← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 10/20/25
00:44:19
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 Med Money. Welcome to Que Marica. I'll be with my friends. I'm just trying to make a little money. My job is not just entertain. It's to educate. It's to teach. So call me 1-800-743- CNBC. Tweet me at Jim Cramer. You know why I always say own Apple, don't trade it? Because despite the myriad bears and there are endless haters, this company always comes up with the best there is. The most beloved products on earth. And that's why you can't trade it. That's why you must own it. Apple stock surge today on the back by it was backed by some hefty research reports helped buoy the entire stock market with the Dow gaining 516 points, SB jumping 1.07% and the Nasdaq poll voting 1.37%. Apple soared because three different analysts went out positive stock at once, including Ben Righteous from Amelius, who's been on the He's a bit on board the whole way, but let's face it, you could have easily gotten in the whole gain at Apple if you simply watch this show or belong to CBC Investing Club. More recently bought my new book how to make money in Any Market because I flogged this darn thing every day. A nothing wrong with little shameless promotion given that I've been right on the stock the entire way. I've said over and over and over again that as long as Apple makes the best products, people will buy them and the stock will eventually play catch up. You will never catch these big moves like today entirely unexpected. If you're constantly flitting in and out, you will be selling at the bottom and buying at the top. Sure enough, the recently released iPhone 17 series is a monster hit. Whether it be that lightest one, the iPhone Air, which feels like a candy bar, your hand having felt it, or the heaviest duty or the one in between. It's all there, right down to the selfie taking the auto adjust so nobody's cut off. Now you can say I had an edge on everyone. That's how I found it. Because we took selfies with Tim Cook, the CEO of Apple, and he talked about this wondrous selfie sensor. I meet people all the time now with the 17 and we take pictures that are always good. There was a time not that long ago when getting a decent photo took some work and you had to have someone with long arms like CC Long Arms Kramer, my daughter who takes all the selfies because that way no one gets cut off. I split people right down the middle. Or maybe I had an edge because when we were, when we worked out the pricing when we were in Kentucky, we realized we learned from TIP that take into account the trade in value of your current iPhone and the subsidies from the wireless carriers, there would basically be no, no increase in price regardless of the tariffs. How many analysts told us to be 200 to $300 more? Who can afford it? Again though, that's something anyone could have figured out. What? Or they just watched your interviews with Cook and spared the arithmetic. But the bearish analyst never factored in the trade value and rarely thought about the providers who were at war with each other. And Apple's phone is the principal weapon of getting new subscribers. Or maybe we knew that the iPhone air was as light as a candy bar. It simply looks really cool, something that Tim Cook gets and a lot of customers want it. But again, that's not like it was inside information, particularly that it was selling so well in China. This rally in Apple was totally gettable. The bullish facts were all there. But so many people missed the move because there's a whole cottage industry of people pumping out negative data points on Apple. Everyone made so much of the departures of Apple programmers, some going to Metta where they compete with a new form factor that combines glasses with device in your pocket. At the same time we heard that series a bozo who will bum you out. We heard that China sales have to be weaker because the government no longer likes Apple. We heard that the new phones were merely incremental and not noteworthy. We heard the usual issues, the slowing nonsense and of course the tariffs. All these issues were canards. Most were Hatched by people who were unwitting useful idiots for the short sellers. Still others simply weren't listening to both sides. Or as Melissa Righteous says, quote Apple is on a mission to silence its critics. We saw we see upside in sales in China in the calendar year 2026 and momentum in new models overall. Yes, he goes on, quote unquote. While the media is obsessed with AI talent departures and focus on delays, Apple could have the last laugh as the new Siri could be launched in March. And Apple's poised to expand its hardware lineup with a touchscreen home hub and cameras, a tabletop robotic assistant assistant and even a mobile robot for the home. Who's thinking about this stuff? The bulls. All three analysts reports today said that Wall Street's earnings estimates were probably too low. Not just for the year but maybe even for the out years. I think that makes sense. Explains why the price looks high but might come down when we see the real earnings. And you'll have missed it if you're trading. I also like what Evercore said in its tactical buy call that Apple service revenue could continue to grow at a double digit clip. I like loops approach in its upgrade to listen to this quote Time to sink your teeth into this. Apple's multi year iPhone run. Okay, well that passes Wall street humor. Come on Loops. Anticipating a foldable phone in September of next year. How big will that be? What's missing from all these upgrades and pushes is that Apple's one of the most loved companies in the world. But you can't factor that into a spreadsheet. There are 1.5 billion iPhones in use. The company puts out incredible products that are adored. Think about it. Do you ever