← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 10/28/25
00:44:26
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 Mad Money. Welcome to Kramer Friends. I'm just trying to make you a little money. My job is not just to entertain you, but to educate, to teach you. So call me at 1-800-743-CNBC or tweet meyimkramer Today, take a cut to the quick. David Faber, my partner on Squawking the Street, said that as of this morning, Amazon stock had only rallied 29.5% since July 6 of 2021, while the S&P 500 had double that performance. He suggested that I had overstayed my welcome in Amazon for my charitable trust on yet another update with Dow gained 162 points. SB advanced.23%. Nasdaq jumped.8%. David's job, his ride post his upgrade got me thinking because that is some serious underperformance. I can't deny I've been wrong about Amazon for the past four odd years. But let me tell you how I think about this. I'm not wrong. First The Chapel Trust takes a long term view. Longer than the period since Andy Jassy took over CEO after running the incredibly successful Amazon Web Services. I talk a lot about time frames and how to make money in any market. You need stocks that you can work on for over long, long periods of time, longer than Jassy's tenure. I make it clear that as long as you still like what the company does, and I sure do with Amazon prime, proud prime member. As long as you think it's a valuable part of your life and Amazon is probably the most valuable service I use. As long as you find it reliable and trustworthy and I don't know of a more reliable and trustworthy service in my life, other than maybe the Apple iPhone universe, then you want to stick with it. I actually don't care that the stock's only up about 30%. Suggested became CEO. I am a huge believer that Amazon stock will eventually catch up with my judgment. Now, when I was a hedge fund manager in the 80s and 90s, I probably would have agreed with David. A hedge fund can't afford to own something. Through four years of underperformance, I had all these rich partners who were always looking over my shoulder, constantly criticizing my mistakes and they'd never let me stick with something like this. I'd be saying stuff like if Jassy were an NFL coach, he'd be fired. But he's not an NFL coach and he has not presided over four seasons worth of football. Plus, this period of stewardship included the pandemic which probably impacted Amazon more than any other company on earth. And it came through, I think, rather remarkably. I don't know about you, this company is losing fortunes in Europe now. It makes a lot of money there. When Jassy started to run the whole company, it had very few competitors of size in the web services division, the one that made it into a lucrative powerhouse. Now it's got Microsoft Azure and Google's cloud and you know those are, those are tough, potent rivals and they're on with what some say are superior semiconductors. Lot of video. I think when Amazon reports on Thursday, we'll see Amazon Web Services actually pick up its growth rate. Right now it's at 17.5%, something that's disappointing. If it gets closer to 20%, well, guess what? I'll look darn smart. The stock will climb because it's that division that seems to be all anyone cares about now. Last night we learned of something pretty interesting. Amazon's laying off 14,000 corporate workers to as the Journal said slim down and conserve cash. Slim down and conserve cash. This is one of the most lucrative companies on earth. But if Amazon can find a way to make its shareholders more money, it's going to take it as a shareholder. I like that. I like that Amazon is never done trying to make you money. I criticized Amazon a couple years ago for hiring hundreds of thousands of people during COVID to make it work and then not quickly firing the surplus workers who weren't needed when the pandemic was over. Their reaction was much smarter than anything I had thought of. What happens if we fire the wrong people and you don't get your package the next day I said that it won't matter. I'm not going switch anyone, any anyone else. They thought that was just a wise guy answer. You know why? Because they said we got a higher standard that standard than that, Jim. That's not what we're about. Now you could argue that Amazon's been slow to rationalize. I'd say that they took their time to get it right. Now they're firing people because they figured out how to make the remaining workforce more productive using AI. It might have taken longer than any of us hope. But I've got to tell you, I believe at last AI is ready indeed to help big companies figure out who can do more with less. But there's another reason why we keep this stock in the Chapel Trust and it's a little bit more ephemeral. But I'm going to tell you about it because it's the way money management works. See, look at the action in Alphabet. You see it earlier this year, concerned about just apartments, attack on the company or monopoly over monopolist behavior. Worried that Gemini, its agent, would cannibalize the search function. We sold this stock to the trust. Now, you know I believe in no woulda, shoulda, coulda. Don't be a second guessing so and so, especially over winning position. We had a winning position going, worry about the losers. But man, we sold Alphabet at the wrong time. We left 100 points on the table. My worries, they were misplaced. The Justice Department was no more able to hobble Google for any competitive practices than it was with Microsoft at the turn of the century. Yes, a judge found that Google was a monopolist. Yes, the judge sounded hell bent on taking Google apart and do so in a way that would decidedly not make shareholders money. The remedies were all over the place. People close to the Justice Department were making it very clear that when they were finished, justice was going to have Google Hobbled, maybe beyond recognition. Now I knew that Alphabet, parent of Google was much more than just search. It had the cash machine that is YouTube. Incredibly fast growing cloud service business led by Thomas Currie and one of the smartest I know. It has its self driving kingpin that is Waymo. It has a whole bunch of great projects that we barely even know about it as the NFL Sunday