Mad Money w/ Jim Cramer 1/22/25

Summary

Mad Money w/ Jim Cramer – Episode Summary (January 22, 2025)

Host: Jim Cramer
Produced by: CNBC
Release Date: January 23, 2025

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1. Market Overview and Federal Reserve Commentary

Timestamp: [01:22]

Jim Cramer opens the episode by discussing the evolving relationship between the Federal Reserve (Fed) and the stock market. He highlights a shift in focus from Fed policies to business-driven market movements, suggesting that the Fed's influence may be waning in the current economic landscape.

• Cramer states, “My mission is simple to make you money. I'm here to level the playing field for all investors.” ([01:22])

• He contrasts the past dominance of Fed decisions under President Biden with the current administration’s (President Trump) approach, emphasizing that businesses now play a more significant role in influencing the market rather than Fed policies.

• Key Points:

  • Fed's Diminished Role: The Fed's rate changes and policies have historically driven market movements, but recent shifts indicate a potential decline in their influence.
  • Business-Centric Market: Under Trump, there is a renewed focus on business strategies and deals influencing the stock market.
  • Animal Spirits: Cramer introduces the concept of "animal spirits"—business optimism and activity driving stock prices, independent of Fed actions.

Quote:
"Stocks are going to trade on earnings, not just on interest rates. And I think that frankly, is terrific." ([04:45])

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2. Political Influence on the Economy and Investments

Timestamp: [04:45] - [21:04]

Cramer delves into President Trump's active engagement with CEOs and his hands-on approach to economic strategies, contrasting it with the previous administration's more restrained stance.

• Engagement with CEOs: Cramer notes Trump's unprecedented communication with business leaders, facilitating large-scale deals and fostering a pro-business environment.

• Significant Deals Discussed:

  • Project Stargate: A massive investment in data centers worth $500 billion, boosting stocks like Oracle, SoftBank, ARM Holdings, and Nvidia.
  • TikTok Acquisition Negotiations: Trump’s aggressive stance in encouraging ByteDance to sell TikTok at a reduced price, likened to "the Godfather treatment."

• Energy Sector Transformation:

  • Oil and Gas Strategy: Trump's reformation of the oil and gas industry aims to lower domestic prices and counteract Russian energy influence.

• Market Implications:

  • Shift from Fed to President: Cramer posits that Trump's policies and initiatives may overshadow Fed decisions in steering the stock market.
  • Bull Market Across Sectors: Emphasis on bullish opportunities arising from Trump's economic maneuvers.

Quotes:

"He may not matter anymore. Interest rates always matter. That's not going to change." ([03:30])

"I am witnessing a changing of the guard from Powell to Trump as the most important person in the economic firmament." ([17:00])

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3. Energy Market Analysis with Rusty Brazil

Timestamp: [13:36] - [21:45]

Jim Cramer interviews Rusty Brazil, founder and executive chairman of RBN Energy, to discuss the potential impacts of President Trump's energy policies on the U.S. energy market.

• Discussion Highlights:

  • Drill Baby Drill:

    • Cramer’s Perspective: Advocates for increased drilling to boost production and lower prices.
    • Brazil’s View: Points out that increased production could lead to lower prices, potentially reducing dividends for energy companies.

  • National Energy Emergency:

    • Cramer's Argument: Claims an unforeseen energy crisis driven by the surge in data center demand and the need for diverse energy sources.
    • Brazil’s Counterpoint: Emphasizes the role of courts in potentially blocking presidential orders aimed at increasing fossil fuel production.

  • Natural Gas and Coal:

    • Natural Gas Prices: Expected to rise due to increased demand and limited production capacity.
    • Coal’s Renaissance: With Trump’s support, coal producers like Alliance Resources Partners LP may experience a revival despite environmental concerns.

• Key Insights:

  • Regulatory Challenges: President’s orders to boost energy production face legal hurdles.
  • Market Volatility: Natural gas prices are poised for significant fluctuations, presenting both opportunities and risks for investors.
  • Investment Opportunities: Coal companies may see renewed interest and potential growth, especially master limited partnerships offering high yields.

Quotes:

"As the President, if I saw the market go down for a couple of days, I'll call up Elon Musk and say, hey man, let's get something positive." ([20:32])

"Natural gas has been held down for a long time... we're going to start exporting a lot more LNG. Prices are going to go up." ([21:20])

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4. Stock Highlights and Recommendations

Timestamp: [08:37] - [21:45]

Throughout the episode, Cramer engages with callers, providing stock recommendations and insights based on current market trends.

• UPS vs. FedEx:

  • UPS ([08:37]): Considered due for an upside surprise; suggests moving to FedEx instead.
  • FedEx ([08:51] - [09:18]): Praised for better management compared to UPS.

• Tesla Concerns ([09:41] - [09:58]):

  • Current Status: Stalled stock due to recent earnings.
  • Future Outlook: Requires new, innovative developments to drive growth.

• Netflix Performance ([23:21] - [36:56]):

  • Earnings Report: Delivered a strong quarter with 19 million new subscribers, surpassing expectations.
  • Content Strategy: Successful original programming and strategic sports broadcasting to retain subscribers.
  • Growth Drivers: Ad-supported plans and international expansion contributing to revenue growth.
  • Cramer’s Stance: Continuously recommends Netflix, citing its robust performance and market momentum.

• Additional Stocks Discussed:

  • Dogtopia (Ad Segment)
  • Google & Arista Networks ([31:18] - [31:52]): Positive earnings and growth prospects.
  • Fubo TV ([30:46] - [32:00]): Acknowledged as attractive speculation despite losses.
  • Wingstop ([35:34] - [36:56]): Expressed concerns over inconsistent performance and management communication.

