← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 10/29/25
00:44:21
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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C
Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. My friends, I'm just trying to make you a little bit of money. My job is not just to entertain you, but to educate, to do some teaching. Call me 1-800-743- CNBC. Tweet me at Jim Cramer. The regular economy got a little help today. It was the help it needed. A quarter point rate cut from the Fed, which immediately translate into lower borrowing costs for a variety of shorter term loans, although not necessarily longer term ones because those are set by the actual bond market. Still, we'll take all the help we can get. At a time when the consumer seems to be balking at larger purchases, vacations, even steak dinners because they fear they might lose their jobs and costs have gone up so much because of inflation, thoughtful Fed chief Jay Powell made it clear that the Fed may not cut again next month. May not. And I think that sudden circumspect attitude really did club the averages. Dow only sinking 74 points after being up most of the day. S and P ending minimally down. Nasdaq still gaining.5.5% after being much higher though in the session. Now you might think it's crazy for people to be worried about their jobs with the unemployment rate so low and the president cracking down on immigration. But we're now seeing a reckoning of sorts where everybody's worried about their jobs because of, yes, artificial intelligence. The epicenter of the worry, the sun around which all anxiety revolves, is the 5 trillion DOL Nvidia, one of my two favorite stocks, as you know, along with Apple, which reports tomorrow. And as far as I can see, the angst seems shorter term avoidable, but only if the people at the top of your company recognize that Nvidia simply an intellectual engine that makes you more productive, smarter, thinking better so you can go create things at an even lower cost than before the revolution, you just might not know it. Yes, indeed, Kramer, uber fave. Alex Karp from Palantir hey, it's all on how to make money in any market. I mean it. Yesterday on our air did acknowledge that there could be be people left behind by AI but they shouldn't be left behind if they could heed the thunder and do the pivot. Many of today's execs think there's only a run game when the AI forward passes their arsenal, they just can't figure out how to use it. Take the three behemoths that reported tonight because they've gone all in AI, Alphabet, Metta and Microsoft. Now a few years ago, all three of these companies seemed that they were headed for irrelevance, but they refused to let that happen. Alphabet, parent of Google, wasn't going to let wasn't content to just dominate search. Instead they integrated Gemini, their generative AI platform. A couple of laughs and bugs at the beginning, but oh wow, it's doing terrific. I when I look at the numbers like I think they're like the Carpenters, they've only just begun. And Meta wasn't it just glorified advertising site? Well, they embraced AI like none other spending A fortune will be more on that in a second. They are still trying to dominate as always. And how were the report cards for these stocks? Well, this is interesting. It's tricky. See, we don't have all the conference call. Nice. Microsoft, for instance. Their call is so late that it starts pretty much when we're doing the show. It's like election night says let me give you some early returns. Alphabet shot the lights out with the revenue growth accelerating for the third straight quarter to 16%, much better than expected and the company earning $2.87. Wall street was only looking for $2.27 and that's why that stock is flying after hours. You know I think it's terrific regretfully because I still I told you the trust sold it. When you drill down Alphabet still firing in all cylinders their Corsairs business up 15% no cannibalism and I their generative AI platform is doing so well. At the same time Google cloud revenue beat expectations by over half a billion dollars up 34%. Fantastic. Margins were better than expected when you back out $3.5 billion one time charge your European fine and Alphabet's capital expenditures were in line. It was really good and I got to tell you it's going to be the star it's going to be the one that people are going to think about now for the benchmark of these stocks and even the the amount of money that they spent in derail anything they're on fire just playing out on fire. Now the one that is trickiest is matter. Even though the revenue was much better than expected, their earnings took a huge temporary hit for the President's one big beautiful bill act led to a colossal earnings miss. But according to Meta this is a one time thing and their tax bill will be a heck of a lot lower if not for a one time hit, well they would have earned $7.25 per share. That's much better than $6.72 that Wall street was looking for. At the same time they raised their full year revenue forecast but they also raised for your capital expenditure forecast by even more in there. That's therefore not as good as what Google did. They're spending more than what Google did and that's what people are thinking about. Okay, I've got to tell you if you throw in the fact that the Stock was up 28% going into the going into the quarter and you can understand why the stock got clobbered after hours, it was up too much. I I think it's a reaction. I am joined down and club members you will get a concise to the point bulletin tonight about where I stand with this potential opportunity. Microsoft port of what I thought was a truly strong quarter. Not only did Microsoft deliver a top and bottom line beat but they're all important. Cloud infrastructure, vision, Azure so its growth excited to 40%. That said, the stock still got hit in after hours because I think it came in too hot. Remember Microsoft shares caught fire earlier this week after their deal with OpenAI gave him that 27% stake in the for profit part of the company. If it hadn't already run I think Wall street would have been fine. It might have been a bit of a Yawner. Frankly, more to come later tonight for club members. Finally, as I said earlier, the Fed's rate cut will make things easier for the real economy. But let me put