← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 12/16/24
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
Loading summary
Transcript107 lines
- [00:00]
American Express Representative
With Amex Business platinum, you get 1.5 times Membership Rewards points on select business purchases, so expanding your inventory scores more points for your business. That's the powerful backing of American Express Terms and points Cap apply. Learn more@americanexpress.com AmExBusiness what's your boldest, truly ambitious life goal?
- [00:19]
Jim Cramer
Everyone has one and everyone deserves a.
- [00:21]
American Express Representative
Way to get there. That's why Estate street offers a wide.
- [00:23]
Matt Murphy
Variety of ETFs to give all investors.
- [00:25]
American Express Representative
Access to the market and the chance to reach their goals.
- [00:28]
Jim Cramer
Like with DIA, where you get 30.
- [00:30]
American Express Representative
US blue chip stocks in a single trade. Wherever you're heading, getting there starts here with State Street.
- [00:34]
Voiceover Announcer
Before investing, consider the fund's investment objectives, risks, charges and expenses. Visit ssga.com for perspectives containing this and other information. Read it carefully. DIA Subject to risks similar to those of stocks all ATs are subject to risk, including possible loss of principal Alps Distributors Inc. Distributor.
- [00:49]
Jim Cramer
My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad money starts. Hey, I'm Kramer. Welcome to that money. Welcome to Crame America. I'll be my friends. I'm just trying to make a little money. My job Entertain, teach, educate. Call me 1-800-743-CBC. Tweet me at Jim Cramer. Sometimes the action in the stock just seems so obvious, yet you only notice it after it happens. So on a day, we're all anticipating what the Fed will do on Wednesday with the Dow dipping 111 points, SB advancing point three percent, NASDAQ gaining 1.24% to a record high, by the way. I think it's worth reflecting on why we didn't grab hold of certain opportunities, ones that in retrospect seem so obvious so we don't miss similar ones in the future. The first mistake we made, and I am speaking collectively, wasn't truly believing that the fundamentals always matter. I know from experience that this is just not always true. For example, there there are these cold stocks. These are stocks where what's happening at the company and what's happening in the stock are two very different animals. But unlike meme stocks, cold stocks have such a loyal shareholder base they can trade independently of the business for years and years. The most obvious example? Tesla. This rally since the election is one for the ages. It's a move that, in retrospect, everyone should see coming, right? I mean, why not? Elon Musk has been all in with the winner of the presidential election, electric cars are doing much better than everyone else's. Full self driving could be around the corner. But now let's look at what might have kept you out of the stop. If you go back in time to when we found out that Elon was a big time Trump supporter, the media was filled with how long will that last? Chatter. The President elect is famously mercurial, while Elon Musk is obviously brilliant, but equally arbitrary and capricious. The idea that these two could bond in any way before they clash seemed inevitable. Plus electric vehicle sales they were sinking everywhere. We saw adoption slow for all EVs including Tesla in the United States. The competition in China it became cutthroat most Tesla is a relatively high cost producer numbers the estimates they kept going lower. Plus was this lawsuit about him getting his bonus where it wasn't clear that he'd stick around as CEO if he lost. Too easy to pivot to some other part of his empire. Now of course the reality turned out to be quite different. But it was easily missed by the numbers guys on Wall Street. First the public is back into the stock market bigger than ever. The public doesn't listen to Wall street research. Many don't even know what it is. Others think it's worthless. The public do one key thing that the analysts didn't. Musk was incredibly close to Trump. Spent hundreds of millions to help them win. So as long as Trump won, Tesla was going to be a huge winner. You had to be on board, you had to believe it was like a, it was like a sports team. As it is, it turns out Tesla has more driving on self data than Google backed competitor Waymo Data that Trump will buy into maybe and crown Tesla the full self driving winner versus the piecemeal city by city approach away. Maybe it gives them the whole interstate highway system, I don't know. It also helped the GM dropped out of the self driving taxi business, making Musk view more of reality. Tesla is much more than just a vehicle company, it's a tech company on wheels. Of course Tesla's up 86% for the year, with nearly all of that coming after the election when we realize that not only is Musk tight with President elect Trump, he's helping reform the government to Trump's liking. Doing a lot of this or he plans to. Once you get a CEO with that kind of political influence, it's easy for the faithful to imagine the unlimited possibilities. Which means they're no longer constrained by the price to earnings multiple. They'll pay anything for Tesla much Higher than these prices. They're actually insensitive to price. Oh, and did I mention that brokerage firm Mizuho just upgraded the stock from hold to buy off of an improving outlook under the Trump administration A few minutes after the market close. Next up, Netflix. What the heck were we thinking when we didn't own Netflix? Is there a week that goes by where we don't talk about a Netflix show? The big linear TV networks like to do expensive shows about fires and hospitals and police. Fire Country, Hospital PD. It's been their formula since the 1970s. They just keep doing the same thing, failing each year. But Netflix, they come up with things like Jake Paul versus Mike Tyson and it did huge viewership numbers. I tried to get at me, what the hell is that with the word? It didn't work, at least when I was trying, but didn't matter. Millions of people watched it. We're 10 days from the start of Squid Game to take that Fire Country. We watch all sorts of hell fire. We all sorts of program from other countries because we've been taught by Netflix to like subtitles. It's insane how good this company is, honestly. Convincing Americans to read subtitles. That may be the most important cultural event of the 21st century. And yet Wall street doubted Netflix the whole way when it came to the new ad supported subscription cheer. They didn't get it perfect right out of the box, they told us. Well, many of you who followed the company presumed it was a bust. Oh, it was hardly a bus. And it's just going to get bigger and bigger. It's easy to say, of course, that it wasn't. Yet anyone could have had it. But those who spend their lives examining this company thought otherwise. They said stay away. And third, the professionals. Who are we to doubt the professionals? They doubt the adj. Who are we to doubt them? And then there's the multiple. The darn price turnings multiple. Netflix was always selling for 50 times earnings, which is just too high for the people who care about valuation. Those people aren't the general public. They aren't the homegivers and homegamers who love Netflix. They won cold stock. Cold stock. That's up 89% for the year.