ticket for every sake. Oh, and did I mention Ruth Porat, Alphabet's president and chief investment officer. She may be among the top five smartest people I've ever met in business. Not only that, but my wife loves her. But I couldn't get over the supposed cannibalization from AI. And I certainly couldn't handle a judge who seemed eager to destroy Google as we knew it. So the trust sold the stock despite the fact that it was inexpensive on a price earnings ratio. But what happens? Google beats the cannibalization route by coming up with a brilliant synergistic link between Search and Gemini. They're on the same page for Evans saying oh, and that judge, he takes it all back and says the technology of competitors has made it so whatever monopolistic behavior he detected basically didn't matter anymore because the marketplace is so robust. In other words, Google's lawyers who made it clear to anyone who talked to them were right. Google hasn't done anything wrong other than be a better competitor than almost any other company out there. Except let's see, how about Apple, Metta, how about Microsoft, Nvidia, Tesla, and yes, Amazon. Only those six companies can take Alphabet on and you need to worry about it. If they do maybe one day open I will join them. But I want you to think about this. I already made one of the worst investment decisions of my child trust run. I booted a fabulous company stock because I was waiter of Justice Department and a fine young cannibal named Gemini. The bottom line, dumping Alphabet was a huge mistake. And I'm not going to make the same mistake a second time. A gigantic company run by brilliant people figures out a way to win. Amazon stays in the dark portfolio. Madeline in Texas. Madeline. Hi Jim. Thank you. As a new investor, your show has really helped me. So I just ordered your new book.
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And I'm very excited about that.
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You're very. Yeah. I'm calling about ARM Holdings. In January I took a relatively large position in ARM because it's tech does more with less energy and also creates less heat. But after I bought it, it tanked. So last month I sold half of it at break even. Now it's up again.
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Should I chase it?
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No, look, don't chase it. You've got a position. That's fine. It is expensive, hot stock. I happen to like Rene Haas very much. But you've got a position. Don't complicate the situation by buying a little more. Almost at the high. This is a terrific position you've got. Let it run. And let's go to Dan in my home state of New Jersey. Dan, Booyah. Jim, thanks for doing the show. Appreciate everything you do. Thank you, Dan. Thank you very much. Yeah, definitely, man. It's a great show. So bought Disney a while ago. Stock is having no traction. Just thinking of dumping it and parking my money elsewhere. What do you think? No, I said the same thing to Jeff Marks. You know, Jeff runs runs a chapel trust with me and I was fed up. I just said, how long? How long? But the fact is there's value there and someone's going to bring out the value. And when it happens, I got to be in Disney. I can't just say, you know what? I am bored with the stock of Walt Disney Company. There's value. I'm sticking with it. Amazon stays in the portfolio. I'm not making the same mistake I made with Alphabet, I'll tell you that much. Or may have money tonight. Steel market, Newport boy. There's one I should have. The portfolio is getting in the data center business big time. And I'm hearing about how the company plays in the space of the CEO. And not only is this the busiest week of earnings season, but we also have a Fed decision tomorrow. So what should investors expect? I'll give you my take. And Celestica helps keeping the data center connected. Great Canadian company reported a blowout. Blowout or set of earnings. I'm hearing how this under the radar tech company shouldn't stay under the radar for that much longer. And you may need to be in it. So stay with Kramer. Don't miss a second of Mad Money. Follow at Jim Cramer on X. Have a question. Tweet Kramer. Hashtag mad mentions. Send Jim an email to madmoneycnbc.com or give us a call at 1-800-743-CNBC. Missed something. Head to madmoney.cnbc.com on Fox 1.
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You can stream your favorite news, sports.
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And entertainment live all in one app. It's and unfiltered. This is the best thing ever. Watch breaking news as it breaks.
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Breaking tonight, we're following two major stories.
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And catch history in the making. Debate, drama.
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Touchdown.
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It's all here, baby. Fox 1 We live for live streaming now.
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The wrongs we must right. The fights we must win. The future we must secure together for our nation. This is what's in front of us. This determines what's next for all of us. We are Marines. We were made for this. Look at Nucor Go. Last night this company, the biggest and best dealmaker in America, if not the world, reported magnificent quarter sent the stock soared. This is a little crazy because Nucor pre announced its earnings numbers a couple of weeks before the end of every quarter, so we usually have a pretty good read of results. This time though, the company delivered a blowout earnings per share number with higher than expected sales, up 15% year over year. As a steel company, how they do it in large part is because President Trump's tariffs are almost an unmitigated positive for the steel industry. We're going to dig down into this. It's much easier for Nucor to make money when the White house has a 50% tariff on imported steel. They've been dumping our steel for so many years, they have wrecked our market. No more. But don't take it from me. Let's check in with Leon Pal. He's the President CEO of Nucor. Get a better sense of the quarter, Mr. Pal. And welcome back to Mad Money.
