← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 12/3/25
00:44:19
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer
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Hey, I'm Kramer.
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Welcome to Mad Money. Welcome to Kramer America. I hope you made friends. Hey, I'm just trying to make a little bit of money here. My job is not just entertain, but to educate. To teach you. Call me 1-800-743, CNBC tweet Mitchell Kramer okay, we keep hearing about the overstretched consumer and the chilly job market. Now, based on this endless drumbeat of negative news, shouldn't the stock market by all means, measures and means, be way down?
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Just today we got some ugly data points. The ADP national employment report was downright hideous, showing private employers shed 32,000 jobs in November. Obviously disappointing. Wall street was looking for 40,000 new jobs. Initially it pummeled the averages for a late morning rebound that transformed into an out and out rally. Dow finishing up 4 and 8 points, S&P gaining point 3%. Nasdaq advancing point 1. 7% odd. Right? How could that happen? And when you check under the hood of this ADP data, it's even worse. ADP chief economist Nella Richardson stuck a dagger into the growth economy narrative with her commentary. Listen to this quote. Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment. And while November's Slowdown was broad based. It was led by pullback among small businesses. Okay, I know economist, but I know the job market. Small businesses, not large businesses are the backbone of the American economy. Large businesses lay off people to increase profits. Small businesses hire so they're getting span. See, the ADP numbers are a sign of real economic weakness. You think that's a bad thing for the stock market, right? Wrong. Let me show you why. Numbers like the ADP sad sack tally actually paved the way for what could be a terrific rally, maybe through the end of the year. First, for months this market's going higher in anticipation of rate cuts in the Federal Reserve. But the Fed can't cut rates if the economy is too strong. And that goes double for this job market. These ADP numbers are exactly what the bulls needed.
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It makes it so much easier for the Fed to cut and maybe. Hey, keep in mind this one. We did get another report called ISM Services pmi. It's gobbledygook percent authentic Wall street gibberish for the business temperature for the month of November. And burning was this line with such huge implications that it should have been the lead of any top down discussion. It's fair. Let me quote the Prices index registered 65.4% in November. Its lowest reading since hitting 65.1% in April 2025. The November figure was a 4.6% drop from October's reading of 70%.
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Weakness in hiring. Okay? Especially where it hurts small business. And we got lower inflation. You know what that is? How about Nirvana? How about Goldilocks? How about actual Ecstasy? Because not only will it allow Jay Powell to cut its trace the next Fed meeting. Also in subsequent years, because slower growth with lower inflation gives you the possibility of multiple rate cuts can breathe new life in the economy. Oh, and by the way, whatever might be left to the rate when Jay's done will get hacked up some more by the new guy. Now that's how you get what I call blow off top. That would be the least expected of all results that I hear about between now and year end. There's only one problem. This potential monster rally is hidden in plain sight. See, we're spending so much time on tech. The data center, the power needed for the data center, the cost of the data, the expense of the semiconductors, the possible cracks in thesis, the jobs to be taken away by AI, the earnings of the hyperscalers, the potential slowdown of Microsoft, the number of iPhones really sold, the foibles of OpenAI and the endless attacks on in here that many people might actually miss this entire move. See, right now it's very easy to be blinded by the brutal trench warfare in tech.
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So let me help you remove your tech blinder so you can stop worrying about the next hit job article that assassinates Adobe or ServiceNow or the one that assassinated Salesforce is not looking so smart right now. I'm going to start with the most important element of this rally. It's built on the backs of the most important group in the entire market, which are the banks. The real mess of the economy's health. After consolidating post earnings, the group is roaring. Led by Wells Fargo and Citi bank of America. JP Morgan right there with a picture perfect. Even better. Capital One, COF and American Express, the lower and higher end credit card companies are challenging their old highs. I think they take them out. Second, there's retail. In all my 40 years of following retail, I can't recall a time when so many chains were doing so well that there is this much full price merchandise for the holidays. Things just aren't on sale. There's no promotion. Every day we get a new set of retailers doing amazingly well. Just today Dollar Tree reported a really terrific quarter like Walmart starting to appeal to a higher end demographic. Those who thought this chain would be hurt by food stamp cutbacks, they read the room totally wrong. How about Macy's? Wall street expected a dis report filled with talk about promotional holiday season. That's what they're used to. Not this time. We're finally starting to see the benefits of closing weak stores. By the way, 9% same store sales increase from Bloomingdale's. And that's where the current CEO Tony Spring came from. Lots of people thought that the last quarter for American Eagle was aberrant. It was so great a splash in the pan. The terrific numbers this morning put the light on that notion. And that's not all. Consider this list of retailers that performed sharply better than expected. Tapestry, Ralph