Mad Money w/ Jim Cramer 1/29/26

Summary

Mad Money w/ Jim Cramer — Episode Summary (Aired 1/29/26)

Host: Jim Cramer (CNBC)
Date: January 30, 2026

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Overview

This episode of Mad Money is a classic tour through the rollercoaster of Wall Street, guided by Jim Cramer’s blunt, energetic, and often entertaining analysis. Cramer dives into the day’s wild market reactions, especially around hyperscalers and AI, breaks down recent earnings for giants like Meta, Microsoft, Apple, IBM, and Tesla, and interviews the CEOs of Royal Caribbean Cruises and Otis Worldwide. The show also features the famous Lightning Round, answering rapid-fire stock questions from callers. The episode’s core message: don't give up on high-quality companies, even after volatility, and be ready for market shifts driven by technology and changing economic forces.

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Market Recap and The AI Wars: Meta, Microsoft, Tesla, Apple (00:54–12:34)

Key Insights & Points

• Market Highlights:
  • Dow up by 56 points, S&P down 0.13%, Nasdaq lost 0.72%, but all were higher than earlier in the day when a Microsoft selloff threatened a bigger drop.
• Meta’s AI Comeback:
  • Meta (Facebook's parent) soared 10%, proving the market rewards companies where AI is truly delivering results.
  • Cramer praises Mark Zuckerberg’s clear statement on AI’s transformational role at Meta:
    “AI is the greatest force multiplier... AI is changing the company’s fortunes in a way that is just extraordinary.” (09:13)
• Quote of the Night — On Meta’s Power:
  • “Meta knows everything about you…and his company will present your brain with exactly what you want. You will buy what they advertise because generative AI is finally that powerful.” — Jim Cramer (08:46)
• Microsoft’s Stumble:
  • Microsoft disappointed by not spending enough to meet AI demand, and only 1% of their 1.5 billion users pay for ‘Copilot’.
  • “It’s like Microsoft makes dog food that the dogs don’t want, right?...Dogs can’t read.” — Jim Cramer (07:59)
  • Cramer maintains faith, expecting Microsoft’s leadership to adapt:
    “Absolutely not [time to give up]. Remember, this is Microsoft. Just waiting for the velocity decline to dry up and then I will decide.” (11:14)
• Tesla & Apple:
  • Tesla repositioned itself from “just a car company” to a robotics and cyber company in one session.
  • Apple reported a robust quarter, blowing past iPhone sales expectations.
    • “Own it, don’t trade it.” — Cramer’s succinct Apple takeaway (12:14)
• Nvidia and Hyperscalers:
  • Nvidia is "not playing the game — they're running it; they're the house." The real king of AI.
  • Other hyperscalers (Alphabet, Amazon) may rotate from paper to rock in the “AI rock-paper-scissors” analogy.

Takeaway:

• “Don’t give up on these companies…they're nation states.” — Jim Cramer (12:19)

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Lightning Round: Stock Q&A Highlights (39:30–41:32)

• Novo Nordisk (NVO):
  • “I think that novo is a hold, not a buy.” (12:19)
• Rio Tinto:
  • “I just think you should go in and own it. Great hedge against chaos in the world.” (39:54)
• Armour Residential Real Estate:
  • “The yield is 15%. That is worrisome — that is not a bargain.” (40:27)
• Carrier:
  • “He’ll come through with it fine. I think you buy it now and put it away.” (40:48)
• Palantir:
  • “If anything, I would say great opportunity to buy Palantir…IBM is a cheaper stock than Palantir.” (29:53)
• Rubrik (Cybersecurity):
  • “All the same, have to wait and shake out the price. Right now, I do not like falling knives.” (41:23)

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Royal Caribbean Cruises CEO Interview — Jason Liberty (14:12–21:02)

Main Discussion

• Travel Demand Remains Strong:
  • Despite talk of the travel boom’s end, bookings are at record highs.
  • “We’ve been building this dream machine…best ships, best destinations, and the best people.” — Jason Liberty (14:41)
• AI’s Role:
  • Heavily investing in AI and technology to personalize and manage yield, resulting in higher demand at higher prices.
  • “We have 15 million price points that we’re managing every day and growing.” (20:26)
• Supply Myths:
  • Oversupply worries dismissed:
    “That is not what we’re seeing from the consumer.” — Liberty (16:12)
• River Cruises Expansion:
  • Rapid growth led to doubling the river cruise fleet:
    “Demand has been well above our expectations…very, very long waiting lists to get on.” (17:13)
• Discovery Class Ships:
  • New, game-changing ships launching; marketing hype built up for 2029.
• Forecast and Wave Season:
  • “We’re 2/3 booked for 2026 — these are ironclad bookings.” — Cramer (19:04)
• NFL Ads Boost Bookings:
  • “In times like this…when they’re watching football and looking at sunshine, that certainly stimulates them to dream about being in the warmth and being on our beautiful ships.” — Liberty (20:26)

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IBM Earnings Breakdown (22:46–29:53)

Key Discussion Points

• IBM’s Comeback:
  • Blew past expectations: Q4 sales up 12% to $19.7B (est. $19.2B); gross margin and earnings beat.
  • “IBM’s best growth rate in more than three years.” (23:41)
• All-around Software Growth:
  • Red Hat up 10%, Automation up 18%, Data up 22%; mainframe business (IBM Z) up 67%.
  • “There’s a real mosaic of strength.” (25:19)
• AI Consulting and Internal Use:
  • IBM is both provider and user of AI, driving $4.5B in annual run-rate savings (internal productivity).
  • “IBM’s not just the vendor, it’s the client.” (27:42)
• Valuation:
  • Trades at around 25x earnings — cheap for the growth, especially compared to SaaS peers.
  • 17 straight quarters of earnings beats. “IBM nearly doubled since I started recommending it just over two years ago.” (29:37)
• Bottom Line:
  • “Buy some IBM if you don’t already.” (29:41)