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Thanks Jim. Appreciate you having me.
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Absolutely. Now Leon, I want to take a little holistic approach to be don't do that with you because we want to get right to the numbers. But what it looks like to me is that because we have tariffs, you are therefore more predictable. Therefore you can create more jobs by building more factories and have an actual return on investment that you've not been able to have given the fact that many countries have treated us mercilessly for years and really kind of destroy American steelmaking capabilities.
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Yeah, and it's not just steelmaking, Jim. If we look across manufacturing, across this entire nation, we've lost far too many jobs. And as you know, Nucor is not about free trade, we're about fair trade. When countries illegally dump and subsidize their steel coming into the United States, there's got to be something done. And so for us, we're going to continue to advocate for our nation. We're going to continue to advocate for the 33,000 team members that make up the Nucor family. And so we are seeing imports now at a level that's the lowest over the last six years that I've been CEO. So we're seeing imports come down to around 16 or 17% of the total ADC in this country. So a much healthier number that we can continue to reinvest and. But make no mistake, Nucor is on a $16 billion investment campaign. And so our brightest days and our best days are still in front of us.
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Now, I always heard that when we would put tariffs on like this, you would gouge, you would raise prices dramatically. It doesn't look like prices have increased that much at all.
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No. And again, Jim, it is a commodity business. It's supply and demand. And ultimately our consumers and customers are going to dictate that pricing. However, at the end of the day, we've got to continue to create a capability set that differentiates us from our competition and that's what we're investing in. That's how we're thinking about growth. It's not the quarter to quarter. Nucor's always taken a long term growth position and how we think about returning value to our customers and shareholders.
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Now, at the same time you did, I don't think you just backed into being the leading provider of steel solutions for data center construction. You did have a view for a long time, as did your predecessors, that there would be building in this country and that you would be crucial to that building. And it just so happens the data center is right up your alley.
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Yeah, look, we're, we're, we're hitting on a lot of cylinders right now. This is going to be the eighth straight year that has been our safest year in the history of Nucor. We've just been upgraded to a three by Moody's Gym, which makes us the only steel company in America that's rated A or better by all three credit rating agencies. We've returned a billion dollars so far in 2025 to our shareholders either in buybacks or dividends. We're starting up two new facilities at the moment that will be ebitda positive by Q1. We've just started up a towers and structures facility for the transmission towers in this country that will start really ramping up over the next few months. We've got two more that will be built next year. We've got West Virginia's the largest investment in Nucor's history in Mason County, West Virginia coming online next year. So the tsunami of pent up earnings power is going to flow through and bring Nucor to heights it's not seen before. But specifically as you mentioned data centers today Nucor is the only steel producer that can supply 95% of all of the steel products that are contained and used to build a data center. It gives us immense flexibility and capability sets for the hyperscalers and the co developers that are building these in this nation. So it puts us in a unique position to have our enterprise accounts and commercial selling teams be able to actually provide a solution set. Again that differentiates us from our competitors.
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But can you meet the demand? Not what I am told about the number of building. I just can't imagine that one steel company can meet this kind of demand.
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Yeah, I can't wait to continue to meet the demand. We're running at about 85% utilization rates. We've got plenty more to go. And again there's an awful lot more investments that Nucor is going to continue to make to meet the demand in the adjacent spaces as well as the core steelmaking capabilities, galvanizing lines coming online. We've got the startup of our Kingman Arizona melt shop. We've got Lexington, North Carolina's micro mill that started up and again will, will be ebitda positive in Q1. So there's, there's a tremendous amount of opportunity that we're going to continue to invest in this country. And again I think the steel industry as a whole in America is absolutely going to meet the demand that's out there.
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Okay, then I have to ask on behalf of the people who may have bought the stock or seen it go up today, your view on the next quarter is not as constructive. It seems like that perhaps maybe it's demand issue rates are too high in this country as you and I know. Maybe there's a lot of industry that doesn't want to expand because they fear things. Why, why are you putting in what I regard as being a somewhat conservative if not ultra conservative view for next quarter.
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Yeah, look, it's a cyclical business, but we're coming off a softer Q3, Jim. So those prices flow through the order book that will be realized next quarter. But in almost every category across the enterprise are our pricing's up, our backlogs are up year over year, 25 or 30% or even higher in some cases. So yeah, it's a short term that you're going to see Q4 results. But the volume drop isn't because demand's weak. Demand remains fairly robust again across almost every product category. It's really the seasonality and some outages that we're going to take across our steel mills that the volume will be slightly down.
