that turnaround is going. I'm on a two track mission right now though. First I'm examining the established profitable companies that are impacted by the rise of the data center. Second, I'm examining those that are in the mix but are not profitable. Why care about the latter cohort? Because you know what? I've started a froth watch with many of these stocks being bid up Gamestop like by retail typically using platforms like Robinhood that brought so many newer investors into the market. But not necessarily wiser, just newer. You know I've been behind in video the whole way and I've been, I've. Look, I've supported the data center stocks the whole way because the staggering need for computing power to fuel accelerated computing. But there's another group of red hot stocks is antithetical to the very concept I'm investing in. I'm talking about the stocks of super respective companies that have some contracts and some revenues but no earnings and none expected anytime soon. Now many need cash just to sustain their operations. They're often the height of speculation. Now I'm not against speculation as you know from how to make, you know how to make money in any market. I say you can have one spec in a program of five stocks but let's not get out of control and that's where we are going forward. I'm going to start naming the names of these impoverished growth companies. The ones that have been bid up furiously and will likely need to do stock offerings because they're desperate to raise money. That's what happened in the great Internet crash of 2000. As the dotcoms took advantage of their sky high stock prices by issuing new shares, the market was overwhelmed with all the supply. That sudden surge in supply directly led to the crash because while individuals move stocks up then as they are doing now, those secondary offerings were sized for institutions. When the institutions lost their appetite for this kind of stock, the entire market fell apart as huge amounts of worthless stock wiped out the savings of many individuals, many who never came back again. It also destroyed the performance of many a mutual fund. I think we'll see that pattern play out again with so many of these red hot speculative names. Unless they cool off. Case in point, I on cue IO and Q. That's a huge loss making Quantum computing company with a stock that had bid up aggressively by retail to the point where it rallied 85% for the years of last night's close. Then this morning IonQ just offered 2 billion shares. 2 billion shares were the shares and, well, it's actually more common shares and warrants. It was a complex deal, but it knocked the stock down almost 9% today. I think this offering will be the first of many and they could weigh on all these stocks. I just hope these deals stay in Sherwood Forest along with the other Robin Hood plays and don't break out to the rest of the market. 2000 losses could not be contained and they ultimately dragged down almost everything. Sooner or later though, someone needs to pay the piper here, whether it be nuclear or bitcoin derivatives or quantum computing, or even some of the unprofitable data center adjacencies. I'll be sharing the Sherwood Forest names with the Investors Investing Club in my weekend memo, my Think piece. This froth of the forest is in some ways right on time because this is the third anniversary of the bull market, a time of complacency speculation. So far you've done fabulous if you speculated in these stocks, but the underlying companies most likely need capital and after a certain time it won't be available. Warning that time is now starting. So please sell some of these specs before the companies and the insiders do the same. At a minimum, please take out your cost basis. I'm sorry I'm going to be harping on this, but I have to believe me. I managed money in the year 2000, but you're shorting these young profitless.coms all documented the street.com by the way, we finished up 36% for my hedge fund. If the red hots are going into a similar situation, I'm telling you that you need to ring the register. The sooner the better. Even if we came down so much today, we keep hearing there's a ton of froth in this market. That's not true. There is it, but there is a far a Sherwood Forest that's filled with froth and the Robin Hoodies they won't be able to stop the declines. All I said is always bull markets. On my promise. I find just for you right here, Mad Money. I'm Jim Cramer. I'll see you Monday.
- [48:24]
E
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates and may have been previously disseminated by Kramer on telev, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer.com It's Cybersecurity Awareness.
- [49:06]
A
Month and LifeLock is here with tips to help protect your identity use strong passwords, set up multi factor authentication and report phishing scams. And for comprehensive identity protection, LifeLock is your best choice. LifeLock alerts you to suspicious uses of your personal information and also fixes identity theft, guaranteed or your money back. Stay smart, stay safe, and stay protected with a 30 day free trial@lifelock.com Specialoffer terms apply.