- [06:45]
Voiceover Announcer
That was easy.
- [06:46]
Jim Cramer
Then there's Palantir. Now this enterprise software slash defense contractor is a real company. I mean like totally real. It has a tremendous business model. Could change the entire Defense Department budget. But in some ways, Palantir is a renegade company playing by its own rules. Like amc, the theater chain the CEO actually caters. Not to Wall street, but to Main street individual investors. The difference is that when it comes to enterprise software, you don't use price turning small models. You use this difficult to understand rule of 40 where you add the revenue growth rate to the EBIT margin. If the sum is above 40 then you got a winner. Most companies that are losing money can't reach this number, but some can if they have incredible revenue growth. Palantir appear to be losing money hand over fist, but it passed the rule of 40 tests with flying colors. Since then the growth has been accelerating rapidly. The profits are exploding. It's among the fastest growers in the entire industry. Top of the rule of 40 + like Tesla, Palantir tight with Trump. So why didn't we see it? Because the CEO was too brash and the actual business too opaque by nature. What they do is secretive, but there are plenty of renegade traders and investors see they saw it. The kind who made money and got out of AMC near the high when the CEO sold. The kind who made 100 or 200 bucks with GameStop. These people bought Palantir on CEO Alex Karp say so to them it was worth a lot more than anything else, even as it was worth nothing to the Wall street analysts who covered it. Now Palantir has made a major breakout. It is up 340% for the year. Seems obvious in retrospect, but it was anything but at the time. A stock that's been gunned by retail that now, because it's about to have a real earnings breakout, is finally being blown up by institutions. Oh, and the individuals who still like it. They start their buying at 4am they walk it up right into the opening. It's wonders to get up early and see it happen on the crawl sometime, but I don't look, you don't even have to worry. They do the same thing at 4pm right after the closing bell. They take it up maybe like $0.30, $0.50. Usually about a buck. Here's the bottom line. There's a lesson here, and it's a brutal one. Sometimes conventional methods of valuation are completely worthless and you need to embrace the dynamics of cold stocks. House of Pleasure the trick is to recognize when we're in one of those moments in 2025, let's do this. Let's strive to find the stocks of companies that do defy orthodoxy. Some will prove to be wrong, but if 2024 is any guide, the ones that proved to be right will more than make up for any of those losses. I'm going to start the question with Tommy in Texas. Tommy.
- [09:10]
Caller
Yes, Jim?
- [09:12]
Jim Cramer
Tommy, yes.
- [09:15]
Caller
My question concerns the refineries, specifically Marathon Petroleum. Where do we go from here? Buy seller, hold.
- [09:25]
Jim Cramer
I think that our view, our view is that President Trump is very. President Elect Trump very much wants oil to come down in price in order to be able to offset any inflation from tariffs. And I think he's going to make good for that. And that's getting people out of the stocks. And I'm not going to go against that orthodoxy. Let's go to Ian in Virginia. Ian, Jim, how's it going?
- [09:50]
Caller
Would love to hear a little bit about TKO. Seems like they have some pretty big opportunities with 2025 sports rights renewals as well as some continued synergies and then some big opportunities for WWE with international expansion and sponsorship revenue. Love the show. Merry Christmas, Jim.
- [10:04]
Jim Cramer
Thank you and same to you. And I think you're right. This company is heavily motivated to go higher. They just insist it's really a wonder to behold. I'm not getting in front of it. I mean, I just think if you want to own it, be my guess. All right. As we reach the end of the year, it's worth thinking about the reasons why certain stocks shot up in 2024. In 2025, I'll be looking for stocks that defy orthodoxy. Well, man money tonight, can the home builders keep heading higher? I'm invest investigating if some signs of weakness could shake up the Bull Runs foundation, then I'm checking up on a sector that I think is ripe with opportunity. I'm kicking off a series where I'll reveal some top tier names to keep an eye on. And later, with the shares of Marvel technology up over 100% this year, I've got the CEO to break down what's behind this massive move and whether there's more behind it. And stay with Kramer.
- [11:01]
Voiceover Announcer
Don't miss a second of Mad Money. Follow imKramer on X. Have a question? Tweet Kramer. Hashtag 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.
- [11:23]
American Express Representative
You'Ve almost certainly been prescribed a medication before, but did you understand how it worked? The way your medication works in your body shouldn't be a mystery. Learn how Vivgartheitrulo, Fgartigimod Alpha and Hyaluronidase QVFC works by visiting vivgart.com moa. That's V Y vgart.com brought to you by Argenx.
- [11:54]
Jobs Ohio Representative
You have one goal. Find the perfect place to grow your company. You don't have time for empty promises and at Jobs Ohio, we don't have time to make them. You deserve a partner who gets it, someone who understands your vision and the seamless path to sustainable growth. Expect this and so much more in Ohio, where you'll benefit from the best sites, earlier funding and the top industry talent you've been searching for. Bring your business to Ohio and join our centuries spanning tradition of movers and shakers. Get started today@jobsohio.com when you're hiring, the.