Notable Quotes:

"If you have to ask me which is which, then you aren't ready to handle the next four days, let alone the next four years." ([21:04])

"I'm going to give you a two for. I'm going to say the same thing about Palantir. Palantir and App Lovin should go get married." ([34:03])

"We were able to bring a big audience, a young audience, a more global audience in linear television." ([31:45])

---

5. Lightning Round Highlights

Timestamp: [30:46] - [36:56]

In the Lightning Round segment, Cramer addresses multiple caller inquiries, offering quick takes on various stocks and investment strategies.

• Beyond (First Caller):

  • Advice: Recommends holding stock in profitable companies, emphasizing the importance of current earnings.

• AppLovin and Palantir (Repeating Callers):

  • Stance: Positive outlook with continued growth potential; advises buying on dips.

• Sport Radar ([39:02] - [39:20]):

  • Recommendation: Advises to buy or hold, noting profitability and growth.

• Wingstop ([35:33] - [35:43]):

  • Concern: Warns about inconsistent performance and lack of clear explanations for stock movements.

• Comfort Systems USA:

  • Recommendation: Strong endorsement as a "must-own" stock for new investors.

Notable Quotes:

"I only want to Recommend Companies in 2025 that are making money now. We're going to Russell in New York." ([33:34])

"H Vac. And that, ladies and gentlemen, is the conclusion of the Lightning Round." ([36:56])

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6. Closing Remarks and Final Insights

Timestamp: [37:20] - [45:13]

Cramer concludes the episode by addressing an impending energy crisis, elaborating on the urgent need for diverse energy sources to meet the surging demand from data centers and other infrastructures.

• Energy Crisis Factors:

  • Industrial Growth: Lack of recent industrial expansion has left energy infrastructure underprepared.
  • Nuclear Power Revival: Plans to reopen and build new nuclear plants to meet demand.
  • Coal’s Potential Comeback: Despite environmental concerns, coal may see renewed usage due to energy shortages.

• Investment Opportunities:

  • Alliance Resources Partners LP: Highlighted as a profitable coal producer with attractive yields.
  • Coal as an Investment: Suggests coal might experience a renaissance, presenting potential gains for investors.

• Final Thoughts:

  • Bull Market Somewhere: Emphasizes the resilience of the market, assuring listeners that opportunities exist across various sectors.
  • Commitment to Making Money: Reiterates his mission to help investors navigate the market for profit.

Quote:

"I hate to add the list, but we have one serious, totally unforeseen energy crisis. And if we don't work fast, we're going to be overwhelmed by it." ([37:20])

---

Conclusion

In this episode of Mad Money, Jim Cramer provides a comprehensive analysis of the current stock market dynamics, emphasizing the shifting influence from the Federal Reserve to active presidential policies under President Trump. He explores significant investment opportunities in sectors like energy, technology, and consumer services, supported by expert insights from Rusty Brazil. The Lightning Round offers listeners quick, actionable advice on various stocks, reinforcing Cramer's commitment to educating and guiding investors toward profitable decisions.

Disclaimer:
All opinions expressed by Jim Cramer on this podcast are solely his own and do not reflect the opinions of CNBC, NBCUniversal, or their parent companies. Investors should conduct their own research before making investment decisions.

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Notable Quotes with Timestamps:

• "Stocks are going to trade on earnings, not just on interest rates. And I think that frankly, is terrific." ([04:45])

• "I am witnessing a changing of the guard from Powell to Trump as the most important person in the economic firmament." ([17:00])

• "Natural gas has been held down for a long time... we're going to start exporting a lot more LNG. Prices are going to go up." ([21:20])

• "I hate to add the list, but we have one serious, totally unforeseen energy crisis. And if we don't work fast, we're going to be overwhelmed by it." ([37:20])

