← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
'Mad Money w/ Jim Cramer 10/23/25
00:44:05
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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- [00:00]
Jim Cramer
On Fox 1 now you can stream your favorite live sports so you can be there live for the biggest moments, touchdown and catch history in the making. Fox One we live for live streaming now.
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Jim Cramer
Hey, I'm Kramer. Welcome to Man Money. Welcome to Kramer. I come through big friends. I'm just trying to make you a little money. My job is not just entertain, but to put it in context. So call me 1-800-743-CBC. Tweet me at Jim Cramer. Bulls waste a huge Amount of time shadowboxing the Bears. Yeah, the Bulls are always on the defensive, even when they have the history, the data and the numbers on their side. How is that possible? I think people just refuse to trust the market. They want to find reasons not to like stocks and they're willing to go to great lengths to find themselves out. You can see it on a day like today, one that started very negative and then rebounded slowly down, only finishing up 144 points. SB advancing point five. Eight percent and then as that climbing point eight. Nine percent. Wow, that was terrific. Now I spent a huge amount of time in how to make money in any market, talking about how you need to trust the stock market, you need to believe in it to invest. If you don't, you'll constantly get scared away at exactly the wrong time, habitually buy and then sell it. And that's I think why so few people actually build wealth in the stock market. So let's talk about the doubts that drive people away from being good investors using today as a reference point. Now, what I want to do, I'm going to take down the objections raised by intelligent people that make you feel like a chump for owning individual stocks. And they do, particularly rich people. By the way, let's go through the steeple chase of October right up until this morning. First, we're on day 23 of a government shutdown. Go back to the beginning of the month. What was the rhetoric of the moment? It was simple. While shutdowns historically haven't meant anything to the stock market, we were told this time would somehow be different. Why? Because of President Trump. Meaning that because of President Trump, the shutdown will be bad for stocks. What happened? Well, the market's been fine. It hasn't been hurt by a lack of economic data. It hasn't been crushed by what could happen if hundreds of thousands of federal workers stay furloughed. Unless you work for the government, you might not even know what's going on. That may be unfair, but it's true. Again, historically, these shutdowns simply don't matter to the market. Betting they've been a positive catalyst for stock exchanges. That seems the one problem is we haven't get a lot of government data. Tomorrow we're going to get the CPI price index. Now, interest rates went up today, I think in preparation for a bad CPI tomorrow. If it indeed is too hot, there'll be another set of people who are going to come on our air and they're going to tell you to sell because of the cpi. Do me a favor, don't listen to them. Second, hardly a day goes by when the president doesn't threaten or cajole or express frustration with China. Every time he says something is front page, it's almost always negative and people shake. The media makes it sound like it's heightened tensions with China, economic catastrophe. There's a whole host of hedge fund managers eager to tell you this is a perilous time. They're so rich, they don't care about you. They don't. Semis get sold off even though the summer. In short, spy like Micron or Intel, which put a fantastic quarter this evening. Those stocks get sold all the time because of China. Look, I don't mean to mock the process of foreign relations, but this is a president who negotiates in many different ways. Usually he takes a hard line that freaks people out and causes them to sell stocks. Sell, sell, sell. But then he compromises and you feel like an idiot for bailing on the market. And now you don't get back in and there goes all the money that you were hoping to make in the stocks. I've gotten to the point where when I see the market come down because of the President's statements about China, I want to tell you just to go buy because it's been a winning strategy the whole way. Third, nine days ago, we heard the most distinguished banker in the world tell us that we were entering a period of heightened risk where mistakes can and will happen. There have been two big defaults, one of them causing JP Morgan to take $170 million charge. CEO Jamie Dimon said at the time, quote, I shouldn't say this, but when you see one cockroach, there's probably more. Everyone should be forewarned on this one, end quote. At the same time, there were some other bad laws in the system that dinged a couple of regional banks and it caused a huge firestorm. Selling special. The regionals, they got crushed, but it turns out there is no cockroach infestation. Looking at the banks that have reported, we're actually seeing some of the fewest falls as a percentage of loans I can ever recall. Bank of America, Wells Fargo took pains to point that out, said America Express Capital One. Look, I'm not trying to give Jamie Dimon a hard time, but others do that he's an amazing banker, he's a nice guy. I think it always pays to be vigilant. He's probably right that there'll be eventually other cockroaches. There's always a lot of cockroaches. Like, you know, you can't. Nuclear war is not going to take those guys away. But so far the rest of the industry looks pretty clean. You know what I've been thinking? I think, Jamie, it was an ill advised analogy. Here's what I would say would have been better. Sometimes you just get had. Fourth, we know one thing. When we came into this month, Apple stock had become suspect, scary, dangerous. I mean like, wow. Sell, sell, sell. So many experts told us that the iPhone 17 wasn't doing that well. We heard about weak lead times and how this one was just one more iteration in a tired and boring line of phones that nobody really wanted. An analyst From Jefferies on October 3rd downgraded Apple not. Not from a buy to a whole. No, no, no. But from a hold to