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Okay, that's much better. Thank you. Now, you mentioned a series of, of cities or towns and in each case I think there'll be people in the country say, well, what he said Lexington, that he said it in the wrong state. The truth is, is you put a lot of mills in places that were decimated, towns, towns that maybe never had any, any blue collar, white collar, anything. And what happens when you put a Nucor Steel mill into a town?
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Oh, it's incredible, Jim. We're an equal partner with that community. We invest in that community. We just celebrated 25 years in Hertford County, North Carolina and what an amazing opportunity to go back and celebrate with those teams and families that got to rise up and were playing Little league baseball when Nucor moved there and are now supervisors and managers in that town. So we are great community stewards in the towns that we're in and communities where we live and work.
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Now. At the same time, when I say I do think it's important, people have to understand that your industry has historically had many companies that do not have good balance sheets. They've spent too much, they didn't have control of their costs. And that's why there's almost no competitors left in this country once they started allowing dumping. Now, hopefully there'll be no more dumping. But committed to a strong balance sheet, your actual balance sheet is. I don't know how long it's been since it's been. That's good. Despite all the building, how important is it for a steel company to have the best balance sheet?
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It's incredibly important, Jim. It gives us immense flexibility, not just interest rates and how we think about the returns to our shareholders, but it enables us to make the investments for the long term. But in turn, we've got to be great stewards of our valuable shareholder capital. We've got to make sure that we never get too far out over our skis. And so again, I, I've been part of this company a long time. I've watched the leaders before me have a very conservative view of how we treat that, but also a very keen eye on growth. And that's what we've chosen to do. We've invested again about $15 billion to grow this company and it's not going to stop. We are a growth company, but we're going to do so with a very disciplined set of filters and values that ensure that we never, ever put our shareholders or our teams in a place where we, we can't continue to pay our dividends. We can't continue to grow and invest in this nation.
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That's true. In my lifetime I've seen more than a dozen steel companies go belly up and every one of them looked like they had good prospects, but they had real bad balance sheets. Leon To Pallion is the chairman, President, CEO of Nucor. It's always a pleasure to have you on Leon. Just great numbers. Thank you so much.
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Thank you, Jim. Appreciate it.
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They have my.
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As the earnings reports.
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Pour in, Cramer's gauging the state of the economy to see if more companies are in need of rate cuts from the Fed Next streaming is changing the way we watch live sports and your Internet connection can be the difference between catching the game, winning touchdown as it happens or hearing about it from your neighbor's cheers. That's why Comcast is building the network of the future. Using cutting edge AI and edge computing technology, we're bringing fans closer to the action in stunning high definition with ultra low latency. It's not just fast, it's game changing. Learn more at comcastcorporation.com sports Introducing the.
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Not only is this the busiest week of earnings season with the five members magnificent seven reporting between tomorrow and Thursday, but we also get the Fed's latest interest rate decision tomorrow. If you're in many ways that's the the biggest thing is happening and Fed meetings a big deal if it doesn't go the right way. Now don't get me wrong, like nearly everybody else in this business, I expect a quarter point rate cut tomorrow. I bet money on it. But this is a big but the Federal Reserve has a lot of seemingly contradictory information to sift through and a lack of government statistics which could make things very complicated. Remember, we're on day 28 of a government shutdown, said the Bureau of Labor Statistics, the Department of Agriculture, Census Bureau, the three big sources of economic data, they're all way behind. We still don't even have a September jobs report, for heaven's sake. Well, with a host of inflation numbers, housing numbers, retail sales numbers and many other data points that the Fed would normally look at. As for the one piece of regular economic data that we do have, that September consumer price index which was published last Friday, well, it was cooler than expected. A.3% month over month. Wall street was looking for 0.4% increase, but year over year prices were still up 3%. Hey, that's not good. Core inflation, which trips out food and energy costs, also up 3% year over year, not good. Now both of these were slightly lower than expected, which is why stocks roared higher in response. But at the supermarket they don't pay for it. Stocks. See, historically the Fed doesn't love cutting interest rates when inflation is at 3%, especially since it's risen from 2.3% in April. September CPI was the hottest reading since January. At the same time, it feels a little weird to demand rate cuts when the overall economy is still putting up some strong numbers. According to the Atlanta fed's real time GDP tracking tool, they're projecting we had 3.9% GDP growth in the third quarter. That's after 3.8% growth in the second quarter. Again, normally you don't get rate cuts when the economy's got such healthy growth. And let's not forget stocks keep making new all time highs, including today. Honestly, inflation has been rising for the past five months. Is face that GDP growth is strong, stock market is on fire. So