- [12:27]
Indeed Representative
Best way to search for a candidate isn't to search at all. Don't search. Match with Indeed. Indeed is your matching and hiring platform with over 350 million global monthly visitors, according to Indeed Data and a matching engine that helps you find quality candidates fast. Use Indeed for scheduling, screening and messaging to connect with candidates faster. Plus 93% of employers degree indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey. Leveraging over 140 million qualifications and preferences every day. Indeed's matching engine is constantly learning from your preferences. Join more than 3 1/2 million businesses worldwide that use Indeed. Listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at indeed.com madmoney just go to indeed.com madmoney right now and support this show by saying you heard about Indeed on this podc indeed.com mad money terms and conditions apply. Need to hire you? Need Indeed.
- [13:33]
Jim Cramer
After two and a half glorious years, is the bull market the home builders finally coming to an end? Two weeks ago, the S&P Homebuilders ETF, the XHB peaked after 146% multi year run back about 10% because we're seeing newfound concerns that the industry's running out of gas. Let's start with the most obvious reason that the builders have taken a breather. Interest rates. Everyone was very excited about getting lower mortgage rates once the Fed finally started easing. But when they kicked things off with that double rate cut in September, that's not what happened. Instead, long rates, which are actually set by the bond market, began to soar because the bond buyers don't believe that the Fed's truly beaten inflation. They're holding back. We got a second rate cut in November and we'll probably get another one on Wednesday. But the bond market still isn't playing ball. The owner, the 30 year treasury bottomed to 3.9% the day before the Fed started cutting rates, then soared nearly 4.7% in mid November. After pulling back earlier this month, the 30 year yield is back to 4.6%. Mortgage rates are hostage to the bond market, so as long as bonds don't take their cue from the Fed, rate cuts don't mean much for housing. Oh, that's dispiriting for homebuyers who might have been waiting for the Fed to cut to get a mortgage. And it's dispiriting for the industry that this long awaited catalyst really hasn't panned out at all. Homes are the most intractable when it comes to price and a big reason why inflation is just too high. The election result didn't help either, because there's a concern that some of President elect Trump's proposals will put upward pressure on inflation, blocking the Fed from cutting rates more aggressively. At the same time, if Trump cracks down on immigration, the homebuilders will have fewer customers and they'll also have to pay a heck of a lot more for labor. More important, last week we heard from Toll Brothers, the nation's top builder of luxury homes. And Wall street certainly didn't love what they had to say. I considered Toll one of the best homebuilders, so this one's important to me. While the the actual quarterly results were fine, even good tolls forward looking metrics, which is what really care about, were less good, some goes. Same goes for the guidance. I mean first the company's backlog is slipping a bit. It's 6.47 billion in October. It's down 7% year over year. That number was still comfortably better than expected. But you never like to see the backlog ebbing down. Then there was tolls guidance. Their full year forecast for deliveries was good, same for average price per home. But their guidance for the current quarter fell short on both these lines. Basically, the guidance seemed to be implying that even though 2025 would have been a slow would have a slow start for Toll Brothers, management thinks they can make it up, you know, maybe in the rest of the year. In short, they're asking to take a leap of faith. And Wall street just doesn't like to take a leap of faith. On the conference call, the fantastic CEO Doug Yearley told an interesting story which was interpreted different ways. Kind of like a Rashmon conference call yearly said that as long rates rose throughout the quarter, the market softened in September and October. So Toll Brothers began to ramp up incentives. Their strategy is to focus on maternal equity and turning over inventory. So they'd rather make concessions to get a sale done rather than stick stubbornly to a higher price, not sell things. But these incentives naturally had an impact on the company's guidance for the current quarter. It's not a good sign when you need to discount your merchandise in any business, including homebuilding now yearly. Also said though that the housing market got better in November. He thinks it's because the end of the election cleared a mental headwind for demand. The economy remains strong, stock prices are high, plus tolls even starting to see evidence that a wealth transfer from parents to millennial homebuyers is happening as parents are helping out with down payments. And as the market got better, the company began to pull back on some of the incentives that it leaned into in September October. And that's why Toll's guidance for the full year looks so much better than the guidance for the current quarter. It mystified people, though. I actually think really told a pretty reasonable story about a company doing what it needs to navigate a tricky environment. Overall though, the numbers are just going in the wrong direction. Your tolls coming off two years in which average selling prices were around $1 million per home, now it's looking at 955,000 for 2025 and lower than that for the current quarter. The saving grace is that they got it for higher deliveries this year, but that was kind of expected. Remember, we were waiting for these rate cuts to unshackle the housing market. The bottom line is that Toll seems to be working harder than investors thought it would have to in order to maintain high volume despite a not so hot environment. So in response, the stock fell nearly 7%. Then it kept falling further on Wednesday, Thursday and then Friday. By the close on Friday, Toll was down, well, roughly 15% from where it closed on Monday, right before the quarter. Now, to be honest, I was surprised about the extremely negative reaction Tolls quarter and I wasn't surprised that it sold off, but it was much more violent than expected. I mean, the most negative thing for the homebuilders last week was the 2025 outlook note from the sector from JP Morgan, which included some particularly bearish comments about the industry, along with estimate and price target cuts across the board. I actually, I thought the piece was extreme, but the JP Morgan analysts explained that they thought the industry's favorable supply, demand debt dynamics going away. In a more normalized environment, you're going to see more price concessions and other incentives which will hurt margins. It doesn't help, by the way, that we're starting to see more existing homes coming back to the market. That's good for buyers but not good for homebuilders. There are some things I could quibble here, but the I like like the idea that homebuilders are too expensive. The stocks, I mean, or that interest rates aren't expected to improve materially in 25, I debate both those. In the end, the Toll Brothers report had some disappointing lines, but I don't think it was bad enough to send the stock down 15% last week. The JP Morgan industry downgrade was disconcerting, but also a prediction for the future, not a new data point. Still, I have to admit I am concerned. There are two big things coming up for the homebuilders this week, and I'll be watching like a hawk Wednesday night. Lenore Reports is another best breed operator. We need to see if they're having some of the same problems as toll. Second, there's the Fed meeting. The Fed's favorite reporter at the Wall Street Journal, Nick Timorous, put out a piece today suggesting we might get fewer rate cuts next year than people are expecting. If the Fed does anything to indicate that on Wednesday, the homebuilders will indeed roll over. Bottom line, I'm not ready to call time of death on the homebuilder bull market yet. But those trends that I just described and that last them forever, right? Things that were good things have gotten tougher for this industry. So keep an eye on these stocks because as long as the bond market refuses to play ball, the home builders, they're going to struggle. Money's back after the break.
