Mad Money w/ Jim Cramer 1/28/25

Summary

Mad Money with Jim Cramer – January 28, 2025

Released on January 29, 2025

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Episode Summary

In this engaging episode of Mad Money, Jim Cramer navigates listeners through the latest developments in the stock market, offering insightful analyses, strategic investment advice, and in-depth discussions with prominent CEOs. The episode covers significant market movements, the impact of technological advancements, and emerging opportunities across various sectors. Notably, Cramer conducts interviews with Leon Topal of Nucor, Marc Benioff of Salesforce, and Christian Klein of SAP, alongside his signature Lightning Round segment where he shares buy, sell, and hold opinions on diverse stocks.

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1. Market Insights and Nvidia Analysis [01:03 – 08:55]

Jim Cramer kicks off the episode by addressing recent fluctuations in the tech sector, emphasizing the drawbacks of panic selling. He uses Nvidia's tumultuous experience as a case study, detailing how rumors surrounding DeepSeek—a Chinese AI model competitor—led to a substantial drop in Nvidia's stock. Cramer advises investors to maintain composure and highlights the resilience of well-positioned tech companies.

Notable Quote:

“Nobody ever made a dime panicking. No matter how many times I've said that...” ([01:10])

Cramer discusses the implications of DeepSeek's emergence, explaining:

“If you match yesterday's carnage in tech with today's bountiful harvest of winners, you know why I have to repeat myself.” ([03:15])

He underscores the importance of strategic patience, particularly in volatile markets:

“If you panicked and sold tech yesterday, you missed today's cornucopia of tech winners...” ([04:50])

2. Interview with Julie on Eli Lilly [08:55 – 10:35]

In this segment, Cramer welcomes Julie to discuss Eli Lilly's current market stance amidst evolving pharmaceutical landscapes. They explore Lilly's upcoming earnings report, recent Q3 performance, and the impact of GLP1 disruptors on the company's stock.

Notable Quote:

“I do believe in Lilly. We own it for the trust.” ([09:23])

Julie highlights the significance of Ozempic's new application for kidney failure, suggesting potential growth avenues despite recent stock challenges:

“With the earnings just around the corner and a noticeable Q3 miss, it seems like the street can't agree if this is a buy or a sell.” ([09:08])

3. Interview with Leon Topal, CEO of Nucor [13:10 – 21:45]

Jim Cramer sits down with Leon Topal to delve into Nucor's strategic initiatives and market performance. They discuss the ongoing challenges in the steel industry, particularly focusing on foreign competition and U.S. trade policies. Topal elaborates on Nucor's diversification into warehouse systems and infrastructure projects, highlighting the company's robust growth and commitment to shareholder returns.

Notable Quotes:

“We are going to return it to our shareholders...” ([18:11]) “Nucor sits at the epicenter of all of that, Jim, to not only build the infrastructure for it, but supply the parts, pieces and components into all of those streams.” ([16:20])

Topal discusses the impact of transshipment and trade agreements on domestic steel production:

“Canadian and Mexican imports account for almost 40% of the entire import picture in the US...” ([14:52])

4. Interview with Marc Benioff, CEO of Salesforce [23:41 – 31:57]

In a conversation with Marc Benioff, Cramer explores Salesforce's advancements in artificial intelligence and data integration. Benioff discusses the introduction of Agent Force, Salesforce's AI-driven platform that enhances customer relationship management by integrating digital workers with human agents. They examine the competitive landscape, particularly Microsoft's AI initiatives, and the strategic positioning of Salesforce in the evolving tech market.

Notable Quotes:

“Every great product needs a great branding campaign...” ([28:17]) “We are deploying humans and agents working together...” ([26:42])

Benioff emphasizes the importance of data over hardware in AI development:

“We are living where our support agents are working with agents, so digital workers are working together to solve customer needs...” ([29:17])

5. Interview with Christian Klein, CEO of SAP [32:19 – 39:38]

Cramer engages with Christian Klein to discuss SAP's impressive financial performance and its strategic integration of AI into business solutions. Klein outlines how SAP's AI strategies are enhancing operational efficiencies for major clients like General Motors, focusing on predictive demand, inventory optimization, and workforce management.

Notable Quotes:

“We are infusing AI into the businesses of our customers...” ([34:27]) “When we invented ERP 50 years ago it was a transactional system and today actually it's a business suite...” ([37:29])

Klein highlights SAP's agnostic approach to AI infrastructure, prioritizing data integration over hardware specifications:

“We are using the best large language model for the different use cases we have to want. But the value is the business data.” ([35:50])

6. Lightning Round [39:56 – 43:12]

Jim Cramer transitions to his interactive Lightning Round, where he responds to listener calls with quick investment opinions. He addresses a variety of stocks, including Viking Therapeutics, First Solar, and Waste Management, providing clear buy, sell, or hold recommendations based on current market trends and company performance.

Notable Quotes:

“I prefer Eli Lilly. I want to go to Terry in Florida.” ([40:34]) “I like Waste Management very much. I think it's an absolutely terrific stock.” ([43:12])

Cramer advises caution with certain healthcare stocks, advocating for waiting to see real bottoms before investing:

“It's a very expensive stock. I'm trying to sell a lot of GE Healthcare...” ([42:46])

7. Cruise Stocks Analysis [43:43 – 47:39]

Concluding the episode, Cramer turns his attention to the travel and leisure sector, specifically focusing on cruise lines like Royal Caribbean. He highlights the company's recent earnings surprise, revenue growth, and strategic expansions, positioning cruise stocks as undervalued with significant growth potential.