why the heck does the Fed feel the need to cut interest rates here? If anything, you probably worry at one point whether they shouldn't be raising interest rates to stamp out inflation. Now if you only look at the big picture, sure, but keep in mind, we're a month behind with most of our macro data because of this shutdown. And if you look at what we've heard from Publicly traded companies. How I like to make the giant mosaic. Well, I will tell you, the publicly traded companies are saying you got a ton of reasons that not only should you cut rates, but you must cut rates. First, there's a labor market. Now, we may not have the latest employment report, but we do have some private labor statistics which are looking, I'd say mixed at best. And we're crazy hearing about large scale layoffs in the private sector. Adp, the world's number one payroll processor, released its private company employment data back on October 1st. As they see it, private payroll shrank. That's right, cut by 32,000 jobs in September week. Today we got another update from adp and it was better but still not particularly strong. Corey, ADP latest numbers for the four week period that ended on October 11th. The private sector added an average of 14,250 jobs per week. That implies we got monthly private sector growth of 50 to 60,000 range not particularly robust. One big country. Although it is better than their earlier September figure. More important, we keep seeing large scale layoffs. You've seen the headlines. Just this week we learned Amazon's cutting 14,000 corporate jobs. That's about 4% of the workforce within Tech alone. Applied Materials plans to cut 1400 jobs. Rivian electric vehicle makers firing 6, 600 people matter. It's laying off roughly 600 people across its infrastructure teams. Beyond Tech, how about this one? UPS today, you see that they just announced they laid off 48,000 people this year. And by the way, that was a major reason why they delivered much, much better than expected earnings today. Good for the shareholders, but obviously not good for the workers who lost their jobs or the broader economy. Finally, as earnings season unfolds, I notice more and more signs of real economy. Companies struggling. So let's just look at one day. Look at today as a reason why you got to be worried. First, the nation's largest homebuilders company called Dr. Horton. They missed expectations for homebuilding revenues and deliveries and earnings per share with the company increasingly have to offer incentives to get sales across the finish line. Now Horton also gave soft revenue guidance for their 2026 fiscal year, even though they're projecting better than expected deliveries. Basically, Mattress thinks they're going to have to compromise on price to sell homes that they're building. And Horton's guidance for the current quarter was particularly weak, which is why the stock got clobbered today. Remember, housing more than any other industry is hostage to interest rates. Horton needs lower rates and it needs them now to get Business reignited. Speaking of housing carrier Global company I really like reported this morning while the heating ventilation air conditioning company delivered in line sales with a solid earnings beat. And by the way, they have good datacenter business. There was some surprising softness in its residential business carrier, the aircraft, the air air. Your air conditioning company. Take a look. It might be, it might actually be your air conditioning company. Now their commercial business is on fire. All right, it does the climate control data center. It's the residential division. It was surprisingly weak. But again, housing's weak, so it's going to be weak. But we also got this is new and that I saw today at this point, results from Royal Caribbean. Now they've been leading the cruise lines higher for a very long time. This group's done remarkably well this year. But today Royal Caribbean gave disconcerting guidance for the current quarter and next year and that's why the stock plunged almost 9% in response. Now, after speaking with CEO Jason Liberty on squawking the street this morning, I think maybe that decline was an overreaction. Even he had a lot of good things to say. Still, the market is saying that the consumers become choosier about what to spend on and how much to spend. This one next one did take my breath away though because I didn't see it coming. VF Corp. Okay, now this is a big apparel company they reported this morning and they're the parent of Vans North Face, Timberland and host of other brands. They managed to beat sales and earnings estimates. So when it came out I said okay, looks good. But their guidance for the holiday quarter was shockingly dismal. Hence why the stock plummeted more than 12%. That's just one more bad read on the consumer. But you know what I mean. The close represent mainstream and mainstream maybe it's not doing so good. Remember I've been saying that there are three markets. First, there's anything connected to the data center and we talk about that a lot. It's absolute fire responsible for most of the strength in the broader economy. When you see strong GDP growth, that's a data center. Second are the super speculative stocks. And that group was white hot, then got cold a bit and it's been more mixed up for the past week. I'm not optimistic about the future of most of these, but some of them are going to be, they'll come out fine. It's the third market though, what I call the real economy. And right now the real economy, like housing, like vacations, like clothing is really struggling. That's Something the Fed should care about. A rate cut can breathe new life into the real economy. It's needed. And there is real pain being masked by the wonders of technology earnings. But in the absence of official economic data, the evidence of weakness in the real world economy increasingly comes from the private sector. Let's hope Jay Powell is watching. Here's the bottom line. Dr. Horton needs rate cuts. Carrie needs rate cuts. Royal Caribbean needs rate cuts. VF Corp. These rate cuts. When I say I expect the Fed to cut rates this week, these are the things I'm looking at. Keep your fingers crossed that the Fed's looking at them, too. Let's go to Joe in New Jersey. Joe. Hello, Mr. Kramer.
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Thank you.