- [19:58]
Voiceover Announcer
Coming up, Kramer checks the vital signs of the health care stocks going into the new year.
- [20:04]
Jim Cramer
Next.
- [20:08]
Voiceover Announcer
Building a business may feel like a big jump, but on deck, small business loans can help keep you afloat. With lines of credit up to $100,000 and term loans up to 250,000, OnDeck lets you choose the loan that's right for your business. As a top rated online small business lender, OnDeck's team of loan advisors can help you find the right business loan to fit your needs. Visit ondeck.com for more information. Depending on certain loan attributes, your business loan may be issued by Ondeck or Celtic Bank. Ondeck does not lend in North Dakota. All loans and amounts subject to lender approval.
- [20:40]
American Express Representative
Looking for toys that'll get the biggest reactions?
- [20:43]
Jim Cramer
Yes, please.
- [20:45]
American Express Representative
Walmart has Jaw dropping toys like For Real, Daisy, Yoga Goat, awesome Razor Crazy Cart Shuffle, Whoa, hot wheels, Bluey 3 in one, airplane playset and more. Aren't you gonna say cool?
- [21:01]
Jim Cramer
I'm saving it for the holidays.
- [21:03]
American Express Representative
Smart. Welcome to your Walmart.
- [21:18]
Jim Cramer
Given how much stocks have run the past six weeks, it'd be hard to find good places to put new money to work. But there's always an opportunity somewhere. As we head into 2025, I think that opportunity is going to be in health care. Mainly that's because the health care stocks have been such terrible performers this year, dramatically lagging behind the broader averages. Now, it's hard to bet on health care when the Fed's cutting rates, because these are textbook slowdown stocks that thrive when the climate is not doing so hot. But the election was also a clear negative catalyst for the group, as President Elect Trump wants Bobby Kennedy Jr. To run the Department of Health and Human Services, something that terrifies the industry because he's considered to be a big time vaccine skeptic. Plus, if the second Trump administration tries to dismantle Obamacare like he did the first time, then lots of people now getting subsidies simply won't be able to afford health insurance. That's very risky for the whole health care edifice. But a certain point, all this stuff will be baked into health care stocks and frankly, I'm thinking we're pretty darn close to that. Over the weekend, we ran some numbers to try to quantify the damage that's been done to the health care stocks. I've got to say, it's pretty horrifying when you look at the 62 health care stocks that are in the s and P500, on average, they're down more than 19% from their highs. That seems extreme when so many other sectors are trading at all time highs. And that's why all week I'm going to comb through the health care sector looking for high quality stocks at good prices. Tonight I want to start with one of the hardest hit subgroups, biotech and pharma. The 16 stocks classified as biotech or pharmaceuticals companies in The S&P 500, they're down an average of 21.4% from their highs. It's the hardest subsector. It's pretty decimated out there. Well, what looks good? Let's not overthink this, please. Eli Lilly is at the top of the list. Now we own this one for the Chapel Trust and it's earned its nearly $740 billion market cap. But with the stock in the high 700, it is pulled back almost 20% from its highest in late August. As recently as late October, this stock was still sitting in the low 99 hundreds. But we got hit real hard after reporting a Seemingly not so hot quarter and then it got hit again after the election. Reported the idea that RFK Jr. Is not a fan of GOP dash one weight loss drugs like Lilly's Mount now I think these events are bad reasons to sell the stock first. While Lilly technically responded reported a miss it was just technical and it's technical that it just cut its full year guidance. The reasons for this were important. The company cited wholesale destocking from Mojaro and Zeppelin for the softer numbers. Many investors took that to mean that the demand for the GOP Dash one drugs has to be impaired. But I think Lilly was just being measured with its marketing and promotion at a time when supply was constrained. I don't think there are any issues with demand whatsoever. These are miracle drugs. If anything, I say Lilly's guilty of poor communication, but that's created a buying opportunity for anyone who's missed the stock's tremendous run. You can get back in. As for the political risk angle, I got a chance to speak with RFK Jr. On air last week on the floor when President Elect Trump visited New York Stock Exchange. I asked him directly about these GOP1 drugs. He said basically that his preference is that people never need these drugs because they eat well and get plenty of exercise. I can't argue with that. But as David Rick, CEO of Lilly has said on this show, diet and exercise hard to stick to and there's plenty of people who need some additional help, which is why these wonder drugs can do. Kennedy may not like it that we need these shields 1 drugs, but it certainly doesn't sound like some major crackdown is coming. I think that is completely false. So in the end I see things going back to normal. Freelie Lilly assuming they can deliver some better numbers, which I think is a fair assumption. Now we'll be back to focusing on the incredible growth of these GOP Dash ones. By the way, next year we get the fresh phase three data for a pill version of Lilly's GOP Dash 1 treatment, which could be huge if that data set good. Basically, you're