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Otis Worldwide CEO Interview — Judy Marks (31:49–39:29)

Key Discussion Points

• Service is King:
  • Service revenues up 5%; 93% of quarterly profit and backbone for 2026.
  • “The main thing at Otis is service.” — Judy Marks (32:15)
• Refurbishment & Modernization Boom:
  • 9M+ elevators globally over 20 years old drive demand for upgrades; orders up 43% in China.
• US Construction/Multifamily:
  • Multifamily housing and infrastructure projects (airports, hospitals) are a growth engine.
  • “Multifamily is back…seeing that grow in every part of the US.” — Marks (35:06)
• Labor Pipeline:
  • Otis is hiring, apprenticeship programs strong, oversubscribed.
• Capital Returns:
  • “Most years we return 100% of capital…dividend and buybacks. For us, it’s all about service, refurbishment, modernization.” (38:32)

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Special Segments

Multiple (M) Compression in Software Stocks (41:35–47:30)

• Advice on Valuations:
  • The Price/Earnings ‘M’ is “the secret sauce of the stock price.”
  • SaaS/software names like ServiceNow & Salesforce face multiple compression due to AI fears reducing user counts and thus billings.
  • “…their growth remains strong. Can the market be wrong? Of course. Can you get in front of a freight train? Maybe not now, not yet.” — Cramer (45:57)

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Notable Quotes & Moments

• "It’s not done going higher now...Meta is a rock for certain." — Jim Cramer (08:59)
• "It’s like Microsoft makes dog food that the dogs don’t want, right?" (07:59)
• “Never give up on the hyperscalers. I just said horrible things about Microsoft, right? And yet, am I a buyer? All right.” (12:19)
• "Nvidia…they aren’t playing a game at all. They’re running the game. They’re the house. That’s the best place to be." (12:27)
• "ServiceNow has always been a good earner. But Wall Street’s saying the good days will come to an end..." (45:05)
• "There’s always a bull market somewhere, and I promise to find it just for you." (47:25)

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Episode Timestamps

• 00:54–12:34 Market recap, AI, and tech stocks (Meta, Microsoft, Tesla, Apple, Nvidia)
• 14:12–21:02 Royal Caribbean CEO Jason Liberty interview
• 22:46–29:53 IBM earnings analysis
• 31:49–39:29 Otis Worldwide CEO Judy Marks interview
• 39:30–41:32 Lightning Round stock Q&A
• 41:35–47:30 The “M” — how multiples shape stock prices and SaaS sector woes

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Conclusion

Jim Cramer’s episode is an urgent reminder to trust long-term management and not get tricked by short-term market mood swings, especially with leading tech and industrial companies. He warns of valuation compression in software stocks due to AI concerns but urges listeners to keep the faith in market leaders and pounce when the dust settles.

If you want the quick takeaways:

• AI is real — but only for companies truly harnessing it (Meta up, Microsoft wobbles but don’t give up).
• IBM is back and cheap for the quality; Otis thrives on service and modernization, not just new builds.
• Royal Caribbean’s demand is strong; fears about travel’s end are “not what we’re seeing.”
• Multiple compression is real in software; wait for bottoms before buying.

Cramer’s core advice: “Don’t give up on these companies…they’re nation states.” (12:19)

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Skip the noise — follow the smart money, but be patient for the right pitch.

Transcript

[A]