hear about anyone else's phone launches? An Apple phone brings lines around the block and a host of cities around the world. China, Japan, you name it. That means nothing to the analysts, but it should mean everything to you because it keeps you blind from being blinded by the negativity that Wall street keeps pumping out about this company. Apple's installed base is so large that Google pays them more than $20 billion be the de facto search engine. That relationship was blessed by a federal judge who initially ruled that that outfit was monopolist. Once you knew that Apple could get what it wanted from just using the best search engine rather than developing their own. Well, you know what that told me? That Apple maybe could even do the same thing with artificial intelligence. Why spend hundreds of billions of dollars, develop your own AI and all the nuclear power plants and stuff when the companies behind these Chat bots may actually pay you for the privilege of being the iPhone default. They could open the bidding and say, 30 billion. I got 30 billion. I see 31. I got 32 in the back. I see 31. You bet $35 billion. Talk about fabulous gross margins. That's what I think. You actually have to pay them a year to be in their phone. You have to believe that with so few distinguishing factors among the chat bots that the only way to justify the spend is to become Apple's AI conduit. It's a natural move, and it wouldn't cost Apple a penny. This is the kind of thing that happens when you have the most popular product on earth. Now, there are a lot of misperceptions on Wall Street. This weekend, I wrote to CNBC investing club members explaining how Salesforce, for instance, demonstrated convincingly that real clients think Williams, Sonoma, FedEx, PepsiCo, Dell are saving money using the gentics, okay, that's their product. And building better revenues with their agent for forced platform. Nothing's being cannibalized. Amazon, despite its painful web services outage today, may actually be reaching a bottom. And that's what it means when your stock goes up on bad news, like Amazon did today. But to me, the amazing thing is how traders have managed to make almost no money in Apple, the house of pain, because they trade in at highs and sell at lows. They can't take the constant negativity that the analysts pump out and the press comes out. And all the. All the people who come on, the money managers, they can't get it right. I do blame the analysts and reporters who end the short sellers who work so hard to get you out of the stock. They accomplish their. They accomplish their mission. They work themselves to the bone, scaring you away from Apple. And now they have to take up their numbers and eat some crow. I think some of these people are irresponsible. Others are weirdly biased. Others should be just fired for their poor analysis. Analysis, yeah. All right. But the bottom line, if you use common sense, if you checked out prices from the phone carrier at Costco, you asked the salesperson for specs at an Apple store. Then you had everything you needed to know. Why you should own, not trade, Apple. The owners are the ones who got to participate in today's rally. It's why I spend so much time in how to make money in any market saying, you got to stick around these great stocks rather than flitting in and out, because that's how you lose money. Hareesh. In New Jersey. Hareesh. Hi, Jim. How are you? I am doing well. How about you? Fantastic. Wanted to know your. Your research on Adobe. What do you think of Adobe? A lot of people comparing Adobe to Salesforce and saying that Adobe can make a comeback like Salesforce did. I think they're two different animals. The problem with Adobe is they got some very powerful competition. I think the stocks come down a lot, but this still doesn't make me want to pull the trigger. How about Robert in New York? Robert. Jim. Jim, give me. Jim, I have to tell you, thank you so much for inviting me to that interview with Jensen. Wayne, What I got to tell the listeners out there, what you see, Kramer, is what you get. Honest, modest, and integrity. I have. Jim, I got to tell you, when I met you and watched what you did, you were the kindest. You made people. You make people millionaires. That's why they. Thank you. Gentlemen, millionaires. I got a minute, which I feel terrifically about, and I know you talk about that, Robert, and I can't thank you enough. We made many millionaires in India. Many millionaires. And I think they'll be joined to what I write and what I read. And thank you for that. How can I help you? Now, let's talk about a company that has been struggling lately amid rising operation costs and competition. Their earnings are due out in November, and I think this report will be positive because of the increased attendance in the theme parks. You got to own this stock before the earnings report. It's going higher, in my opinion, but I need your blessing. It's got good management changes, Disney. Okay. I think at this level, Robert, it's good. I do speak a lot with Jeff Marks about it. I expressed some displeasure today, saying, oh, my God, it's still at 111. I thought it should be at 120. I think it gets to 120 at 120. We have to reconfigure and rethink. Thank you for what you said about making people millionaires. We changed lives. I'm looking at Regina Gilgam, my executive producer, and she and I talk about this all the time. We change lives. That's what this show does, and I'm very proud of it. All right. If you use common sense, then it would be easy to own Apple through all the negativity. And the owners of Apple that were able to participate in today's rally were not the traders. They were the owners. I mean, Money Tonight, earnings tend to be a negative catalyst for the stock of America's Best. But after reporting last week. Wall street actually like this report sending shares higher. So could this momentum continue? I'm breaking down the quarter and giving you more. My take and investors have turned to gold as a flight to safety with US treasury standing in the shadow. So what should this make? What do you make of this safe haven dichotomy? I'm going up the charts to find out. And Ulta has spent much of the last few years in the doghouse, but now that the usage is starting to look a little prettier, I'm digging digging into how the company got back on track. So stay with Kramer Foreign don't miss a second of Mad Money. Follow at Jim Kramer on X have a question? Tweet Kramer Hashtag Mad Mentions. Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC. Missed something? Head to madmoney.cnbc.com Fox News is now streaming live on Fox One. The voices you trust, the stories you won't find anywhere else. This is the story breaking right now. Fox One we live for lives.
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Typically, whenever American Express reports earnings, the stock tends to sell off. I always tell you that even if the numbers are excellent, Wall street finds a reason to dislike it. That's why I say listen, you got to wait to buy the stock on post earnings weakness and usually these are great buying opportunities. When the company for July for example, the stock plunged from 315 to 302 just like that over next two days. That's when I told you to buy the dip. And I hope you did because the March best is now just under 350. This time though, something very different happened. When Amex reported last Friday the numbers were so phenomenal that the stock actually rallied and rallied hard, up 7.3% in a single session. What was so great about this quarter? The market especially finally break its post earnings losing streak. Well, to start the result, the results were just fantastic. The company's build business, meaning total cardholder spending was up 9% year over year, coming in much better than expected. Total revenue was up 11%, also much better than expected. They earned $4.14 per share. Wall street was only looking for four bucks even that. That was 19% growth by the way. Really incredible. In the company's core US consumer services unit, spending was up 9% acceleration from 7% in the previous two quarters. Growth was driven by the company's youngest customers. That's what we want. Gen Z spending was up 39% year over year. Millennial spending was up 12% compared to 8% growth for for Gen Xers and just 4% for those tight fisted baby boomers. What can I say? Our parents raised us to be cheapskates in the commercial services segment. Their build business grew 4% year over year. I know that doesn't sound great, right? But it still represents acceleration from 2% in the first two quarters of the year. And Amex's international car services division had the best growth of all. Build business up 13% year over year thanks primarily to 15% growth in goods and services spending. International consumer spending was up 14% with international business spending up 12%. Look at these numbers. In short, the overseas business is great too. Even better, America's Best raised the low end of its full year sales and earnings guidance. Previously the company is forecasting 8% to 10% revenue growth year over year with an earnings per share result of $15 to 1550, which would represent 12% to 16% growth from last year. Wow. Now we're talking 9 to 10% revenue growth with earnings per share of $15.20 to $15.50. That's a 14 60%. This is a huge company. The consensus earnings estimate for this year was 1534 entering the quarter above the midpoint of previous range, but right in line with the new one. Wow. What about credit quality? We're starting to hear a lot about that for some of these banks. Last week we saw many regional banks tank because of bad loans, but American Specially doesn't have that problem. In fact, their credit metrics are improving. Tell that to the bears. The percent of card members, loans and receivables that are 30 plus days past due remain at just 1.3%. That number hasn't budged over the past five quarters. And for the second consecutive quarter, Amex's net write off rate actually ticked lower to 1.9% down from 2% in the previous quarter and 2.1% in the court before that. The company's total provision for credit loss is $1.287 billion, consisting of 125 million reserve bill and 1.162 billion in write offs, which is better than 1.43 that Wall street was looking for. That's a major driver of the earnings beat. That's the way you want to beat numbers. While we've been hearing some rumblings about a softening consumer, especially on the lower end, Amex simply isn't seeing any credit issues at all when this well healed card base. It's pretty smart. However, I'm not sure if any of that explains why the stock rallied on Friday. Like I said before, American Express sells off after virtually every quarter, even when numbers driven. So what was different about this quarter? Different enough to send the stock into the stratosphere? Okay, right at the start of the conference call on Friday, CEO Steve Scooter, one of my absolute favorite CEOs, said that the recent launch of their new Platinum card has been a success. Many you got it in the mail. It's pretty cool. The strongest start they have ever seen for Platinum Card refresh in the US Screer went into great detail about the value proposition of Amex's various card programs. Basically they've got this incredible rewards program that's irresistible to the company's deep pocketing customer base. Squeering explained that the company's premium customer base, which is unmatched in the credit card industry, gives Amex insights into how rich people spend their money and what types of benefits they value the most. That in turn helps them decide where to invest to get