Transcript

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[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 now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. I got people, my friends. I'm just trying to make you a little extra money. My job is not just to entertain, but to educate, to teach you. So call me at 1-800-743- CNBC or tweet me. Jim Cramer. It happened. We did a show this morning and we didn't talk about the Federal Reserve other than when I said to my squawk on the street, colleagues, isn't it great not to talk about the Federal Reserve? Meta commentary doesn't count. So on a day when The Dow advanced 131 points, the SB gain point 61%, the NASDAQ jumped 1.28%, I want to talk about an amazing change and it's in the ether the idea that we won't have to care so much about what the Fed does to help or hurt business or even what they say. Instead, we can focus on what business will do to help you Ever since COVID we've had to deal with these endless hammerings about what the Fed will or won't do. As the pandemic raised, the Fed cut rates and cut rates. Their every move reverberated through the stock market, sentence soaring. Then when the Fed switched to being restrictive and created a bear market to knock out hundreds of companies that just come public, stunting the growth of many domestic companies. When the Fed switched directions again to easing last September, lots of stocks went up. A way to go back down when it turned out that the bond market wasn't playing ball. Got this weird market where we started doubting the Fed's every move because the bond bullies kept contradicting it. The Fed cut short rates, only see longer term rates go higher. Lots of back and forth on that one crazy moment. But you had no choice because under Biden, when it came to stocks, Jay Powell and his Murray band of governors and regional presidents, well, they were the only game in town. But then President Trump takes office and suddenly we don't really care what these Feds have to say. Who were they anyway? You know why? Because it may not matter anymore. Interest rates always matter. That's not going to change. However, out here it feels like we may be back in the world that I remember. A world where the Fed only plays a role at extreme moments. A world where we don't have to guess and guess and guess their next move or even listen to what the regional governors are saying because it won't be that important in the barges. Lots of times the Fed might have a bias, but it hasn't always had that much impact on the action. The Fed always had the last word under Biden, though. Before him, though, business is what mattered. Homework about business, not homework about the Fed. And in that kind of world, there are some really terrific investing opportunities for you and for me. Or to put it as bluntly as I can, this market is no longer a word of the Fed. Stocks are going to trade on earnings, not just on interest rates. And I think that frankly, is terrific. Now in some ways what's happened is we now have a President who's friendly with big business in a very hands on way. He's speaking to more CEOs than any president I've ever seen. In the last 24 hours, he's probably spoken to more than any president I've ever seen. He's putting together gigantic deals like he's a business person. The Stargate is planning to build so many Data centers, only $500 billion worth, that the stocks of Oracle, SoftBank, ARM holdings and Nvidia went through the roof this morning on swag the Street. Rene Haas, CEO of aam, told me that Stargate could create tremendous demand for all datacenter equipment, especially high end chips from Nvidia. To those who thought that there might not be enough customers in videos latest and greatest product, Blackwell, think again. Right at this moment, President Trump is trying to put a deal together with the United States government, partnering with someone to buy TikTok or its Chinese parent company, ByteDance or whatever. Yeah, now this one's totally wild. Get this. He's basically saying to China, look, you can sell us this very valuable asset right now at a reduced price, mind you, and we're going to run with it and we're going to, we're going to run with the American company of our choice or we can just close it and make it worthless. It's your choice. Yeah, he's literally making an offer that the Chinese can't refuse. He's given the Godfather treatment. Why can't other people see that? That's what's happening? At the same time, he's remaking the oil and gas business on the fly. I think Trump wants to bring the price of oil gas down in a 2 for 1 deal, getting inflation lower here, beating the Russians dry because they need oil and gas prices to stay high in order to fund the war in Ukraine. Two for. And he's making it clear that he favors more commerce with China, something that Wall street sees as a possible win for American semiconductor companies whose exports have been restricted because of fears probably well grounded, that China would use the chips for military purposes. I go through this litany for one reason, one reason only. Hate them or like them. The level of activity is creating something that the Fed hasn't been able to do. It's creating an economy in a stock market dominated by what we call animal spirits. And the animal spirits are good for stock prices. Before going to this term animal spirits, let me just say, first of all, it's always bothered me because it kind of obfuscates rather than lightens. It's like when I asked my former wife, Karen Kramer, tremendous stock trader, why a certain stock was going higher. And she say, more buyers and sellers, what good is that? But the fact is, whether you like Trump or hate him, he's now the son that the economic solar system revolves around. He and not Jay Powell most likely determine the direction the stock market and he wants it to go higher. I think this president, if he saw the market go down For a couple of days he'll call up Elon Musk and say, hey man, let's get something positive. Launch some rockets, do an IPO for that Starlink thing or call Larry Ellison from Oracle. Say what else can work? Well do let's get another deal going with the Chinese or maybe a cold David Solomon, Goldman Sachs, Jamie Dimon, JP Morgan say, hey man, we got to get some puppies. You got to get some public here. Let's go down the New York stocks, inside deals and that's how we're going to do business for the next four years. Or maybe you'll just wake up and call the heads of the states of a whole bunch of countries to say he didn't like how business they held little business they did with the United States last month. So he's going to cut off their oxygen unless they do more buying. Yeah, I think he's going to look at it like a ledger. That's how positive animal spirits do get generated. Though this is not something Trump always did perfectly well in the first term, but he seems to have got a better handle on it now that he's back in office, possibly because more CEOs are willing to cooperate. Also because he's in touch with CEOs from the tech industry. Now, I'm not saying that he's focused on the SB500 Dow every minute of the day, although he sure seems to have discovered the nasdaq. I am saying that the contrast between Trump and the energy that he's putting into business versus what Biden did is striking. Biden had an aversion to talking about business, except when it came to climate change. He didn't seem to care for CEOs. Even when he did good things for a particular industry like the CHIPS act, he wasn't the one dealing with them or taking seem to be all that much pride in it. Because of his absence, the focus shifted to Fed Chief Jay Powell as the most important person in the economic firmament. That's over. Here's the bottom line we're now looking at changing of the guard from pal to Trump. Oh, it won't be easy as one's pretty predictable guy and the other's a wild card. And if you have to ask me which is which, then you aren't ready to handle the next four days, let alone the next four years. Mark Hillroy. Mark Hey Jim, thanks for taking my call. No problemo. What's happening?

[Caller]

So I'm trying to skate where the puck's going here. The stock has seen a downturn since 2022 but with a return to profit growth last year, a potential growth year for industrials and a nice dividend is UPS worth a look.

[Jim Cramer]

Okay, so I read a piece this morning that drove the stock up actually saying it is going to be better when they report this would be Cal to May his first real upside surprise. It yields 5% now 6% is where the level where stocks are being held by and that's the trampoline, not five. But I read the piece and the piece made me feel that I should go by FedEx as I think FedEx is better run. I just flew from L. A where my arms tired. Sammy in California.

[Caller]

Sammy, hey, we miss you here out in L. A. I'm actually in Northern California. I just had a hot dog from Costco so I'm very happy and I get to talk to you.

[Jim Cramer]

I'm quite buck 50 for that. Do you pay any more than a buck fifty that.

[Caller]

No, they didn't have onions today. I was very disappointed.

[Jim Cramer]

Jim, I'm going to speak to the former cfo. Remind me to call that. Okay, go ahead.

[Caller]

Okay, thank you, I appreciate that. Listen, I have order stock which you've been recommending and which I've been in and out of for years at 480. Unfortunately it's bouncing around at 400. Want to know what you think is happening with Tesla and when do you see it going back up and what's going to send it off?