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Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] market update podcast or find Schwab Market Update wherever you get your podcasts. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. Other people make friends. I'm just trying to make a little bit of money. My job is not just to entertain, but to educate. Teaching. Call me 1-800-743- CNBC. Tweet me at Jim Cramer. Markets can be capricious. Markets can be moronic. But if you own stocks, the market's always right. There's no alternate universe. So it doesn't matter if the actions create. Doesn't matter if the market's literally playing Rock, paper, scissors with Matt as the rock and Microsoft as the scissors, you have to deal with the closing prices and they can be brutal. Dow inching up 56 points. S&P declining 0.13%. Nasdaq losing 0.72%. But those are much higher than where it was at one point in the day when it looked like the market was going to take a real Microsoft related header. That's incredible for and it didn't pay any attention to matters. Good stuff. You know, though it's hard to believe that matter, which had been written off as a company that spends way too much on AI just last quarter, could rally more than 10% today as those investments paid off in spades Last quarter metta had been the scissors. This time it's the rock. Meanwhile, Microsoft perennial rock isn't spending enough to meet the demand for AI, or at least in the right places, because it seems to be putting its resources, buying the wrong stuff. They become the scissors and they got crushed down 10%. Truly horrific. Horrible to watch. Is that fair? Like that has something to do with it. Let me explain. The market's been obsessed with everything you need to profit from, right? The companies making the most money from artificial intelligence is obviously video. Their chips are the foundation the entire industry. Of course, invidious chips can't just be plugged into the wall. They aren't bricks with transistors stacked up like statues. They are giant boxes filled with all sorts of tiny circuits packed into servers that burn so hot that you need to spend fortunes on electricity just keeping cool. They consume enough power that we need dozens of new nuclear power plants and natural gas plants and solar farms, keep everything running. The companies that are making money from these chips are all those that live in and around the data center. Fellow server components like the memory and storage makers. They've been huge winners. You know that some of those produce power, help get electricity to the data centers, provide backup generators because we don't have enough power in the system. Think Eaton, ge, Vernova, the electric company, especially the nuclear ones, the Constellation. There's Cummins, there's Bloom Energy. I like that. There's. There's Brookfield and there's Caterpillar. Hardly a day goes by without one of these generating a monster set of numbers. Today was Caterpillar's turn, the energy from its generator business at the stock soaring 3.4%. A year ago, CAT was at 393. Today 665. Tonight, SanDisk, a memory device company, reported earnings and gave a forecast that sent its stock soaring. Bye bye bye. But let's speak truth right here, right now. I listen to CEOs constantly. I read their words, I hear their calls, I talk to them. And until last night, I hadn't heard a single executive who actually uses AI, not participates in the making of it, but use an actual client state unequivocally, just with no caveats. That AI is the greatest force multiplier, that it can make his business fortunes, that accelerating the sales and earnings. That AI is changing the company's fortunes in a way that is just extraordinary. And last night it finally happened. And it is meta. Leave it to Mark Zuckerberg from say that has allowed his company to offer the greatest advertising vehicle in the world. Aimed at his user base. Oh, by the way, it's just 3.5 billion daily activities like half the people are welfare. Haven't seen or like close to it. This matter knows everything about you. And if you've been a Crest user your whole life, I swear, I swear they could get you to switch to Colgate. It could get you to buy something you never thought about. So Cooper, where is he? Is he. Is he at his desk? Is he in a Y? No, he's in your cerebral cortex, silly. He's in your cell. He's in your darn Vegas nerve. And his company will present your brain with exactly what you want. You'll watch. The darned accelerated computing makes sure of that, because the video is better and cleaner than ever. And you will buy what they advertise because generative AI is finally that powerful. No more scissors. This one is a rock for certain. It's not done going higher now, though. Let's look at Microsoft, Mr. Softy, as I call it when it came public. It's tough to watch this great business, this rock play the scissors. There's so many amazing things about this company, which has dominated software for 40 years. It's been unassailable. Until last night when we heard, frankly, a convoluted story. I mean, like, don't buy on don't buy. They said that Microsoft isn't going to spend enough money to meet its artificial intelligence demand. But. But at the same time, it was proud that it had 15 million paid users of Copilot. 15 million. Wait a second. They have 1.5 billion users. They were proud of that. 1% of these people pay to use Copilot. How many use Clippy? What does it tell you? How about that? Maybe Copilot just isn't that big a winner. It's like Microsoft makes dog food that the dogs don't want, right? And somehow they think if they slap new and improved on the side of the can, the dogs will clamor for it. Dogs can't read. Of course I simplify. But when I listen to the conference call, I can only conclude one thing. Unlike matter, Microsoft may not be making all that money on AI even after all the massive investments in open air and all that stuff. Certainly less than expected. We keep hearing that AI is eating the software industries alive, right? Kind of like when software was eating hardware. Something, by the way, that Ben Reitzos over at Melius predicted would happen years ago. And it's finally come true. AI is enjoying a smart, is bored of endless proportions right now, and that includes solvers, a service companies that used to be tremendous secular growers. Microsoft never seemed to be on the menu though until last night. He's kind of like an old d'. Oeuvre. Yet last night Microsoft played the scissors and matter was the rock. No two ways about it. Is it time to give Microsoft what? Are you out of your mind? Absolutely not. Remember, this is Microsoft. Remember the game Metamorph from Loser? Winner in one quarter. Microsoft can do the same. It's just got to kind of bite the bullet here. I haven't bought this stock Mike Chapel Trust in two years. You have a sizable position. Don't need to. But I am betting that next time around Microsoft could come out on top. And I'm looking at a level to buy Microsoft. Satya Nadella and CFO Amy who will figure it out. They're smart. Yes, the situation is that fluid. I'm just waiting for the velocity decline to dry up and then I will decide. Club members stay close. I know it's hard to believe how quickly this market can change its attitude. Last night I heard a disastrous car company speak. Turns out it's actually a robotics and cyber company and I want to buy. Bye bye. Yes, Tesla's the paper that turn into scissors in one session. I didn't like it as a car company. Boy, I love it as a cybercap and humanoid. Rub that juggernaut, call me a buyer and give me five robots while I'm at it. After the close, Apple reported magnificent quarter just tonight. A robust top and bottom line beat driven by staggering levels of demand for the iPhone 17 that nobody is looking for. Wall street was looking for iPhone sales of less than 79 billion never came in. 85 billion. I knew they're popular but I mean come on, I underestimated them. Now we still have to see what they say on the call about some important topics like how they'll deal with skyrocketing memory prices. And still after seeing these great numbers for the last quarter, I have an idea. I've been thinking, I've been thinking. How about own it, don't trade it. Now if you only have one takeaway from this entire segment that I just gone through other than the Vegas nerve thing, the bottom line is you must not give up on any of these companies because they are run by really smart people with lots of money. They're nation states. I thought Alphabet would be carrying in the face of AI but I bet when we hear from them next week we'll realize a I search winner outfit may be next week's rock and it may be even making more money from a Metta is Amazon paper scissors. I think it's paper but this game changes so quickly you may actually have to rush your judgment. Unless of course you're in video. They aren't playing a game at all. They're running the game. They're the house. That's the best place to be. Oh yeah, of course. Silvio in Florida. Silvio. Hi Jim. No code member, first time caller. Oh, thank you. Glad thank you for all your help. Oh, thanks a lot. Thank you. I'm calling about a biofarm that has struggled. Last year shop price dropped nearly 40% but year to date has gained about 20%. This Biofarm has a first mover advantage of NGLP1 global market which is projected to reach about 170 billion by 2031. He has a P ratio less than 20 compared to Illy realized 50s plus while still on 50% of the global market share. What do you think about nvo? Nvo? I kind of liked it when I spoke to him. I got to tell you I kind of warmed up to them. I was in San Francisco and I said you know what I get that cycle down more. Maybe we do some bring but I love Eli Lilly and David Ricks and what can I say, you know as long as Eli Lilly and David Ricks are putting up those numbers and they get that pill form soon, I think that novo is a hold not a buy. Rock, paper, scissors Vegas. All right. And that's vagus kind. Today's, today's lesson is that you should never give up on the hyperscalers. I just said horrible things about Microsoft, right? And yet what am I a buyer? All right man. Money tonight Royal Caribbean cruise higher after the earnings today and I'm getting to the bottom of what's continuing to prop the travel thesis with the company CEO. Then Big blue proved last night that it's ready to earn some big green. I'm breaking down the post earnings IBM story and I'm checking in on the state of the construction market with the CEO of elevator maker Otis. That includes the service business. Stay with cream. 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. Miss something? Head to mad money.cnbc.com Comcast business helps retailers become seamlessly restocking frictionless paying favorite shopping destinations. It's how Nationwide restaurants become touchscreen ordering quick serving eateries and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership. Comcast business is powering the engine of modern business. Powering possibilities Restriction supply. Hey, Fidelity. Can I get a second opinion on stocks in the Fidelity app?

