← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 1/5/26
00:44:17
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer
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Homes.com knows that when it comes to home shopping, it's never just about the house or condo. It's about the home. And what makes a home is more than just the house or property. It's the location and neighborhood. If you have kids, it's also schools, nearby, parks and transportation options. That's why homes.com goes above and beyond to bring home shoppers the in depth information they need to find the right home. And when I say in depth, I'm talking deep. Each listing features comprehensive information about the neighborhood, complete with a video guide. They also have details about local schools with test scores, state rankings and student to teacher ratio. They even have an agent directory with the sales history of each agent. So when it comes to finding a home, not just a house, this is everything you need to know, all in one place. Homes.com, we've done your homework.
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Oh, could this vintage store be any cuter?
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Right?
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And the best part, they accept Discover.
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Accept discovery in a little place like this? I don't think so, Jennifer.
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Oh, yeah, huh? Discover is accepted where I like to shop. Come on, baby, get with the times.
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Right. So we shouldn't get the parachute pants.
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These are making a comeback, I think.
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Discover is accepted at 99% of places that take credit cards nationwide. Based on the February 2025 Nielsen.
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Hey, I'm Kramer. Welcome to MAV Money. Welcome to Cramerica. Other people make friends. I'm just trying to make a little money. My job is not just to entertain you, but to educate, to teach you. So call me at 1-800-743- CNBC or tweet me at Jim Cramer. After 20 years of bad money. Tonight, let me lay out my 2026 game plan for you. I want you to manage as much of your own money as possible as I laid out in how to Make Money in Any Market, my new book about how the market really works, along with an index fund, I want you to own individual stocks, not trade them. Own them and let the power of compounding do its work. Most important, I want you to stick with those great stocks because that's where most people go wrong. They get shaken out of their long term winners. Stop it. So on a day when The Dow jumped 595 points as we gained 0.64%, the Nasdaq climbed 0.69%. I need you to understand what makes my approach different from the conventional wisdom. It's all rooted in the sales and trading I did for 20 years before man Bunny started. I want to show you the fallacy of trading and the greatness of owning. And today's a terrific day to do so. First of all, we know the story of the day, right? President Trump's overthrow of the ruler of Venezuela, President Nicolas Maduro. There's a lot that can be done and said about the Dunro Doctrine and what it means for American foreign policy. But as investors, come on, we want to try to make money off it. That's why you come to the show. That's what I deliver. The thing is, even though this is a big story, it might not be a big long term business story. And we are looking for big long term gains, not that short term profits comes from scalping. Sure, it's exciting to play what I call the parlor game of guessing what will go up, what will move on a given day. You have Chevron with his Venezuelan interest itself for ages now. It might get more than 100,000 barrels per day that it currently pumps from the once great Venezuelan reserve reserves. Country only pumps about 9,000 barrels a day and most of it goes to China. Maybe that contract can be broken. Venezuela owes so much to China, as much as $50 billion. And who knows if Maduro's replacement will honor those debts. The US refiners, especially Valero may be a big beneficiary of that oil because they still have refineries that can handle what's known as heavy crude. That's what Venezuela produces. Valero, Phelps 66 and Marathon Petroleum could be big winners in the US but only if they can divert that oil to the Gulf. Who knows. Venezuela's oil infrastructure is a mess though. They've been starved for ages ever since George W. Bush tried and failed to al speedurist predecessor 23 years ago. Everything's going to be rebuilt. How? Maybe Halberd and KBR Slumberger, now slb all got major contracts in Iraq for similar situation making happen as well. They could be considered potential winners here too. Now that's the speculation. Here's the issue. All these stocks I just mentioned zoom from the get go. You had to pay top dollar to get into this game today. I think the moves were well thought out in terms of players. Stocks were right but they were not well thought out in terms of profits. In that case the stocks were wrong. Why? Because they opened too high. All of them. Now we have a set of over inflated stocks and you expect losses for those who came in at the highest. Because the timeframe here for all these stories to play out is years, not days. I am betting that in a few days or even soon as tomorrow there will be no one to sell these stocks to at a profit if you bought them when they opened or throughout the day. Now