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Hey, Joe, how you been? Joe, you doing good? Fine, yes, thank you. Oh, good. I started. I started reading your book and I can't put it down. You're very nice. Thank you so much. It's selling okay. It's selling okay. Thank you for pointing that out. Well, how can I help you? Yeah, and you got to sign it for me. I've been told you gotta go check out Tractor Supply in Rockaway.
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And when I went there, it's the.
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B
New place for me to shop. Is it a buy? All right. Now, I've got to tell you, here's my feeling on Tractor Supply, short term. I'm not a big fan of retail, but Hal Lawton runs that place and he runs a tight ship. I think you got to give it some time. It sells at 26 times earnings. I'd feel a little better if it was under the market multiple, maybe 22 times earnings. And Joe, you know I care about it. And you read, you read how to make money in any market. Just read about the multiple point the chapter on multiples and know that I think that the multiple is too high. No reflection on Mr. Lawton. Just reflects the stocks a little bit up too much. When I say I expect the Fed will cut rates this week, it's because tomorrow it's because I'm looking at the real economy and it's crying out for it. My fingers are crossed. Much more money had, including my exclusive. With it under the radar, I play Celestica soaring over 8%. Today I'm covering one of the greatest tech stories you may have never heard of with the company's top risk. Holy cow, is it terrific. Then remember Nokia? Well, it's back and better than ever after Nvidia announced it was taking a billion dollar stake in the company. Out of nowhere. That one I'm sharing how this was just one of many stories from the year of magical investing and where it calls rapid fire. Tonight's of the Lighting round. So stay with Kramer. Lately the contract electronics manufacturers have been on fire. I'm interested. J. Bill We've had them on flex Taiwanese company Foxconn as well as a lesser known Canadian outfit, the one we're going to talk to you now, Celestica. Here's a stock that has more than tripled for the year coming into this week. Just, you know, that means 253% as of today, jumping almost $25 or 8% today in response to a great quarter and maybe more important, a bullish investor day where they really explain what's going on right here in New York City. Slutsko posted a sizable top and bottom line beat with a terrific forecast for 2026. How they do it. These companies are all beneficiaries of the data center boom because they manufacture so much the hardware that goes into these warehouses full of servers. Sluster, though, has started designing its own equipment to in many ways that's where the money is this point. My only worry is maybe it's too late to buy. You know, I'd like to for a long time. Stocks has had a good run though. Let's take a closer look with Rob, my onus. He's the longtime presidency of Celeste. More. Mr. My own is welcome to man, mighty great pleasure to have you.
- [34:36]
D
Wonderful to be here, Jim. Thank you.
- [34:37]
B
Well, first of all, congratulations. When I look at how well you have done, it really is because you have taken both different strategy and different tactics from the old days. You've taken on a much more lucrative approach. And I want people to explain because it's your first time where manufacturing is, you may be the best there is making things.
- [34:58]
D
Well, thank you very much. You know, we made a decision a long time ago to move away from commodity markets.
- [35:03]
B
Right.
- [35:04]
D
And to get more into design and manufacturing. And that transformation has paid off in spades for us.
- [35:10]
B
So why don't you talk about, for instance, what this might mean in terms of of the data center, because a lot of people say, well, who makes that stuff in there? And in many ways you make a lot of it.
- [35:22]
D
We do. So what we do inside the data center is we make high speed networking, we make AI, ML, computer and we make storage systems and we make it both at the component level and the systems level. And we deliver these to hyperscalers, digital natives and also enterprise customers. And we do so at scale. And the reason why we're able to do that is because we do the design and the manufacturing. So that design for manufacturing is a great recipe to be able to consistently execute at scale.
- [35:52]
B
Now Tony, I might be wrong, but at one time I always I viewed some Seleska is someone who did it for others, so to speak. And I know you still do some of that. But you were doing proprietary things that know that they're not just a blueprint for not from another company.
- [36:04]
D
Now that's correct. A large portion of our business, over 40% of our business is actually, you know, designed for hyperscalers designed for digital natives. And here we actually design our own equipment, we manufacture our own equipment and we deliver it. And it's at the bleeding edge of technology. Some of the latest technology that we're using is right in development these days.
- [36:27]
B
Now one of our favorite companies for a long time and a long time position for my child trust is broadcom. We had Hawk 10 on recently. I think that Hawk may be the most exacting CEO in America. He's a tough guy, but when he comes on he tells it to be straight. He obviously does not tolerate anyone who's doing anything other than the finest work. He you are a preferred provider of them now. What does that mean?
- [36:53]
D
Well, we think we've earned that and they're a great partner. They make bleeding Edge technology for XPUs and networking and we use their silicon in a lot of our designs. So what it means for us is when they launch a new piece of silicon. So the Tomahawk 6 is their 1.6 terabyte silicon. When they launch that into the marketplace, they'll work with us to develop products and those products end up in the major hyperscalers.