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Investing involves risk, including risk of loss. Online US equity trades and ETFs and retail. Fidelity account sell order, assessment fee not included. Some account types and securities excluded. [e-mail] commissions Fidelity Brokerage Services, LLC Member NYSE SIPC Ugh.

[A]

Could this vintage store be any cuter?

[C]

Right?

[B]

And the best part, they accept Discover.

[A]

Accept Discover in a little place like this? I don't think so, Jennifer. Oh yeah, huh? Discover's accepted where I like to shop. Come on, baby, get with the times. Right. So we shouldn't get the parachute pants. These are making a comeback, I think. Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen report. On a freezing cold day here in New York and a not so hot day for the average, I want to focus on warm weather and sunshine. I'm talking about Royal Caribbean Cruises, the largest cruise line in the world by market capitalization, which reported a solid quarter this morning, then gave us incredibly strong guidance, sent the stock up nearly 19%, a second largest gainer in today's session. Management was very bullish on recent booking trends and their full year forecast for 2026 is spectacular. What makes them so confident? Let's take a closer look with Jason Liberty. He's the chairman CEO of Royal Caribbean Cruises to find out. Mr. Liberty, welcome back to Mad Mining.

[C]

Hey Jim, Great to talk to you and and welcome. Greetings from South Florida.

[A]

You're very lucky to be in South Florida. Now let me ask you something. A lot of people feel that the travel bull market might be on its last legs. I look at this and I say there is something very major going on for you. Have this kind of outlook and it just seems it's spectacular. Can give me some of the factors or making this these bookings unbelievably great?

[C]

Sure. Well, I think first and foremost, Jim, just foundationally when we look at our business, we've been building this dream machine of having the best brands in Their segments having the best ships, having the best destinations that are now expanding. And you couple that with the best people in the world, delivering the best vacation experiences in the world. And you couple that with a lot of strong tailwinds.

[A]

Right.

[C]

We're still a very small part the $2 trillion leisure market. There are great secular and demographic trends driving this. And we've also invested heavily in AI and other sets of technologies to better personalize and yield manage our business. And collectively, what that's driving is high quality demand that is supported by a great and new loyalty program that's keeping our guests inside of our ecosystem, resulting in more reps, which is why we're seeing strong booking volumes at higher prices.

[A]

Well, it's clear that this whole notion that we hear about that there might be an oversupply of Caribbean ships is something that you put to rest today. I'm not going to ever let anyone get away with that canard anymore. Correct.

[C]

Yeah, I think that's, I think that's exactly right. I mean, you know, there's always an increase in supply in the different deployments that we go into. And I do think we're differentiated between the ships that we have on the water, on the private destinations we have with Perfect Day of Cococay and the Royal Beach Club that we just launched a few weeks ago. That differentiates us in the Caribbean space. And still the Caribbean is the number one destination that our guests are looking to go to. And so I think, you know, some of the concerns that are out there, which I, which I, I certainly can understand, but that is not what we're seeing from the consumer. And I think that's also bolstered by drivable markets. We have more drivable markets here in the state of Florida as well as Texas that go into the Caribbean that lower that cost to the consumer or to our guests. And that's also why that value proposition to land based vacation is still at least 15%. And so we're still also insulated from any type of concerns that could be out there. And so as you said, we're not seeing that in the Caribbean. We're seeing similar trends that we're seeing in our broader business with the Caribbean.

[A]

Okay, I understand. Also, I'm not just. It's not just the Caribbean. We spoke about river cruises when they came out. You actually introduced them on our show. That was not that long ago. You're doubling the number already.

[C]

Yeah, well, as I said on your show, Jim, this is not a hobby. And so the first thing we wanted to do was to make sure we had designed the ship and we knew how we were going to elevate the experience and do that in our first 10 ships. Demand that we have seen has really been well above our expectations. Our guests, our customers, our loyalty members, their thirst to go on river not as a substitute but as an additional vacation experience is very clear with very, very long waiting lists to get on. So we have full confidence that we're going to generate high quality, strong demand for an elevated river experience here and that provide easy confidence for us to put an order in for 10.

[A]

I understand you also have a new cruise line going out, a whole new line, no one knows anything about it. I want you to talk about it. Really just tell people on air because it'd be the first time anyone's ever heard about.

[C]

Well, I don't know, it's on a different cruise line. I think you're talking about our new class of ship.

[A]

Yes.

[C]

Which is coming out. Yes, our discovery class. And so of course we'd like to keep the marketing machine going here and the little things here. But what I will tell you like we do on all of our ships and all of our classes of ships is that this will be a game changing ship in this segment. It's going to continue to build incredible multi generational memories which is very much at the heart of our Royal Caribbean brand. So we're very excited about it. The first one will come out in 2019 and we've been designing this ship for several years. And that coupled with the incredible icon class for the Royal brand just drives so much excitement. And these by way these ships are generating net promoter scores into the 80s. And so that's obviously a great sign of incredible advocacy and also that our guests walk away with great experience.

[A]

Experiences which infuse trust those later. Now one, this thing I was taught by you and by your colleagues and predecessors, this is wave season. People have to recognize when you talk about 2/3 booked for 2026, these are ironclad. It's not like they're looking at it and saying we're doing okay. This is numbers, more numbers that we can put that we actually can put pencil to and figure out what to pay for. Royal Caribbean, to me it says pay more than it's selling for.