Lauren, Kohl's, tjx, Urban Outfitters and of course Wal Mart. In fact, I can only recall Target, Burlington Stores and Home Depot being disappointing. That's extraordinary. It should not be happening when there's a slowdown in hiring of the disappointers. Home Depot is the most sensitive to a decline in interest rates. The Fed's meetings next week. So things could turn around real fast for the desk bot, which is higher than where it reported that bad quarter. That's why we own it for the travel trust. Once you join the club, find out more Next group that gets some more the transports which are also in breakout mode. We know that Union Pacific is doing extraordinarily well at the merge of Norfolk Southern. Great situation. I think FedEx is a coiled spring. We've yet to hear a single disappointing E commerce story. Save Target. Fantastic setup for FedEx. Also for JB Hunt and ArcBest. I think they'll have a good run. Then it might come back to the drug stocks. Why? Well, remember, lots of people think the economy stalled or in a tailspin. They're wrong, but they'll want to participate. When money managers are worried about the economy, they reach for Johnson, Johnson, Merck, illegally, Vertex, New One, Amgen, and even lowly worm Bristol Myers now that it's got a readout on some drug for agitated Alzheimer's patients. No, it wasn't an approval. It wasn't even a well run trial. It's just they didn't have to cancel it or say that it doesn't work. And on that really incredible news, the stock poll voted 5.6%. Unbelievable. How about Apple in those Chinese numbers? Time to buy Gravity and by Microsoft, Jensen Wangs on the Hill. Can you get Nvidia back into China, please? I'm tired of those. Here's the bottom line. For once we have a genuine Macro rally. Let's stop obsessing on what we don't know about tech and let's just own, not trade Apple and Nvidia and get along the real economy stocks that could be poised for world championship run for the roses into the end of the year. Barring something crazy coming out of the White House. Yep. Stop stressing about AI and go buy some banks or some retailers. And while you're at it, take a couple of transports. Let's go to Heinrich in Texas. Heinrich.
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Hey Jim. Booyah, Booyah my friend.
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What's happening?
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Oh, it's a pleasure talking to you. I have been watching your show for the past 10 years and investing. I am a member of your club and also I just got the book.
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Oh my God.
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Yup, yup, yup. You're being so instrumental to my life and to the life of my 12 year old and a 9 year old that are watching you too.
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So thank you, that's great. I want them to know what to do when they get the money that all the money you've made them in stocks. Let's go to work.
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All right.
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So Jim, I've been holding volunteer for the past few years and currently is down. Yesterday was down about 16%, today is down about 10%. My question here to you is from your perspective, is this the kind of correction that where long term investors should buy the deep or does it make more sense for us to take some profit out and rotate part of that position into value stocks and maybe pharmaceuticals?
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Right now I'm sure this is the stock was Palantir. That's right. I'm going to be sure. All right. I don't want you to sell Palantir. Palantir is a great high growth, high quality name. Alex Karp is a bit of a wild man. I don't mind that. I think that they're doing incredible work. Now I know there was an article in the Washington Post about them working with ice. You have to keep your politics out if you want to make a lot of money. Not that I'm like crazy about what are some of the things they do and they don't. But if you're asking me whether I think the stock's going higher which is what I think you are as well as those kind words, I think Palantir is going higher. Okay. We finally have a real macro rally points not a tech rally. I think it's time to go long in the stocks be poised for championship type 1 into years end and look around. They're all around you. No more data center bouncer reported last night beat estimates but the stock is relatively flat in today's session. What gives your I'm making some sense to the quarter to CEO. What do you do when Lowe's goes higher? Hey, I'm digging the conglomerate, not the home improvement store. Fresh off the company as addition to the new high list again and still think turn in this quarterly results after the bell and they're confusing. I'm running through them anyway. We'll figure it out.
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Sometimes the cybersecurity stocks go out of sty. But as I lay out and how to make money in any market, the cybersecurity business never goes out of style. The risk of being hacked is just too high. Especially now the bad guys have access to the tools, the artificial intelligence tools. Which brings me to CrowdStrike. It's a key position my Chapel trust has been for years. Reported what I thought was a pretty darn good quarter last night. Company posted a nice top and bottom line beat while their net new annual recurring revenue, their key metric came in at 265 million. Most people looking for 239 million maybe all you need to know. Of course the stock temporarily pulled back response to the quarter, but opening down of almost 20 bucks for rebounding to finish up more than $8. And that's what almost always happens, the CrowdStrike and then the stock tends to bounce back. So let's take a closer look with George Kurtz. He's the Co Founder President CEO of CrowdStrike to learn more about the quarter and what comes next. Mr. Kurtz, welcome back to Money.
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Great to be here Jim.