- [37:20]
B
Right now I want to talk about the communications portfolio. Your strong growth is in optical programmers. We are big believers that optical is not nearly as big as it will be in the data data center. And fiber won't be as big. What will you will be much bigger. What are, what are you seeing in the optical programs you're doing?
- [37:38]
D
Well, optical is certainly growing. There's something called CO package optics or CPO and it'll probably be prevalent in the 3.2 terabyte mode. And we're just starting to experiment right now and do proof of concepts, POCs we call them for the 1.6 terabyte and Copact Co Packaged Optics has the opportunity to actually reduce the power consumption and it's a big driver, potentially a big driver in the future.
- [38:08]
B
Okay, so what does that I. Excuse me for pressing on this, but CO package Optics. What does that look like when I go into the data center?
- [38:16]
D
Well, it's a piece of silicon that Broadcom is developing. So that's where the optics is actually on the silicon. So it would eliminate the need for the pluggable optics. Truth be told, there's probably room for both types of technology in the future. Pluggable optics optics or co packaged optics in the future. But over time that seems like the growing trend and we're working with Broadcom and others on developing that capability.
- [38:45]
B
Okay. Now I don't want to lose sight of that. The ATS segment is, does matter. I mean a lot of people just say what are they doing with that? But, but historically there's. I know it's slower right now, but I think it, that just seems like it could pick up and I don't want to lose that business as I'm a shareholder. Right.
- [39:00]
D
It's a great business. So it's about 25% of our revenue right now. We operate in four key sectors. So we do high reliability solutions for aerospace, defense, semiconductor, capital equipment, health, tech and industrial. And our focus right now is through engineering led engagements and to improve the margins in that business. And based on the guide that we just gave, margins should be up about 70 bips by the end of the year, year over year.
- [39:27]
B
Now one last more philosophic question. There are a lot of people who feel that this is a bubble. I know I follow people like you and like Hawk, hard nosed people. And I say these are people who are different from 1999 and 2000 where I was very much in the mix and I didn't see hard nosed people, I saw dreamers. Do you believe like I do that this is actually a very important moment in the world and the companies that are building this moment are going to end up reaping big profits and not big losses?
- [39:57]
D
I agree. I mean I right now is used to be a utility, used to be a nice to have. It's a utility, it's a must have. So if your competition invents a new drug or optimizes their supply chain, you're going to follow suit. And what we do at Celestica is we build the infrastructure enabling that. So if AI is a speeding freight train, we're laying the tracks ahead of this freight train. Well, making that happen.
- [40:24]
B
Well, I'm very, very proud of that you came on because your company has been a company that I've wanted to talk to for a very long time. And it'll be always God, I'll say, oh, darn it they're up 9 again. They're paid again. But people should recognize you're a just you're a great businessman and a great manufacturer. I want to thank you for coming on. Congratulations your analyst day.
- [40:43]
D
Thank you very much and hopefully you have me back.
- [40:45]
B
Oh that would be terrific. Rob. My own is the president CEO of Celeste along one of my favorites and clear you know they call them Dex very easy to understand this company. Mid monies back after the break. Coming up, Kramer takes your calls. And the sky's the limit. It's a fast fire lightning round next. It is time. It's time for the white run container. I'm going to just be cold stop credit on my Steppers planet sale and then the lightning round is over. Are you ready ski daddy? Time for the light round. Critics let's start with Rosemary Minnesota. Rosemary, my precious sweetheart, I am a devoted and adoring student of yours for more than 20 years and I should get a good grade because I am diversified. I have 83 individuals positions in my. Holy cow. You may be a bit of a mutual fund there, Rosemary, but that's okay. I noticed I switched to Rosemary when I heard that and you know, every time I have sold the stock, I've always regretted it. Two years later. I got into to Pfizer about 21 years ago at 36. Yeah. Rosemary, I don't know what to say about Pfizer. I mean it's got that yield of 7%. It bought that CGEN. I thought it was going to change to change it but right now the drug stocks are just in a world of hurt and this one continues to be there. You can own it. They got to figure out something that that yield will protect you for a while though. Let's go to Leslie in California. Leslie, Jim, I've read Ben Graham, Eugene.
- [42:34]
C
Fama and Burton Malachi, but your book is the most radical investment book I've ever read.
- [42:41]
B
Semper. Thank you really would disagree with my book. Semper. No. Jeff Barton pulled it off. You know, he missed the quarter real bad and I was worried. I said, Jeff, you know, I don't know. I was going to put it in the book. I felt like wow. And then when they just blew up, I said ah, can it come back? And the answer was you back when guys like Jeff Martin came right back. He's done a great job. Let's go to Alex in New York. Alex, Jim, Booyah, my friend. I am pleased to meet you. Right back at you. We have. Thank you brother. You spoke about the stock in the past, given the current market conditions, revenue growth has negative year over year, but its recent rally and mixed fundamentals. Do you see plug power at a long play investment? I still can't believe it's around. I mean, frankly. I mean, how much money can you lose over a certain period of time and still be allowed to be called a stock? Okay, what can I say? That's my view. Let's go to Howie in Wisconsin. Howie. Booyah, Jim. Howie B.