Notable Quotes:

“Cruises have become genuine secular growth plays and they may stay that way for a generation.” ([45:30]) “Royal Caribbean reminds us it travels a $2 trillion business. Cruises are considered an amazing value within that 2 trillion.” ([46:10])

Cramer underscores the resilience of cruise lines post-COVID, noting their disciplined capacity management and the increasing consumer preference for experiential travel:

“These companies have become incredibly disciplined about not adding too much capacity at once, which makes the industry much more resilient...” ([46:50])

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Conclusion

Throughout the episode, Jim Cramer provides a comprehensive overview of the current market landscape, emphasizing the importance of strategic investment decisions and the potential of emerging technologies and sectors. By engaging with industry leaders and offering nuanced stock recommendations, Cramer equips listeners with the knowledge to navigate the complexities of Wall Street effectively.

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Notable Quotes Recap

• “Nobody ever made a dime panicking. No matter how many times I've said that...” ([01:10])
• “We are going to return it to our shareholders...” ([18:11])
• “Every great product needs a great branding campaign...” ([28:17])
• “We are infusing AI into the businesses of our customers...” ([34:27])
• “I like Waste Management very much. I think it's an absolutely terrific stock.” ([43:12])
• “Cruises have become genuine secular growth plays and they may stay that way for a generation.” ([45:30])

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Key Takeaways

• Tech Sector Resilience: Despite volatility, strategic patience in tech investments can yield substantial returns.
• Pharmaceutical Prospects: Companies like Eli Lilly exhibit strong fundamentals despite market uncertainties.
• Industrial Growth: Nucor's diversification and strategic initiatives position it for robust growth amidst global competition.
• AI Integration: Salesforce and SAP are at the forefront of integrating AI to enhance business efficiencies and customer relations.
• Investment Strategy: Cramer's Lightning Round emphasizes the importance of informed decision-making and identifying undervalued stocks.
• Travel and Leisure Opportunities: Cruise lines demonstrate significant growth potential, supported by disciplined management and evolving consumer preferences.

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By synthesizing expert insights and current market trends, this episode of Mad Money serves as a valuable resource for investors aiming to make informed and strategic financial decisions.

Transcript

[Jim Cramer]

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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 kramerica. Let's be with my friends. I'm just trying to make you a little money. My job is not just entertainment to educate tissue. So call me at 174.3CBC. Tweet me Jim Cramer Nobody ever made a dime panicking. No matter how many times I've said that, it always feels like the first utterance. But if you match yesterday's carnage in tech with today's bountiful harvest of winners, you know why I have to repeat myself. If you panicked and sold tech yesterday, you missed today's cornucopia of tech winners with the Dow gaining 137 points and S&P climbing 0.92%. But the Nasdaq filled with tech going up 2.03%. Now, before we dig into what happened today, I want to emphasize that when I say no one ever made a dime panicking, I'm actually not even talking about being opportunistic. I'm saying that if you wanted to sell in video into the worst single day loss in history of a market capitalization, maybe you learned your lesson as the stock bounced back furiously today, up nearly 9%. Because as bad as this deep sea thing might be for video, it might not be that bad. No, it's not back to where it was. I get that. And maybe it shouldn't be, but it really got oversold and therefore it caught a bounce when there was only one downgrade. A lot of positive chatter that it isn't over for what was not long ago, the world's largest company. I get that it wasn't easy to do nothing yet to sit on your hands. So you had this Chinese alpha come out of nowhere, announced basically that you don't need as many Nvidia chips as you thought for AI because you can get much more out of each ship, maybe 10 times more if you just use the software. That's pretty much what Deep Sequence offered. And it's certainly a frightening prospect for in video as the company has been perceived to be a monopolist that price gouges. Now the way I see it, that's nonsense. Nvidia invented this business, spent billions upon billions of dollars building it up and it simply charged with the market bear until last week. We figured that to get most tasks done, to get the best use out of Nvidia's product, you had to order a colossal number of chips at obscene prices. Now though, if someone comes along and says, hey, you know what, you can get 10 times as much output from an invidious chip that you thought, you got to figure you only need to order 1/10 as many chips as you thought you needed, right? Isn't that the math? And that's why Nvidia stock got obliterated yesterday. What if everyone who's ordering these chips cancels 90% of their orders? What if you only need 1/10 of the data centers you planned? Okay, that is enough to scare anyone, but fear doesn't necessarily generate the right decisions when it comes to the stock market. Remember, I'm not talking about being opportunistic again and buying in video this morning when it went from plus four to minus one. I'm just talking about not selling you the biggest route in history. Or to put it another way, because I really am trying to get this point across. Obviously doing nothing was actually a great strategy. You didn't expose yourself more risk. And if you're truly worried that Nvidia might lose 9, 10 of its orders, you got a chance to sell at a much better price simply by waiting a day. Sell, sell, sell. The panic yesterday was so palpable that people even sold the beneficiaries. The companies that are doing well might even do better if deep seats formula for success spreads. Bunch of knuckleheads. At one point yesterday we saw some huge potential winners get hammered. As to stocks like Meta, Microsoft, Amazon, Alpha, all four of them came roaring back today. They were all fabulous buys, house of pleasure, yes, panicking cause smokescreens that obscure what in retrospect were some fairly obvious opportunities. If matters buy 500,000 chips from Nvidia and the price of those chips comes down because people realize they don't need as many. Well how is that negative for matter? The only way to frame this is a negative is if you got a problem with arithmetic. In which case instead of doing this I suggest some remedial math classes might help. Irony of ironies. How about the fact that Apple, which had been in free fall for weeks, has made abrupt U turn two days ahead of earnings and has now rallied from 222 to $238. How crazy is that? And once again I remind people that I want to own Apple, not trade it. That's how we feel for the trust. But a lot of people sold it yesterday to 22. I wonder what they're thinking. That said, if you can't handle the fear of owning the stock of Apple through a quarterly report that is almost universally regarded as horrible, awful and miserable before it prints, which is going to on Thursday, well you're now free to sell the stock at a much higher price. I say go forth and sell. Some stocks were held correctly as winners this environment mainly the companies that benefit from less expensive hardware like ServiceNow which rallied another 2.6% today in Salesforce which gained 3.7% on top of a colossal gain yesterday. We're going to have CEO Mark Ben Affleck to talk about this new deep seek see and how it seeded the world later in the show. But now let's get back to the real issue here because I got to make another point. If you made it through the yesterday's cataclysmic drop and still own the stock of Nvidia, can we just stop for a second and think about what deep seat might really mean for this incredible company? First, it's entirely possible that companies will place smaller orders if they can really get much more use out of Nvidia's chip chips. It's just possible the price of compute could come down. That's understandable. If a company setting up still one more AI powered customer assistant, then it's entirely possible that there won't be as much demand from videos highest end chips. If that's the case, you could argue that you might even be able to use less powerful chips. Item from from Amazon from amd. Salesforce is the king of the AI powered customer system. So it's a gigantic winner from Deep sea. The more commoditized the hardware, the better off for Betty off. But what if you're thinking much differently? What if you want to create a world of specialized robots that can do anything humans can do physically and do it better than we can actual physical robots? Humanoids. Call whatever you want. Can Deep Seek do that for you? Does Deep Seek help you create the best self driving cars? Does it keep your data private? Or like TikTok, does it just turn out to be a way for the Chinese government to influence us and gather our information? Huh? But one look at the incredible run in the cybersecurity stocks tells me that someone besides me has thought about the implications. Do you think the stock of chapters are holding crowdstrike doesn't go up $34 or 9.35% in a single session for nothing. And then there's something else that bothers me about the slam job on a video. With Wall street suddenly treating as a commodity chip maker like some sort of intel not deserving of a trillion dollar valuation, let alone a 3 trillion. We may have just found out about Deep Seat because we read about it in the New York Times. Is it really possible that Mark Zuckerberg from Meta, Larry Ellison from Oracle, Elon Musk from everywhere, guys who've been ordering chips, video chips, the most aggressive, expensive kind, like mad. Do you really think they were blindsided, Julie? They didn't know anything about this. Were they as clueless as the people who sold a video in yesterday's Vortex? Were they so involved with President Trump's initiative and so eager to please the President that they ordered billions of dollars of chips just to show they liked them? Somehow I don't think that makes a lot of sense. I hope you don't think so either. These folks didn't just fall off a turnip truck where they were frantically trying to buy some Blackwells. Here's the bottom line. The shoot first, ask questions later approach works when there's fraud or chicanery and we know we must sell. But when things are complicated or murky, it might not make sense to help create the biggest single day dollar loss in history. Chums. There's a better way. Just don't do anything. If you really want to sell, you can do it into the rebound the next day. In my experience, after one more dip in the morning, you almost always get a better price. Julie and Connecticut Julie.