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Oh thank you George. Now George, I'm going to do this interview a little different.
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This interview, this conference call I've got, I have to do the interview different because you see the trophies behind you. This was a trophy quarter and you who are very, you know, very matter of fact about things, actually started the call by saying crowdstrikes fantastic. Q3 you were all in. This is a different kind of quarter, isn't it.
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Jim? We had a monster quarter. You know, if you look at our records, we had a record Q3 for annual recurring revenue. We had a record Q3 for free cash flow, almost 300 million. We had a record operating income. So when you look across the board, it was a monster quarter. We delivered broad based success across all geographies, all platform modules. And I think it shows that CrowdStrike is the platform of choice in cybersecurity.
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Now, you did something in the narrative that I thought was also very interesting. It was like you left crumbs. It was I cancel and gretel Accenture. Okay, F5E. Why? These are all the appliance company F5. But these are all thought leaders as if we were in medicine. And you want these thought leaders because they are not one and done. They are companies that delve out contracts in your behalf. Is that what happened? Do you have Accenture in ey just literally saying, Listen, you got to go to CrowdStrike.
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Well, that's it, Jim. We've invested in our partner and our channel community. And when you look at some of these global sis, we've spent the time and effort to not only educate them, but enable them. They've got the relationships at the highest level in these enterprises. They're helping to make decisions and drive buying purchases for these large companies. So we're providing fantastic technology. They're able to wrap a lot of services around our technology. And really between us and our GSI partners and other partners, we're focused on giving customers outcomes. Not just technology, but outcomes of stopping the breaches, saving money, saving time, reducing cost and complexity. And that's why all of these big partners are embracing CrowdStrike.
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Is that also why Jensen Wong endorsed you as being the best?
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Well, look, we've got a fantastic relationship and you can't say AI without Jensen Huang and Nvidia and to be featured at his conference in Washington dc. I was there. We're the only security company that you know, had its own slide and was called out by Jensen. Again, we've got the right technology. Not only that, we've got the right people behind it. And we have like minds. We're focused on solving customer problems and using AI in ways that haven't been contemplated before.
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And is that why AWS said you're the best?
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Well, aws longtime partner, we've talked about AWS for many, many years. I saw you had Matt Garman on last night. We're a part of reinvention. And what did we do there? This is actually, I think, a game changer. We are now integrated within AWS natively, where customers of AWS can use next gen siem, they can pull it up in their console, the billing will happen automatically through aws. And really we're gonna drive a lot of momentum and new customer adoption because we're now part of the ecosystem there. And I think we gave them a great competitive technology against some of the other hyperscalers that are out there. And look, they have their choice to pick whatever technology they want. They picked CrowdStrike.
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Are these Kurtz to Matt? Is it Kurtz to Julie? I mean, in other words, are you sitting down with the tops of these companies and saying, listen, we have what you want, because I know you as a guy who says, I'm going to make this contact, I'm going to get this done.
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Well, it's absolutely true. I had dinner with Matt a few months ago. We talked about this, talked about a lot of other things, our partnerships, how we can do together what's happening in the industry. When you see all the changes, you see how fast things are moving and, you know, it starts at the top, but it's all about people and relationships and doing what you say you're going to do and delivering the best value for customers. That's what Amazon and AWS is all about. And so that's what CrowdStrike is about as well.
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You left another clue. You talked about a Fortune 500 consumer packaged goods company that was. Well, that happens to be involved with the displacement whiz being bought by Google. That deal is not closed. But when you've taught me that when you have this kind of company being bought by another company, that's your chance. Almost every consumer packaged goods company that I looked into during the Clorox terrible hack didn't seem to know what to do until you called them, even though they weren't your client. Is it this kind of thing where now Whiz is a place to be able to. It could be an annuity stream for you?
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Well, whenever there's disruption in the market, whether it's in cloud security, whether it's in the sim market, you know, you name it, it's an opportunity for us because customers are looking for the best outcome. They're looking to consolidate. And if they have to make a choice or change vendors or, you know, have to make contract decisions, it's a natural. It's a natural point for them to open it up to the Market and say what else is out there. And with our Flex contracts, we have many, many customers saying we want CrowdStrike, we have Flex, we want to put it under a flex contract and we want to be able to use it and double down on CrowdStrike. And that's what we're seeing across the board, not only in cloud security, but certainly in next gen SIEM and in identity as well.
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Okay, so how could there be a government contract with 75,000 endpoints of legacy coverage that goes to you in just what did they just realize? Wait a second, ours isn't up to date and we're concerned?