my entrepreneur hat on for a second when I when I create a bunch of companies over a multi decade period, some of which were even successful first, many of the companies in the so called real economy have only themselves to blame for missing out on the data center boom. Today Caterpillar reported the stock shot up more than 11%. Why? You know why? Because previous CEO Jim album we decided that he was going to make that company perennially cyclical boom and bust into a secular growth story by emphasizing turbines and power equipment. And what were the star divisions? Turbines and power equipment. And that's how you get a stock higher. The division that provides power. Amazing. The one that he presided over. Sure you need CAT construction equipment to build a ton of things, but you especially need power for the data center. Humble be saw coming, that means a visionary. But then you can't go get Generac. Well what do they do? They're the maker of backup generators with some data center exposure even though it's clearly not enough because the stock got slammed today in response to a not so hot quarter. They even cut their forecast because in the end generics core business is making generators you can use during a natural disaster and have been enough natural disasters. Unlike cat, these guys did an all in pivot to become a more secular growth story. They didn't bet big enough in the data center. That wasn't smart. A few companies in America were like Cat, most were like Generac. And a quarter point rate cut won't make enough difference if you have the wrong strategy or if you're late to a better one. Here's the bottom line. This rate cut is great news for the so called real economy that I keep telling you about is down in the dumps. But as you can see from Caterpillar, the best performing companies in the real economy are the ones that also have a ton of exposure to to the data center economy. And as for tonight's Superstock parade, Alphabet's the winner. Microsoft's trying to take second place and that is looking like it's came in first but it's last out at the finish line. Ty in Arizona. Ty.
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Professor Kramer, how are you?
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C
I'm good Ty, how are you?
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D
I can't be any better now that I'm talking to you. I want to say thank you so much for writing the book. I listen to it every day on Spotify.
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C
Shareholder of the way I did that. I sound so Kramer. Meaning I sound so Philadelphian. I apologize to the world for my Philadelphia accent, but my mom's. Mom's was even worse.
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D
You're perfect. I can't tell you how much I'm thankful for it. I start my day with you, David and Carl, on Squawk on the street. And then I'm taking a shower listening to you through Spotify. So thank you.
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C
Okay. That might be close enough in terms of our contact, but that's great. I appreciate that. And, you know, look, what can I tell you? We play for you. You are my boss. How about that? I don't play for dinner. I play for you.
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D
Okay, I got a question I need some help with. And you've helped me tons before, and you even helped me with this one. I think Squeer is in over his head at American Express. I want to swap it for Klarna.
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What do you think?
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C
No, I won't let you do that. I don't think Squeers in and over his head at all. I think he's actually a. I think he, in his own way, is a genius. He's figured out what younger people want. I was just. Funny, I reactivated my platinum card yesterday, and I said, you know what? Squery, he just figured it out. He makes us happy. I think he's a very good executive. Klarna's fine, but Squery, let's just say he's figured it out. I'm going to. I hope. Maybe it could be the same Sully in New York. Sully. Hey, Sully.
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D
Jimbo.
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C
Booyah.
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Mandy, Alice, thank you for all your hard work, man. Always walking the street. You, Mr. Favor, Mr. Quintanilla.
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C
We work hard on that show. I bought a big basket of research down there just in case Favor was trying to nail me on something. You know, sometimes he gives me a hard time. I never give him more time. What's that all about? Maybe we have to get a psychiatrist and have four people.
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D
Always a good watch. Thank you, sir. Don't want to take too much of your time, man. I'm a big. Yes, I'm a big believer in the stock long term, but short term has been killing me, man. It's DraftKings. DKNG want your opinion on it.
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C
I happen to like DraftKings very much. Now, the problem is, obviously that the people are beginning to worry whether gambling, again, is honest. I think gambling is honest. I think Jason Robbins is honest. I think there's always going to be dishonesty and fraud wherever you go, you can't game fraud. It does occur and I just think that it's just something that happens. But the DraftKings, if they get Texas, Florida and California, wow, it'll be terrific. Look, the real economy got the rate cut it needed today. We can take that. Whatever we can do for that real economy. And as for Microsoft, I don't know Matter and Alphabet. Great money tonight we've got an action packed lineup of guests starting with service now the enterprise software powerhouse reported after the bell but is now the time to strike? I'm going to find out with companies stop brand and taking a bite out of Brinker's earnings. I mean geez, these restaurant stocks keep getting hit and don't miss. So don't miss my conversation. CEO maybe we can figure it out and Otis is going up after the elevator makers top and bottom line beat. I'm going to get an update on the state of construction at home and abroad and of course the service opportunities for the company's bankable CEO. So stay with Kramer.