[Jim Cramer]

Okay, that's a really great question. What happened is when it reported its last quarter and the numbers weren't that good, the stock went up. That was the signal that people felt it's no longer a car company, it's a tech company. Right now it's stalled. It needs to be able to demonstrate something different and new and then it's going to go higher. The stock is only resting if it goes down any more than I want you to and I just wish that my travel trust we do have a meeting on Thursday, tomorrow at noon. I wish we had bought Tesla for it but we own Mag 6. It's better than. Well, one more would have been good. Who? I think we're witnessing a changing of the guard from Powell to Trump as the most important person in the economic permanent on man money tonight. I'm checking with the founder of RBN Energy. Get a read on the energy landscape and talks of tariffs as President Trump's begins the second term and Netflix soared to a new high today on earnings. I'm going to recap the quarter telling you where I stand on that streaming giant. And speaking of all time highs, one of my absolute favorite companies, GE Vernova reported and it was on the move again. So why don't you stay with.

[Mad Money Producer]

Don'T miss a second of Mad Money. Follow imkramer on X. Have a question? Tweet Kramer Madmentions Send Jim an email to madmoneycnbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.

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[Jim Cramer]

Investing in oil and gas has always required a certain level of tolerance for volatility, even in the best of times. With President Trump back in office, though, I'm expecting a lot less calm. So as the market grapples with a wave of executive orders and discussions about tariffs I think we've got to consult an expert to see how all this affects the energy market. That's why we're checking in with Rusty Brazil. He's founder and executive chairman of RBN Energy, my favorite energy analyst by far. To shed some light on the subject. Rusty, welcome back to bed Monday. Great to have you in person, Jim.

[Rusty Brazil]

Great to be here in person. It's been a while.

[Jim Cramer]

Fantastic. Now, Rusty, there are a lot of things that are being said about energy and what can happen. I look to you as someone who might say maybe it can't happen. For instance, if a president says drill, baby, drill, do the big executives of oil just say, you know what, it's time to start drilling more?

[Rusty Brazil]

I don't think it works that way. For one thing, all the orders that came out on Monday basically do away with any kind of obstacle that would prevent somebody drill baby drilling. But to be motivated to drill baby drill, I've got to do the right thing for my shareholders, your customers. And so that means that if I drill baby, drill, going to do, I'm going to create more production. And what happens when production goes up? Prices go down? Well, prices go down for the big producers, they're going to actually pay less money in terms of dividends. So I'm not at all sure how this is all going to play out.

[Jim Cramer]

But, Rusty, I'll take the opposite side on that. How about a prisoner's dilemma? How about if I'm the guy who decides I'm going to drill more and the other guys aren't, then I clean up and I really do as right for my shareholders.

[Rusty Brazil]

And if that's the case, that's fine. But keep in mind that the energy business always moves. Herd instinct. Everybody always does the same thing at the same time. And that may be a little bit of an overstatement, but not that much.

[Jim Cramer]

Okay, now, I heard all day today the national energy emergency. There is no energy emergency. But is there in some ways a, an energy emergency when it comes to data centers and demand for, for electricity and demand for fuel to make electricity?

[Rusty Brazil]

Depends on your definition of emergency. If emergency is what happened in the 1970s when Carter was president, we had lines all the way around the block. Nobody declared a national emergency then. Now we've got a national emergency. So what is the emergency? The emergency is we need to implement more production, more transportation, more use of fossil fuels. And to do that, we need to eliminate a lot of barriers. So what Trump has done is basically invoke a emergency that gives each of the, each of the jurisdictions, each of the, each of departments, the ability to access emergency authority and those emergency authorities can be used by anybody for anything, not just AI, not just data centers.

[Jim Cramer]

But I read your ex, you know, read you every day. And you talked about you got some top 10 things. One thing is certain, you make it clear. There are so many courts and rules, rules that can't be overturned in courts that can block that even there. The president may not be as important as we think.

[Rusty Brazil]

The president is going to do everything that he can, but the courts are going to be a big problem. As a matter of fact, you can look at essentially all the orders. Many of the orders that came out on Monday reversed essentially everything that Biden did. Right? That's really, if you list, it's just list after list out of things that are getting reversed. That's all things that Trump can do. But Trump can't make the courts go away. So now my view is the courts are the problem.

[Jim Cramer]

Okay, now let's talk about a different kind of emergency. Let's say you wanted oil to come down or natural gas to be, of course, shipped more. Is there a strategy that may actually be geopolitical? Would President Trump be trying to say, put pressure on Russia, on the ruble, on how much money they have by lowering the price of oil, making it more difficult for them to pay for the war?

[Rusty Brazil]

I think that's what they're talking about. But I would question how effective that's going to be because Biden tried that. Biden, when Ukraine invasion first happened, Biden was going to go out and basically do everything that he could to cut Russian exports to zero. But then somebody mentioned, Joe, if you do that, that's going to take 5 million barrels off the world market. Prices are going to go up, gasoline prices are going to go up, and you're not going to get reelected. And at that point in time, they kicked in this goofy program of limiting the price to 60 bucks, which is never going to work, and somehow go ahead and let Russia keep producing but lower the amount that they could get for their oil. It did not work. So now the question is, and there's a piece in the Wall Street Journal today about the possibility of Trump actually kicking in serious sanctions on Russia, which would reduce that 5 million barrels of exports to something a whole heck of a lot less. And if that were to happen, it could make a big difference in Russian economy and whatever happens in the war.

[Jim Cramer]

All right, good. More direct, less going to affect our market. Now, speaking of our market, how about this IPO Venture Global was looking like it's going to be one of the biggest deals first come this week. Inspiring $110 billion energy company banking on Trump's return. To hear anything about this thing, we.

[Rusty Brazil]

We talk to them a lot. They are really good. They are extreme. Darn right. They've been extremely successful. They have been extremely aggressive in the way that they have approached the market. They have basically cashed in on their leading. They're not leaders compared to Cheniere, but by golly, they've been right there with them. And they have implemented a number of facilities where they have been able to cash in before their customers. Their customers don't necessarily like that. Okay, but they're, but they're cashing in before the customers. The money is in the bank, and my guess is it's going to be a darn good ipo.