getting a chance to buy Lilly at a Black Friday style discount of nearly 20% year despite its tremendous prospects. What's that like? Oh, next, how about Vertex Pharma? Vertex Pharmaceuticals, which has evolved over the past decade or so from a promising biotech company focused on cystic fibrosis to a diversified pharmaceutical company with a $120 billion market cap. Not long ago that market cap was much higher. I like Vertex because they're working on not developing non addictive painkillers with some potential FDA approvals and product launches on the horizon. Well, Vertex is only about 10 10% or so from its all time high right after the election. In part that's because it reported great quarter the day before the election. After a couple of days of post quarter gains, the stock has pulled back hard for reasons frankly that aren't really apparent to me. Frankly just looks like run of the mill profit taking for stock. It's up 113% since the end of 2021, fueled by the market's apathy toward pharma. But with the core cystic fibrosis business humming and some major painkiller catalysts coming, I think you should buy the dip here. Finally, as I've been saying pretty regularly for the past few months, I think you should consider building a position for some squib, which happens to be the newest position My Chapel Trust as well as headquartered in the hometown where I live. This stock has been hot since the summer as investors have bought into the new strategy put forward by CEO Chris Berner, who took over late last year. Now Bernard is trying to build world class franchises in cancer, cardiology and neuroscience. His plan started paying off when Bristol Myers got approval for the first and a totally new class of schizophrenia drugs back in September, something they picked up from a recent acquisition. Far fewer side effects than the competition. Doesn't hurt that Abby is working on a competing product and failed a major clinical trial of trial last month. But after a nice pop on the AbbVie failure, Bristol Myers has been pulling back this month to the point where it's now down almost 9% from its mid November highs. As with Vertex, I can't give you a good reason for that. Again, I think the pullback simply reflects concerns about the group has nothing to do with Bristol Myers specifically. Hey, by the way, even after rallying some 42% from its early July lows, this stock sells for just 7.9 times next year's earnings estimates. Boy, that you know that's the cheapest pharmaceutical company in the S&P 500. Aside from the unprotected Moderna, Bristol Markets also supports a 4.4% yield. That's the second best of the group. So to recap, the fundamentals improved dramatically in the second half of this year. The stock's still dirt cheap and you're even getting paid to wait with that juicy dividend which was just boosted last week. So here's the bottom line. With so many groups hitting new highs, I think it's worth taking A step back and putting money to work in one of the most hated groups out there, health care. These stocks have simply gotten too cheap given its prospects, especially Vertex Pharma and Bristol Myers. Stick around for the rest of the week. I'm going to give you some more fresh health care ideas at cheap prices. Let's take some calls. Let's go to Ron in New York. Ron, hello Jim, six time caller. Wow. I'm interested in Pfizer. I own 300 shares and I don't know what to do with it. I bought it at around 35 and I don't know if it'll ever see that again. I don't know whether to buy more or to sell it. I don't want you to buy more. I don't want you to buy more. We need to see two good quarters in a row. We haven't had that, but it has a 6.8% yield and that yield is safe. So on your sixth call, I would say hold. Don't buy, don't sell. Let's go to Richard in California. Richard, hi Jim.
- [28:03]
Caller
You're a true legend. Thank you for all your dedicated years helping you.
- [28:07]
Jim Cramer
Thank you.
- [28:09]
Caller
Okay, so listen, I'm concerned about amgen's cholesterol lowering PCs, canine injection drug Repassa, which is their third largest drug in their portfolio with around 2 billion in worldwide sales because it's being displaced by both in the United States and in Europe by new competition. The competition is coming from Experian Therapeutics who creates a drug called bemidoic acid once a day oral pill which is sold in Europe by the hiki Sanko, a $50 billion company. They're growing scripts in Europe like gangbusters at now half a million patients. Experian labels the drug Necrotol and Necrostat here in the US which is a combo drug. And now insurance is covering the cost of the drug. And this year the FDA granted Experian drugs both their drugs a primary prevention label. They're the only statin alternatives with primary prevention label. The second concern in Europe, the ema, European Medicines Agency in Germany have recommended bemadoic acid ahead of PCST 9.
- [29:04]
Jim Cramer
Well, I'll tell you the truth, I actually am still a believer in Repatha. I know that that's problematic to what you just described, but I think that Repatha is a great drug. My problem with Amgen is that there was a lot of hype about their GLP1 equivalent and the studies just didn't come through. So I guess we both find reasons. Richard, you're a very good caller. I've known you many, many times and I think your analysis might be better than my analysis. But I'm saying stay away from Amgen and you are too. Let's go to Allen in Pennsylvania. Alan.
- [29:38]
Caller
Hi, Jim, this is Al from Pennsylvania. I'm looking to see what you think of symbol BI IB Biogen.