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Don't miss a second of Mad Money. Follow imkremer 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. Miss something? Head to madmoney.cnbc.com.
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The biggest moments, touchdown and catch history in the making.
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Fox One we live for live streaming now.
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And International Sleep Day is tomorrow.
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So the pillows will get delivered and.
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Everyone can sleep soundly, especially you. AT&T5G requires a compatible plan and device coverage not available everywhere. Learn more@att.com 5G Network.
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C
Well, this has been a great year for anything connected to AI. It's been pretty darn awful for the enterprise software space because if there's one thing AI is already good at, it's writing the code that the enterprise software guys give you. And that's why even the highest quality enterprise software companies have gotten slammed. Take Kramer Faith ServiceNow, which helps its customers automate all sorts of IT and back office jobs. Going to today's close, this Stock was down almost 24% from its all time high in January. But here's the thing, we haven't seen any signs of artificial intelligence impacting their earnings. Tonight Service now reported another excellent set of numbers. 22% revenue growth, 56 cent earning beat off a $4.26 basis. Even better, management raised nearly every line, every line of their full year forecast. Don't take it from me. Earlier today we got a chance to speak with Bill McDermott. He's the bank chairman CEO of service. Now let's take a look at this. Mr. McDermott, welcome back to Bad Money.
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Thank you Jim. Great to be with you.
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All right. So Bill, I know there's a lot of hand wringing about the software sector, but your company tonight turned in a pretty darn good set of numbers. You beat expectations on every single line for the reported quarter. Could you tell us what you're seeing on the ground that allows that to happen and what you're offering to customers that you're really putting up some big numbers?
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E
Yeah, Jim, there is an amazing thing happening here. I think we might have actually reinvented a new category for you. There's the Mag 7. They deserve all the credit. But now you might have the Super 8. You have to add ServiceNow in there. The customers today obviously want to leverage AI, but the same lack of integration that held back digital transformation from delivering ROI is also holding back the AI proof of concepts out there. And there's only one AI Platform for business transformation that's connecting to all the clouds, all the language models and all the data sources so these companies can run like best run businesses. And this is in the form of workflows. And so these workflows are really business processes. We have 75 billion of them running in real time right now, doing more than a trillion transactions across all industries. Because we are the company that makes enterprises run better. And that's why the results are what they are. The happiness of the customers are there and obviously the shareholder value as well.
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C
Well, you are 103 deals north of 1 million in net new revenue for you ACV. Then 6 were above 10 million and then 3 were above 20. Now what does a 20 million new customer get from you?
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E
That's the greatest question, Jim. With our platform we have an AI platform that has been natively built and as you might have seen with our great friend Jensen yesterday, we built it on Nematron from Nvidia. And it's a multimodal platform that delivers large language model intelligence and the power of large language models at a fraction of the size and cost. So for us, great brands like the NHL and our friend Gary Bettman can have an agentic portal with a single point of entry individually branding his 32 clubs. And now they can run like clockwork. You request something, you, you get the answer back and the action is taken on the ServiceNow platform and they call it my home ice. I could have told you a similar story for ulta Beauty or AstraZeneca or even the great FedEx company. Think about the logistics and intelligence required to run a great company like FedEx. Our AI platform builds AI powered supply chain workflows. So in real time they have visibility into their supply chain performance. They can predict things and prevent issues and take actions when they need to. So they remain a best run company. And this is happening all over the world. You know, we have 55x improvement in the number of assists in just a few short months. So the hockey stick is kicking in.
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C
That's fantastic. Now there is a thesis against that that I want you to refute which is this idea of AI eating software that people feel that enterprise software is going to remain under pressure because with AI I can make my own software to compete against ServiceNow. Does it really work like that?
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E
Doesn't work like that, Jim. You know, that's the beauty of our strategy. We realize the world needs access to the great hyperscalers and so we integrated with all three of them. So that's a cooperative. The world's going to benefit from the large language model providers, but they don't do what we do. So, for example, if you think about an enterprise today, I'm sure you're reading the headlines around all these security issues like I am. We run security operations, we manage the assets, we manage the operations, we service the business, we give you the employee experience, we give you the customer experience. The innovators are doing jibe coding on our platform and everything now is a natural language. They don't even have to touch a keyboard. And this is enterprise AI, which is a lot harder than consumer AI. It cooperates with consumer AI. Like I said, we integrate with it all, but they're not going to do regulatory environment processes for financial services Firms with 60 years of legacy technology and the complexity that goes along with it. And that's true of every industry. So we just do something different. And as it relates to the systems of record that most people talk about being eaten by AI, I don't even think they'll be eaten by AI. But what's happened, Jim, is an enormous frustration out there with these systems of record trying to sell agents into an already complex environment because those agents are being sold into silos. And that's the very reason why I won't work. AI is a cross functional sport, Jim.