an actual sell, sell, sell, sell, sell, sell, sell, sell, sell, sell. A sell. Saying that anything good about the new phone was already priced in. The expectations were excessive. This downgrade sent chills through any Apple bull. And in other words, he was Saying even if the numbers were good, it wouldn't matter. I bet that scared a lot of you. Did it scare you? Did you sell the stock because of it? Did you violate my own Apple, don't trade it dictum this week? We started with three different firms proclaiming that the iPhone 17 turned out as much bigger hit than anyone thought. Gettable fact. Just had to look at the lines worldwide to see how people were desperate to get their hands in this thing. You just had to listen to the outgoing COT mobile when he told you the sales were brisk because of the deal they were offering the 17. Honestly, you just had to try one to see how special it is. Yeah, Apple keeps going higher. Finally, the tariffs. We've had a couple of weeks of earnings season. So far, the tariffs really haven't been that much of a factor other than the media where we ask everybody about them. I've yet to see a downgrade triggered by the tariffs. It's not that they aren't there, just they're not the small hoot. Small, smooth. Holy. If they got baked into share prices months ago, well, that's. You won't even notice if you sold because of the tariffs. And so many of you did. Well, we apologize. Shouldn't have scared you. You need to remember that when the CPI comes out tomorrow. Because just in case it's too hot because of the tariffs, you don't sell stocks by mistake outside of here. Right here, right over here is a street, okay? It's called Broad Street. 42 years ago, I walked down the street on the way to my job on 55 broad at Goldman Sachs. The Dow at the time was at 1,000. That was some 45,000 points ago. Do you know what I heard every day back then when I was at 55 Broadstreet? I'll tell you what I heard. Oh, what a terrible time to invest. Horrible. Rates are too high, housing's too expensive, inflation still out of control. We had a cowboy actor as a president who didn't know anything about the stock market, and even his own vice president accused him of practicing rude economics. So when I started working, I heard the fabled three words that I've heard for most of my working life, including from my own lips, when I got it wrong, and that is get out now. Since then, since I first heard get out now, the Dow Jones Industrial Average is going from 1,000, about 46,000. To many of the people who come on and talk about the market, that rise means absolutely nothing. They treat the market as if we're a coin with a bull on one side and a bear on the other. Doesn't matter that there's history on the bull side. They treat each session as a 50, 50 coin flip. But the bottom line, this market is not a bunch of coins to be flipped. It's a collection of companies to be invested in. So do this for me. If you're going to think of the market as a tug of war between the bulls and the bears, would you at least think of the bulls as the favorite and given the benefit of the doubt? Because if history's any guide, the bull deserves it. Gregory in California. Gregory, this is Gregory, and I've got a problem. I'm an overbuyer, Jim. I own too many stocks. I own more than the investing club. I may need you to be my sponsor and help me out here because I find it hard to sell quality. So look, if you tell me to get rid of this one, I will. But it beat the Streets EPS by a whopping a thousand thousand percent over the last two quarters and the price went from 120 to 283 as a result. That's come way down. But I still have a pretty sizable gain. So do I sell it now, hold through earnings that are in a week or buy more of Reddit? I think Red is doing terrifically, Gregory, thank you always for your call. You're just an amazing follower of Mad Money. I think Reddit's going to go much, much higher. They've got the data that a lot of these search engines need. And I've got to tell you, I think management, I think Steve Hoffman is under. He's really just, he doesn't get the credit he deserves. I like the guy. Let's go to Dan in New York. Dan, hey Jim, calling you from Oyster Bay, Long Island. Love your show, all your insight. I love Oyster Bay. So some of my guys like to play a piping rock, but that's because they're America's guests. I don't get into those clubs. What's going on? It's a great course. Well, stock I like is, is ups. I bought this stock as a value play earlier this year when it was getting beat up, couldn't resist the yield and continued to get beaten up with the tariff news and they bought some more and the price stabilized around 85ish, averaged in about 103. And my questions are, should I buy more, should I hold or. I think the stocks trying to bottom. I think the stock's trying to bottom, Dan. I personally don't care for it. I am a huge buyer of FedEx and I like JB Hunt. So don't say I'm. Don't say I'm anti transport. That would be a big mistake. It's just that I do feel that ups the dividend so big. I don't know. I know they're sacrosanct but they could use. All right, if you think the market is just a constant battle between the Bulls and the Bears, at least could you give the take the look, I'll tell you, you got to give the points to the bulls because I got to tell you they are they just do better than the Bears if history's any guide. Okay, they're the favorite. How about that? Well man money tonight breaking up is hard to do unless you're General Electric. I'm running through the earnings reports from two of its descendants, GE Aerospace and GE brno. Showing you where I come down leads to excellent companies. Then what the heck happened to the stock of IBM? Early this morning I'm gonn post earnings move with Big Blue to help you make sense of where the company is headed next. And Dover hasn't caught fire this year like other companies with the ties to the data center. But today's move, I don't know, maybe a sign of things to come. Let's sit down with the company CEO to find out. This terrific investing club holding. So stay with Crater. 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 now you can stream your favorite live sports so you can be there live for the biggest moments. Touchdown. And catch history in the making. Fox 1 We live for live streaming now.