[Jim Cramer]

Wow.

[Rusty Brazil]

Wow.

[Jim Cramer]

Okay, well, let's, let's go one step further. The LNG pipelines. You told me that the president. The first thing you would do would be reverse the pause. The pause did some serious damage, didn't it?

[Rusty Brazil]

Oh, it depends on your definition. Damage. So there's eight LNG facilities that are operating right now. The pause didn't do anything to them. There were four facilities that were in the works coming online. It backed one of them off a little bit, but not by much. Two of them are actually coming online right now as we speak.

[Jim Cramer]

Okay.

[Rusty Brazil]

And another one had problems with their contractor and could not get the thing going. There's another eight projects that basically were held back because of the pause.

[Jim Cramer]

That's a lot of money. A lot of jobs, too.

[Rusty Brazil]

But the pause is going away. And all of these guys are celebrating tonight, except they've got their lawyers all in a room right now because five of the eight have legal sanctions against them right now. And the question is, what's going to happen to the courts? If the courts basically hold up everything that the pause was holding up, then, hey, these guys are still sitting there. But they weren't. They weren't going to be able to be online for years anyway. The four guys that are working right now, they're going to be online by the end of 2020.

[Jim Cramer]

Last thing I know you're, Because I read you every day for many years, you're loathed to say, listen, gasoline is going to go here, naturally is going to go there, but which of these are going to be the most volatile and that we should be most concerned of giant moves? Not gas. Gasoline. What do you think?

[Rusty Brazil]

My sense is it's natural gas. Natural, natural gas has been held down for a long time. I mean, let's face it, natural gas prices are four bucks today and it's really cold out there. So what's going to happen to natural gas? We're going to start exporting a lot more lng. Those four facilities are going to come online. We're not going to be able to catch up drill baby drills soon enough and the price is going to go up. That, I think is a pretty sure thing.

[Jim Cramer]

That's an inflationary word to end things on, but that does it. But it's a continuum with you. And that's why I love reading you first thing every single morning. That's Rusty Brazil, founder and executive chairman of RBN Energy. I feel that I can go toe to toe with anyone in that energy business because of this man. Thank you, Rusty man. He's back at the break.

[Mad Money Producer]

Coming up, fresh off a new subscriber record. Can we Netflix keep the viewers watching? Kramer's breaking down the earnings next.

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[Jim Cramer]

Last night, netflix delivered a tour de force earnings report that sent the stock up almost 10% today. Why? Because it was just that good. Now some of that's because of the stock had cooled off of over the past month. After soaring higher last year, it pulled back to the mid-800s and we even saw some cautious commentary from the analysts, including some price target cuts. But then Netflix reports that they just make it look so easy. They generate 19 million new subscribers, the biggest quarter of net additions in their history. They're raising prices. They're getting all set with an advertising model that will keep the money flowing and the subscribers growing beat after beat after beat. And they make it seem like child's play. But if it's child's play, why can't Anyone else do it? Consider these statistics. Netflix had more number one shows in the weekly streaming top 10 charts last year than all the other streamers combined. All they had more view hours in the weekly streaming top 10 charts than all the other streamers combined. And you know what? They still only account for less than 10% of TV viewing in every country where they operate. Drilling down the numbers, Netflix posted a substantial revenue base beat and higher than expected earnings per share, which grew by 102%. Strong margins despite the fact that they had some big expensive productions this quarter. Free cash flow $1.38 billion which while down 13% year was still healthily above the 1.06 billion that wall street was looking for. Though why don't we go back to that subscriber number, which really well be that 19 million new subscribers figure, bringing the total paid subscriber count to more than 301 million people. The analysts only thought that they'd add a little over 10 million subs and even the whisper number from the bulls in the buy side was only 12 to 13 million. Instead they got nearly 19 million. Well, that's a miss, right? And a good one. Even though the quarter was great, I've got to say the guidance was tad mixed. Nephew's outlook for the current quarter was below expectations. Basically every single line on that threw off people. But their full year forecast? More important, different story. Netflix initially gave us a 2025 forecast when it reported its last quarter in October. This time they raised their full year revenue guidance by $500 million and raised their operating margin outlook by a percentage point, both modestly better than expected. So again, I call that mix. But it hardly mattered because the quarter they reported was so insanely good and the commentary from the management on the conference was so bullish. Well, you feel like they're running circles around the competition. And they are. First, Netflix's fourth quarter content slate well, it was pretty darn effective. Squid Game Season 2 is on track to become one of Netflix's most watched original season seasons Series seasons. Carry On. Loved it. Joined the company's all time top 10 films list and they had tremendous success with their live sports events, The Jake Paul vs. Mike Tyson boxing match that became the most streamed sport event ever. And Netflix had the two most streamed NFL games in history with this Christmas Day doubleheader. But you know what? Netflix actually downplayed the impact of those individual pieces of content on its remarkable subscriber growth. On the conference call, co CEOs Greg Peters and Ted Sarandos said The overall content slate drove membership growth. And even if some people came to the platform for the fight or for the NFL games, they stayed for everything else. As Sarandos put it. I'm going to quote him. What really been most encouraging is that the retention behavior of those folks who did come in for those events look a lot like the folks who came in for all of our other big titles and quotes. In other words, they didn't come for the ball game and then discontinuated for the ballgame. That is what separates Netflix from the competition. Netflix says that the old fashioned linear TV folks simply don't have any engaging programming. Or they pay too much for big sports rights deals to bring in viewers, but the viewers don't stick with them. Netflix doesn't want to pay up for the full rights to anything. They just cherry pick the best events like this 2 terrific NFL Christmas Day games. More importantly, Netflix knows what you want to watch. From the very beginning, this company used data to figure out what everybody likes. There's so much more in touch with you, with the viewers, and not have to fear upsetting the conservative advertisers that come with it. They know that the viewers don't mind subtitles, which means you buy a lot of programming very cheaply from overseas, like Squid games. They know the linear companies aren't just handicapped by the linear drawdown. They seem to revel in their own darn cluelessness, producing the same fire and cop and nurse and doctor shows over and over and over again. Maybe so they can get something to hit the syndication rights. The big what, let me see it is like the bell went off for them. Not whether you like it, but whether the syndication rights are worth a lot of money. Netflix, the other hand, they're not interested in that and they're not afraid to take risks. They're tremendous judges of programming. If I told you that I had a series where in the very first episode 500 people play a lethal game of red light, green light involving a giant doll, would you take that one? The networks might not touch it, but Netflix turned Squid Game into one of the biggest franchises in history. Now, because they're adding so many subscribers, they can even get away with raising prices by a dollar to 250 per month across most plans in the US, Canada, Portugal, Argentina. At the same time, we learn more about their ad supported tier and it's already used. In the fourth quarter, ad supported plans accounted for 55% of Netflix's signups in countries where these plans are available and membership on the company's ads plans grew nearly 30%, just versus the previous quarter. On the conference call, co CEO Greg Peters told us that Netflix doubled its ad revenue year over year in 2024 and that said, we expect it doubled again this year, end quote. I mean, that's why this company's revenue growth is accelerating again. That's why I like it so much. Later on the conference, Sarande has noted how the company's debut of WWE Monday Night Raw earlier this month drew 5 million viewers, which by the way is two times the audience that Monday Night Raw was getting Linear TV streaming beating linear. Later in the same answer, Sarandos explained that the company's incremental approach to sports opting for one off events rather than full seasons. Well, let's just say, listen to this quote. We were basically able to bring a big audience, a young audience, a more global audience in linear television. End quote. Braggadocio? Maybe, but it's hard to argue with the figures. You can't, frankly. Aside from the latest guidance from the current quarter, which they'll probably beat, no one really cared about anyway, this was about as close to a perfect call as you're ever going to get. So I'm not surprised to see Netflix catch four analyst upgrades today beat the S&P 500 higher, setting a new all time high. Look, I guess I could worry about the fact that Netflix now sells for 39 times this year's earnings estimates and 32 times next year's debt numbers, but I'm still not going to lose any sleep over it. Why? Bottom line? Because to date, recommending Netflix has been the right call every step of the way, even when its stock looked expensive in the past. Now, I've been pounding the table on this one for ages. I'm certainly not going to stop now when the company has more momentum than I've ever seen. I want to go to David in California. David hey Jim, I'm calling about Fubo TV. They signed a deal with Disney where they got 220 million in cash upfront. The market cap of Fubo is only 1.2 billion. They already have 1.6 billion in revenues and they're growing at 24%. What do you think about Fubo? Well, I don't recommend stocks of companies that don't make money. They're losing a lot of money. But I will say this, it's a very attractive spec and I like people to speculate as long as they know the risks. You've got a $3.60 risk. Enjoy. Let's go to Dave in Illinois. Dave.