[Julie]

Hey Jim, how are you? Thanks for having me.

[Jim Cramer]

I am good. Julie, how are you? I'm doing good. What's happening?

[Julie]

I'm very good, thanks. So I was hoping we could talk about the weight loss elephant of pharmaceuticals, Eli Lilly.

[Jim Cramer]

Sure. What are you thinking?

[Julie]

Well, so with the earnings just around the corner and a noticeable Q3 miss and the continuing momentum of the GLP1 disruptors, it seems like the street can't agree if this is a buy or a sell.

[Jim Cramer]

So. You're very right. That's very true. Okay, so I mean we just found out today that Ozempic has something for kidney failure. And that means that maybe Lilly has now Lilly has. I will say this, the single worst chart I have seen in a long time. And there are a lot of people on Wall street are chartists. However, I actually like the fundamentals. Now David Ricks did on our show pre announce a better than expected quarter and nobody listen. But I do believe in Lilly. We own it for the trust. And I've got to tell you, I think in another dip you get another opportun opportunity to buy. And I'm sticking by that. All right, look. Thank you. Look, when things are as murky and complicated as the deep seat news, sometimes you know what it's best to do nothing. That can be a strategy too. All man money tonight. New course up on yesterday's report. But can the stock keep climbing? I'm talking earnings tariffs in the state of steel with companies top brass then as deep seek shakes up the stocks. I've got Salesforce CEO to get a better read of the landscape for tech. Hey, maybe he wants to bury the hatchet with Microsoft. You never know. Plus I'm checking in with CEO of SAP to get a close at what's powering growth for that German software player, one of our super seven out of Europe. So stay with Kramer.

[Mad Money Announcer]

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

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[Jim Cramer]

Look at Nucor. Go back. When the steelmaker preannounced its results in December, Wall street saw it as disappointment. But when Nuclear reported last night, they reported a huge top and bottom line beat, much better than expected. And that is why the stock shot up nearly 4% today. Now, over the last year, Nucor has come down close to 30% thanks to falling steel prices. But with the new administration vowing to protect domestic steelmakers from foreign competition, I think the stocks become a lot more attractive. Let's take a closer speed. Speak to Leon to Pal. He's the chairman, president, CEO of Nucor. Learn more about what's going on. Mr. Pal, welcome back to Money.

[Leon Topal]

Thank you Jim. Look forward to talking today.

[Jim Cramer]

Okay, so I've seen the actually precipitous decline in steel pricing and but I have not seen a concomitant decrease in activity in our country, which leads me to believe that there is some manipulation and there is some dumping, particularly by a country that is way too much steel, which is China. But we're not seeing it through China. We may be seeing it through our trading partners. Do you think the President can stop it?

[Leon Topal]

Yeah, there's no doubt in my mind. We saw him stop it in you Know, his first administration. I think we'll see it again and again. What you're going to see, Jim, in the coming days, weeks and months is a very pro America trade policies and enforcements. We saw the memo last Monday on tariffs and what they're going to do and I think they're going to be far reaching and I think they're going to be very broad to again stop the illegal dumping, the manipulation, currency manipulation and subsidization of steel is coming into the shores of the U.S. can you.