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Well, Jim, if you look at the current administration, it's exciting because it's really for the first time that they're operating like a business. They want to consolidate, they want to save costs, they want to procure at a, at the macro level, not just piece parts. They have less people today than they had in the past. So they're going to need better outcomes and they're going to need better security. They want to save money for the American taxpayer. And CrowdStrike is a fantastic solution given the current threat environment and we've seen how prolific the nation state actors are and we're going to be there to help secure our national interests.
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Okay, now the last thing I want to ask about is that you people need to know, and it was questioned on the call. There was a good question, can't be dismissed. Why are we focused on ARR growth and not other things? Why is ARR growth accelerating 73% the metric and not what you're doing in small medium sized business? Can you help our viewers understand, unlike the analyst who's probably a nice person, that it is the real right, it is the right metric.
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What is the right metric, Jim? And you know, when we became public in 2019, we were literally one of the first companies to really disclose ARR and we didn't focus on billings, which is kind of a noisy metric. And you see others trying to follow suit in annual recurring revenue, but basically that is the health of the business. What is your annual recurring revenue? Right. And the, the beauty of our model and a SaaS model is you keep layering new revenue on top of new revenue until you get to near 5 billion annual recurring revenue. So in the quarter what we called out was 265 million of net new ARR. And that just keeps adding to our total. And again, the more you grow it, the bigger it gets, the stickier it gets. And you see the success in the numbers that we put up well, this.
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Was the culmination of a lot. We didn't have to talk about any sort of thing that happened. I know something happened a year ago. I don't remember. It was like a shutdown of some things and you were involved. That's how I feel about what's happened here. That was past not even worth talking about.
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Rearview mirror, Jim. You know we're focused on is customers new customer acquisition. We did some great acquisitions which were de minimis in the quarter in terms of their revenue contribution but the technology is fantastic and again we've got the right platform at the right time with the right momentum.
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Well, congratulations George Kurtz, co founder, president and CEO of CrowdStrike, who actually quite candidly predicted every bit of this was going to happen. Thank you, George.
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Thank you, Jeff.
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Money's back.
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After.
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Coming up, a sleeper stock is waking up with Lowe's Corporation rallying. Kramer's explaining what's behind the run and whether the move can continue next.
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This.
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Not all bull markets are are noisy like the high profile moves in the data center stocks this year or the super speculative plays that were working very well until a few weeks ago when the year of magical investing ended. Some bull markets are quiet so the fortune like the almost silent move in Lowe's Corporation. That's L, O, E, W, S or letter L for you, you home gamers. A conglomerate of insurance, hospitality, energy, infrastructure and packaging businesses. Levy, Lowe's feels like it's achieved almost permanent resident status on the new high list. At least until the stock pulled back over the past few days. Good opportunity here. Now there's one. This one. This is an enigma. It's the only company, the s and P500, that has zero analyst coverage. Pretty crazy. Consumers got a market capitalization really $22 billion. Maybe that's why so few seem to have noticed that Lowe's keeps marching higher up almost 25% year to date.
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Reminds me of Seaboard, another the conglomerate. No analyst coverage in a stock that just won't quit. I only found about them last week because they have known butterball turkey brands of many, among many others. Now, the last time I recommended Lowe's was way back in April 2022 when the stock was trading at around 63. It's not 105 and change, up 67%. That's versus 53% for the S&P 500. Nice win. But in the five months after that segment, Lowe's pulled back to 49. So you had to take a leap of faith on this one. Since then, though, the stocks were more than double in little more than three years. Especially in recent months, this one's caught fire. So what's driving the move? Okay, first, let me give you some background. Lowe's is what we call a wholly company consisting of four businesses in four distinct industries. Company gets more than 80% of its revenue, about 62% of its profits from its 92% ownership stake in CNA Financial. That's a gigantic property and casualty insurance company company. Lowe's also owns a company called Boardwalk Pipelines. That's a natural gas and nat gas liquids pipeline and storage play. And that made up about 12% of their sales last year and 29% of the profits. They've got Lowe's Hotels, which is only 5% of business, but it's probably the one you're most familiar with. Finally, They've got a 53% stake in a smaller rigid plastic packaging company. It's called Altium Packaging. It made up 4% of their earnings last year. Beyond that, it's important to remember that Lowe's is a family business. A great family and a great business. At the beginning of the year, former CEO James Tisch, the second generation, passed the role to his son Ben Tisch, whose older sister happens to be the new York City's police commissioner. She's staying on, by the way, under the new mayor, to the collective relief of everyone who is worried about public safety. Now. You never know with these family business situations. But in the first letter