we know because we've been through this before. When George W. Bush invaded Iraq, there was a lot of talk about the taking the production of 2 million barrels per day to as much as 12 million barrels per day, one day. But you know, it took nine years to get Iraq's production just to double to 4 million. And it hasn't gotten much beyond that. But honestly, the Iraq situation might be easier than what we're looking at in Venezuela. Yeah, it's that bad there. Consider the process. Venezuela nationalized most of the oil production years ago. You'd have to privatize it again, which would prove very difficult. Then there's no money up front for any of these projects. And most important, oil's been going down in price. So there could be very big losses for all concerned except the refiners and Chevron. Then again, if Chevron were to double production, you know what, it would still be just a drop in the bucket for that oil giant. Now I don't know how the refiners are going to get that crude that is meant for China to pay its bills in the debt that Venezuela owes China. And you know what? I don't think any traders have thought this through. So then how do we profit from the turmoil in Venezuela? Candidly, I don't think there's very little to be really. There's very little to be gained and the buyers have already gained it. I have no desire to reign on anyone's trading gains. But that's all it is. The people who did well were the ones who already own these stocks. Coming into this morning's session, you were too late from the get go if you came in today. Sad fact, but true. And look, I think this kind of trading is really ill advised. Long term, I believe it's going to give you suboptimal returns. It's very rare these days that everything is unexploited at the opening, you were simply too late as the trade was over by the opening bell. What should we be talking about instead of Venezuela? I like to talk about things that can make you money. How about something that did next to nothing at the opening, allowing you to get in the low. How about the bank stocks coming this year? I tried to determine what stocks are still cheap so you'd have something to pull back on if these stocks were to go down. I looked at the Capital Trust name such as and I also looked at JP Morgan and Citigroup. And based on their valuations, these stocks are still outrageously cheap heat versus the rest of the market. If they go down, you know what you can do? You can buy more of that. Take Goldman Sachs. I've been shouting for the rooftops that this will be the year of mergers and acquisitions, not to mention gigantic equity offerings. Goldman stock opened almost unchanged. It sells at just 17 times earnings, less than the average S&P 500 stock even knows. It's much better than they are. And it's a huge player in M and A and issuance IPOs. That's worth buying. The stock ended up rallying nearly 4% after Quad Fire. And you could have made all that today. And I think it's still got lots more room to run. Not a trade. Or how about Citi which was up huge the last year but still only sells for 12 times this year's earnings estimates. I think Citi will exceed the investments continuing its resurrection from the dead. The stock opened just a little bit higher. So if you bought it here, you would have made had a decent shot at making money as Citi finished up almost 4% as well. But again that's chump change. It's the big move, the multiple year move that I want you to get. Let's consider Capital One which recently acquired Discover to become a very heavy hitter in the credit card space. I think this bank which trades at just 12 times earnings is the cheapest of all. It's terrific if you think there'll be rate cuts this year. Something is pretty much assured given the candidates that President Trump is looking to replace Jay Powell. Right. Capital One will be using this Discover network that it bought last year to extend it treaties and is buying back a ton of stock itself. It's not too late to buy the stock which the child trusts a lot of. What else could you look at on daily today? I like to watch the declines to find good entry points. I want to see what's on sale. Take all these drug stocks. Boy were they on sale today. Fastest grower. The best opportunity would not be Eli Lilly which has moved a great deal and I still like but Johnson and Johnson. It's spinning off its orthopedic business deploy synthesis something that will immediately raise its price earnings more because that business is much slower growth than the core pharma franchise. Same thing happened when JJ spun off. Can view its over the counter drug business. Great move to raise the valuation. At one point this stock was down more than $5. Today I think it's a terrific entry point, even down 3. Notice what I keep coming back to the price to earnings multiple because of the interest. The P E multiple section of how to make money in any market generated in 2026. In 2025. In 2026. I have to teach more about this magical elixir. The P is where the gains are. Bottom line. If you can get the stock of a terrific company at a discount, not a premium as to do with the veteran Venezuelan incursion that I'm telling you, I think will be ill advised, then you're investing well instead of trading badly. And history shows us that's how big money is made. Not theoretical, not endless trading, but actual investing. And that is what 2026 will be all about. George in Texas. George.
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Hey, Jim, thank you. Longtime listener just calling about ServiceNow. A recent stock split. Do you like it at these levels?