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Jim Cramer
The market doesn't always get things right, especially during the heat of earnings season when there's simply too much information for anyone to process all at once. Just look at two of the children of General Electric, GE Aerospace and GE for Nova, two of the best performing stocks of the year, up more than 80% apiece. Both companies reported terrific quarters, but both of their stocks initially sold off before rebounding dramatically from the lows. I want to walk you through what's going on here because these two represent very important parts of both the real economy and yes, the data center economy. Why don't we start with GE Aerospace, which makes jet engines along with all sorts of other airplane components with a huge maintenance and repair business that's incredibly lucrative? When GE Aerospace reported on Tuesday morning, they delivered a clean top and bottom line beat stunning 26% organic revenue growth. That growth was driven by better than expected results in both their commercial engines and services divisions as well as their defense and propulsion technologies business. In fact, management was so confident in these results that they raised their full year forecast pretty much across the board. To me, this was an amazingly impressive quarter. I read it in the morning, I said about 6 o'. Clock. I said look at this day, this is going to go nuts. But Wall street had a more mixed reaction than I did. After rallying a little less than four bucks on Tuesday, the stock then gave up all that and more yesterday for rebounding eight and a half bucks today. So which was the right move? The rally on Tuesday and today or the decline yesterday? While there were some concerns about GE Aerospace's implicit guidance for the fourth quarter, I think that's mainly management being conservative. On the other hand, there are a ton of positives here. In fact, I could argue that this company stood by Larry Cope, who's such a great executive. Maybe the best industrial report this year. For starters, the company's commercial engines and services business, by far the largest segment, put up some tremendous numbers. 22% growth in equipment revenue while the services revenue shot up 28%. That was aided by a 33% increase in internal shop visit revenue. Keep in mind, GE Aerospace really cleans up with their services business because it carries much higher margins than selling equipment. That's how the commercial engine and service division grew earnings by 35%. I love a good maintenance business. I don't even care if you give away the darn engines. If you get that maintenance business, you make a lot of money. Management now expects to see commercial engines services revenue growth in the low 20s for the full year. Previously, they were guiding for a growth rate in the high teens. That's a real uptick. At the same time, GE Aerospace had lots of positive things to say about their supply chain. Something that requires a lot of attention. This age of much higher tariffs. Companies seeing its priority suppliers, the ones that are mission critical, continue to improve on their shipment targets. These suppliers ship more than 95% of committed volumes for the third consecutive quarter. Very impressive figure and a huge improvement over a year ago. I think some of that was because of COVID The hangover of COVID very much underestimated. Now you might be asking how much can these supply chain improvements really matter? But management credited these improvements for the record leading edge Aviation Propulsion or Leap deliveries they saw last quarter up 40% year over year. Leap is a family of turbofan jet engines, one of the company's most important commercial products. GE Aerospace expects Leap to become the industry's most utilized narrowbody engine. People love those narrow bodies in the not too distant future, eventually surpassing the CFM56 that's made by a joint venture between GE and the French company Safran Aircraft Engines. But the real key here is not engine sales again, it's the engine sales create a large installed base that requires high margin maintenance services. Because aerospace can now reliably get their hands on their most important inputs, they'll be able to increase LEAP engine deliveries by more than 20% for the year when previously they forecasted just something between 15 and 20%. That's major. In the end, both GE Aerospace and GE Renova are poised to be winners from the President's trade war. Because when other countries decide to make nice with with Trump by narrowing their trade deficits with us, they need to buy lots of big ticket items to really move the needle. That means they need to buy aircraft. It needs they need to buy turbines. Just this past quarter, for instance, Korean Air agreed to buy 103 aircraft from Boeing, many of which will contain engines from aerospace. I think this one of the best ways to play the incredibly robust bull market in aerospace and travel. Plus, it doesn't hurt that even with today's rally, the stock's only a few bucks higher than where it was trading before the latest quarter, rapidly getting this terrific quarter for free. All right, now how about G Vernovo, which we own for the travel Trust? Once again, GE's old power business reported an excellent top and bottom line beat spectacular organic revenue growth rising MARGINS Most importantly, GE Vernova saw its backlog grow 15% year over year up to more than $135 billion. Company racked up almost $15 billion new orders remember, orders give you a direct read to the current level of demand for the company's products. Despite these numbers though, GE Vernova stock initially plunged 9% yesterday for rebounding from its lows and finishing the session down 1.6%. Today Wall street reassessed again. This stock shot up 3.3%. Now that move