keep the rewards program attractive. Keep in mind people pay a huge price for these rewards. The fee for the new platinum card is $895 and that's a charge card, not a credit card, meaning you need to pay off your balance in full every month. You're paying that fee for these fabulous rewards and apparently people are more than willing to pay up. Last month's Platinum card refresh seems to have gone very, very well. Squery said that I'm going to quote your new Platinum account acquisitions are running at twice the level before the refresh. Wow. End quote. Meanwhile, the company has record high bookings on Amex Travel. More customers are linking their Platinum accounts to Resi that's at Amex on restaurant reserve reservation platform and spending is roughly double with certain vendors that offer new Platinum benefits like Lululemon and smart ringmaker Aura. But the big takeaway is simply that the new Platinum card has been incredibly well received. It's so popular that the usual post quarter selling was swamped by a wave of new buyers. What makes this all the more impressive is American Express launched the new Platinum card at a time when the premium car space is facing a lot of competition. J.P. morgan, Wells Fargo, Capital One, Citigroup, they all introduced similar offerings recently. If you were worried about the competition, this quarter was definite proof definitive that there's nothing for American Express to be afraid of or you to be afraid of if you're a shareholder. Here's the bottom line. On Friday, America's Best reported a fantastic quarter quarter. And for once, its stock actually rallied in response. Highly unusual people, but it makes sense. The numbers remain excellent, including the credit metrics. The new Platinum card is a huge hit. Frankly, I just wish the stock had sold off like usual. So I can tell you to buy it on weakness. But hey, there's always next quarter. Net money's back after the break. Coming up, following today's major gains, Kramer's going off the charts and looking past the speculation, seeing where investors looking for safety are putting their money next.
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Try angel stuff for your tushy. It's made by angels. Soft and strong. Budget friendly. The choice is simple. A roll that feels like paradise and always at a heavenly prize. Pick up a pack today. Angel Soft. After an incredible day like this one, it's hard to complain. But as I keep telling you, I I'm very worried about the speculative mania that swept up large parts of this market. We've got all sorts of incredibly high risk stocks trading at levels that are borderline impossible to justify. I don't mean the place. Most of them are actually real companies, real revenues and real earnings. I'm talking about the nuclear power plays, quantum computing, space exploration, flying cars, rare earth minerals, and some of the more ancillary data center stocks. I was gratified at last to see some profit taking in these companies, many of which remind me of the year 2000 and that flotsam injection that hurts so many people. In fact, there's something downright bizarre about this market's perception of risk. During the last speculative mania, which is in 2020 and 2021, when all sorts of momentum stocks were buoyed by the government's Covid era cash handouts, investors also rushed to buy U.S. treasuries. At the same time, they pretty much ignore gold. These are two classic places put your money when you're worried about the future. Back then, people who were worried, they went all in Treasuries. This time though, treasury yields have been coming down to where while the price of gold is skyrocketed, even people searching for safety want to do something, want to do it by investing in a boom and bust commodity. I thought it was because the Chinese are doing and I'm sticking by that. But that. Well, let's just look into it like this. What does it mean for the market? To answer that question, you got to go off the charts. And to do that, we need the help of Carly Garner. She's a brilliant technician who is a senior commodity strategist and broker to Carly Trading. She's also the author of a newsletter on commodities. It's called the Carly Perspective and she's our resident commodities expert. Very right on a lot of things. As Garner sees it, this market's full of people who've embraced the mantra that the trend is your friend. Why not in 2025. That philosophy has made you a fortune. While more responsible investors with diversified portfolios have sadly been left behind. Garner believes that the public has confused trading with investing. I really like this. Okay, now get a loser of this. This is, this is oklo, also known as Oklahoma, the experimental nuclear power company that's expected to burn nearly $100 billion of cash per year. According to consensus estimates, Oklahoma is yet to book a dime of revenue, yet it has more than it has a $23 billion market capitalization. It's one of the biggest winners of the year as she sees it. I'll close the height of speculation. The kind of stock you put in your discretionary portfolio, but not your retirement portfolio. I couldn't agree more. And I'm urging you to take something off the table. Excuse me. Right here. It's, it's just going too far too fast. This is a parabola. You know I hate parabolas. And again, we're even seeing this in the most boring asset classes. Like gold. Gardner thinks people are parking their money in gold as a safety asset, but really they're just chasing a trend here. This is a non income producing commodity with a history of endless boom and bust cycles. In our view, when gold's up more than 50% from of the year, buying is a speculative trade, not a long term investment. So take a look at this monthly chart of the price of gold versus the price of the 30 year treasury. This is