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Well, the problem is is that it is a software company and the software companies are being eaten by the hardware. Some would say it still has a high priced earnings multiple. I was surprised the stock gave up so many points on Friday. I thought it would bounce back today and it really didn't. I think that it's 42 times earnings. That's a P E multiple. It's still a little too high for me. It is one of the better companies in an industry that is being. Well, it's having a tough time with AI even though it is an AI leader itself. Odd, huh? Robert New York Robert.
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Jim, how are you doing tonight?
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Hey, Robert, how you been? What's going on?
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Happy New Year, Jim. Happy New Year to you and your family, your wonderful family. And I just want to say I was just sitting in a restaurant and everybody's like, where are you going? We're ready to eat. I said, I got a call, Kramer, because I can't make a move without this guy because he's the one who.
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Makes everybody let the food get cold. Maybe I just have no, your listen.
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Your book, everybody should get that book because I learned so much from you, buddy.
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Robert, be the man. Thank you.
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Thank you, Jimbo. All right, Jim, Company is starting. It's starting to break out. It's up almost 20% in the last month. Their proprietary credit models, adaptive checkout and merchant tools have fueled it. A 30% year over year increase in active merchants and strong consumer growth. Now, here's the key to this company. They have a phenomenal underwriting department. Now, everybody out there go to the videotape because Kramer interviewed this guy and it was A great interview. December 16th the company has over 40 million Americans are using it. They're going into the UK, baby. And I want to buy more here. Jim, affirm.
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Oh, you should buy more, Robert. I think that stock is going to par which is genuine Wall street shippers for $100. It's an 80 right now. Max Levchin, genius. He's funny guy too. Come on, man. All right, look, I think most of the gains have already been made in the oil complex. And at this point, I'd rather you focus on investing in terrific companies that are trading at a discount because that's what 2026 will be all about. Oh, man. Tonight I'm kicking off the new year by reviewing the best and worst stocks in S and P from 2025, from winners like Micron to losers like Trade Desk. I'll break down which names can keep their major mojo technical term going into 2026 and which ones need to be avoided altogether. Then I'll take a look at the best worst days of 2025 from the tech heavy NASDAQ and Share, where I come down on many of these which have a lot of AI in them. And Costco stock has hit a rough patch in recent months, but is now the time to start a position in the company? I'm going off the charts to find out, so stay with Kramer.
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Don't miss a second of Mad Money. Follow imkramer on X. Have a question? Tweet Kramer. Hashtag MADmentions. Send Jim an email to madmoneycnbc.com or give us a call at 1-800-743-cnbc. Miss something? Head to madmoney.cnbc.com.
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Psoriatic arthritis Symptoms can be unpredictable.
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I had joint pain and I couldn't move like I used to. I needed relief. I got Cosentyx. It helped me move better.
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Cosentyx Secukenumab is prescribed for people 2 years of age and older with active psoriatic arthritis. Don't use if you're allergic to Cosentyx before starting, get checked for tuberculosis. An increased risk of infections and lowered ability to fight them may occur like tuberculosis or other serious bacterial, fungal or viral infections. Some were fatal. Tell your doctor if you have an infection or symptoms like fevers, sweatshirts, chills, muscle aches or cough, had a vaccine or planned to, or if inflammatory bowel disease symptoms develop or worsen serious allergic reactions and severe eczema like skin reactions may occur. Learn more at 1844 cosentix or cosentix.com. Ask your rheumatologist about Cosentics.