- [29:45]
Jim Cramer
I'm not a fan of I do believe that if you're going to go for Alzheimer's drug, you're going to go for Eli Lilly, which is not talked about that much because there's so much talk about Lilly's GLP1. But I think their Alzheimer's drug is going to be a great standing over multiple years. I look as we head into 2025, I think it's time to take a look at the health care stocks which in my view have been hated for too long. There's much more Mad Money, including my sweet Marvel Technologies after the company's early December earnings beat. Marvell is doing so well. Plus, I'm telling you where I stand on opportunity in individual stocks following some incredible conversations with Americans and club members. No your calls, Rapid Fire, tonight's Dish of Lightning round. So stay with Kramer. The biggest winners of the year just kind of keep winning in December. And that's exactly what we're seeing in Marvell Technology. Semiconductor companies now up over 100% year to date. Doesn't hurt that they report a terrific quarter two weeks ago with strong tailwinds from their AI related businesses. One is at the stock up 23% in a single day. Since Marvel's kept running. So can the momentum continue? Let's check in with the hard charging Matt Murphy, the chairman CEO of Marvel Technology. Get a better read the situation. Mr. Murphy, welcome back to Mad Money.
- [31:01]
Matt Murphy
Yeah, thanks Jim, for having me.
- [31:03]
Jim Cramer
Okay, so I'm going to tell you, Matt, in all, with all the executives I've met, you have been the most plain spoken about the revolution that was occurring in your company. You said it out loud to everybody and there were a lot of skeptics. But could you walk through the narrative as you were very clear that I was going to be the future for you?
- [31:21]
Matt Murphy
Very much so. Look, three years ago in 2021, we did an investor day. We laid it all out there that in the cloud and in the data center, the trend was going to be towards custom silicon and custom silicon for AI. The last three quarters we've been saying that on our earnings calls. In fact, I came on your show in April after a day and we laid it all out. $75 billion opportunity for Marvell, targeting 20% market share in custom AI chips. And now you're starting to see in our financial results in our third quarter and our Q4 guide, tremendous momentum. But it's all, it's been out there.
- [32:02]
Jim Cramer
It's been out there to the point where you even fly. You said, jim, please look at the press release we had which was Marvell expands strategic collaboration with AWS to enable accelerated infrastructure. It was December 2nd, so I looked at it, I said, wow, I think that's really big. It turned out to be huge.
- [32:20]
Matt Murphy
It's huge. Tell us why it's unprecedented, I think in two ways. One, it's actually a two way relationship. So on the one hand there's a five year arrangement where AWS is going to buy silicon chips from us, both for custom AI and for networking. So that's one part of the arrangement, five year deal. But the other side of it, which is very strategic, is AWS is our supplier. We use WC for our design of our chips in the cloud. We're an early adopter here. So it actually works both ways. Both companies are leaning in to support each other, to drive the growth. So it's very unique.
- [33:01]
Jim Cramer
But we would be wrong to think when we think of hyperscalers, that there's just one that's a customer of yours. You've got others?
- [33:07]
Matt Murphy
We do, yeah. We do business with all the top four U.S. hyperscalers. We're shipping custom silicon chips to all of them and then for two of them we're developing custom AI accelerators.
- [33:19]
Jim Cramer
But this does not necessarily mean to the exclusion of work that you've been doing with Nvidia.
- [33:24]
Matt Murphy
No, look, Nvidia has been a tremendous long term partner of Marvell and we work with them in a very complimentary way because we have a very strong business in chips that are for the connectivity inside the data center, getting the data on and off the chips and into the network. So we work with them on those types of products as well.
- [33:41]
Jim Cramer
Can you explain to people that every chip, everything, custom silicon, every bit of it is needed? It's not like, well, if you win, somebody's losing. This is just one where everybody needs your stuff.
- [33:52]
Matt Murphy
Absolutely. Look, we are in an unprecedented AI super cycle for AI as a service, but also for the silicon TAM underneath it. This is unbelievable. I've been doing this for 30 years. I've been through every major one of these cycles. PCs, smartphones, digital cameras, cloud computing, you name it. This one's bigger than all of them.
- [34:13]
Jim Cramer
Okay, so where are you seeing people use it? Because we have still have skeptics. Matt, will you tell the skeptics other than the fact that you plunked down $1 million because people weren't listening when your stock was at 72, it's at 125. What are people doing with these chips with your custom silicon that you know that they don't?
- [34:31]
Matt Murphy
Yeah, think about it this way. Think about, think about the data center capex that's being spent hundreds of billions of dollars a year and these are smart people.
- [34:40]
Jim Cramer
That was very smart.
- [34:42]
Matt Murphy
And so what you want to do if you're going to spend that kind of capital and the OPEX as well because energy so critical, you've got to optimize your cloud, you've got to optimize your system. That means every watt of power you want to squeeze out in terms of performance and power savings. And so when you optimize or customize all the silicon up and down the stack, you can get that, that benefit. So there's a huge economic reason that these companies want to go do that. But it's not a zero sum game.
- [35:11]
Jim Cramer
Right.
- [35:12]
Matt Murphy
This, this market size is enormous today and it's going to be astonishingly large in the future.
- [35:18]
Jim Cramer
Why is it so hard for people to understand your critical role in all of this until now? Yeah, you told everybody.
- [35:25]
Matt Murphy
Look, I think, I think it's a, it's, it's, to be fair, I think it's a combination of we've had a strong story, we've had strong proof points along the way but our third, third quarter results and our strong fourth quarter guide, you know, biggest beat and raise we've done as a company, I think it just sent the message that it's here, it's not in the future, it's already starting same time you've had these.
- [35:49]
Jim Cramer
Other businesses that are, you know this is sector that we've been talking about. Yeah, we've got some sickle business that I think especially with an easier Fed they could turn up big and they're not small.
- [36:00]
Matt Murphy
Yeah, no, that will have a big impact on it. And in fact when I came on here in April, you gave me a little bit of a bad time about those legacy businesses but fairly so major times Matt. But, but, but guess what, those, those businesses like an enterprise, networking carrier, telco, those types of businesses, we guided Those businesses up 15% mid single digits in our fourth quarter. So they are recovering now. So that's really the base foundation kind of bedrock of Marvell in terms of profits and eps. But then we have the growth kicker from the AI which is a much bigger market.