incredible. Why? While the speculative stocks are flying, more cautious investors have been making a panic rush to safety. Garner says, we've seen this before. So you see gold spec, okay, Treasuries down this way. In 2020, the world was really from a global pandemic. Investors of all types were gobbling up US Treasuries as quickly as they could. At its peak, the 30 year bond was paying less than 1% of interest per year in the form of coupon payments. Even worse, anyone buying Treasuries at those levels faced historically large interest rate risk. Because when interest rates rise, bonds fall. Anyone buying Treasuries with almost no yield is betting that the world's so dire that you'll be happy to simply have an investment that retains its value without giving much of return at all. Buying a 30% year bond with a sub 100% yield was pure insanity. Yet everyone was doing it. Some regional banks that ended up getting hurt real bad. If this sounds familiar, it should. In 2025, we're witnessing the same rush to perceive safety assets, except instead of Treasuries, it's going to gold as the market's going parabolic due to speculative buying. That's a totally power. That's a total parabola member. Parabola is like what you see from a, from a lamp. Okay, think of it like that. Garner thinks these gold buyers are taking excessive risk without considering the potential hangover that might come later. During the treasury heyday of 2020, the gold market was relatively sluggish. It wasn't the haven of twist for anybody. Now though, gold feels like the only haven. Even though the 30 year bond is paying roughly 4.5% as opposed to what you're getting back here. When we look. And then when you look at Covid. I know that 4.5 sounds like a waste of time in a world where assets are appreciating by 25 to 50% regularly. But those massive returns are unlikely to last forever. If speculative stocks start getting hammered by say, a wave of insider selling, which you know, I think is coming, you better believe the Treasuries will come back in stock. There's a reason that the 10 year has been roaring of late. With its yield coming down below 4%. I want you to take a look at the monthly chart. The 10 year over the last 25 years of treasury futures trading. Gardner points out that the 10 year note, the futures have kind of found this level at117.117 tend to be a meaningful pivot. The market behaves bearish below this price and bullish above it. Future yields are complicated due to the basket of liberal securities, but this equates to a yield of roughly 3.5. 3.5%. I'm sorry, 3.25. This is the 17 right there. Another way to look at this, 3.25%. It's going to act as a magnet. And if yields fall below that level and treasury prices might rebound, taking yields still lower. If fundamentals are dire enough, Garner thinks we might even see a round trip to the top of the trading range, which would be 130. In short, with a benchmark 10 year rate currently at just under 4%, Garner says a move to 3.25 appears quite likely now. And a run down to the 2 to 1.5% level is a real possibility. I don't know anyone thinking like this. After all, the relative strength index, an important momentum indicator, is trending higher for Treasuries with plenty of room to run. And as treasury prices go up, the yields come down. This is the rsi. Plenty of room. Plenty of room to run. Absolutely. Let me give you One more chart. Okay. This is the weekly chart of the 10 year with the Commodity Futures Trading Commission's weekly commitment of traders report. Down at the bottom, I'll explain the key line. Don't worry. This report shows you how various types of investors are positioned in the futures market. Small speculators are home gamers. Large speculators are money managers and commercial hedgers. People really know they are companies that naturally deal with the product in question. When it comes to Treasuries, when talking financial institutions, Gardner likes to look at the green line, the commitment of traders. Data for large for this is for the large speculators. She points out that in late 2018, before the big treasury rush, futures speculators were holding the largest net bearish position on record. At the time they were net short 680,000 futures contracts. Shortly after that that position began a more winding until it was completely offset at the COVID induced panic highs. That's a monster move right now. Garner notes that large speculators are net short by an even larger margin. Larger margin. I mean this is going to be amazing. But those short positions will eventually be unwell and without another wave of inflation. She's expecting treasury prices to rally while yields come back down. Very contrary view. Basically treasury prices have nowhere left to go but up. She says here's the bottom line. The charts interpreted by Carli Garner show that people want safety have been flocking to gold. But when the speculative bubble bursts, she's betting people go back to long term Treasuries. I hope she's right because long term Treasuries going this low would be fantastic for the economy and great for the stock market. Let's go to Bill, Massachusetts. Bill. Jim, I can't thank you enough for inviting me down for the monthly meeting with Jensen Long. It was electric. Amazing. You were incredible, Jim. Three years ago I got $6,000 worth of Nvidia. Now it's in the six figures. Jim, you change lives, you absolutely change. And meeting Jensen, it was, it was so calming effect. I feel so positive about a whole future of artificial intelligence. He is amazing. Yeah, he's amazing. And how many millionaires has he created? How many milliards in that room? And we're talking about teachers and fire people and all sorts of people worked hard all their lives in a calling but they never were able to like, you know, do really as well as they should have. And