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C
You have to run across. Even if it means going into an.
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AI platform that's been designed to do that.
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C
I mean, even if it means bumping up against friends like, like Marc Benioff. You have to go where you have to go, right? I mean, because people want. You have to go where the customer wants you to go.
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E
Exactly, exactly. And you know, think about the customer. You're right on it. Can you believe, Jim, in 2025 we have companies out there that sell multiple clouds and the employees have to log in to multiple clouds and they are not seamlessly integrated. So the customer can't just place an order, get what they bargain for and then be serviced on one common platform. It's not available in the market except from ServiceNow. So it doesn't make anyone else's platform bad.
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C
Right.
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We're just doing something very different. We're playing a one of one game here and we're winning.
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C
It makes us. Now, one last thing. I know you are, famously for the individual investor. It's one of the reasons why you like to come on Mad Money and why we're so happy to have you. You did something. I go to a lot of these execs, I say, I know the big institutions, they don't want to pay a lot of commissions so they want a high dollar amount. But it makes it difficult for me to say to a young Investor, go buy 20 shares of Service now. Or to a person in their 30s, go buy 300 shares. You're giving us a five for one split. Why are you willing to listen to the regular investor and do what is right so that you can get a broader non hedge fund base of clients?
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E
Jim, it's really an honor to be with you because nobody knows the market and nobody knows enterprise software any better than Jim Cramer. And Mad Money is a great show. I watch it all the time and all my friends watch it. And our brand now is Forbes most Trusted, right next to Nvidia, Fortune's best run company, Glassdoor's favorite place to work. And I feel strongly that we're right now ready for more than just institutional investors. We know the consumer investor wants in and I don't want you to have to buy fractional shares and go through all that. So a 5 for 1 split will get you in the sweet spot of being able to buy many shares from ServiceNow and participate in this great growth story. We're only getting started. Not only are we the only enterprise software company in the world to grow at a 50 plus gym, but we've been doing it for a decade straight. You have so many welcome to the party. We're going to grow together. I think you now have mag 7/1.
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C
Super 8 way for individuals to participate in AI beyond some of the other stocks that they might have because it's going to be you. From what? From you've broken away from the pack. You're doing it right. I want to thank Bill McDermott, Chairman CEO of ServiceNow with a blowout quarter. Regardless of what the stock does right now, it's a blowout. Thank you, Bill.
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Coming up, forget the fajitas. Kramer's checking in on Brinker after earnings to see if the Chili's parents can keep sizzling.
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C
Next, why does Brinker, the parent company of Chili's, keep seeing its stock get hit? Coming today, Brinker Stock was down 30% from its highs and that was after a report this morning and the stock had hit again, only finishing off 7.5%. Even though the company delivered a top and bottom line beat Wall street maybe didn't love that. Management had some kind of difficult things to say about tariffs, margin pressure. They're getting hit hard by import duties on beef and shrimp. At the same time, the bulls didn't have too much to hang their hats on. Because Brinker merely. Well, they didn't merely reiterate their full year forecast. I mean, I wanted something more than that. And now, well, let me just say this stock was up huge coming in from last year. And that's why we got to check in with Kevin Hockman. He's the CEO of Brinker International. Get a better read in the quarter and where the company said. Mr. Hoffman, welcome back to Mad Money.
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F
Hey, Jim, thanks for having me on the show.
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C
I think that you are probably the victim of one of the greatest years ever. And you had that magical year and the stock went up a lot and you're still doing great numbers. And it's Wall street saying, what have you done for me lately? And all you continue to do is deliver great numbers. What more can you do?
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F
Yeah, we couldn't be more proud of the teams. We had a great quarter on Chili's were plus 21% on sales, 13% on traffic. Our EPS was more than double a year ago. Significant, significant wins all across the board. Great guest metrics. We had a phenomenal quarter. Obviously, expectations for the coming year are even higher because of the quarter that we had. And we just have to deliver. So, you know, quite frankly, a little disappointed with the reaction to the great results that we had. Not terribly surprised. But it does give our team the challenge to continue to deliver.
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C
Well, I mean, look, it's almost by road. Look, as someone who has been a reporter and an analyst, my natural question is, yeah, but. Yeah, but how about the tariffs? Aren't they hurting you? How about inflation? Aren't they hurting you? And there's only so much shadowboxing you can do. We know that there's. If there wasn't an Argentinean, if we had an Argentinian breakthrough, we get stake here easier. And yes, there's some inflation, but you're doing remarkably well despite those.