[Jim Cramer]

Please explain to people what transshipment is? That it's entirely possible that a country like China uses middlemen in Canada and Mexico to smuggle their steel in here. Basically because that's what it is, they're smuggling.

[Leon Topal]

Well, when you think about the US consumption at about 100 million tons, about 100 million tons is leaving the shores of China looking for a home. And the greatest home and the greatest economic home in the world is the United States. So whether it's Vietnam, Canada, Mexico, it's got to stop. You know, Canadian and Mexican imports account for almost 40% of the entire import picture in the US so the trade agreements that were brought under USMCA have got to go back. We've got to reinstate 232 and again create a fair and level playing field. And again today that is not the case.

[Jim Cramer]

Now let's make it clear, you are not saying that Nucor should have unfettered access. You're fine with these, with these companies and countries, if they want to open steel mills, this country, you're more than fine. You're not trying to, you're not against that.

[Leon Topal]

Look, we'll compete against anybody in the world. We've said that for years and years and decades. And so again, our cost structure, our team, I would stack up against anybody. Jim, it's exactly what you described. It's the illegal dumping, the subsidization of steel's in the currency manipulation that creates a very unbalanced and unlevel playing field that has hurt the steel industry for decades now.

[Jim Cramer]

At the same time you have been spending big capital improvements and you're moving to a lot of different end markets. One of them is, let's say steel that might go into data centers. Now suddenly we are concerned that there'll be fewer data centers built. Is this something that's been on, on your mind?

[Leon Topal]

Yeah, absolutely. It's a megatrend for us as we continue to grow. As you know, we acquired Southwest Data Products company last year. And again we look for the Racking in the warehouse systems that we've got within the Nucor to continue to fuel that. But look, I've watched over the last 30 hours in the news cycle with what's happening in that at the end of the day, that growth over the next five, eight, ten years is going to be continue to grow. If we think about the energy, space and grid hardening and bringing the power to power the data centers as well as all the other manufacturing growth that's going to be spurred under the economic policies of deregulation, lower interest rates, corporate tax rates. I think it's all fuel. And Nucor sits at the epicenter of all of that, Jim, to not only build the infrastructure for it, but supply the parts, pieces and components into all of those streams.

[Jim Cramer]

All right, now one of the things that I also saw, I had been concerned about your, your warehouse business, the doors business, because that had slowed down. But I don't know if you could prologis, which is the biggest, actually call it a bottom in warehouse just last week. And are you starting to see a similar thing, a bottoming of that business?

[Leon Topal]

Yeah, not only the bottom, Jim, but you have to remember as well that it's the reason we acquired that is to prevent some of the cyclicality that we see in steel. So while it's off in terms of what we see in the steel typical sine waves, it is much, much slower. So their, their growth and their continued earnings is really strong. And again, we forecast that to be even stronger in 2025.

[Jim Cramer]

Now, I know that you are big fans of your stock. I am too. Obviously you did repurchase a great deal of stock at $168. Do you just keep buying? What, what do you think is the right thing to do?

[Leon Topal]

Look, I think at the end of the day, Jim, we are on the about 2/3 of the way through a $16 billion growth campaign in both organic and M and A activity. And what we've always done is we don't have a great home for that. We're going to return it to our shareholders as over the last five years as CEO, we've returned $12.5 billion or 60% of our net earnings back to our shareholders. As you know, our shareholders know and those that are, you know, active in terms of thinking about the dividend king that Nucor has been for 50 plus years now.

[Jim Cramer]

All right, now how about what can happen here with Cleveland Cliffs as potential partner for US Steel? I happen to enjoy Cleveland Cliffs. I think they do a good job. The stock's been Hurt just like yours though by Chinese, maybe even worse by Chinese dumping. Worth it to to be able to pick up something, if you can, from them.

[Leon Topal]

You know, Jim, we're the largest steel company in North America. So of course we took a look a year and a half ago and, and we'll continue to look and see if those assets come back. But you know, part of the reason we didn't move forward is valuation. We're not going to overpay for assets. We're going to be really disciplined with our growth. And there's been an awful lot of talk and chaos around the noise of the acquisition with Nippon in us. The nostalgia that us deal is thought about is from 40 or 50 years ago. It is a shell of itself. And it's not because of the hardworking men and women in their plants. It's because leadership didn't recognize the changes that were coming. The technological innovation, the competitors like Nucor that were going to emerge as the nation's largest, safest, most productive and sustainable steel maker. And so if you look at our net earnings, it would take the next three competitors combined to get anywhere close to what Nucor has done.

[Jim Cramer]

Well, I mean that, that is incredible. And what I really like is you keep putting up plants in places that might otherwise not have any economic activity. I think it's important for people to recognize that Nucor is, is much more forceful and important when it comes to growing communities that have been hurt than the US Government.

[Leon Topal]

Oh, absolutely. You think about again, all of our plants from Hertford County, North Carolina, Mississippi county in Arkansas and again across this incredible nation, we have incredible hard working men and women that make up this incredible family. And Jim, I'd be remiss if I didn't tell you 2024 was the safest year in our history. And if you think about every result, every KPI we talk about, it is because of the men and women who make up this incredible Nucor family. And so we are poised. And I think 2025 is going to be a better year than we saw last year. But in the years to come, Nucor is incredibly well positioned in our, our best days are still in front of us.

[Jim Cramer]

Have you seen the burst of enthusiasm and optimism that I've seen enough to be able to increase the GDP estimates from the Federal Reserve of Atlanta just this afternoon, seeing that kind of burst of optimism.

[Leon Topal]

Yeah, look, we're seeing it everywhere. Our customers, Our customers. Customers. I talked to three of our largest customers last week and that, that sense of promise and confidence in the economy is fueling the resurgence of reshoring increased order activity. Our backlogs are up, order activity is up and I think you're going to see that continue into 2025.