[C]

Well, I think that's, that's, I mean that's by the way how our yield management tools that are fueled by I work you were 2/3 of the way booked for this year. And that puts us in a position to effectively manage pricing and we try to encourage everybody to book early, not just in order to get maybe the price points that you want, but also to make sure that you're getting the vacation experience you want, which is not just about you're booking on the shift, but it's also, and we have been seeing this, the pre booking activities for all the wonderful things and experiences you can have on and off the ship during your vacation period. So as you said, we have great visibility into the quarter, we have great visibility in the year, and we feel very encouraged by the trends.

[A]

One last question. I know you guys are actually pros at AI. Can we actually think about how many bookings you get during the middle of an NFL game after we look at those fabulous ads?

[C]

Well, you know, Jim, I think it's amazing and I think we're very thankful for the advancement in technology. We have 15 million price points that we're managing every day and growing. And so as you, as you, as you said, these great ads and these great sponsorships that we have, whether it's during NFL and other sporting events or inter Miami that just won the championship this year that we're the sponsor of, you know, that's really where the eyeballs are and that, you know, that stimulates them to dream. And, and of course, you know, in times like this when it's incredibly chilly in different parts of the country and they're watching football and they're looking at sunshine, that certainly stimulates them to dream about being in the warmth and being on our beautiful ships.

[A]

Well, I know it's certainly done it to my family. Well, thank you so much, Jason Liberty. Great day for you. Deserving day. I know how important wave season is and you've crushed it. Jason Liberty, Chairman CEO of Royal Caribbean Group. We got to wait till 2029. Do we find out more about Discover? That's all right. I'll wait for your ads and then we'll book it. Thank you so much, Jason. Thanks. John's back here for the break. Coming up, last night's earnings electrified the stock of IBM. So should you plug the tech giant into your portfolio? Kramer's dissecting the data next. Hi, I'm Lewis Howes, New York Times bestselling author and host of the School of Greatness podcast. And if you haven't checked out the School of Greatness yet, you are missing out.

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Unlimited daily cash back on everyday purchases wherever they shop. This means you could be earning daily cash on just about anything, like a slice of pizza from your local pizza place or a latte from the corner coffee shop. Apply for Apple Card in the Wallet app to see your credit limit offer in minutes subject to credit approval. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City branch terms and [e-mail]. Last night everyone was focused on the state of Microsoft or Metta and of course Tesla. There was another tech company reported an impressive quarter that people weren't discussing. I'm talking about IBM, one of the great, albeit unheralded, winners of the year. I went positive on IBM way back in December 2023 when it was trading 160 bucks. Since then, this company's been reporting some of the best growth in ages. Resurgence software business that, among other things, helps customers build their own AI applications. IBM stock shot all the way to 325 at its all time high last November. We're pulling back to the 300 area for the last couple of months. The last few times I've talked about this one, I felt kind of defensive. IBM had slipped to $294 as of last night's close, but then they reported and boy, that stock soared 5% today in response to an unambiguously good quarter close to $309. IBM saw its sales growth 12% to $19.7 billion. Also was only looking for 19.2 billion, thanks to the better than expected results from software and infrastructure businesses on a constant currency basis sales were up 9%. That was still IBM's best growth rate in more than three years. That said, these guys are cleaning up, helped in part by a weak dollar. Their gross margin came in solidly better than expected, which helped them deliver $0.21 earnings beat off a $4.31 basis. Nice. That strong fourth quarter capped off in another excellent year for IBM with 12% earnings growth. Not that long ago, it seemed like IBM just couldn't grow no matter what it did. It was a stagnant business. Everyone assumed its best days were behind it. They don't think that now, under the leadership of CEO Arvin Christian, is putting up double digit earnings growth. That makes IBM one of the cheapest stocks in the entire market, not just in tech. Digging a bit deeper into the numbers, IBM standout software result was powered by strong growth from essentially every subsegment. Hybrid cloud. That's red hat up 10%. Automation up 18%. Data up 22%. Transaction processing up 8%. Now that red hot. Now that Red Hat. Their number was technically a little bit disappointing. And this is the same issue that some people quibbled with when IBM last reported in October and this stock sold off in response when people saw that again. But ultimately it started skyrocketing because the guidance was tremendous. See, this time around, nobody blinked at the Red Hat numbers. Why? First, it was well telegraphed, but second, the shortfall was partially due to the government shutdown. That's one off. Most importantly though, Arvin Christian CFO Jim Carvin explained on the conference call that while Red Hat used to be the only real growth driver for IBM software business, it's not just one growth contributor among many. And some areas like automation and data are putting up spectacularly strong numbers. So a modest shortfall from the Red Hat enterprise software business. It doesn't even move the needle. I took heart that IBM didn't need Red Hat to grow faster because there's a real mosaic of strength. Now looking at the other divisions, consulting continuous looks very solid. Partly keeps driving business to IBM software and infrastructure products. Their consultants basically tell companies what technology they need. IBM can fill many of these slots themselves. Plus there's a lot of demand for AI consulting. Companies finished 2025 with a generative AI backlog of $12.5 billion. 12, 10.5 billion of that comes from their consulting business, with the other 2 billion being software. Finally, IBM's oft forgotten infrastructure divisions getting a big boost from what is a powerful mainframe recess cycle. Yes, their big companies still use mainframes. Lots of them. The infrastructure division grew 21% in the first fourth quarter, driven by 67% growth from IBM Z which is that mainframe business. I think those are numbers, just stunning numbers. On the conference call, Christian explained that this is the mostly due to the excellent sales for the Z17 mainframe which was released last summer. Paradise mainframe can process 50% more inferencing operations per day than the previous iteration. That makes it very popular. IBM customers of course. Long story short, it was an amazing quarter and I'm betting IBM has a lot more room to run even after today's rally. Now some of that simply because IBM rolled out a terrific full year forecast for 2026 last night. This year management expects constant currency revenue growth of 5%. Wall street was only looking for 4.1% members big companies, so that's a huge delta in revenues. IBM also guided for $1 billion year over year increase in free cash flow, implying roughly 15.7 billion in free cash flow this year. Again, that was a big surprise analyst looking 15 billion. As long as these guys can make the numbers, I think the future is looking real bright for Big Blue. And that's because I'm a big fan of the IBM narrative in a nutshell. I They're selling customers products and consulting services that help them profitably embrace a I While there are plenty of companies offering AI tools and service at this point, there's a much smaller set of companies offering AI products that can actually help customers save money. IBM's right at the tip of the spear. These guys have extra credibility here because when it comes to their various AI products, IBM is not just the vendor, it's the client. It's like that old hair club for men at OH. Last night Christian explained that back in 2023 the company set out to achieve $2 billion in productivity savings mostly through internal AI adoption by the end of 2024. And as they came out of 2025, that had grown to 4.5 billion in annual run rate savings. Beyond that, everything else though, IBM is the rare winner with a fairly low price earnings multiple. Sometimes you got to find some of those. Even after today's rally, the stock sells for a little more than 25 times this year's earnings estimates. And and the estimates may well prove to be too low as IBM has beaten the earnings estimates expectation for 17 consecutive quarter. Of course, 25 times earnings is still a bit of a premium to the broader market. The SB trades at 22 times this year's earnings estimates. But I'm happy To pay a premium for such a high quality story. It's still below these big software as a service companies multiples. So here's the bottom line. IBM nearly doubled since I started recommending it just over two years ago. And after last night's quarter, I think this rally is far from over. Companies has got so much growth coming from mainframes and software consulting. Best of all, the stock still is inexpensive here. I say buy some IBM if you don't already. And recognize that CEO Krishna has turbocharged the sales and earnings so much that it would be a gift if this 399$ stock were to fall below $300. Jerry in Missouri. Jerry. Jim, thanks for taking my call. Oh, of course. What's up, Jerry? Jim, I bought this stock when it was around $130. That was when he said it would go to $150 and it did. So you changed your narrative a little. And he said it would go to $200 and it did. Then he said it go to $250 and it went back down to $150.