[Caller]

Dr. Kramer, my good mad friend. Looks like those Washington commanders just handed your Eagles an easier path to the super bowl, no?

[Jim Cramer]

Well, I don't know. I like the way that fellow Jaden Daniels plays. If I didn't, if we didn't have to play these guys, I actually probably would be rooting for this team. But I appreciate what you say, Dave.

[Caller]

Yeah boy, that Dick Fangio coach defense is powerful, isn't it?

[Jim Cramer]

He's something man I'd love to be in his head. I think he's got something special coming for Jaden, but I'm not going to tell what it is.

[Caller]

Let's get to work. Jim. This $160 billion tech company provides client to cloud networking solutions for data centers. It's up some 17% already this year. Due 7% on the day's news today and the pin action created by Project Stargate. Of course I'm talking about Arista Networks. So Jim, delivering positive earnings results in the last five quarters. Can a net continue to deliver these strong results in 2025?

[Jim Cramer]

As always, Dave has got the right pulse in the market. Jay Sri la is just a remarkable executive and here's the way I tell people to buy risk and networks. When you decide you want to buy it, you have to put some on because that's how great it is. But then you got to wait for a dip because Arista trades in classic stair step fashion. Let's get J. Sri on. Her company is in the mix of every great data center story and it is a must own for those who don't already have so much data center as I do for my travel trust. Thank you Dave. And yes Jayden, it's going to be tough because you know rookie quarterbacks are 05 in the in the championships and he, well he could be 06. Look, this was basically a perfect quarter for Netflix. I'm not going to stop recommending it now. It's just too darn good with too much momentum now there's much more me up on it including my recap of what's leading the run up in GE Branova. Plus the data center demand drives higher. I'm breaking down the power crisis that I think we've face and what it could mean for a very strange player that could make you a lot of money even if it shouldn't. And all your calls Rapid fire in tonight's edition of the lightning rounds to stay with Kramer, it is time for global war. Talking about vice hustler Coastal. Start creating go explain the sound and then the lightning round is over. Are you ready, Ski daddy? Time for the lightning round, cameras. I'm starting with Quinn in Massachusetts. Quinn. Hey, Jim, first time caller here. Love the show. I was just wondering about beyond the.

[American Express Representative]

Honest company here, Jim.

[Jim Cramer]

Just, just, you know, look, I totally get it. I get the fascination with it. And when they make money, I will recommend it. Now that means. And someone might say, jim, it was a six bucks. You kept me out of it until it went to 10. I don't care. I only want to Recommend Companies in 2025 that are making money now. We're going to Russell in New York. Russell. Hey, Jim, how are you? I'm doing well. How about you? Good, thank you.