- [36:35]
Jim Cramer
Why are people always say putting words your mouth. A guy, two wise guys said, oh, Matt's going to buy alter. And I said, well, I don't think so. Then I said, well, Matt's going to leave. He's going to go to Intel. I mean there's just this kind of weirdness of a yesteryear thing that Intel's got going versus what you guys are going.
- [36:55]
Matt Murphy
Yeah, look, I said on my earnings call, I am so, I'm so blessed to be at this company. So blessed. It's a, it's an amazing.
- [37:03]
Jim Cramer
It didn't start easy. No. You should tell people you almost. I thought you were going to go bankrupt at one point.
- [37:08]
Matt Murphy
Yeah, it was a real, it was a turnaround situation. Very serious set of problems. There's a delisting notification from nasdaq. The board had turned over. Right. There was no cfo. The auditor had quit. I mean, there was a lot of things to deal with. And the bones of the company were, the engineering bones were good, but the products were all in consumer tech. So the transformation that we drove me and my team in this company is to a pure play custom AI data center company. Well, I. 75% of our revenue.
- [37:40]
Jim Cramer
You were one of the.
- [37:41]
Matt Murphy
It was zero back then.
- [37:42]
Jim Cramer
You saw it coming and you made some acquisitions and some of it was a little bit of luck. But you told me, look, Jim, I think this one may have something big in it. You were the most transparent executive I have ever met.
- [37:53]
Matt Murphy
Yeah.
- [37:54]
Jim Cramer
And all I can tell people is this guy told you what was going to happen and he even finally in the end just bought stock in the open market because you weren't listening.
- [38:02]
Matt Murphy
Yeah.
- [38:02]
Jim Cramer
And well, what a great run.
- [38:04]
Matt Murphy
Yeah.
- [38:04]
Jim Cramer
Matt Murphy, Chairman CEO of Marvell Tech mrvl. Go look at the history of this company. You will not believe how big and how great it is versus what Matt inherited many years ago. Man. He's back after break.
- [38:17]
Voiceover Announcer
Coming up, Kramer takes your calls. And the sky's the limit. It's a fast fire lightning round.
- [38:24]
Jim Cramer
Next, it is time for the white biceps. I shouldn't know the course doc was there, my staff pissed. But you don't play this out and then the lightning round is over. Are you ready skeet dads for the lightning round? Crazy round? I'm going to start with Brian in Colorado. Brian.
- [38:51]
Caller
Jim, how you doing?
- [38:52]
Jim Cramer
I am doing well, Brian, how about you?
- [38:55]
Caller
I'm doing great. I hope they give you some time off over the holidays here.
- [38:58]
Jim Cramer
Oh, I hope so too. I got a lot of other stuff I gotta be cooking on, pal. Let's go to work.
- [39:02]
Caller
What do we got going into 2025? I wondered how you feel about gold miners. Specifically Newmont Corporation Ticker Nem.
- [39:11]
Jim Cramer
I think New mine is terrific and I think you'll do well. I think that we have to have a hedge and it can either be Bitcoin or gold or both. Let's go to Joe in New Jersey. Joe.
- [39:21]
Caller
Hi, Jim. Happy holidays.
- [39:23]
Jim Cramer
Same to you, Joe. How you been?
- [39:26]
Caller
Oh, good, good. Jim. Jim, Dow Chemical.
- [39:29]
Jim Cramer
What do I do? Chemical? I'm deciding that it's just a China stock. It seems to trade with the materials and the materials are trading off of China. It doesn't matter if it's even true or not. But that's why this thing keeps going down and I'm not going to touch it until the. Until January because now we got everybody out of a loss on the darn thing. Let's go to Jade and I'll Ohio Jade. Jim, great to be here, man.
- [39:50]
Caller
I just want to say a big.
- [39:51]
Jim Cramer
Thank you from the bottom of my heart for what you do to people. Thank you to my friend back at home, Carla. Congrats on the baby girl.
- [39:59]
Caller
Jim, what are your honest thoughts on.
- [40:00]
Jim Cramer
All right now, all. She's fine, but I don't like the insurers. I. The only one I'm recommending is Chuck. Let's go to Stuart in Florida. Stewart.
- [40:10]
Caller
Professor Kramer, how are you this evening?
- [40:13]
Jim Cramer
I'm doing well. Thank you for giving me tenure. What's going on?
- [40:17]
Caller
Well, I wanted you to know that I'm a club member and I had the pleasure of meeting you and Jeff at the annual meeting in Carl Gables.
- [40:27]
Jim Cramer
It's going to be fun next year. We're already planned. It's going to be great. I need you to be there. How do we. How do we go to work together? What are we thinking?
- [40:34]
Caller
I also have to thank you for helping me improve my account balance by over 40% this year to date.
- [40:41]
Jim Cramer
Thank you. That's what we want. We want club members to make a lot of money. That's the point. There's simple. It's a simple, simple goal. Let's go to work.
- [40:51]
Caller
Well, about six months ago, I bought into a small position in this company and it immediately popped up 20%. But since then it's been churning and consolidating and going back and forth between 15 and 20% up. And it missed earnings in November by a Few pennies. And so I was wanting to get your opinion on CLH in Harbors.