[Jim Cramer]

Well, you tell a terrific story because you're a great company and Leon, it's great to have you on the show. I really think that this is the level that you have to own Nucor if you have any faith in in the US Economy, which I certainly have and I know you do. Leon to is the chair president CEO of Nucor. Thank you, Leon, for coming on the show.

[Leon Topal]

Thank you, Jim. Appreciate it.

[Jim Cramer]

That money's back in the break.

[Mad Money Announcer]

Coming up, how are tech companies navigating the air race after yesterday's big declines? Kramer's one on one with Salesforce CEO Marc Benioff. Next.

[EY]

What'S at stake when administrations change from the first 100 days and beyond. EY brings insights on the issues that matter. Executive orders, regulation of AI, the fate of billions in tax credit, global trade and workforce stability. No matter the policy shifts, EY helps business and government leaders remain resilient and seize dynamic growth. EY navigate the geopolitical and economic landscape with confidence.

[Jim Cramer]

Finding the music you love shouldn't be hard. That's why Pandora makes it easy to explore all your favorites and discover new artists and genres you'll love. Enjoy a personalized listening experience simply by selecting any song or album and we'll make a station crafted just for you. Best of all, you can listen for free. Download Pandora on the Apple App Store or Google Play and start hearing the soundtrack to your life. When we found out about DeepSeq, that's a Chinese AI model that can produce similar results to the leading US models using fewer resources. People that she sold almost every stock involved in the ecosystem dumb. There are a few exceptions like the AI empowered software companies that are pure winners in a world where artificial intelligence development could be much cheaper. Companies like Salesforce, the cloud software pioneer that was among the first to market with its own AI application for customer relations management agent Force stocks now up almost 8.8percent over the past two days because it's a clear beneficiary in post deep seat world. How much does this move the needle for? Let's go straight to the stores. Let's go to Mark Ben Co Founder Chairman, Salesforce Figure out what deep seek means for artificial intelligence. Mr. Bennett, welcome back to Mad Money.

[Marc Benioff]

Jim, it's always great to be with you and thanks again for having me.

[Jim Cramer]

Of course we do need to know how much it really does move the Needle when, when you can shift away from or make hardware commodity, then we start realizing that there are other things are gold and including data being interrogated, say by people who want to use Salesforce and make more money. Is that what could happen?

[Marc Benioff]

Well, Jim, we've been talking now for, I guess, I don't know, a couple of years about these models. And you know how I feel, which is that these models are just commodities and the real value is in the data and the metadata that's inside these companies, which is what drives the model and makes them special. So what you see now is another great model actually from China. And it's not going to be the last Chinese model, Jim. You're going to see a lot more models from China and a lot more innovation in the model space. And this is inspiring a new generation of model that yes, is lower cost, is cheaper and as you can see with Deep seek, this was 27 times cheaper than the open air model. So this is an incredible advancement and inspiration for all of us.

[Jim Cramer]

Well, but let me ask you, last week you said to my friend Andrew Sorkin, the United States of America has a tremendous lead in artificial intelligence and in technology. Is that not true?

[Marc Benioff]

Well, we absolutely do. You can see the majority of the models are American models. But here we see now the Chinese also coming in with not only an aggressive competitive model, but one that's cheaper and lower cost. So it just gives everybody the motivation to keep going and going faster, but.

[Jim Cramer]

At the same time, and you and I both know Jensen Wong, what he's doing is at another plane in a lot of ways. I mean, he's trying to make it so that we all say have a robot assistant humanoids. He make it so that humans are side by side with, with robos, whatever you want to call them, agents, how we call them agents. Now that doesn't mean that you think that in videos run out of steam here.

[Marc Benioff]

Well, Jim, you know, Jensen and I both agree with something very clear, which is that we are now in the third wave of AI, which is the agentic wave. And the agentic wave is driving this incredible new platform for many companies, the ability to make things much lower cost and much easier. And you mentioned, we were just at Davos last week with Andrew and Sarah Eisen also. And I'll tell you, all of Davos ran on Salesforce the entire conference, which has been true for more than a decade. But this year was the first year that we built an incredible agentic layer across the conference so every attendee could work with agents. Not Just with humans, but agents as well. To plan the conference, contact their friends, make restaurant, restaurant reservations. All of these things were possible at Davos for the first time. And it's no different than we're doing now for so many exciting customers that we have, which is deploying humans and agents working together. You saw it at Dreamforce, now you've seen it at Davos, and you're going to start seeing it at so many of our customers across the world.

[Jim Cramer]

Well, I understand, and I think that, of course, the. The data is what matters, and if you can make the hardware cheaper, it's even better. But do you think that maybe we even kind of fomented China to make data cheaper, hardware cheaper than we did? Was that our fault, so to speak?

[Marc Benioff]

Well, I think they do what they do. And look, technology is getting lower cost and easier to use. It's a continuum. And this is exciting. This is why I love my industry. I love being in the technology industry. Jeb, because we're always. How many conversations have we had exactly like this over the two decades or so?

[Jim Cramer]

Another conversation we always have.

[Marc Benioff]

I mean, it's from cloud to social to mobile to AI and now we're talking about these models and how the models are compressing and getting more efficient and that no one company has a lock on any one model, and everyone is having a model. This is very cool.

[Jim Cramer]

Okay, now another thing we need to settle. Another thing you and I have talked about. Look, I think Matthew McConaughey, you know how much I like of him. I think he's terrific. He's fun, he's so smart. And I see these ads and I'm telling Faber, David Faber, my partner, you know, look, this is like the greatest campaign. I love it. It's incredibly funny. And I bet you it's bringing a huge amount of business to Salesforce. And I think David saying, like, well, I don't know who watches it and then goes to Salesforce and buy something. But the fact is it's about ubiquity. It's about the recognition that there's something going on that maybe your company should be involved in. Has it had an impact? If I went to your. To. Well, your. Wherever your headquarters is. If I went to talk to people from Salesforce where they say, listen, McConney's killing it.