[Caller]

My question is that App Loving.

[Jim Cramer]

Oh, man, I'm hate. I'm hate loving App Lovin. I cannot believe the stock goes up every day. Do I ever wish my chapel trust with us? I actually wish I were the stock. I wish you could always say, oh, hi, Mr. Applovin. This thing does not quit. It doesn't know how to quit. And all I can tell you is unless someone else comes in directly and says, you know what we do what they do and we charge half the price, this stock is going to keep going up because it is a love stock. I'm going to give you a two for. I'm going to say the same thing about Palantir. Palantir and Applovin should go get married. Let's go to Kevin App. Appelin. Lovin. Let's go to Kevin in Washington. Kevin.

[Caller]

Hi, Mr. Kramer. I'm a relatively new investor. I bought my stock after seeing it on your show about three months ago on Mad Money. It is called Sportradar. I love how they are rapidly expanding their US Business. The earnings have been pretty good and they've been on a great run. So my question for you is, do I buy, hold or take money and run?

[Jim Cramer]

No, no. I like this company. I think this company now turned profitable. It's doing a lot of really good things. It is not expensive. It's not expensive on its growth rate. Okay, so I think you're into something good. It's speculative, but I like it. Let's go to Tracy in Nevada. Tracy, hello, Mr. Kramer.

[Caller]

You are the hero of my finances.

[Jim Cramer]

You make fun.

[Caller]

You make investing fun, interesting and profitable.

[Jim Cramer]

Well, if I get people to be in it, I can teach. If I don't get them in, I can't teach. So thank you. You are the mission.

[Caller]

You're so exciting and entertaining. I never miss a single minute of your show.

[Jim Cramer]

Thank you. Thank you.

[Caller]

You have made me a lot of money and. But I'm wondering about Wingstop. It's been a little mean to me, so I'm wondering what you think about.

[Jim Cramer]

I am worried about wing. Now, see, Wingstop, when they reported last, did not give me an explanation about why they didn't do well, and so therefore I went off on them. Now, I have to tell you, I don't personally dislike them and I have to like the product, but when you come on the show and you're talking good, you know, and say good things and I say good things about you, and then you don't give me the information I need to say why I should continue to like you, then I. I have to turn on you. It's just what I do. And it's not just because I'm from Philadelphia. Let's go to Sam in Pennsylvania. Sam.

[Caller]

Jim, speaking of Philadelphia, how about those Eagles?

[Jim Cramer]

Go Birds, man. Go get. Big game this Sunday. So big it's like I can't even handle it.

[Caller]

Big game this Sunday. An incredible game last Sunday.

[Jim Cramer]

Yes, yes.

[Caller]

Calm today about a company that I actually called in about a year ago discuss is Comfort Systems usa. When I called, the stock was already trading at a premium.

[Jim Cramer]

No H Vac. Whether it be trane, whether it be carrier, if you got H Vac. It's the thing. I mean, I know it's weird because it's very much like plastics in the. In the movie the Graduate. Like, if someone were to tell me right now, a young kid walk by and say, jim, I'm thinking about going in the stock market. You know what I tell them? H Vac. And that, ladies and gentlemen, is the conclusion of the Lightning Round.

[Mad Money Producer]

The Lightning round is sponsored by Charles Schwab. Coming up, is the US entering a power crisis? Cramer's giving you his take on the future of energy in the United States. Next.

[Jim Cramer]

It is time seven light round because we're about to work for Google. Sevyn, soccer switch. Nicole, start creating. Play this now. And then the Lightning round is over. Are you ready, ski daddy? Time for the Lightning round, cameras. And we're starting with Quinn in Massachusetts. Quinn. Hey, Jim, first time caller here. Love the show. I was just wondering about the audit company here, Jim.

[Caller]

Just, just.

[Jim Cramer]

Yeah, you know, look, I totally get it. I can't get the fascination with it. And when they make money, I will recommend it. Now, that means that someone might say, jim, it was at six bucks. You kept me out of it until it went to 10. I don't care. I only Want to Recommend Companies in 2025 that are making money now? We're going to Russell in New York. Russell. Hey, Jim, how are you? I'm doing well. How about you? Good, thank you.

[Caller]

My question is about App loving.

[Jim Cramer]

Oh, man, I'm hate. I'm hate loving. App Lovin'I. Cannot believe the stock goes up every day. Do I ever wish my Chapel Trust winners? I actually wish I were the stock. I wish I could always say, oh, hi, Mr. Applovin. This thing does not quit. It doesn't know how to quit. And all I can tell you is unless someone else comes in directly and says, you know what we do what they do and we charge half the price, this stock is going to keep going up because it is a love stock. I'm going to give you two for. I'm going to say the same thing about Palantir. Palantir and Applovin should go get married. Let's go to Kevin Appellon Lovin. Let's go to Kevin in Washington. Kevin.

[Caller]

Hi, Mr. Kramer. I'm a relative investor. I bought my key stock after seeing it on your show about three months ago on Mad Money. It is called Sport Radar. I love how they are rapidly expanding their US Business. The earnings have been pretty good and they've been on a great run. So my question for you is, do I buy, hold or take the money and run?

[Jim Cramer]

No, no. I like this company. I think this company now turned profitable. It's doing a lot of really good things. It is not expensive. It's not expensive on its growth rate. Okay, so I think you're into something good. It's speculative, but I like it. Let's go to Tracy in Nevada. Tracy, hello.

[Caller]

Mr. Kramer. You are the hero of my finances.

[Jim Cramer]

Thank you.

[Caller]

You make investing fun, interesting and profitable.

[Jim Cramer]

Well, if I get people to be in it, I can teach. If I don't get them in, I can't teach. So thank you. You are the mission.

[Caller]

You're so exciting and entertaining. I never miss a single minute of your show.