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E
Yeah.
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F
And I think that's why there was a big expectation that we would raise guidance today.
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C
Right.
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F
You know, for us, this was the completion of Q1. So we still have three quarters to go in our fiscal. It's not like we just have one more quarter. Then, of course, we could raise guidance. So between the tariffs and the macro uncertainty, which is not necessarily hitting Chili's, it's hitting Maggiana's a little bit. Right. It was very hard to change guidance today when we have so much more Runway in front of us. And quite frankly, Q2 is the big thing that everybody's asking about. We are, we're rolling a plus 31% of Q2 last year on our same store sales, we were up 43% in the month of November. And so everybody's wondering, can they comp the comp? We did release our first period numbers so October high single digits and we said we're on track for mid single digits for the entire quarter and now we just got to deliver it. I believe if we deliver that it will change the belief that we can comp the comp. We can count these huge numbers and continue this role that we.
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C
I agree with you because you're kind of at a sweet spot in terms of how much the stocks given back. Now there was a moment in the call, I don't even know these analysts even pay attention to it. You said that particularly Chile's fastest growing income cohort is now households with income under 60,000. Again almost by road. They're saying I guess you must be hurting with the under 60,000 cohort. Did they not listen? You are telling a story that if you offer value for the choosy consumer, they keep coming.
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F
Yeah, that's exactly right, Jim. So I think what they've been hearing from our competition is the low income consumer is pulling back, which is obviously true for the industry, but it's not true for Chile. So we look at, you know, we grew 21% across every cohort with, with, with people under the age of $60,000, we actually grew faster. So as it's pulling back for our competitors, they're actually coming to Chili's and we're winning market share. The reason why that's happening is we've been spent the last two years hammering 1099, improving service levels, upgrading the food and people are coming in and having an amazing experience. That's why we're winning with the low income consumer. That's why we'll continue to win with the local consumer and that's why we'll continue to comp the cop.
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C
You know, it's funny you mentioned you continue to get it better and it's absolutely true. But I was thinking about our friend Julie was at Cracker Barrel. You changed Southwestern queso. After announcement there was a lot of blowback on social media about this Gillick case. So I mean, I guess no matter what you do, any change with social media now, it seems like there's a lot of people who are angry and there may not really be a lot of people who are angry.
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F
Well, I think it's a fair comment, Jim. You know, we did test the new queso. It did very well. It's doing very well. In rest in the restaurants right now, especially with newer guests that have never tried our queso before. But it's clear there's room for two quesos at Chili. So that that current guest that is used to that skill at queso, they told us loud and clear they like the new queso. A lot of them like the new queso. Some of them don't, but they want the old queso back. And one of the big things that we've done in our turnaround is not just listen to team members on how we make their jobs easier, but we listen to the guests of what they want. They want better food, they want better service, and they want better atmosphere. And if skilla kids is a part of that to keep them coming back, we're going to bring it back, and it should be back sometime in December.
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C
All right, well, miss that. You have great social media, you have a terrific customer base, and yet you're still determined to try to turn around. Maggiano's is Maggiano's, which someone might say, if I were in the boardroom, I might say to you, you know what? You're like the best. Maybe it's a distraction. Maybe you should just kind of move on.
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F
Well, it is a much smaller part of the business. It shouldn't impact the business very much. The reality is we want to use this as a test case of whether we could be a portfolio company. You know, our new coo, Rich Kistle, and I, have gone deep in the business. We know exactly what we need to do to get back to Maggiano's, which is Italian American favorite, served abundantly in service. That doesn't feel like a chain restaurant, right?
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C
No.
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F
I think if we do those things, we are going to win in the long term. Maybe it won't be as fast and as robust as Chili's, but there certainly could be a meaningful part of our business. I'm very confident we'll get there. It might take a few quarters, but we are going to get there.
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C
Look, the wine that I had, I did not know was a chain. It was long before I knew you. It was on Route 10 in Hanover, New Jersey, and I said, oh, it's a nice Italian place. Never in a million years did I know as a change. So I totally get that. I just don't want you to be distracted. Eye on the prize from the remarkable work that you've done with Chili's, and that's what I care about more. But if you tell me you're not distracted, I'm. I'm okay with it.
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F
I got to tell you something. At Brinker International, we love winning and we're going to win on both brands.
- [30:57]
C
Fair enough. Okay. I want to leave it on that note. Kevin hoffman is the CEO of Brinker International. That symbol E80. Thank you so much, Governor. Again. Thank you, Kevin. Really appreciate it.