to shareholders earlier this year, Ben Tish explained, quote, like my father and his father before him, I believe that the CEO of Lowe's Corporation has one job and one job only, to grow intrinsic value per share, end quote. Sounds good to me and has the added benefit of being true, as I know his father and I knew his father before him. The best we have in business in this country. Honorable is the word that comes to mind first and always. Lately, the company's been doing a great job of growing intrinsic value because its two largest businesses, CNA Financial, Boardwalk Pipelines, they basically print money. Through the first nine months of the year, Lowe's net income from CNA was up a solid 4.3%, including a much more impressive 43% jump in the most recent quarter. As for Boardwalk Pipelines, its earnings grew by nearly 25% through the first three quarters of the year. The smaller businesses are both down this year, but they're simply not large enough to pull anything down. They don't move the needle. Remember, CNA and Boardwalk collectively account for more than 90% of the sales and earnings at Lowe's. So why don't we start with cna? The past few years have been a very good time for the property and casualty insurance space, with insurance premiums rapidly on the rise. At the same time, we've had relatively high interest rates since 2022, which is terrific for this industry because insurance companies like to take your premiums and invest them in the bond market. There's a reason the other majors, like Progressive, I'll say Chubb, have been such terrific outperformers for the past five years or so. The most recent quarter was especially strong for CNA, with its profits of 43% year over year, thanks to better underwriting results and higher net investment income. Now, some of that's frankly because we had a milder hurricane season, though it's not necessarily something we can repeat. As for pipelines, regular viewers know that I'm a big fan of these energy toll roads with little exposure to the actual prices of the underlying commodities. We've got a ton of liquefied natural gas export terminals being built, which is great for Boardwalk because it means more volume going through their pipes. Plus, all these new data centers are desperate spread for electricity, which translates to more demand for natural gas that goes through pipes saw its net income grow 22% year over year in the most recent quarter. And they've got eight major projects. These are all growth projects still in the works, including several in the Gulf coast region that will keep that growth rate growing. That's very good news for Lowe's, the parent company. I remember when this pipeline seemed to go nowhere and I thought it might be a bad acquisition. But Lowe's, it took a longer term view than I had and it's really paying off now. There's one more reason why this stock become a quiet juggernaut. And this may be the trick, the reason why it just won't stop. See, Lowe's is a steady repurchaser of its own shares. From the end of 2014 until the most recent count at the end of September, Lowe's retired an astounding 45% of his common shares outstanding, reducing its overall share count from 373 million to 207 million. They can afford to do this because the CNA financial business throws off a ton of cash and distributes much of that cash via dividends. CNA trades independently, where it has a very attractive 4% yield. In reality, the payoff's even better because every Every year since 2014, CNA has also paid you a special dividend. This year it was $2 per share, which means the actual dividend yield for 2025 is north of 8%. When you include that, here's some quick math. Lowe's owns roughly 248 million shares to CNA Financials, so they got around 954 million in dividends from the subsidiary in 2025. That's enough to cover the cost of all their share buybacks in each of the past four years. Talk about a great business model. Even with with flat profits, those buybacks still translate into some terrific earnings per share growth. How about the valuation? Right. Lowe's trades at roughly 16.5 times last year's earnings. That's pretty reasonable, especially compared to the S&P 500, where some people think it's trading at 28 times last year's earnings. I prefer to use a forward valuation based on future earnings estimates, but there's no analyst coverage here. Still, though, through the first nine months of 2025, Lowe's put up 8.8% earnings growth. If they can keep that up in the fourth quarter, they'll make just under 7 bucks. $7 per share. That means the stock's trading at just roughly 15 times in my back of the envelope earnings estimate. And that is really cheap, especially given the high quality management year. So here's the bottom line in this story. That is not exciting and I don't care. It's easy to see why Lowe's keeps making the new high list that I like and is exciting and I do care, even though it doesn't get as much attention. The core insurance business doing great. The second most important business board pipeline is really coming on its own. Meanwhile, the secret sauce here is the company steadily buys back shares. One reason the stock still so darn cheap even after a big run. And that's why I still very much like Lowe's Letter L here. And if you come back next year at this time, I'll probably like it even more. Let's go to Dustin in Oklahoma.
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A
Dustin, good evening Mr. Chill. It's good to talk to you again. I'm chilling get to talk to you this week. Hey, you're chilling.
- [31:30]
E
I love it.
- [31:31]
A
Hey, it's fitting to get to talk to you again this week. Our two teams are meeting up on Monday night. I rarely get to play the Birds, but my lifelong Chargers are gonna see what we can get from you.
- [31:41]
E
It's gonna be a huge game. It's gonna be. Look, I want to win fair and square. Hope you guys left hand hand heels non throwing hand.
- [31:48]
A
I hope, I hope Herbert can play as well. That's. Yeah, we're looking forward to it for a good one. Well, hey, I calling you tonight about my new one of my newest AI plays that I absolutely love. It is about a multiple of 96 and you know the fundamentals sound really good to me since their newest acquisitions of any business right now is going into 2029 already and it is my newest favorite stock. So I'm going to ask you again what you think for the long term of GE Vernova and what you're looking at.