[Marc Benioff]

Well, Jim, I'm looking forward to, you know, catching up on all of those details when the quarter closes. But what I'll tell you is I love Matthew McConaughey. And he brought Woody Harrelson in as you know, to build an incredible campaign for what is by far the most exciting product we've ever had at Salesforce, which is Agent Force. And you've already seen it at Dreamforce, you saw it now at Davos, you see it at Salesforce. We're alive where our support agents are working with agents, so digital workers are working together to solve customer needs, where, you know, we get about 36,000 customer support calls every single week. Well, now about 31,000 are handled by agents and 5,000 are handled by humans. This is an incredible advancement for us, and we're doing it for a lot of our customers. At Davos, we also had the pleasure to be with Dave McKay of Royal bank of Canada, who's deployed us on their wealth management business with Agent Force. And he's talking about how, you know, we're going to be able to save him, hopefully hundreds of millions of dollars and I hope, you know, generate billions of dollars of revenue for him with Agent Force. So I couldn't be more excited about the progress. And you're right, every great product needs a great branding campaign. And I think Agent Force has kind of gone from zero to hero in just about three months. I mean, how long ago when we were at Dreamforce where we heard Agent Force for the first time? I think that was just September.

[Jim Cramer]

Oh, it's an amazing turn. It really is. Now I'm going to try to do something that might be impossible. I see Microsoft making some personnel changes. I see them breaking up with perhaps with the people that we know, Open Air, and I'm wondering whether you might ban the Clippy to talk. They've got some smart people. Maybe they'll start making the assistant a little bit better. Why don't we bury the hatchet right here, right now and not. And not inside his head.

[Marc Benioff]

You're. You're right, Jim, that Microsoft has disappointed so many customers with Copilot. It just hasn't delivered because it's just repackaged Chat GPT and I guess that's fine. But now, you know, with Stargate, that got announced last week, it's really a bifurcation between Microsoft and Open Air. Microsoft, you know, delivers their infrastructure Azure. Well, now chat GPT and OpenAI are going to be running on this new Stargate infrastructure. This is a huge transformation. And a lot of that has to do with Microsoft basically starting their own Frontier AI team, you know, under Mustafa Sullivan, who you remember was Google, who started DeepMind. Then he had inflection. Now is it Microsoft running their AI efforts, building their own Frontier Models. This is a huge advancement again for the industry. Another model.

[Jim Cramer]

Right, but I mean, at the same time, I mean, maybe Copilot becomes more of a pilot, maybe, you know, maybe an astronaut. What do you say? Come on. Right now just say it's going to get better and that we should stop making fun of Microsoft on Mad Money.

[Marc Benioff]

Look, Jim, you know that Microsoft's the number one software company in the world. Enterprises Salesforce is number two. It's important that we paint the clear differentiation between Copilot, which has not been able to deliver these results for customers and agent Force, that is. And look, we can see it in right on my own company that this is a tremendous platform. And I just spoke with hundreds of customers last week at Davos. I didn't find a single happy Copilot customer there.

[Jim Cramer]

All right, well, we didn't get exactly that hatchet bearing moment, but that's okay. That can happen some other time. I am thrilled to have Marc Benioff who's the co founder, chair and CEO of Salesforce.

[Christian Klein]

Great to see you.

[Jim Cramer]

And I want a couple agents next to you next time I see you. Okay? I'm going to hire a couple.

[Marc Benioff]

It's about humans with agents working together. Digital labor revolution.

[Jim Cramer]

We're all pals. Mark, thank you so much. Good to see you, Matt. Money's back. Every month.

[Mad Money Announcer]

Coming up, fresh off its earnings report, what's in store for software giant SAP? Kramer's catching up with the CEO next.

[Jim Cramer]

Over the past couple of years, this SAP German enterprise software giant is becoming quietly one of the best stories in tech stocks. Now roughly 250% from its lows. September 2022, its cloud business caught fire. It's a roll. It's been incredibly successful. Now this morning, SAP reported a strong quarter with an impressive full year forecast. Though the stock didn't get any credit for it. It's still up 11% for the year, though I think it's got a lot more upside, especially because it's kind of tech stock that's basically immune to the deep sea shakeup and it's got accelerating revenue growth. We call that arg. But don't take it from me or Today we had this chance to speak with Christian Klein, the CEO of SAP. I want you take a look. Christian, once again you delivered excellent numbers and I want people to be reintroduced to how great you guys are. We need you. One of our seven Super 7 of Europe and a lot of this because you're not a small company. But you had accelerating revenue growth this quarter.

[Christian Klein]

Absolutely, Jim. I mean Q4, the total year 2024 was a record year for SAP. I would go that far that it was the best year in SAP's history. And look, I mean cloud revenue accelerating. Our total cloud backlog is now amounting to 63 billion euro up 40% outperforming our peers, customer satisfaction up. And of course I 50% of the deals have already AI embedded. So it was a fantastic year for SAP.

[Jim Cramer]

And yet at the same time, as I read through all the different things about your company, it does seem that you're early in your customer cloud transition, even after all the success.

[Christian Klein]

Jim, that is right. I mean, look, I mean the company actually was founded over 50 years ago. We are in a massive transition. But you know, also, I mean it's actually a great treasure to have all of these customers, 400,000 customers. We have the richest business data set of all tech companies. And of course in the age of AI, that is of course a crown jewel. What we have also sitting at the nexus between business and technology. And that really matters not only in the cloud, but also about infusing AI into the businesses of our customers.

[Jim Cramer]

Well, let's go there because it does seem like you're infusing it and it really doesn't matter. You're kind of agnostic into whose AI infrastructure using and that what's far more important is that you have the data and that the data is the secret for the best AI solution.