- [31:07]
F
Hey, thanks so much.
- [31:08]
C
Okay, have money back.
- [31:11]
B
Coming up, Otis is on the move after earnings. Kramer rides along with the elevator giants CEO.
- [31:19]
F
Next.
- [31:28]
C
Is Otis Worldwide, the top dog in the elevator business on the rise again. When this company last reported July, the numbers were mixed and the stock went down 12%. I wasn't sure if that was right this morning though. Supported again. And the numbers were a lot more constructive. They delivered a slight revenue beat with a solid 5 cent earnings base. Beat off a dollar basis. Management also raised their midpoint of their full year earnings forecast, which is why the stock rallied a couple of bucks today. People forget that this company makes most of its money from service and maintenance. So it's less hostage to the broader global economy than you'd expect.
- [31:59]
G
Tech.
- [31:59]
C
Does that mean the stock can keep climbing? I know the company sure does believe so because they bought a ton of stock. Let's take a close look with Judy Marks. She's the Chair, President, CEO of Otis Worldwide. Find out. Ms. Mark, welcome back to money.
- [32:11]
G
Hey Jim, great to be with you again.
- [32:13]
C
You keep finding ways to make money. I love them. Obviously we love service and we love the remake. But now we got mod. We like that too. You keep finding ways to take existing business even if they don't build a lot of big buildings and making a ton of money off.
- [32:29]
G
Jim, you know our business is pervasive and almost ubiquitous. When you think about uses for elevators and escalators. We touch all walks of life. With 2.4 billion people a day using our product, that means they need to be safe, they need to be reliable and they need to be current and modernized and refreshed. I'm so proud of the team what we put forward. This quarter, our service sales were up 6% organically. 70 basis points of service margin growth. And that's what drove our 9% EPS beat. But what makes me even more excited is what's coming. And our order book for the first time in new equipment was up since. Since 12-4-23 new equipment orders were up 4. But the modernization business, the refurbishment business, keeping elevators not just safe, but modern, technologically energy efficient. That was up 27% this quarter with 14% organic sales. That's the future. Early innings for that, there are 8 million buildings and 8 million, excuse me, 8 million elevators in the world out of the 22 million that are over 20 years old and in need of modernization.
- [33:38]
C
Also there are some new buildings coming up. They have just a tremendous demand. This JP Morgan Chase headquarters has got to be one of the biggest jobs you've ever had.
- [33:48]
G
Yeah, I'm just, I was proud and humbled to be with Jamie Dimon and the team last week and our team of colleagues. We've worked on this for five years. 89 elevators and escalators. It's a brilliant building. And when I say brilliant, it's an intelligent building and everything it does. It has our most recent and our first instance of Compass with the destination dispatch Infinity, which basically real time manages traffic flow with an AI algorithm for the 10,000 people that are going to be working in that building.
- [34:21]
C
Well, that would be good lesson for a lot of other companies that don't realize how much productivity is being lost as people waiting around.
- [34:30]
G
Well, we don't want people queuing at elevators. We want to move them as fast and efficiently as we can and safely. As you know, safety is our business. And you know, the bit the business in North America, Jim, has just really turned positive. There are two real indicators. I'll share with you. Fifth quarter in a row, our new equipment orders are up in the US and Canada and it's really strong across residential read that multifamily and infrastructure. But just as important in our delivery, our new equipment construction delivery, we encountered some challenges in the second quarter in terms of job site and those challenges are gone. The construction trades are there and everything's moving just like it was before pre Covid. So we're really bullish. We changed our new equipment outlook for the market for the Americas and it's looking really strong going into next year.
- [35:26]
C
In terms of backlog, within I'd say about a mile around me are a number of buildings that were not that people told me were dead because they were commercial. And then we changed the tax laws and now they are all coming alive and they all need to be modernized. It looks like that this conversion business, at least in New York City, hopefully others would look at what we're doing is great for you.
- [35:49]
G
The conversion and modernization business is growing synchronously across the globe. In China alone, our modernization orders were up 150% this quarter on the back of some government stimulus for residential buildings. But we are growing our modernization business everywhere. Orders up 27% globally. Revenue organic, up 14. Our backlogs up 22% in modernization. And we are just in the early days.
- [36:16]
C
Well now I do want people to understand at one point you would have said, well Otis, that's China. People say, oh, that's just China. You really made China a smaller part of the business. But you did have some good. You actually think that maybe it's bottoming in new equipment.