- [43:38]
C
From the land of green and gold.
- [43:40]
B
Well, fantastic, fantastic. I'm banking on Howie R. From the land of green and green. What's happening? That's how Roseman just. Hey, yeah, Jim, you know, we know the Green Bay pack is back, but Jim looks so good. The question, Jim, is Dow Inc. Back or at least. All right, that last quarter was good. That last quarter. Jim Fitterling put up a good quarter. I think that stock can go higher. I also like Solstice, which is a recent spin off behind it. Well, it's going to start trading regularly. That one's a good one, too. It's going to ring the bell, I think on Thursday. So I think you're okay in Dallas. I would hold on to that. And that, ladies and gentlemen, concludes an upper Lightning round. The Lightning round is sponsored by Charles Schwab. Coming up, can the year of the magical investing keep going? Kramer sharing his thought as speculation of all shapes and sizes continue to pay off for investors. Next. I know you think I'm joking when I call 2025 the year of magical investing, but every day something borderline miraculous this happens around here. Something so lucrative that it's easy to see why everybody's speculating. I mean, it's almost crazy not to sit it today. First, Nvidia takes a $1 billion stake in Nokia. Yes, Nokia. Remember them? That's a 2.9% stake, 166 million shares at $6.01. They're parting up to work on AI native mobile networks. AI network infrastructure. The goal is to make everything faster. Now, look, I think it's driven. But more importantly, if you own Nokia, you just made 23% in one day. As the stock roared from $6.42 to $7.77 and traded, by the way, as high as $8.19 now till today, I don't think many of us are really paying much attention to Nokia anymore. I certainly wasn't. It felt like the stock had been left for dead for years. In the year of magical investing, though, the investors who believe that Nokia is more than just a river in Finland. Well, they just caught a windfall. It's incredible this kind of thing. It's not supposed to happen. Every day we have people calling in on uranium stocks. Anything uranium, right? Most of them are huge money losers. But these days we're so short of power that we're opening up old decommissioned nuclear power plants that were never supposed to be reopened. These plants are supposed to be dead now. They're the undead. They're vampire plants. Today we learned that the US government signed a deal with Westinghouse, jointly owned by Brookfield Renewable Partners and Cameco, that's a uranium company, to help and that's going to help construct $80 billion worth of new nuclear reactors. Suddenly the stock of Cameco, which I blessed by the way in last Friday's Lighting Round because it actually profitably produces uranium, unlike the rest of them, jumped 23% one session. That's huge. It's insane. It's positively insane. Or how about CrowdStrike, one of my favorite stocks. That along with the video we own for the chopped trust, it was cruising along up seven bucks today. And then Jensen Wong, yes, the CEO of Nvidia, said something at his GTC conference in Washington. He told people, quote, I can't think of a better company to protect AI than CrowdStrike. Bingo. Boom. A quick 10 more points as Jensen announces a collaboration with CrowdStrike to make cybersecurity agents. How about if you're a long suffering shareholder of Skyworks or Corvo? Never fear. With no real antitrust department, these two companies which have competed over radio frequency chips, hammer and tongue, tooth and nail. I don't care whatever cliche you want to convey that they're financially mortal enemies. Now they decide to merge. Both stocks soared, patience paid off in a way that never would have been allowed under any other administration. I don't even know if this could be reviewed. Maybe not. Ideally any trust policy, but great for the stock market. And again that's what we're focused on. Get what I'm saying? Why didn't just keep striking around here? You just don't know who's going to get hit and when. Quantum stocks lagging or cmo. Wait long enough, you might get the government jackpot where the commerce department takes a stake in one. I'm like it did with the CHIPS act and Intel. Quite a double on that one by the way. You own shares in a money losing coal company. Hold it. There may be critical minerals in them there hills. It just doesn't stop. Yes, this market speculative yes, at least for now, that there's a ton of speculation, but it keeps paying off. Sure, I'm worried that we're 1999 going to the crash of 2000 scenario. That's the worst. However, I have to admit something else. The Year of Magical Thinking has a ton of alchemy to it, but it's producing a whole lot of gold all the same. I like to say there's always a bull market somewhere, and I promise try to find it. Just for you. Right here on Mad Bunny. I'm Drew Kramer. See you tomorrow.
- [48:17]
A
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates, and may have been previously disseminated by Kramer on 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. Cramer'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 A Sapphire Reserve.
- [48:56]
B
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A
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A
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C
Yeah, for you get $500 credit for the edit. A collection of luxury hotels with Chase.
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B
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