- [32:23]
E
G Vernova by Chappazar San Jose thank you for the kind comments. Let me make this really straight. This whole uranium thing, the whole nuke thing, if it happens, it's going to be GE Vernova. But more importantly, if it's Nat Gas, it's GE Vernova. Which means it is the only real company in that whole power segment that everyone's so crazy crazy about to speculate on. Don't speculate. Invest GE Vernova. Even though it doesn't get a lot of analyst coverage, it's easy to see why Lowe's keeps making new highs. And I still like it here even at these levels. Much more money ahead, including my post Earnings exclusive with Snowflake. I'm breaking down all the important headlines out of the cloud company with the CEO. We've had them before. The stocks up big over the course of the last year. Then if you must trade zero day options two times lever ETF or any uranium data center quantum play out there then I got a message for you partner and all your calls. Rapid fire in tonight's edition of the lightning round. So stay with Kramer.
- [33:26]
What the heck just happened to the stock of Snowflake Co. Reported a seemingly robust quarter after the close and stocks breaking down after hours trading. That makes sense. I don't know. Some of that's because Snowflake was up more than 70% for the year going to today's close. This one of the rare sulfur companies has convinced Wall street it can make a killing from AI rather just be killed by AI. And the numbers have mostly backed them up. Today there was a fly in the OHM at Snowflake's operating margin guidance for the current quarter came in about 7% and it's only looking for 8.5%. But in other words it was, it was lower than people expected but enough to torpedo the stock. It doesn't deserve to sell off. Let's check in with Sridhar Ramaswamy. He's the CEO of Snowflake. Get a better in the quarter and what comes next. Mr. Ramaswamy, welcome back to Mad Money.
- [34:07]
C
Hi Jim, good to see you.
- [34:08]
E
Okay, so sweetheart, we got to deal with this niggling thing that I think is just going to be forgotten about by 10:30 tomorrow. But there are some people, some press headlines that say wait a second, there's a weak profit margin. It must mean that they're not making as much money as people think in a. A completely a complete fiction. But I'll let you knock it down rather than me.
- [34:28]
C
Well first of all Jim, we had an incredibly strong quarter when it comes to revenue. $1.16 billion growing 29% year on year. Great, great product momentum. It's all about creating amazing products. We are very proud of bringing Snowflake intelligence to GA adopted by 1200 plus customers right out of the gate. Amazing names like the USA Bobsled Team and Fanatic and so many more. The thing that I'll tell you though, we are doing this with focus, speed and also operational trigger. There is a lot of attention being paid to how do we do our jobs more efficiently, how do we practice what we preach when it comes to AI and the gains that we are seeing internally in terms of how we operate are going to be very efficient. That's the magic of Snowflake, which is we will continue to grow at these impressive rates. That's why we raised for the whole year by a pretty big $51 million while being responsible and running the business extremely efficiently.
- [35:34]
E
Well, that makes a lot more sense to me and I think that people will look at something like the revenue revenue, $100 million run rate already. Can you tell people first how you can isolate AI revenue when you look at what you you get and what are people getting? What are the customers getting for what you're doing with AI?
- [35:52]
C
That's right. Well, one of the things about Snowflake is that the consumption model ties us very, very closely to customer value. That and our obsession on making things simple means that experimentation with AI for our customers is dirt simple. There's no new contract. Everything comes out of the box. You can build a chat bot, you can build a data agent. We give you amazing tools so that you can do that in a matter of days or weeks, not months or years. So you can get on this nice feedback loop. The bulk of the hundred million in ARR in AI revenue comes from the Cortex family of products. Everything from being able to use AI functions when you're running SQL to being able to talk to structured data, which is our specialty. And then the flagship products, Snowflake Intelligence, which is game changing. Jim, what if you had one? What you could do was both ask questions about, hey, how is the quarter doing? How is revenue? But also questions like what questions did I ask R the last time he was on Mad Money? It is that instant access to data without needing analysts without needing data, scientists without needing to wait for days or weeks that makes Snowflake truly magical. And that's the value that we are delivering. Anytime I show this to a CEO, they go, I want that. And that drives more people to want to put more data on top of Snowflake.
- [37:11]
E
I don't blame them. I think that's terrific. I like the reference too. Now, you also made a reference that I got to follow up on because it's something I was going to bring up unless you did. But the USA bobsled team did come to you because milliseconds matter. Tell us what they're doing to you. I think that will help a lot of people understand who don't understand what Snowflake really does.