[Christian Klein]

Jim, I could not have said it better. Actually this is exactly what we are doing. This is what our AI strategy is about. We are actually sitting on a very rich set of business data, HR data, finance data, supply chain data, sales data. And by bringing this together in our AI foundation, think about agendic AI. You can predict demand, you can actually hand it over from the sales agent to the supply chain agent because you have to deliver, you have to have the right inventory, the right spare parts at the right time. And then of course you can go over to the procurement agent to make sure also procurement is closely in sync and that's completely automated, really delivering higher automation, but at the end also a great consumer experience. And indeed we are agnostic to any kind of large language module. And this is actually our winning formula. Business data of SAP embedded in the business of our customers together with the best large language modules. That is what we are doing.

[Jim Cramer]

Well, okay, maybe you could, for people who are not as close to large language models, things like that, just talk about for instance what you do with gm because GM reported today it's A great company and I know that you're a great customer.

[Christian Klein]

Indeed, GM is a great customer and actually they really decided to bet on our platform to drive the transformation of gm. So to give you a few use cases, what really matters for them, what drives high value for gm? First when you think about spare parts management, it's actually about really delighting the consumer that the spare parts are available at the right time at the right place. And what our software does, what our AI does is predicting this demand, you know, very accurate and then making sure that you can always optimize inventory. So you are delighting your consumers but you also optimizing inventory which can save billions of CapEx. Second, I mean material traceability. Now is the raw material still available to not get any kind of supply chain disruptions. We have 17 million suppliers lined up, we are connecting their end to end supply supply chain to really predict, you know, could there any be supply chain disruptions? And that are two use cases. Third one, maybe one more. It's on total workforce about, you know, the skills are changing in the age of AI and so do you have the right skills? Is there any kind of skill gap? Which skills do you need to develop? Which skills, which people do you need to recruit? That is done via SuccessFactors. And this is, you know, what was really helping GM to transform.

[Jim Cramer]

Now I guess what I think people will say is, well, how does GM measure whether their company is doing better and making more money after SAP comes in? Now you must have multiple examples about how once SAP comes in, the sales go up and the earnings go up. Is that, is that how you pitch SAP? Because I want people to understand that this is a great stock to own.

[Christian Klein]

Yeah, indeed, Tim. I mean, look, I mean when we invented ERP 50 years ago it was a transactional system and today actually it's a business suite which with so much intelligence embedded. So it helps you to automate your business, to drive efficiencies, to make smarter decisions, to help with predictive simulations. That is what our suite is about. And of course it runs integrated because a GM like any other company needs to run end to end to delight the employees about really connecting them with each other, but also delight your consumers because actually, you know, your customer experience doesn't stop with sales. It needs to go into the supply chain space, etc. And this is what ACP actually does.

[Jim Cramer]

Now I do, I want to tell you we do have Mark Benioff on tonight from Salesforce. He is arguing that it really doesn't matter again about the Hardware, what matters is the data. But I want to ask you, do you think that it's so irrelevant that perhaps the price of compute is going to drop rather dramatically, which I know I'm not asking to pilot in videos fortunes, but that would upend pretty much everything that we've been thinking is going to happen post Deep sea.

[Christian Klein]

Yeah, I mean look Jim, in this place I absolutely have to agree with Mark. He's right. I mean look, when you look at cloud, when you look at big data, the innovation always started on the infrastructure layer. You need better hardware, better technology and then actually it goes up the stage stack, it goes to the platform, it goes to the application layer. And that is now what is happening at AI. I mean the value creation really happens. You know, how can I build a more resilient supply chain? How can I help to sell more to make sure you optimize your inventory? This is where the value creation sits, the infrastructure, the large language models. I mean we are using the best large language model for the different use cases we have to want. But the value is the business data. The value is about infusing AI into the businesses of our customers.

[Jim Cramer]

All right, that is excellent. That is one of the reasons, many reasons why including the fact that the performance of your stock's been unbelievable. That we like you as one of our super savvy. Christian Klein, CEO of SAP. Congratulations on the great numbers.

[Christian Klein]

Thanks a lot.

[Jim Cramer]

So they have money back.

[Mad Money Announcer]

Coming up. Lightning doesn't just strike twice in Creamerica.

[Jim Cramer]

We are.

[Leon Topal]

Yeah.

[Jim Cramer]

Booyah.

[Julie]

Thanks for taking my call.

[Mad Money Announcer]

It strikes every day. Kramer is back in a flash with your questions.

[Jim Cramer]

Next. It is time and then the lightning round is over. Are you ready? Ski dagger light round. Crazy. Remember to start with George in New York. George, Professor Kramer. Bubble eye. How are you, George? Good. Good to talk to you, buddy. What's up?

[Marc Benioff]

Tell me what's going on with Viking Therapeutics?

[Jim Cramer]

Okay, people. People think that even if Lilly's stock can't go up, why would we want Viking Therapeutics? And a lot of people were in it for a takeover. So far it doesn't look like that's materializing. So they're giving up and they are selling it. I prefer Eli Lilly. I want to go to Terry in Florida. Terry. Hi Jim, it's Terry in Port Charlotte, Florida. I've been watching your show for a long time and I sure thank you. What you and your crew always do. Thank you. So anyway, this solar stock has been battered quite a bit of late and I'm wondering if it's time to start nibbling on First Solar. It is a very inexpensive stock. I'm telling I'm still really for the fact that that Anne XT next tracker Sug actually put an upside surprise tonight. And if that if I when I look into that and it says that it's good for solar, I will tell people who belong to the charitable trust to CBC Investing Club whether it's time to get a little more aggressive on solar. And let's go to Richard in California. Richard.

[Julie]

Hi Jim.

[Jim Cramer]

I've called you a handful of times.