then Jensen comes along and does it. Oh, what a guy, what a guy. Amazing, amazing. Jim. I'll tell you, I 95% of my whole 401ks because of Nvidia and Jensen. He is amazing. I was able to diversify. Diversify, diversify. Okay, so what have you been buying, Bill? Let's go over that. I bought a whole bunch of Goldman Sachs because I. Oh my God, that is so right. Goldman Sachs is so cheap. And David Solomon's doing such a good job at 15 times earnings. I think you're in fantastic shape owning Goldman. Large position for my channel trust. It was a great quarter. I went over with a fine tooth. Com. It was ridiculous that the quarter was not received as well. And it was a great opportunity to buy. All right. And thank you for those kind words about Gen Z in what we did that day. The charts interpreted by Carly Garner suggest that when this speculative bubble bursts, investors are going to flock long term to long term treasuries again instead of gold. Now focus is right because lower interest rates would be huge for the economy. And don't we need it? Hey, much more bad money. Have you seen the stock of Ulta lately? The cosmetics retailer is ready to make up its losses and I'm sharing. If the recent reality could be a sign of what's come then people keep asking me why I'm urgent investors take a little off the table in some of these speculative names. I'll reveal my one word thesis and of course all your calls. Rapid Fire in tonight's edition of the Lightning Round. So stay with Kramer. I'm always searching for stocks that can escape the gravitational pull pull of their sectors. Take Ulta Beauty in a tough environment for retail. Ulta was flirting with new highs as recently as a couple of weeks ago. Since then it's pulled back pretty hard. This is the largest beauty retailer in the country with a number of 1400 stores that's double as salons for well over a decade. Ulta is one of the greatest growth stories around as the stock rallied from $4 and change near the bottom in March of 2009 to an all time high of just under $575 early last year. But that's just, that's just the big picture. If you zoom in on just the past five years. Well, I mean the stock looks like more of a kind of a roller coaster. After peaking in March of last year, the stock plunged 46% to its lows of March this year. Badly though, it's caught fire, climbing roughly 70% from its lows. Practically. The straight line though started rolling over two weeks ago. House of pleasure. What's driving this? All right, so it's just the numbers. New CEO Keisha Steelman took over at the beginning of the year and she's been focusing on turning this company around. When the company reported mid March results were solid, the new narrative took hold, allowing the stock to jump more than 13% in a single day. It was a pretty reassuring session and it's hard to look back since then. Also followed up with another better than expected quarter in May, fueled by improved in store and online execution and better management of promotions leading to margin expansion. Management highlighted market share gains across both mass and prestige brands. Even better, they raised the full year forecast, which is why the Stock shot up 11.8% the next day. Again, it's all about the strong earnings. Now some of that's because alt is better run, but some it's simply easier comparisons. Kohl's finished its roll out of Sephora store within a store. That's Sephora. That was coup by Kohl's and that happened in late 2023. That heightened competition put pressure on Ulta's same store sales the following year. But now that we've already anniversary those numbers, it's having less of an impact. Fast forward to late August when Ulta once again delivered a much better than expected set of results. This was another top and bottom line beat. With 6.7% safe for sales growth. Wall street was only looking for 2.9%. A lot of that was driven by higher traffic, up 3.7% year over year, which is exactly what we wanted to see. Also saw a 90 basis point pick up in its gross margin thanks in part to stronger pricing. So they had both pricing and traffic. A lot of people were worried that the company would need to get very promotional to keep moving lots of merchandise. That just hasn't been true. As a result, management was once again able to raise its full year forecast, increasing the guidance for both same store sales and earnings per share. Again, the turnaround is really starting to bear fruit. Under Keisha Stone Steelman, Ulta has strengthened its core business. They've been focused on broadening their product assortment to lure more people into the stores. Last quarter the company announced that it had launched 24 new brands, many of which are exclusive to Ulta Beauty. More recently, they introduced a new collection from Rihanna's new skin care line, also exclusive. These new offerings have deepened customer engagement, contributing to loyalty program growth of 4%. Now I know that sounds small, but you know they have. They have 45.8 million members of the loyalty program and some good bargains there. I remember according to management, more than 95% of total sales come from these loyalty members. And I've always said that loyalty programs give them a major edge on the competition. Alta is also making steady progress on Steelman's second strategic priority, expanding businesses that are additive to earnings. Management highlighted strong momentum for its plans for international expansion, including the recent acquisition of Space NK. That's a British specialty retailer, operates 83 stores across the UK and Ireland. They also spoke positively about the recent opening of an Ulta beauty store in Mexico, as well as their first location in the Middle east, which is set to open this year. Then there's the newly launched Ulta Beauty Marketplace, which went live last week. This online