- [37:31]
C
Well, you know this sports is complicated. And with things like the bobsled team, a single millisecond can sometimes be the difference between A gold medal and no medal. And those folks obsessively look at every single factor that goes into how a bobsled operates to what's the push rate to when does somebody get into the bobsled. On and on and on. And what something like Snowflake Intelligence does for the coaches, it gives them instant access to the entirety of the data set they can look at. How do I go about optimizing? How do I gain insights on what's working, what's not working? It basically lets them iterate run experiments on how they can get better in real time without the need for complex data science. It simplifies the hard to do which is really our specialty. We make the hard easy for our customers to do.
- [38:22]
E
Now another outfit, I know the hard nosed business people. I see their ads. They follow me wherever I go. I don't mind that they're from Philadelphia. It's cool. They fanatics. They are globally owned sports merchandise. For those who don't know them, they have enlisted you and it seems like a very good partnership.
- [38:38]
C
That's right. They have over 100 million customers doing everything. They have esports, they have merchandise and they use it to analyze the behavior of these customers, put data at the hands of the people that are optimizing them. So we are a big part of for them rolling out a sports, you know, sports advertising network. It is that ready access to data that makes this such a great partnership between them and us.
- [39:07]
E
Now one thing I need to know is, is that we had on last night. They're terrific. You're partners with them. And they're talking about cloud migration still early. They're talking about maybe 20% has been migrated to cloud 80. Not is that is a really that many people are still on premises, not in the cloud.
- [39:26]
C
Well that that tells you the amount of opportunity that we at Snowflake have. And here's where is very powerful. I told you earlier, if I show Snowflake Intelligence to a fellow CEO the first thing that comes out of them is like I want that. How do you have information about all of your customers right on your phone? I want a similar thing. It's exerting a powerful pool. What we are also doing at Snowflake is using AI to make things like migrating data from legacy systems onto Snowflake a whole lot easier. So we see I call that the push pull phenomenon of how there is more drive to do more things with Snowflake. And it's very early when it comes to cloud migrations and I think will be a Massive accelerant for us as well as folks like AWS, one of our largest partners. We've spent $2 billion through them through the AWS marketplace. That gives you an idea of the volume of joint work that we are driving.
- [40:22]
E
Last just shortly this deal you match with anthropic. $200 million partnership bring agency to global enterprise. Pretty good deal. A lot of people talking about anthropic. This one came together quickly.
- [40:34]
C
It did. You know this, they are among the very best model makers in the world. Beloved by developers for coding agents for example. And what this is going to let us do is bring their flagship models to all of our customers securely within their Snowflake deployment. We are also going to be working on going to customers together doing giant go to market as it were. So it's a, it's going to be a very fruitful partnership. We work very closely with, with that team and it all heralds to the tremendous potential that Snowflake has in the upcoming quarters and years.
- [41:10]
E
Excellent. Well Street Art. Look, I know this is a great quarter. There's just no flies at all. And I'm so glad you came on. Sridhar Ramaswamy, the CEO of Snowflake. The stock will be down, then I'll be up because it was a great quarter. Street Art. Thank you so much.
- [41:30]
Okay, don't miss out. This is your shot to join me in the investing club and get in our live morning meetings at 10:20 each day we go through the club's portfolio. Act fast, scan that you QR code or go to cnbc.comkramer club. I want you to be a member. This is the best time all year to join the club. And now it is time.
- [41:55]
My Stanford versus grandson. Bug, you play the sound and then the lightning round is over. Are you ready, Ski daddy? Time. The light rounds round. We start with David in California.
- [42:04]
A
David, Mr. Kramer, it's an honor to speak with you. I'm calling about a stock called Lumentum.
- [42:14]
E
Lumentum? Yeah. I mean look, this is just a red hot spec stock that actually makes money. I'm gonna say it's okay as long as it recognizes spec. Let's go to Wesley in Texas. Wesley.
- [42:24]
A
Yes, sir. Thanks for having me on, Jim. I'm talking about sticker symbol msci.
- [42:31]
E
Okay, okay. That's one of my absolute favorite stocks. It's been a complete winner. It's been a winner for ages. The reason why it's been a winner is frankly because Henry Fernandez runs it. I think he's great. The stock's down 9% for the year. What an opportunity. Let's go to Mark in Wisconsin. Mark.
- [42:47]
A
Thank you Dr. Kramer for taking my call.
- [42:50]
E
My pleasure. I got a company here for you that I own, buy, sell or hold. Digital Bridge Group. Alright, that's data centers, it's cell towers. It's all the stuff that I'm saying right now. I'm gonna say no, I'm gonna say pass. Let's just take a pass right now. It's not the right stock for this moment. And that, ladies and gentlemen, conclusion of the Lightning Round.