- [36:32]
G
So China's 12% of our global revenue this quarter, similar to last quarter. And it's become a smaller part, not because China's smaller, but because the rest of our business is growing in a very healthy manner. First half of the year, new equipment was down about the market was down 15%. Our orders were down about 20. Second half, including this third quarter, market's down about 10. So we're seeing nice sequential progression. Our orders were down mid single digit for the quarter and we think we're going to end up the second half that way. So I'm calling it stabilization. I think it's great execution by our colleagues. I owe them a ton of thanks. Not just in China, but our 72,000 colleagues across the globe every day, both installing as well as maintaining and modernizing elevators and escalators.
- [37:19]
C
Now you also, you very bold. You said, look, I'm buying the stock. I mean you were very comfortable buying back a lot of stock. I think there are people who said, wait a second, it wasn't that good a quarter. Why is she buying back stock? Well, it turns out that whoever was selling it may not have understood your long term plan.
- [37:36]
G
Yeah, our long term plan remains healthy. Our medium term guidance is strong. Our EPS is strong this year despite macroeconomic challenges, whether it's China, new equipment, tariffs, we've worked through that. And our new EPS guides 5 to 7% what that does. And with the cash we generate, it lets us allocate capital. Our dividend was up almost 8% this year and we bought back about $250 million of stock in the third quarter. We accelerated that because the stock price was low, but we believed in our future and I think it's proving that way. $800 million of share buybacks this year.
- [38:11]
C
No, look, I thought that was great because I think I remember when Steve Tusa switched and made it so yours number JP Morgan analyst who I find is very, very rigorous. When he went with it, I was saying, okay, I got to re understand the story because that when I see a Stock go down 12, I usually think it will, maybe it's right. That was a wrong decline. And it was great that you stepped up and bought Stock because that's what a good CEO does when this. When the market has it wrong.
- [38:36]
G
Yeah, no, thanks, Jim. Listen, our service business is so solid. It's not just going to get us through this year. It's going to get us to 2030. It's going to get us way beyond. We're 172 years old. We're proud of that. But we don't rest and great company, great industry and we really appreciate leading.
- [38:56]
C
Well, terrific. I'll leave it there. Judy Marks chair presidency of Otis Worldwide after very, very strong quarter. Thank you so much. Great to talk to you.
- [39:05]
G
Thanks.
- [39:05]
C
Jimmy's back here for the break.
- [39:08]
B
Coming up, Cramer takes your calls. And the sky's the limit. It's a fast fire lightning round.
- [39:15]
C
Next it is time to talk to the Light round. The coldest wave in planet Sound. And then the lightning round is over. Are you ready, Ski Dag? Time for the light round. Catch up. We start with Mark in Florida.
- [39:38]
B
Mark.
- [39:38]
G
Mark.
- [39:39]
D
Hi, Jim. Thank you for having me on your show. I believe this is the first time my stock has risen like a phoenix from the ashes. It was $4 a share in 2020. Today it's hovering around $17 a share. And that's thanks to the co CEOs of Tom Long and Maggie McCrae which I hope one day you'll have on your show. My belief is rise exponentially as a pick and shovel energy stock supplying natural gas to AI and data centers at the be done.
- [40:05]
C
Which one?
- [40:08]
D
What do you have to say about Energy transfer?
- [40:10]
C
I like energy transfer very much. I've got to tell you. Enterprise Product Partners is the one I do recommend. How to make money any market but M1O because I really like those. But Energy Transfer is an excellent company. Let's go to Wyatt, Maryland. Wyatt.
- [40:23]
D
Jim, thanks so much for taking the call.
- [40:26]
C
Of course.
- [40:26]
D
I have someone here who has a question for you.
- [40:29]
C
All right. Mr. Crimson. Mr. Kramer. My name is Wyatt. I'm nine years old. My dad's an investor and bought me shares of Toast a few years ago. It's up a lot since but that but has pulled back recently. As a restaurant owner, what do you think about Toast as a company and would you do anything with the position ahead of the quarter? Wow. I mean think about that now there's some that kid's got horse sands look, I think think Toast is right now it's trading on the idea that the restaurants aren't doing well. Not that Toast isn't doing well because Toast happens to be doing very well. And you're right to be able to look at that company and make that judgment away from the restaurant business. I would be a buyer of toast, but only after they report on November 4th. And thank you. I like the kid I get. The kid stays. All right, let's go to Joe in Iowa. Joe.
- [41:20]
B
Jim.
- [41:21]
D
My 4 specs DV ELT I got.
- [41:23]
F
In at 31 cents.
- [41:24]
D
I've been buying at the lows, harvesting.
- [41:26]
F
The highs and in the meme.
- [41:28]
C
But this thing is giving, you know, it's losing money. It's losing money hand over fist. I. I would take off. I would take off a little, let the rest run. Your cost base has got to come out right now. Three times your cost bas take out. Then you can't lose money. How about that? Let's go to Steve in Arizona. Steve.