makes sense to me. As I told you last night, GE Renova reported a terrific quarter and the stock only sold off because it already run up dramatically going into the earnings because it's connected to the data center and people love the data center because you need their engine electricity for the data center. As we told CBC Investing club members, there was just a lot to like here. Management gave us a ton of positive commentary about their $5.3 billion purchase of the remaining 50% of prolact. That's a joint venture with Mexican company makes equipment for the electric grid cheaper. Nova's buying the entire thing. As Scott Stress CEO Sars sees it, this acquisition will bulk up the company's exposure to the fastest growing segment of their power business, which is electrification. Remember, the grid is old fashioned and can't grow the way it should without their equipment. It is hard to argue with that statement as Prolix largest product offering is power transformers, the kind that are used in the data center alongside all sorts of other energy intensive applications. At the same time, Magnus says they're seeing significant investment in electrification for Nova expects their combined serviceable addressable market to expand at a 10% compound annual growth rate, eventually doubling in size by 2030. That's a data center because this is business had almost no growth for years and years and years. What else? This is a moment. There's a ton of speculative interest in nuclear power. I think too much. By the way, those speculative stocks have been obliterated in recent weeks. G for NOVA actually builds nuclear plants. Make this one of the safest ways to play the theme if it's going to take a long time before any of this plays out, simply because building a new nuclear power plant can take more than a decade. But I think we're going to begin to hear a lot more about what's known as small modular nuclear reactors, and that be could two years now make people realize if you want to invest in the concept of nuclear power, well then go buy the stock of GE Vernova Plus. While the company's repurchased $2.2 billion worth of its own stocks so far this year, they say they'll continue to buy back stocks on an opportunistic basis as they believe in quote, there is incremental value embedded in our stock. Well, it doesn't really get that much more bullish, does it? Here's the bottom line. When two of the children of General Electric reported this week the market got a both wrong. But today they came roaring back. I'm betting a G Aerospace and G for NOVA are ready to run and that today's rallies were the ones that matter. Their money back after the break. Coming up, Big Blue beats again. So why is Wall street bailing? Kramer's revealing what investors are missing when it comes to IBM's results next.
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Jim Cramer
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Jim Cramer
You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. Stop struggling to get your job post seen on other job sites. Indeed Sponsored Jobs help you stand out and hire fast. With sponsored Jobs, your post jumps to the top of the page for your relevant candidates so you can reach the people you want faster. According to Indeed data, sponsored jobs posted directly on indeed have 45% more applications than non sponsored jobs. There's no need to wait any longer. Speed up your hiring right now with Indeed and listeners of this show will get a $75 sponsored job credit. To get your jobs more visibility at indeed.com madmoney just go to indeed.com madmoney right now and support our show by saying you heard about Indeed on this podcast. Indeed.com mad money terms and conditions apply. Hiring Indeed is all you need. What the heck just happened to the crazy stock of IBM? I've been a big fan of this company for the past couple years, in large part because they figured out how to make money from artificial intelligence. IBM sells lower cost AI models that offer tools that help developers make AI applications and their consulting business tells clients how to use AI. That's why the company was able to return real revenue growth for the first time in ages. It's why the Stock's up nearly 30% year to date and it's more than doubled over the past few years. IBM gives you all the benefits of AI, but it has reasonable valuation, even a solid 2.54% dividend yield. But as of today, we've now seen two consecutive quarters where the stock sold off in response to better than expected numbers. When they reported three months ago, the stock plunged 7.6% in a single session and kept drifting lower for the better part of a month. That's though IBM came rolling back then. The same thing happened yesterday. Just today. Last night, IBM reported what looked like a pretty darn good quarter, yet the stock opened down almost 8%. And though we bound apart from those levels and still finished the session with off almost 1%. So you got to ask yourself what the heck is going on here? Now, I was surprised by this one because there was really, you know, to me there was really nothing wrong with the quarter. As I said this squawk of the street this morning when I pounded the table for you to buy, buy, buy, buy, buy, buy. There was no reason for it to be down so much. IBM delivered a healthy top and bottom line beat revenue up 9%, making this their second straight quarter of accelerating revenue growth. Their operating margin came in at 18.6%. Wall street was only looking for 17.1%, which is how the company earned $2.65 per share. That's up 15%. Wall street was only looking for $2.45. Arvin Krish, CEO, he just delivered even better. IBM raised its full year forecast, kind of, kind of, I'd say. Management now says they expect constant currency revenue growth of quote, more than 5%, end quote, after previously guiding for