[Julie]

Over the past year on my favorite stock. Last time we talked, I was so excited to tell you about the wonderful AI sales and core business growth. You simply said, rich, it's up 100% in the past year. Wow, you were right. The stock came in quite a bit. Now it's seems to me with the core business growth of 10% per year and the digital platform up 30% per year, the stock is a screaming buy. It's also best in breed and truly all health care really can't be relevant without images. How do you feel about me picking up on this dip on Radnor?

[Jim Cramer]

Well, I'd like to see some sort. I mean the stock did bounce $2 today. I know that. You know what? It's it, it's a very expensive stock. I'm trying to sell a lot of GEGE Healthcare if I can just because I kind of just feel this group is just not strong enough. That includes this one. Let's give it a pause for a second. Let's see if it can't bottom for more than just one particular day. But I understand it was a great stock for a long time. I need to see a real bottom. Let's go to Stanley in California. Stanley.

[Julie]

Hi Jim. Happy New Year.

[Jim Cramer]

Same to you, Stanley. How can I help?

[Julie]

Great to speak to you. I've been watching you since 2005 or 6 when you called ATI the stock of the year. That's how long I've been watching you.

[Jim Cramer]

Oh my God. Allegheny Technologies. That was a great play on stainless steel. Really. Bowen was ordering a ton of it.

[Julie]

So my question is, do you think it's a good time to start a position in WM Waste Management?

[Jim Cramer]

I don't know.

[Marc Benioff]

It doesn't.

[Jim Cramer]

I like Waste Management very much. I think it's an absolutely terrific stock. I think Jim Fish is a remarkable CEO. And the answer is absolutely yes. I would start a position right now. And that ladies. Conclusion of the Lightning Round.

[Mad Money Announcer]

The Lightning Round is sponsored by Charles Schwab Coming up, is it time for investors to set sail? Kramer's breaking down. Why now is the time to buy the cruise stocks next.

[Jim Cramer]

Booyah, Jim, your integrity makes you the.

[Julie]

Booyah saint of Wall Street.

[Jim Cramer]

Booyah, Jimmy chill. Booyah, Jimmy chill. Booyah, Jim. Quadruple. That's a lot of booyah. We're also focused on the impact of Deep Seek on the tech sector that we seem oblivious to the opportunities surrounding us. Opportunities that are a lot more straightforward than figure out whether we need more power plants or fewer data centers and more downside before Nvidia stock. And bottom those are really hard questions. I much prefer the easy ones. What the obvious. Take the stock of Royal Caribbean, which soared 12% today. What did they do this time? Well, they reported a huge upside surprise with spectacular increase in the revenue they generate per available cruise day. How about this Jim? Quote Momentum continues in 2025 with bookings accelerating since the last earnings call, resulting in the best five booking weeks in the company's history. Oh, and you want some excitement. That got the analysts totally jazzed. In 2027 World Crippian we introduced river cruising with 10 new ships. To take advantage of a fractured market is double digit growth over the last decade. These guys have a tremendous reputation, so it's easy to imagine them gobbling up market share. Which allows their analysts to raise their estimates not just for now, but for what we call the out years. You know the funny thing about Royal Caribbean and the whole cohort of cruise lines, they're so great at what they do that the analysts estimates never seem to catch up with their earnings power. Hence the long string of better than expected numbers and subsequent monster rallies. Maybe Wall street keeps getting taken by surprise because let's face it, this industry is full of snobs who don't understand the appeal of going on a cruise. In fact, they probably wouldn't be caught dead on one, which is why they can't get their heads around these stocks. So what's the appeal? As Jason Liberty, Royal Caribbean's boy and CEO, laid out in the conference call, consumers place significant value on visiting multiple destinations. And this is even more important to millennial and Gen Z consumers. And quote, quote, Meanwhile, the macro environment, Liberty says, favors experiences over things as leisure and travel spend continue to grow. Hey, to me it means the cruise lines were cyclical stories before COVID but now they've become genuine secular growth plays and they may stay that way for a generation. Many investors can't bring themselves to accept the cruises have gained so much adherence in such a short period of time, but Royal Caribbean reminds us it travels a $2 trillion business. Cruises are considered an amazing value within that 2 trillion. No wonder Disney's plan to double its fleet size in the next six years. Plus, the cruise companies like Royal Caribbean, Norwegian and Carnival have become incredibly disciplined about not adding too much capacity at once, which makes the industry much more resilient than it was before. COVID whipped them in shape. They used to have too many ships coming online all the time. Stepping back, I think the travel and leisure stocks remain undervalued because so many analysts keep thinking this story just can't last. Market's best with phenomenal stop because people can't. They think that travel can't maintain this incredible pace, yet all it does accelerate. Same reason why Marriott stock keeps climbing one go one step further. It may be a good reason to start buying some Boeing because It's now only 1/4 away from a big earnings breakout. I don't think most money managers are going to wait for that to happen. They went in ahead of time. Of course, not everything is rosy and travel. While I like Delta, United and Alaska Airlines ways to play travel, there's still some laggard haggard companies out there that can act like skunks at a profits party. That's what JetBlue was today with its terrible earnings and outlook that caused that stock to lose over 25% of its value in a single session. Still one more reason why I always like to say I'd rather own shares in the worst cruise line than the best airline. Oh, I also like to say there's always a bull market somewhere. I promise you how to find it. Just for you. Right here on MidMoney. I'm Jim Cramer. See you tomorrow.

[Podcast Announcer]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of cnbc, NBC Universal, 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 from success of new diverse podcast hosts to the ever evolving host listener dynamic, podcasters have created a revolution in storytelling that has forever changed media. Obsessed us, too. That's why we at Sirius XM Media are bringing you the Trendcast. Hosted by me, Sophie Anderson. It's the show that identifies, dissects and explores opportunities for advertisers around five major trends taking hold of the industry today. Take a deep dive with us and listen wherever you enjoy your podcast.