[C]

And he stopped saying it.

[A]

So do you still like Palantir? Yes, I like Palantir. Now Palantir is trading right now with the cohort that is ServiceNow and Salesforce. By the way, those are great companies, but I think that right. Look, everything I hear when you hire them, business does better. And that's why I liked it, not momentum. So I can't back away from it right here. If anything, I would say great opportunity to buy Palantir. And it's not like I talked to Dr. Alex Karp. He and I. Well, you never know. You never know. Well, no, you kind of know. Anyway, IBM has got so much growth ahead of it and I don't think the stock's done rally. But that's a cheaper stock than Palantir. Just so you know. I think it's buy now much more money. Including my exclusive with elevator maker Otis falling after earnings, your investor's getting a buying opportunity in the stock. I'm going straight to the source for answers. Then I'm sharing the 1 number you need to know when trying to figure out what a stock should be worth. And of course, all your calls, Rapid Fire, tonight's edition of the Lightning Round. So stay with Kramer. What do we make of yesterday's results from Otis Worldwide? That's the dominant maker of elevators and escalators. This time the company missed earnings expectations by a penny off a $4 basis with sales also coming a tad light. That's softer orders from American China. Management's full year forecast was a bit surprising. Otis is projecting earnings growth in the mid to high single digits. Wall street was somehow looking for 10% in response. The stock dropped 2% yesterday and then lost another 1.6% today. It is down 18% from its all time high last March, but that's increasing, keeping with a lot of other companies that are in the industrial sector. So is this an attractive entry point for a company that gets most of its business from servicing existing machinery, which is really stable, or are we supposed to be a little more worried? I don't know. Let's check in with Judy Marks, the chair, president, CEO of Otis Worldwide. Yet a better sense of the quarter and what comes next was box. Welcome back to Mad Money.

[B]

Thanks, Jim. I got to tell you, I'm not worried, but I look forward to our discussion.

[A]

Okay, well that's good because what, what happens is sometimes, Judy, I think people say, wait a second, our rates are too high. They're not building much here. We hear about all these problems in China. I always come back and say, look, I like the service business. There's nothing that's changed with the service business. It seems just as strong as ever. I don't care so much about the new builds at this point. Am I looking at it correctly?

[B]

Jim, the main thing at Otis is service in the quarter. Our service revenues organically were up 5%. Our service margins were up 100 basis points. It was 93% of our profit in the quarter and 91% of our profit for the year. Repair, maintenance. And now this emerging but really growing, fast growing demand for modernization and refurbishment of older elevators and escalators really puts us in a strong position for 2026. That helped us 11% EPS increase in the fourth quarter and record cash. We've never been able to generate this much cash to help share with our shareholders since our spin 24 quarters ago.

[A]

Okay, if you were down here with me in New York, New York at the Exchange, what you would see are a huge number of businesses where people like me used to work and they're being converted. And if they're going to be converted, you can't just leave the same old elevator. I have to believe that this tram, which some of the governor helped here, but is going to happen in every major city. There's way too much supply. How will Otis do if you have to refurbish all these elevators that go from office to residential?

[B]

Yeah, it's beyond just office to residential. When you think about the aging installed base 9 million elevators are over 20 years old and in service today. In need of refurbishment in the window and and about over 15 years old in China we had a record quarter. Our orders and refurbishment were up 43% in the fourth quarter and they were up double digit the entire year. We're going into 26 with a 30% backlog. It is about esthetics, it's about technology, it's about total replacements. But it is the fastest growing business. And Jim, it is growing synchronously everywhere in the globe.