revenue growth of at least 5%. All right, splitting hairs, but it's something. IBM also ticked up its full year free cash flow outlook from more than 3.13.5 billion to about 14 billion. That's real money. Now you listen to the conference call like I did, at least initially you would wouldn't have found all that much to complain about. CEO Christian Pregan the call by noting that IBM 7% constant currency revenue growth rate was the highest growth rate in several years and saying that all the company segments accelerated versus the previous quarter. He also told us that the company seeing broad based demand from clients as I see a. Christian told a good story about how IBM is winning with a strategy focused on hybrid cloud and artificial intelligence. He touted strength in the software business, IBM's largest segment where constant currency revenue growth accelerated to 9% led by the automation software business which was up 22% in constant currency. And their consulting business revenue growth accelerated again, turning positive for the first time in four quarters. Which Krishna said reflects quote, growing demand for AI services as clients need help designing, deploying and governing AI at scale, end quote. Of course they do, we know this. And in infrastructure, the final main operating segment revenue growth accelerated to 15% with the success driven by IBM's new mainframe product which launched this spring. It's always a boom when that happens. According to Krishna, it had quote the strongest two quarter launch in history. So much good here. In short, each of IBM is major segments are doing well with AI helping to drive accelerating revenue growth across every part of the business. So what the heck happened here? Why did the sellers dump the stock at the opening? What were they thinking? When I looked around, the Bears were primarily griping about some slightly softer than expected numbers from the Red Hat division. That's their hybrid cloud business which everybody does love. And it only put up 12% revenue growth on a constant currency basis. Now Wall street was looking for 14%. That is a downtick. On the conference call last night, CFO Jim Kavanaugh said that the Red Hat result was due to a quote, softening in consumption based services and Red Hat Enterprise Linux trending back towards single digit growth. As you wrap on last year's exceptional double digit performance, I didn't like that. On top of that, IBM has been guiding for mid teens revenue growth from Red Hat this year. And last night they said, quote, we continue to expect mid teens growth for Red Hat, albeit at the low end. Long story short, Red Hat came in a little light, but it was the only key. It really is the only key part of IBM was disappointing. Personally I Think the negative reaction to that specific piece of hair on the quarter was downright ridiculous. Even as I know that the red hot division again is love for consistent high growth. I loved it. I remember when they bought Red Hat we had on the show. I mean I'd read it on the show constantly. I like that business so bad so much. This tick down in growth was just one detail though within an otherwise very positive set of numbers. Take that guidance for Red Hat for example. IBM saying that it would now be at the low end of mid teens growth this year. Well how about this? Immediately after Kavanaugh uttered those words he said quote, as we wrap on elevated growth in consumption based services last year, we expect double digit revenue growth in the fourth quarter with an accelerated growth profile heading into 2026. Basically part of the Red Hat charges on a consumption basis and consumption was very high toward the end of last year. So they were going up against tough compares. Red Hat's currently lapping that period of elevated consumption so its year over year growth looks lower. But starting next year they expect this business to accelerate as the comparisons get easier. I don't see a problem here. Of course you need to trust IBM's management a bit here, as I do. Specifically you need to trust that the hybrid cloud business will truly reaccelerate, which I do. But when I look at what IBM has done these past couple of years under Ivan Krishna, I got to wonder why would anyone trust him? I mean the guy's totally bankable. These sellers don't believe in giving anyone the benefit of the doubt and it's costing them money. Not you. Plus there's so much good news happening all throughout the rest of the organization. I think it's very short sighted to focus on an ever so slight tick down from Red hat. That includes IBM's recent acquisition of Hashicorp, another hybrid cloud infrastructure play, and that's doing great. Their consulting business has returned to growth, becoming the glue that holds IBM's narrative together. Even their sleepy infrastructure division is doing great with that new mainframe product that's on fire. Somehow this boring business has the fastest growth in the entire company right now. Oh, and let's not forget they have the only commercially viable quantum computing business you want. Quantum. Buy IBM, don't buy the perpetual money losers that want government money to make up for their losses and yours. No wonder IBM stock rebounded from its lows, finishing the session off just under 1%. So here's the bottom line, a story that I think is very easy to get your arms around. If you saw IBM stock selling off this morning in response to earnings and freaked out, there's nothing to be afraid of because the actual numbers were superb. Thankfully, the market eventually came around to my point of view. But IBM still down versus where it was before the quarter. I honestly think that the stock remains a steal here at just over 23 times next year's earnings estimates and a very overcrowded, expensive group of tech stocks. I want to go to Tom in