- [43:14]
D
The Lightning Round is sponsored by Charles Schwab.
- [43:27]
E
I've said it before, I'm going to say it again. The year of magical investing. It's ended in November. Whether we're talking zero days to expiration options or double leverage ETFs of a high risk speculative stocks, uranium quantum flying cars, crypto miners turned data centers. These things will not regain their ill fated heights even if we have a monster out predicted at the top of the show. I don't think people recognize just how treacherous this market can be. I always try to look at stocks from several different angles as detailed in how to Make Money in any Market. For example, I like to look for areas where there's too much enthusiasm or which stocks are interrelated not because they're in the same business but because they have the same shareholder base. In those last few weeks that we had during the downturn, we found out that many of the people who own these high risk speculative stocks also own Bitcoin, typically on margin. So when Bitcoin broke down to the low 80 thousands, it took a huge number of sub optimists stocks with it. Now Bitcoin rebounded hard yesterday and now we're seeing people return to the stocks that made up the year of magical Investing. And I think it's a mistake. Why? Because while I expect a rally, I think it'll be driven this time by the stocks of companies with excellent earnings that aren't too expensive like the ones I detailed at the top of the show. That may not happen tomorrow or the next day, but I think it's coming because many terrific stocks have been treading water gradually building a base and I think that can let them start soar. But the super speculative stocks remind me of the Internet stocks that didn't make it out of the dot com year when it came to an ignominious and I don't want you to, I don't repeat that experience. Unfortunately I seem to be fighting a losing battle. Now is a very Good company. It's not fly by night, but it's called Iran Iron. It's formerly known as Iris Energy. It's got me building data centers for bitcoin mining AI startups and most recently got a contract from Microsoft that's driven. But this morning, in order to pay for these data center work that has to do, it had to issue nearly 40 million shares of $41.12 per share along with a gigantic $1 billion convertible bond. Now Iran's retiring some previous debt. That's responsible. But this deal reminds me of exactly what I saw back in 2000 when things were just beginning to unravel. Huge deals to raise money in creative ways that just kept piling on and on and on. The.com saw the writing on the wall and recognized it was the last chance to raise capital. I know there are some big name people who are shorting all sorts of stocks because they think it's 2000 all over again. I don't agree with that assessment at all. In reality it's 2000 for a relatively small cohort really speculative stocks that I talk about that no one else does. Most of the companies we deal with are incredibly well capitalized. It's not 2000 for them. Mag7 back then we had more than 300 companies come public with lots of promise. We have fewer now, but the ones we do have remind me. And they wouldn't all just come public. Some of them has been around for a while, but they all remind me of luckless.coms. iren is one of those companies. Sure, they have Microsoft as a partner to build a data center that's terrific in a deal worth $9.7 billion to the company over five years. Spectacular. But they need to keep raising money if they want to keep building. Even if they got an almost $2 billion prepayment from Microsoft at the time the deal was announced. That's a lot to iron. Or any company for that matter. But if Microsoft decides it's been overbuilding down the road a couple of be one and done and these data centers are real hard to build. We've also know that the bitcoin mining business can be treacherous too. All I really care about though is you and that stock issuance. This time the deal worked terrific. Iran got the money it needed. That mean you should hold on to the stock to drop a couple of bucks on if you bought it on the secondary. Listen, the hyperscalers with deep pockets are now under tremendous pressure for their spending plans. So do you really want to be left holding the Iran bag or any other bags that are on their way. If the hyperscalers stop building, take the gain. It's terrific. You deserve it. There'll be plenty more of these deals coming. A lot of insider stock for sure won't be as won't be like Iran. The deals won't hold. I say you should get get out ahead of a ban. The nuclear stocks get out ahead in the alternative energy plays and the quantum computing numbers. They have no earnings and little in the way of revenue. Believe me, if you're an executive at one of these companies and you saw how fast your stock can fall if Bitcoin gets hit, sure shooting you're going to bail as the stock recovers. Because now human nature people. Now if you happen to own those stocks too, you need to beat the sellers to the punch. If it's anything like the year 2000, you need to skedaddle before the skedaddling gets too late to sell. Alex says always bull market somewhere. And I promise buy just for you right here at Man Bunny, I'm Drew Kramer. See you tomorrow.
- [47:54]
F
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 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 this segment is.
- [48:34]
D
Brought to you by Gelt. If you're a business owner wondering whether your CPA is just filing forms instead of helping you use taxes strategically, GHELT was built for you. Their expert CPAs and innovative AI tools help optimize entity structure, deductions and retirement contributions with proactive year round tax planning. SiriusXM listeners receive 10% off their first year of service when they sign up. Visit joingelt.com to schedule a discovery call. That's joingelt.
- [49:02]
C
Com.