platform allows brands to directly sell their own merchandise. In exchange, though, they got to give Alta an 18% cut of every transaction. Company's working hard to give this part of the website an exclusive feel. Right now it's invite only and they're careful about which brands they allow on the platform. What else? We learned that management came to a mutual decision with Target to not extend their store within a store partnership. These are dedicated Ulta brand spaces. You've seen if you shop at Target, they're in select locations, they're in mine. This partnership ends in August of next year. And while that might sound like a negative for Ulta, management noted that the royalties earned from this partnership were ultimately well below 1% of net sales. That's pitiful. No wonder they went out. Plus, while the Target store within a store location certainly expanded older's reach, there was a lot of concern concerned that they were cannibalizing their own business. Needless to say, Ulta makes a lot more money when you buy merchandise from their own stores, not from Target. Analysts at Canaccord estimate that roughly 19% of Ulta stores were likely in the same in the same shopping centers. These targets 32% were within one mile. That's a brutal overlap. And that's why Canacort actually believes Ulta could actually see a boost once their partnership with Target expires. Because so many people can just walk down the street from Target to find a real altar location. I thought that was such a good idea. And at the same time, when Ulta last reported the end of August, they gave some positive commentary on the state of the economy. While management noted that consumers, quote, continue to prudently manage their day to day spending, end quote, and are cognizant of higher prices caused by tariffs, those same customers seem to be, quote, prioritizing their beauty regimens. As management sees it, despite the ongoing Macroeconomic uncertainty. They believe that beauty and wellness quote offer a unique sense of comfort and escape, which is why they ultimately expect that will help the category stay resilient. And that's why Ulta stock's been flying. Even though the stocks pulled back recently alongside the rest of the market. The bottom line here is that I think new CEO Keisha Steelman has her arms around the situation. And I don't blame anybody who wants to buy some altar stock given the sharp pullback we've seen this month. And I gotta go tell you, I'm with these people. It sounds like a terrific story. That money's back there for the break. It is time. It's time for the light round. Play this out. And then the lightning round is over. Are you ready? Ski D time. The light round. Crazy. Let's start with Ryan in. Let's start with New Jersey. David in New Jersey. Fantastic. David, how are you? I'm great. And I'm loving your new book. I'm learning so much and I. You're a great writer. You're a genius. For 27 years. Back to her Greenberg days. Oh my God, I love her. But I still read them on substack, you know, it's great. What's going on Hot eight. Is that a long term hold? Because it's making money. Is that. It is. It's making. It is making money. And so there. But it's still a parabolic move. And you know that I feel that parabolic moves are very, very suspect. I think you should ring the register. Let's go to Jacob in Alaska. Jacob. Hey, Jim. First off, huge congrats on your new book. Absolutely loving it. Thank you. Thank you. I'm glad you like it. Someone I saw a guy reading on the subway today. I think that's perfect. Thank you to. A lot of the CEOs have been selling, telling me and saying thank you very much. What's up? It's great. Now we just need to get you up to Anchorage to sign books at Barnes and Noble. But getting down to Alaska. I love Alaska. We got idea. I wanted to get your take on this Nvidia backed. AI Play. Does Recursion pharmaceuticals AI driven drug discovery platform live up to the hype or is it still too high? Recursion on when they were 910 they did an equity offering. The stock got clobbered. It's been down. Now it's a meme stock and I can predict unfortunately that when it's a Meme stock it's going to go up every day. They've adopted this stock. They want to take it higher. I don't know know why, but that's what they say. And I say they. I'm saying, I see they're buying early on in the morning. That's what's going to happen. Let's go to Suzanne in Pennsylvania. Suzanne. Booyah, Jim. Booyah. Suzanne. My husband and I met you in Delaware at your Fostero event. Oh, my wife's phosphora. That was so great. It was total wine and more. Boy, did we have fun. Yeah. Sold a lot of mezcal. What's going on? I know. And I was. Would like you to tell your lovely wife that we really like her recipe with the Montenegro. I will. That's the M and M. It's really delicious. Half and half, please. And shake them, not stirred. That's it. Okay. Exactly. Right now, my question is about lwlg. Oh, Suzanne, you know, that's one of those companies that has almost no revenues. It's never really done anything. I'm gonna have to say no. I'm gonna have to say if you own it, I want you to sell it. Okay, I'm sorry. It's just you can't have. No, they have nothing. No sales, nothing. I can't recommend it. Let's go to Ryan in Oregon. Ryan, where my daughter is right now. Ryan. Booyah. Dr. Kramer. Great to talk to you again. It's great to talk to you. What's happening? A Pennsylvania Salty Snack King is down 20% this year on sluggish sales I've been in since the 2020 IPO. What should I do now with OOTS? Utz is really hard to own. I remember when they had it, of course, in Mad Men. My daughter's in this business. It's a one tough business. Potato chips with stacks. My hope is, is that these guys do get a bid. They've been working very well. They make money. I would not sell the stock. It's too