[Jim Cramer]

Thank you. Thank you.

[Caller]

You have made me a lot of money. But I'm wondering about Wingstop. It's been a little mean to me, so I'm wondering what you think about.

[Jim Cramer]

I am worried about Wing Nelson. See, Wingstop, when they reported last, did not give me an explanation about why they didn't do well. And so therefore I went off on them. Now, I have to tell you, I don't personally dislike them. I have to like the product. But when you come on the show and you're talking good, you know, and say good things and I say good things about you, and then you don't give me the information I need to say why I should continue to like you. Then I have to turn on you. It's just what I do. And it's not just because I'm from Philadelphia. Let's go to safety Sam in Pennsylvania. Sam.

[Caller]

Jim, speaking of Philadelphia, how about those Eagles?

[Jim Cramer]

Go, Birds, man, go. But we got big game this Sunday. So big it's like I can't even handle it.

[Caller]

Big game this Sunday. An incredible game last Sunday.

[Jim Cramer]

Yes, yes.

[Caller]

Column today about a company that I actually called in about a year ago to discuss is Comfort Systems usa. When I called, the stock was already.

[Jim Cramer]

Trading at a premium, no H Vac, whether it be train, whether it be carrier, if you got H Vac. It's the thing. I mean, I know it's weird because it's very much like plastics in the movie the Graduate. But like, if someone were to tell me right now, a young kid walked by and say, jim, I'm thinking about going in the stock market, you know what I'd tell them? H Vac. And that, ladies and gentlemen, is the conclusion of the Lightning Round.

[Mad Money Producer]

The Lightning Round is sponsored by Charles Schwab. Coming up, is the US Entering a power crisis? Cramer's giving you his take on the future of energy in the United States. Next.

[Jim Cramer]

We know all about crises. We have a drug crisis. We have an immigration crisis. We have an inequality crisis. We have a security crisis. We have a trade crisis. We have a climate crisis. It's crisis all the way down. So I hate to add the list, but we have one serious, totally unforeseen energy crisis. And if we don't work fast, we're going to be overwhelmed by it. We need every form of energy available, not gas, wind, geothermal, hydro. What we most need, of course, is nuclear power. Crisis comes down to the fact that we had no real industrial growth this country for decades. So we haven't had to build much energy infrastructure. Now all of a sudden, these data centers start coming online, like the ones that will be part of Stargate, the Oracle softbank open, a Project Kurt Russell movie, by the way. And these data centers consume insane amounts of electricity. It's a level of demand that nobody saw coming. So after years where we spent more time decommissioning power plants and building new ones, we suddenly got to go back into growth mode. As you heard earlier in the show, G for NOVA is pulling forward plans to build and reopen nuclear plants at considerable costs. You've heard about the reopening of one of the three mile and reactors. Now there's talk about finishing two nuclear plants in South Carolina that were stopping some hideous cost overruns. These plants initiated in 2008 were so hard to build it in 2017 they just kind of flew up their hands and gave up. Now Santee Cooper soliciting bids due in May to rebuild these state owned plants a fortune. Maybe they get it, but nukes are still pie in the sky people. Now there is this other fuel that's in the here and now, but it's a pure horror show to almost everyone. I'm the only one willing to go there. Let's talk coal. When the President gave his inaugural address on Monday to create a national emergency aiming to produce more domestic fossil fuels including coal. Once the mainstaying utility fuel. Coal has been phased out year after year after year because it is terrible for the environment. Ten years ago coal based fuel was responsible about 33% of electricity. Now it's fallen to 15%. Part of that's environmental regulations. Part of it a lot because the utilities generally prefer cheaper natural gas. But man, if we're going to turn on decommissioned nuclear plants, something that was unimaginable a few years ago, and Rusty Brazil is right about the price of natural gas going higher, then I think coal will have to go back into the mix and decline. Its use may actually be over. Does it hurt? By the way, the Wyoming, West Virginia, Pennsylvania, big three coal states. Trump rewards those who went with him. Those states are about to reap what the voter showed. Who's the winner? It's hard as the coal court is made up of companies that mine coal for steel production and others that mine coal for utilities. But the latter has been such a dog for so long that the US Companies have tried to merge their way into steel making coal and to lessen exposure, utilities. Peabody Energy and Core Natural Resources are the big ones. I think they're cheap, but they trade more like steel companies than coal companies. But then there's another company called Alliance Resources Partners lp. It's a master limited partnership that's the largest coal producer in the eastern United States. Incredibly profitable company sells at less than nine times earnings as befits a slow to no growth enterprise. And it's not undiscovered because coal prices have actually done well thanks to overseas demand. All that said, this market embraces anything energy. That means coal will soon be back and it makes a lot more sense now that coal is a champion in the White House. If you hear coal mentioned by the President and it's picked up by the mean people, Alliance Resources will be the one people will grab because it's a master limited partnership. It has a terrific 10% yield, but the yield's only that high because people think that the payout needs to be cut. May well be true, but under this President, Coke could have a renaissance. A, let's call it renaissance. Sure, Coal's time has come and gone, but it will come again because the data center inspired energy crisis really is so pressing that there's not really a choice anymore. Yes, demand is that great. We so foolishly multiple good new plants that it wouldn't surprise me if coal's long decline may have finally run its course. Alex says, always a bull market somewhere. I promise. I find just for you right here man Money. I'm Jim Cramer. See you tomorrow.

[Jim Cramer Disclaimer]

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 Is it time to reimagine your future? The right business skills may make a difference in your career. At Capella University, we offer a relevant education that's designed to fund on what you need to know in the business world. We'll teach professional skills to help you pursue your goals like business management, strategic planning, and effective communication, and you can apply these skills right away. A different future is closer than you think with Capella University. Learn more at Capella Eduardo.