[A]

Now I do want to ask about the possibility of a president, our president, who definitely wants lower rates and what that ultimately has done to Otis in the past. If you get rates that come down, are there actually places where there is going to be building that there hasn't been building otherwise because rates are too high?

[B]

Well, our North America business has been growing for the last six quarters. New equipment orders have been up significantly. Building our backlog to where North America think US mainly is going in with a 10% backlog for construction. Multifamily is back, Jim. We had a strong multifamily 22, 23. But I think a lot of developers and owners have decided that we have a housing challenge. One way to solve it is apartments and condominiums. We're seeing that grow in every part of the US from the mid Midwest to, to the Southeast, but everywhere. So when interest rates go down, the math works a lot better for developers. They get the loans and we go.

[A]

Oh, that makes so much sense. I did not. I know that there has been a shortage of of single family home, but that doesn't necessarily mean that there isn't a burgeoning all over the country explosion of apartments just to be able to handle all the people.

[B]

Yeah, and the other market that's really growing significantly across the country and Canada is the infrastructure business. Whether it's refurbishing existing airport terminals, the bus terminals, the metros, the rails, or adding new terminals, terminals, stadiums, hospitals. Again, we serve and we deliver in service for every building as long as you've got about two stories. Whether it's manufacturing, industrial. We're really bullish on the US right now. We've got a great backlog coming into 26. It's refurbishment, its maintenance, its repair and its construction.

[A]

It's a little bit of a stretch. But I went to data center and it was one floor, candidly, but there's 30. A data center costs 30 to $50 billion to build. Is there Otis, in these data centers.

[B]

There are typically they're heavy duty industrial elevators because they're moving the racks, they're moving, they're moving the technology, Jim, and they're moving the people simultaneously. It's obviously at a more rugged and robust elevator and it needs guaranteed upgrade time. So we are seeing a nice demand signal as data centers build out not just here in the US but across the globe.

[A]

Okay, now I noticed you are hiring. Where are you getting your people? This is the kind of shortage. Your industry is the kind of place where I would expect that it's very difficult to find help.

[B]

Well, we, we now have 45,000 incredibly skilled field professionals and they are the heart and soul of our business. We're up significantly. We added 2,000 of our mechanics two years ago and we net up added another thousand last year. Not all in the US Obviously. We're a global service provider. When an opening happens here, we're very proud to be working with our union, the International Union of Elevator Constructors. And when an opening happens, they over subscribe right away because great apprenticeship, great career, no debt, and as I said, a great place to work.

[A]

Now I was at the privilege of going over to that JP Morgan building which is just chock full of Otis. Are there others going up like that? Because it's the talk of the town in terms of just if you're with big CEOs, they all want to go by. I think there's a lot of people who would like to have to return to a great, to the days of downtown and build buildings downtown, which are your, your, you're, you plant the flag. Is it happening anywhere?

[B]

Yeah, we're seeing it happen throughout the globe, but certainly in New York. New York's hot right now. I can't speak about all the projects, but there are a lot of new buildings in Hudson Yards downtown. You're going to see them shortly. Park Avenue is getting a few more as well. You know, I think what Jamie and his team, David arena have done at 270 spectators, spectacular. We're just, we're just proud to be their partner.

[A]

Okay, last question. You've been terrific at returning capital shareholders. What do you think is the game plan for a situation where you're doing really well and the market keeps thinking that what matters is that there'd be a lot more apartments built in China, which is not the story at all.

[B]

Yeah, it isn't the story. You know, we basically most years turn back 100% of our, of our capital and the cash we collect, we collected about 1.6 billion of free cash flow. This year we're returning 1.5 billion because we've done a lot more of small buys of bolt on service providers. It's a service play, Jim. We're going to continue. We actually announced our dividend release again after the market closed today. We're very proud of where we are in our dividend and share buybacks. But for us, we are like capital, low intensive capital. We're going to share this cash with our shareholders. And all I would tell you is it's all about service refurbishment, modernization is part of that and that is going to grow synchronously well above in the teens for years to come.

[A]

Excellent. That's what I wanted to hear. And thank you so much to Judy Marx presidency, oh, chair of Otis Worldwide. Judy, I love you having the show. Thank you so much.

[B]

Thanks, Jim.

[A]