loaded. Let's go to Brandon in Massachusetts. Brandon. Hey, Jim. Booyah. Booyah. Watch the NBC every day. Hey, folks, Favor's gotta take it easy on you on squawking the street. What? Favor's gotta take it easy. No, I love him. He's really nice to me. He's really nice to me. Sometimes he's moody. He's a moody guy. Yeah. You know, sometimes, like. Yeah, you know, like I told him, it's a podcast. It looks like I'm talking to, you know, senior wences over there. How do I make you money? Let's Go. Let's go to work. So I want to get your perspective on this industry. In this stock that I've been buying and holding since its IPO in 2018, it's got really strong future outlook. It's up 60% year to date and because they're supposed to turn a profit end of this year, early next year and my mom told me to buy. What's. What is this? Dr. What's that she's from. She's from China. It's the Chinese majority. In which stock is it? Neo? I don't know. Neo is a. Look, it probably goes to 10. Then you have to sell it. Okay. And that, ladies and gentlemen, conclusion of the Lightning round. The Lightning round is sponsored by Charles Schwab. People, you ask me why am I always urging traders to take profits? All these hyper speculative stocks, the ones that have had parabolic moves. The answer is simple. I lived through and traded through the year 2000. That great peak to the 1990s bull market and the end of the dot com bonanza. Why most of this market is fairly priced on an earnings basis. There's cohort of speculative stocks connected nuclear power, rare earths, quantum computing, crypto money and some tangential data center applications. These stocks, they've gone up way too much. Yet the buyers never quit. You see them start buying at 4am Taking stocks up even though there's little in the way of earnings or even sales. The most overvalued stock since the E Commerce players in the spring of 2000. Again, I live through that. I'm telling you this. Why can't I just be happy with these gains that people have? Because they don't have gains yet. I always say I'm happy when people make money. But critically, you haven't actually made any money until you take something off the table. Most of you own the speculative names, haven't done much profit taking off any. So you have made a real money. You just think you have and say you have. On top of that, I lived and traded through the dot com bust that was started in March of 2000. Saw things I never could believe could happen again. But they are. Back then you were still making decent money owning companies that have long since disappeared. The ones that flew way too high to the sun. Now I've been flogging them endlessly. That winter is a great way to make quick money. A whole bunch of those dot coms looked exactly like 10 today's companies that claim to have rare earths that could revolutionize nuclear power. The insiders were Dreamers, they believed until the lockup expiration and then they were allowed to and they didn't believe that much. At which point the insiders rang the register that. In March 2000 though, the selling got incredibly thick because these stocks had made one last move higher and the lockups were all expiring. You could tell that the ball game was over as the lockups came off one after another. I wrote a piece in the middle of that month for the street.com saying I was selling everything everything and going short many of these stocks or into bonds. I never went into bonds my whole career before them. But I could see the writing was on the wall for the dot com so I wanted to get out. At the time I wasn't on TV regularly. I was just running my hedge fund and writing for real money. The page said the street.com so unless you were a subscriber you didn't know that I got an extremely bearish on the dot com. The speed at which I switched directions infuriated people. Just drove them crazy. How could I change on a dime like that? But I had been bullish for the better part of a decade. I tried to explain to people that the stocks themselves were up multiple hundred percent including in the time since I last had to buy them. But they never forgave me for that so called even though it was one of the best calls of my career. But the buyers didn't want to hear it. Fast forward a year later when the dot coms were obliterated tatters and anyone who stuck around had seen their gains completely be eviscerated wherever I want to heard. People said I led them astray. That the same stocks I was recommending were the ones that I was selling. That's completely wrong. You look at my trading sheets. It confirmed exactly what I was writing. But it didn't matter. I wasn't saying the so called loud enough. That's the way I interpret it this time. Most of the stocks that rallied are ones that with little hope of having profits before the money runs out. A lot to do. Underwriting to pay for the mines or the research and development development or the clients. So they'll be offering billions and billions of dollars with the stock to get there. So I want you to know that I said to take profits in these speculative news before all that happens when the insider selling and corporate selling begins en masse. Don't say I didn't warn you. I like to say this always will market somewhere. Promise. I find it just for you right here. Money I'm Drew Kramer. I'll see you tomorrow.
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All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of cnbc, NBC Universal, or their parent or affiliates, and may have been previously disseminated by Kramer on television, 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 Just in thousands of winter arrivals at your Nordstrom rack store, save up to 70% on coats, slippers and cashmere from Kate Spade New York, Vince Ugg, Levi's and more.
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