Florida, please. Tom. Hi, Jim, first time caller, longtime viewer night. We wanted to thank my wife Tina and I wanted to thank you for the advice you've given us to own individual stocks which has grown our portfolio and is enabling us to live the retirement dream. Thank you. Thank you. That's what I talk about in my book that One of the CEOs just finished reading said that's exactly the kind of stuff that he's getting out of it. So thank you very much. You're quite welcome. Over the last year, the stock I'm calling about has had a steep climb. Climb. Should we buy, sell or hold Palantir? I think you can still own Palantir. It's one of the speculative stocks that I truly like. Why? Because it's actually profitable. Most of the speculative stocks I hear about are not profitable. I spend a lot of time in how to make money in any market saying, you want a spec stock, go buy the stock of Palantir. And by the way, it's not like I'm like, you know, necessarily buddies with the company, but I do think that they're for real. All right, look, and thanks for the time. Word. Look, the sell off this morning in IBM was overblown. And I still think the stock is a steal right here at these levels even though it recovered a lot from the decline. Much more mad money, including my sit down with the top rarest and Dover. Wow. The industrial convolver powered higher today. After some upbeat guidance, I'm finding out if there's more gains ahead on this club name then the Bears will continue to focus on the negatives when it comes to Tesla. Maybe they're missing the big picture here. I'll tell you where I stand on the company. And I gotta tell you, it's different from the sellers. Of course. Oyer coils wrapped up fire. Tonight's edition of the Lighting Round coming up. So stay with Kramer this morning. Got a very good quarter from Dover. The classic diversified industrial manufacturers made a big pivot toward data center aerospace. Clean energy stocks are up more than 8% today. Good news for me, it's a big charitable trust holding. Now technically, some people call it a mixed deposit quarter. Dover's total revenue and its organic sales growth both fell a tad shy of expectations. But they also delivered an 11 cent earnings beat off a $2.51 basis. Management raised their full year earnings forecast. Remember, Dover is the kind of real economy stock that hasn't done as much this year as I would like. But that's because, well, you don't need to report a perfect picture perfect quarter for the stock to rally like crazy. Given the stock was ready to go, could this be the beginning of a longer term move higher? Let's check out Rich. Toby is the chair and president CEO of Dover Corporation. Toby bats in the quarter. Welcome back to bed, buddy.
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Rich Tobin
Hi Jim. Good to see you.
- [33:48]
Jim Cramer
I never understood why the stock fell where it did. And that's not your job to predict the stock, but it is your job to predict margins. And you are saying you don't think anything, you're looking for growth in all your different businesses in next year?
- [34:02]
Rich Tobin
Yeah, that's correct. I mean we do a pretty fulsome strategic planning process in the September timeframe where we go through business by business and take a look at, you know, new product launches, competitive stacks and the like. And in this year is a unique one where I think over the last three years we'd had a countercyclical headwind in maybe one or two of our businesses just because cycle on cycle off, in this particular one we don't see it.
- [34:29]
Jim Cramer
Well, that's terrific because I know I've been worried about some of the business. But I'll tell you what, I've not been worried about this electrical infrastructure business, which is the kind of thing I'm looking for Dover, because I want to invest in a company like that. And that's what you do as the steward of your capital. Dover?
- [34:46]
Rich Tobin
Yeah, look, I mean part of our business model clearly is M and A. As you know, we went through a period where valuations are a bit stretched. Coming out of COVID with very low interest rates, then we've had pretty much a paucity of assets. I mean, I think if you look at M and A and global investment banking, the numbers would show that it's up quite a bit. The middle market, not so much. So we've been kicking the can on a variety of assets. That one I would say is a semi proprietary deal. We had already been working with that company in terms of incorporating their inspection technology. When we learned about it, we just said, hey, wait A minute. This is something we want to own.
- [35:27]
Jim Cramer
All right, so what do we do with companies like company does refrigerated cases or company in the canning business. Historically businesses that might have grown more than they do now. I mean some people would argue that refrigerators are actually in some sort of secular decline because we don't build as many places that might need them. Do you look at these businesses as businesses that are. Don't worry, they have their own cycles and the cycles can come back.
- [35:53]
Rich Tobin
We both the cycle of the business itself and then the competitive stack. For the most part we participate in relatively small TAM markets with very concentrated customer bases. So even on the replacement cycle alone, when you talk about like retail refrigerating equipment that's probably got somewhere between a five to seven year life. So the entire footprint of these retail stores gets replaced over that period of time. So what we try to avoid is markets where there's too many suppliers for a limited low growth market and then you can get in a little bit trouble. But by and large when we look at the competitive stacks of where we participate even in something as basic as retail refrigeration, we like our position.