- [41:20]
Jim Cramer
Doing the. Doing. All right. So my take, my take is that you. It's time to ring the register. It's up 40%. It's a very event oriented stock. I think you should take profits in Clean Harbors. I don't like the chart either, not that that's necessary, determines things. But the stock's up a great deal. Let's go to Timothy in Florida. Timothy. Hey, Jim, good evening.
- [41:42]
Caller
Thanks for taking my call.
- [41:43]
Jim Cramer
Can I say hi to Jayla and Laney? My Stock is Sirius XM Radio 1 that cut the numbers. The numbers aren't there. The numbers aren't there. We got to move on from that one. I don't care that it's already down, but the numbers are not there for si. Let's go to PAL in New Jersey. Pal. Hey, Jim, Booyah. How are you? I am doing well. How about you?
- [42:05]
Caller
Good, good, good. Thanks for taking my call again.
- [42:07]
Of course.
- [42:08]
Happy holidays to your family and your amazing, amazing.
- [42:11]
Jim Cramer
Thank you, sir. Thank you.
- [42:13]
Caller
May the Santa rally continue. And my question today was about Reddit.
- [42:19]
Jim Cramer
I know I'd like Reddit, but you know what? Reddit now has a parabolic chart and I don't know what to do about it. It's just going bonkers and I wish that it has a pullback before I can recommend it. It's an extraordinary chart and it's just moved up too much. Let's go to William in New Jersey. William, Jim, it's good to hear your voice. Thank you. I've got a question about press@shutterstock.com I go to them and I digital imagery. I don't understand why it's not doing better. And if I don't understand why it's not doing better, then I think there must be something else to it that I can't figure out. So therefore I cannot opine on it. And that, ladies and gentlemen's conclusion of the Lightning Round.
- [43:06]
Voiceover Announcer
The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer takes stock of stock picking in an uncertain market. Mac next.
- [43:36]
Jim Cramer
When you get to talk to investors, I mean, invest in club members or people who just like to talk about stocks, it becomes very clear that individual stocks alongside index funds, not by themselves, alongside the right way to go. This Saturday, while signing bottles of my wife's mezcal, I talked to people who turned against the orthodoxy of index funds with a vengeance. Now, sure, they own some and they aren't going to leave the fold entirely. But. But boy are they tired of being patronized by an industry that's been conquered by those who think it's foolhardy to pick individual stocks. The conventional wisdom of financial industry says your idiot if you try to pick stocks. So just put your money in index funds that mirror the averages. But why don't you tell that to a man I'll call Robert I met at Cherry Hill, New Jersey Total Wine and more. First he thanked me for allowing him to believe in himself. Second, he said that because he did believe in himself he was able to make a judgment that Nvidia was the next big thing. Yes, he was helped by me and I was grateful for that. But he described his thought process and the repeated buys during the 2017-2018 period in the wake of my renaming Everest my rescue mutt Nvidia. I acknowledge it was a silly thing to do. He said not so fast. Let me give you the outcome. Robert was up $100 million on the Nvidia he bought in the time when I hounded everyone to buy Nvidia $1 million even with inflation, that's real money. I thought I heard wrong so I went over it again. I said 100 million. He said yeah. I quit his wife 100 million? She said yeah. I went back again and I said listen, I mean you don't tell me. He said 100 million. He'd simply come down to buy a bottle of leases for us forward and pay his respects. Thank you for giving him permission to invest how he saw fit, not just in index funds. After went through the picture taking session I asked him again, please don't exaggerate. He knew the lots, he knew the days. He wasn't exaggerating. I'll talk about a satisfied investing club member too. After that I asked everyone in line what they were buying, what they were seeing. I got a mix of people who like the index funds but really we're doing a lot of the buying of stocks that we like at the club by like TJX in particular I also heard people buying Ollie's which you'd recommend on Mad Money. Last week I told everyone they're both superb with lots of room to grow. Now I didn't come down to the bottle signing in order preach the gospel of owning individual stocks. That's for club members like those who'll be on Thursday's club call. But by the time we were done with a three hour session I found myself actually saying well wait a second, don't forget the index fund component. It gives you a Little bit more of a life gives you a safety blanket. If you got some money set aside an index fund, I think it's much easier to take necessary risks with your individual stock portfolio. Balance is the key. But I did feel emboldened to come out here tonight and tell you that something's going wrong with the industry. I used to love Wall street so enamored with index funds. They're either making a fortune from selling these things or they really do think their clients are morons and they just don't want to say it. Sure, they have Warren Buffett on their side with his folks. He attacks on hedge fund managers that include a patronizing attitude toward individual investors who can't compete so they should surrender to, yes, index funds. And he's too sainted to disagree with. But look, if Robert were the only one who made a lot of money picking individual stocks, then I'd say, you know what? Ebay's won the lottery. Forget about it. And you could say the people who came to Total Wine are self selected because of the investing club. But I'm not buying it. I'm saying that the wizards of Wall street and their journalist doppelgangers have gotten too proud of themselves for convincing millions of people to surrender to the mediocrity of index funds lock, stock and bow. And I think their era may finally be ending. And if I helped, if I helped it to end this year with the investing club and with tales of people making tens of millions of dollars by picking stocks. And here's what I have to say. I'm just getting started. Alex says, Always the bull market summer. I promise I'll find it just for you right here on Mid Money. I'm Jim Cramer and I'll see you tomorrow.
- [47:37]
American Express Representative
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 Krame 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 wherever the road.
- [48:16]
Voiceover Announcer
May take you, Discount Tire and Continental Tire get you there safely with the perfect combination of style, comfort and price. Get a set of Continental tires at your local discount tire store or online@discounttire.com Discount Tire let's get you taken care of.