- [41:44]
D
Hey, Jimmy.
- [41:45]
C
Yo, yo.
- [41:46]
D
Time listener for 35 years plus. And if we could only, we could only bottle your energy with your intellect, all the world's problems would be done. Sir.
- [41:59]
C
What?
- [42:03]
D
I got a question about a little company that came across my scanner about a year ago. A seals Q, L, A, E S. It's a small post quantum company.
- [42:16]
C
I love what they're doing.
- [42:17]
D
I've already rang the register three times on this one.
- [42:21]
C
Well, Steve, I'll tell you what I'm gonna have to do. I'm gonna have to go to the man who knows seal screw better than anyone. I'm gonna go to Ben Stodo. And I mean, he doesn't know it any more than I do probably. And you know more than we do. I am not gonna opine on something where this man is an expert and I am an amateur. I don't like being amateur. I will be a professional by the next time you talk about seal skew symbol L, A, E S and that. Ladies and gentlemen of the Lightning round.
- [42:46]
B
The Lightning round is sponsored by Charles Schwab.
- [42:58]
C
It's human nature to be skeptical. Nobody wants to be a sucker. But we also don't want to be so jaded and cynical that we miss the real opportunities that are often right in front of us. So when it comes to the data center build out, we talk about so much, which is making people fortunes. I'm getting tired of all the bubble talk and the constant nihilism. Like it or not, the rise of both AI and accelerated computing are two of the biggest developments of my lifetime. And to think that they have somehow already peaked is downright fatuous. Let me give an analogy. Last night, my executive producer, Regina Gilg and I went to party to Celebrate our friend Oz Perlman's new book. Read your mind. Oh, this is a wonder. You've seen him on our network a bunch of times. He was on Scotty's afternoon show yesterday Beyond. And by the way, he was on 60 Minutes on Sunday. I love the guy. I like to bask in wonder when I'm with him. Not asking a thing, not trying to figure out how he does it. Just how he reads mine, so to speak. Or how he knows your pin number, your birth date or your first date. What's the point? We know there's a trick. I think it loses all its allure once you actually know how it's done. I bring this up because many investors seem to be looking at this whole data center AI story as a giant con. Just one you Joe's Perlman trick production that they don't want to be fooled by. Yet each day something happens that tells us it's very for real. You think cameco is a joke of uranium company Perhaps slow grow with a stock that's done nothing this century. But then all of a sudden the government decides to partner up with Westinghouse for an $80 billion nuclear build out. All driven by power demand for the data center. Well it turns out the Cameco. It happens. 49% West. Yes. The stock jumps 23% yesterday one session. Did OHS put those points on the board or did the market? How about Bloom Energy? Now I've been waiting for this dog to do something for years. Seven years and nothing. Their solid oxide fuel cells never seem to catch on. Too expensive. Nothing. They lost hundreds of millions of dollars. But you know they never gave up. Sure enough blooms now the industry standard on on prem clean non combustible energy at the data center. And they can't make the product fast enough. Last night they reported a true blowout. Quarter stock shot up 18%. I'll take those gains. And you know who made the most money? The believers. That too. Now I know that there are plenty of AI related companies that are on the more dubious side. But these two companies and so so many others are simply out there working hard to try to develop a better way to generate power or to process data super fast so it could think like us at this pace in two years it'll be better than us. Is that smoking mirrors and how to make money in any market I go to great lengths not to recommend but to demand that you pick one speculative stock for in a five stock portfolio that I want you to take alongside your index funds. Why? Because maybe you could own the next Bloom, the next Cameco 2 stocks that suddenly have changed a lot of people's lives in the last couple of weeks. Sure, you might pick the wrong one, but I think it's worth a try, especially in this market where speculative stocks are paying off like I've never seen in my life. And stop thinking that everyone's out the con. You stop thinking that everyone's trying to be owes Perlman, a man who's very upfront, by the way, about the fact that he's not really a mind reader at all. We've been told that is a bubble for roughly three years straight now. That's been dead wrong every step of the way. How long are you going to take those critics seriously? I'm not saying you should bet everything on the next Bloom Energy or that you should own every uranium etf. I just want you to do what I recommend and how to make money in any market. Speculate wisely because it's worth trying to participate in these huge gains as long as you limit it to no more than one position, that's 10% of your entire portfolio. Look, I don't know how long this period is going to last. I do know that fortunes are being made in this year of magical investing, so why shouldn't you have a small risk position so that you could make a fortune too? I like to say there's always a bull market somewhere. I promise I'd find it just for you right here on Man Bunny. I'm Drew Kramer Cinema.
- [46:48]
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. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer.
- [47:29]
B
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