- [36:35]
Jim Cramer
Okay, now I don't want to repeat something that was asked directly by Steve Tousen, a very good analyst, JP Morgan but when you saw your stock at 160 we were pretty aggressive buyers for the trust. And the reason why we were and we were hoping you were too but is we said this is absurd. There isn't anything about Dover that would merit this decline. But you bought some, that you have a lot of cash left. So I must believe that you see many things that are more attractive than your stock. I couldn't find anything more attractive. But you may think there are things more attractive.
- [37:04]
Rich Tobin
I think at as we went through the year, the funnel in terms of possible M and A was quite fulsome at the time a lot of things dropped off. Either the asset didn't come to market or we stepped away for a variety of different reasons. We were preserving that capital. I think that we've been open and honest and said look, we're not going to sit on a ton of liquidity. As you know, we divested some businesses last year. So we're very liquid right now. My expectation is based on the share price. Even after today's rally, we still think it's cheap. So I would expect that we'll intervene on the shot on the the stock.
- [37:40]
Jim Cramer
Excellent. The last time you were on Where's Liberation Day and that was I spent way too Much of our interview talking about tariffs because everybody was talking about tariffs. It looks like it's been a bit of a cost of doing business, but no more than that. I didn't see any of your businesses really slummed by it.
- [37:59]
Rich Tobin
You know, we took, we discussed this before. I mean we're very much a proximity manufacturer. So not the supply chains are not global in nature. I mean we're not immune to it. And again, I think just because the niche quality of our business and the highly engineered components we do have an amount of pricing power to offset any headwinds.
- [38:20]
Jim Cramer
Okay. And then the two businesses I really love obviously like everybody. So it's not really that original. Anything levered to LNG exports and anything levered to the delivery of the data center. I like the mosaic of business businesses that you have. Would you ever double down on those or would that get rid of the concept of having multiple businesses in different areas?
- [38:42]
Rich Tobin
I well, I would tell you that anything that is even modestly exposed to AI build out has gotten extremely expensive. So I think that we'd be lean into our own product development there. And we've got a variety of different avenues to participate, whether it's the thermal connectors, whether it's the brace plate heat exchangers. So we're all around the cooling the cooling units today and I think that we've got a pretty robust IP plan around what we see how that market would develop over time on the, on the precursor components. It's a bit of an interesting market right now we sell into the turbine manufacturers with internal parts. As you know, the backlogs are there. I mean the volumes are significantly high. What we don't see yet is the midstream components that are going to deliver the gas to these turbines. And our expectation is in the back half of 2026 there's going to have to be significant spending in pipeline and distribution infrastructure to supply those turbines. And we've got a healthy position there.
- [39:56]
Jim Cramer
Well, I know that's committed excellent business. I know that from the G Vernovo spoke to the CEO yesterday. That's exactly the sweet spot and that's great news for us. I want to thank Rich Tobin, chairman, president, CEO of Dover Corporation, one of the longest continuous dividend players and a great mosaic that isn't tied to any particular industry. Rich, thank you for coming back on the show.
- [40:16]
Rich Tobin
Thanks.
- [40:16]
Jim Cramer
Jim Nevani, second, third break coming up. Lightning doesn't just strike twice in Cramerica. Booyah.
- [40:24]
Rich Tobin
Jimmy, chill.
- [40:26]
Jim Cramer
Thanks for taking my call. It strikes every day. Kramer is back in A flash with your questions next. It is hot by the time I step first to grab somebody playing this out and then the lightning round is over. Are you ready, ski daddy? Time to the light round. I'm going to start with Leslie in California. Leslie, Jim, the book is 14.95 and it goes straight to your Kendall. Buy, sell or hold Novartis. Oh, come on. Vass is a winner. He's absolutely win by Steelers by the way, are starting to look really good. I'm a buyer of Novartis. Let's go to Charles in Maryland. Charles. Yes. Good afternoon. I wanted to inquire regarding IO and Q and a quantum computer company initially I thought was rather speculative. Although Alphabet now has a. Has created a quantum chip. Sure. So and so. Yes, they have. Now look, this Stock was at 8410 days ago. It is now down all the way to 59. It was at 54. I think that it's going to get some money from the government. It's going to run up again and then you're going to have to trim it again. It's a trading vehicle. I like investing situations. I need to go to Joe in Iowa. Joe, Jim. Howdy from the heartland. Oh, man. Good to have you. What's going on? I was going to ask about Qfin360 Holdings. Box it back in July and it has great numbers and was a skyrocket and then the China trade stuff hit. Yeah, well, the China financials not for me. I like Alibaba. That's my only one over there. I'm sticking with that. Let's go to Phil in Georgia. Phil. Jim. A big Booyah from the 3rd Infantry Division, United States army in sunny Fort Stewart, Georgia. Man, thank you for serving. Yeah, the 3rd. Wow. My dad was stationed for a while. What's going on? I'm sorry. Honor and