Now money's back. Coming up, Kramer takes your calls. And the sky's the limit. It's a fast fire lightning round. Next. It is time. It's up to the white round. Clears r the soccer center. Bye bye bye. Salsa solid the course top question. I stand playing the sound and then the lightning round is over. Are you ready? Light around crab. Let's start with Ivan in Kentucky. Ivan, Hi, Jim. Hi, Ivan. Who we got? I'll be, I'll be brief, Jim. I've had a position in rio for about 15 years. I can't see a lot of media coverage on the Glean Pool merger. I just wonder if you had a thought on what happened. Just, I have liked Rio. I have. I used to call it, let's put it this way, I like Rio so much, even from when I was at Goldman Sachs in the 80s. And I just think you should just go in and own it. I just think it's a great hedge against all the chaos that we see in the world. RTZ is what we used to call it in the old days when that was the symbol. Let's go to Alan in Florida. Allen. Hey, Jim, Love your show. Watch every night. I'd like to know your thoughts on Armour residential real estate. Okay. At times I've been worried about this because the, believe it or not, the gross yield is too high and this is one of those times. It yields 15%. That is worrisome to me. That is not a bargain. When you see that kind of height in a dividend that's in a yield that's not. That is not a bargain. And you go to Jeff in New York. Jeff, hello, Mr. Kramer. This is from Sodus, New York on the south shore of Lake Ontario. Where winter has given us 30 inches of snow in the last six days. And more on the way. 30 inches of snow at least. The Royal Caribbean. You know, I feel like, you know, hey, celebrity, you're a discover whatever wave season. How can I help? Hey, we love the lake effect snow here in the Rochester area. But the reason why I'm calling, there's a local company in the Finger Lakes whose new fiber technology is making things difficult for a former local company that produces tooling for the data center. Should I hold on to my position and carrier or sell it? Look, I think Dave Kitland's doing a good job. He made an acquisition some people don't like. I don't think they change it, you know, to rely on Europe turned out to be a dicer thing and he relied on Europe. But he'll come through with it fine. I think you buy it now and put it away. Let's go to Craig in Florida. Craig? Jimmy. Gotta be Chili Kramer. Craig from St. Augustine. Good evening. I've been a chill man. I admit it. What's up? Okay, so cybersecurity and software stocks are trading like they're going the way of the dinosaur because of the thought of what AI is suggesting it will replace. You bet. The other night you had the CEO of this company on. And from his point of view, it's gangbusters. The last quarter suggested the same, but the stock certainly suggests otherwise. I know you like it and recommend it. So what is the canary in Rubrik's coal mine? Okay, I like that one. Here's the problem. These are all the same, okay? It doesn't really matter. What you have to do is you have to wait and shake out the price. Locals are going down. When we see a bottom, we will make determinations. But right now, I do not like. I do I look like a butcher block to you? I mean, honestly, I do not like falling knives. And I will not change my way. And that. Ladies and gentlemen, conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. It's all about the M, stupid. I'm talking about the multiple, or more accurately, the price to earnings multiple and what it tells you about a stock and where it's going to in how to make money in any market. I spend a huge amount of time explaining how the multiple works. Because it's the M shorthand for price to earnings multiple that actually determines the price of a stock. This is something that really just confounds many people. Even the young hires I taught at Goldman Sachs owe so many Years ago. The M is basically the secret sauce of the stock price. Sometimes it's delicious, sometimes it's disgusting, sometimes it's pure poison. That's what I see happening to the enterprise software stocks right now. This is an industry where clients pay you per user, which was a great business model back when their clients had lots of employees. Now though, the declines in these enterprise software stocks that do software as a service, brought forth by sellers concerned about AI replacing employees that clients pay for, are downright staggering. It's an Armageddon situation. And it all starts with with a guest on the show last night, Bill McDermott, the CEO of ServiceNow. First, let me just say that ServiceNow is a tremendous company with a highly respected CEO. You bring in ServiceNow to rationalize and digitize your company. Most companies have all these back office silos, hr, it finance that create a lot of bottlenecks without generating any revenue. ServiceNow automates the mess and now they can bring in artificial intelligence to make things even more efficient. They can introduce Agentix to help your company automate workflows. They have a view of the entire organization and with a recent excellent acquisition, can even provide a layer of cybersecurity that many people think is very good. Best of all, ServiceNow knows what your end, your entire enterprise needs. I know dozens of their clients. I've never heard anything but praise. However, this stock has become a nightmare, down more than 50% over the last 12 months, including in nearly 10% beating today in response to last night's quarter, even though again the actual numbers were excellent. So what the heck's going on here? The earnings are fine. The problem is the M, what people will pay for those earnings. ServiceNow's multiple is shrinking, the M is being compressed and it doesn't seem to matter what Bill does or says. He can order up a huge buyback as he did last night. He can break records when it comes down fast. As very lucrative business has grown, he can show that SurfaceNow's core business isn't being cannibalized by its AI components component at all. Business is better than ever. But the market just doesn't believe him about the future, about the forecast, the market saying his company's going to hit a wall, that I will ultimately SAP all of its profitability as clients learn to do more with fewer users. That's an existential threat for ServiceNow because they do charge by the sea. How do we know this? Well, we look at the price to earnings multiple. At the end of 2024, ServiceNow traded 65 times forward earnings. Earnings. In April of last year, it traded down to 42 times earnings. After today's meltdown, it now trades at just under 28 times earnings. And it looks like to me that it's headed lower still. The shrinkage may not be over. In other words, like Ralphie from the Sopranos, ServiceNow has always been a good earner. But Wall street saying the good days will come to an end and the growth cannot be counted on any longer. It's saying the same thing, by the way, about Salesforce, Another software company is doing fabulously with a stock that's also seeing multiple compression. So the question isn't whether ServiceNow will keep delivering earnings. I think it will doesn't matter. Last night when I was interviewing Bill, he was emphatic about the client wins, the incredible growth, the buyback. It out of the corner of my eye when I was interviewing, I couldn't. I just saw the stock being hammered mercilessly and I said, I guess what he says doesn't matter if it was all going down before he even went on a conference call. The end can be brutal. It's like a vote, a referendum. And somehow Bill has been voted off the aisle. The stock market has said, ain't got nothing for you, Bill. Personally, if I were running a company, I would hire ServiceNow and Salesforce do really great. But I accept the market's judgment, at least for now, because I can't fight too powerful. And it doesn't matter what Bill does or says. Doesn't matter what Marc Benioff says to Salesforce. These stocks are going to trade like they're no longer growth names even as their growth remains strong. Can the market be wrong? Of course it's wrong all the time. Can you get in front of a freight train? That is the shrinking price during these multiple. Maybe not now, not yet. Soon when we see how low the multiple can go. And it will bottom. These may be worth buying because we're dealing with great companies right now that doesn't seem to matter, but I bet it won't stay like that forever. Terrific companies have a way of bouncing back, but not until their multiples bottom start to turn around. I like to say there's always a bull market somewhere at Palm start to find just for you. Right here on Man Money. I'm Drew Kramer. See you tomorrow. All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its 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 Kramer 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.

[B]

Or accuracy, and it should not be.

[A]

Relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer what made you confident that you could do something that hadn't been done before?

[B]

I have no fear of failure.

[A]

Trailblazing women Changing the game One of.

[B]

My favorite pieces of advice Think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things.

[A]

Julia Boorstin hosts CNBC Changemakers and Power Players. New episodes every Tuesday. Wherever you get your podcasts.