a privilege, sir. I turned a lot of my young soldiers on to you. Thank you for helping them become financially literate. I'm a member in the investing club, but I'll let you go. What do you think about ktos? No, I got to talk to you. I think that we got to bring you to New York. We got to meet you. You're terrific. We got to get here. I'm looking at my executive producer, Regina Gill and we're going to make this work. We're going to see you in New York. And then Kratos is a terrific stock. It's come down a bit. It's time to pull the trigger. And I gotta tell you, it's an honor. Honor to speak with you. Thank you so much. Let's go to Luke in Arizona. Luke. Hey, Jim, how are you? Thanks for taking my call. Of course. Luke, what's happening? Hey, I'm just calling about a little company called GSI Technologies. Yeah, that thing is a rocket ship, man. I don't know. I gotta find. I'm. What I've got do is I'm going to have to go. I may have to go right to Ben Stodo on this because they just did an equity offering, but it's straight up and I think Stodo is going to know the answer because that's who Stodo is. And that. Ladies and gentlemen, conclusion of the Lightning Round. The Lightning round is sponsored by Charles Schwab. Coming up, Tesla's shifting gears from automaker to AI in Innovator. Kramer's tracking the evolution and what it means for your money next. Tesla's not a car company. It's a technology company that among other things, makes cars. That's why Tesla the stock rallied from $214 in the spring to almost $449 as of today. It's also why the stock only rebounded today after it got clocked last night when reported pretty light car sales and a big decline in profits. I don't blame anyone for thinking that Tesla was told us when its car sales didn't come through in China or Berlin or even here. After all, cars are still where the money comes from. It's why the stock opened down big, about 20 points. And that's where I said on squawk on the street that you had to buy it. Why did I think that? Simple. It's a narrative. You don't have to go too far in the conference call to realize what's really going on here. Listen to this from Elon Musk. Quote, we're at a critical inflection point for Tesla and our tragedy going forward as we bring a I into the real world, end quote. He goes on to say, quote, no one can do what we do with real world AI. End quote. Musk says he has a pretty good insight into AI in general and he boy, he thinks that Tesla's got the highest intelligence density of any AI out there. Who's going to disagree with him. Now, as someone who's dug deep into AI, I have to tell you that when I ask companies where what they're doing in it, I often find myself suppressing a laugh because typically their answer is pretty much a Dodge. The best you get is that they're talking with Sam Altman from OpenAI. A person who seems talk to everyone. And then there's he's using AI to make the best full self driving car. He's using it to dominate the robo taxi game or at least try. There's no doubt that he's got the best self driving alternative on a price basis. He thinks there'll be relentless demand for the cybercap. When you read the conference rule, he makes an incredibly compelling case to buy the stock of Tesla. But not because of cars. We've heard endlessly about how the hyperscalers are desperate for more energy. Musk has put AI to the task and he recognized that if you could develop better and bigger and stronger batteries, that might be the answer for our energy starved country. Storage may be the way to go. Listen to the way this man thinks. Quote if you look at total US energy capability, for example, there's roughly a ton of terawatt of continuous power available in the US. The average usage over a 24 hour cycle is only half a terawatt because of the big difference between day and night usage. If you buffer the energy with batteries, you can effectively double the energy output in the United States just with batteries building no incremental power plants. Well, I gotta tell you, the way the guy thinks, you know. The most exciting part of Musk's investable energy empire though is Optimus the robot operation. There are so many obstacles to mass producing robots that Musk says he's putting himself in the position of a startup to get it right. He says the only way he'll be able to produce millions of them is to think like that. Which of course is what he wants to do. My favorite part of the whole conference call is when Musk talked about the difficulty of making the hand and forearm of a robot, as he put it. Quote it's an incredibly difficult thing, especially it's difficult to create a hand that's as dexterous and capable as the human hand. He says it takes real world AI to figure out how to make a hand that can do things equally humans and to do it at scale. Hate him or like him, this guy's real smart. Now, other than allegedly weak car sales, the most talked about part of the Tesla call was when Musk called proxy advisors. Glass Lewis had ISS terrible recommenders for the upcoming proxy that he's got his contract request. He calls their musings corporate terrorism. I think that Musk, who says he needs to be in control so the robots don't take over, clearly wishes he had two classes of stock so he could be like Mark Zuckerberg who can do whatever he wants with Metta. I say even though he didn't start the company, therefore doesn't have the two classes. Give the man the pay package he wants. Unlike so many other CEOs, he's actually worth it. Like I said, as always but markets so my problems I just for you made money. I'm Drew Kramer. I'll see you tomorrow.
- [47:47]
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