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At the beginning of every year, I like to go over what happened the year before because if you want to know where the market's headed, you got to know where it came from. And that's why tonight I want to cover the five best and worst performers in both the S&P 500 and the NASDAQ. Let's start with the S and P, up more than 16% in 2025. When it comes to the top five performers, do you know that four of them all came from the same business? These are all data storage and memory companies. Well, they belong in the data center. In first place, there's SanDisk, which was spun off by its old parent company in February and then went on to rally 371%. The spin was completed. In second place, There's Western Digital SanDisk, former parent, up 282%. In third, it's Micron, a favorite of the show, up 239%. And fourth is Seagate, another disk drive company, up 219%. These are all called storage companies. Now, each of these companies is a play on the data center's insatiable demand for memory chips and hard drives, which are essential if you're trying to develop complex AI models. So can these memory stocks keep running? On the one hand, historically this is a boom and then bust industry. Okay, when memory chips are hot, eventually companies buy more semiconductor capital equipment in order to make more memory chips and flood the market with new supply. And that's the end. On the other hand, this time might be different. The voracious demand from data centers is immense, and while new supply might come on at some point, these companies have been pretty darn cautious about expanding their capacity so far. Plus, when you look at Micron's annual gains for the past 30 years, there were plenty of times when the stock managed to rally hard for multiple years in a row. The last time the stock rallied more than 2% in a single year was 2013. And in 2014, Micron rallied more than 60%. So it wouldn't shock me if these memory stocks keep running. But if you own them, please, I'm begging you. Why don't you schnitzel? That means take a little bit off the table so that you're playing maybe with the houses money. In fifth place, we have the best performing non memory stock in the S and P, and that's Robinhood Markets, which was up just over 200% in one year, despite the fact that it's pulled back about 20% from its early October all time high. As in many speculative stocks when there was a big peak, 2025 was a great year for the type of speculative assets that Robinhood's younger clientele can't get enough of until it wasn't. That late year pullback for crypto and speculative stocks is why this one cooled off. Now look, I really like Robinhood for a long term story. For better or worse, a generation of investors is learning to invest on Robinhood. And that's a generation is set to inherit more than $100 trillion from their baby boomer parents over the next couple of decades. Short term though, the stock might keep trading with crypto and the super speculative plays. All right, let's do just a couple more quick ones because the top four were also similar. In sixth place, Warner Brothers Discovery. It's up almost 173% last year thanks to the bidding war that many of feel has ended with Netflix's preemptory $83 billion bid. The funny part of the story is that the other major bidder that move these things up is Paramount's guidance that's backed by Oracle's Larry Ellison. He actually made a higher offer, but with some caveats and doesn' appear to be going away. Warner Brothers said that it's sticking with the Netflix bid, but who knows? This whole bidding war was like getting a new season of succession. Look, if someone comes in with a $34 bid, I think they get it. In seventh place is new month. Yeah, the gold Miner that gained 168% in 2025, reflecting the surge in gold prices last year. Now I prefer Agnico Eagle Mines, which is also more than doubled in 2025, but you can't really go wrong in that space when gold has had such a terrific year. Finally, in eighth place is another one I like so much. Lam Research, up 137%. That's a semiconductor capital equip that is who the memory companies call when they need to have more capacity because prices are going up. And this one had a huge move today, by the way. Up more than 5%. Now who's on the losing side of the ledger? Actually some very famous companies that we used to talk about all the time. The worst performing stock in The S&P 500 last year was the trade desk. Geez. That was the former beloved digital advertising play struggling to adapt to the era. With its Stock down almost 68% in 2025, the Trade Desk had a brutal year. This was a tough period for what's known as pragmatic, programmatic advertising. Generally amidst where they there there's a lot of buying and selling by machines. Frankly, they're seeing more competition from players with deep pockets like Amazon and the company dropped the ball more than once. They had a pretty bad rollout for their own AI offering. At the end of the day, advertising is one industry that has genuinely been turned upside down by AI and the trade desk still needs to figure out where it fits in the world. Look, when they do that it could make a difference. But right now they haven't. Now the second biggest loser. Holy cow. Is coming. Fiserv. And this was down 67%. This payment processor and fintech stock got hammered in late October, down 44% in a single session after putrid quarter which came with a slash full year forecast and a management shakeup. Relatively new CEO Mike Lyons called out previous management for prioritizing short term large targets at the expense of necessary investments in the business long term. That sounds like a quagmire I got to say. No thank you. That one. The third was performer. Very interesting. It's a REIT. Alexandria real estate equities down almost 50%. This real estate investment trust focuses on office space for the life sciences industry, including laboratories. And it's been suffering from muted tenant demand for a while. That's somewhat the result of a weaker IPO market in the past few years, which made it harder for small biotechs to raise money and therefore take down real estate. Last month, after a couple of years of bleeding against Alexandria real Estate, they bit the bullet and slashed the dividend by 45%. Coming another cautionary tale about the illusory high yield so many people seek. And before the cut, the dividend was sitting just under 10%. It's still pretty high at almost 6%. Let's hope they can get their act together. Remember, a high yield is often the sign of real problems. Problems not just a Juicy opportunity. Fourth was really amazing Deckers Brands, the footwear and parent company buying Uggs, Teva and Hoka, that hot shoe, it fell 49% in 2025. Deckers got poleaxed earlier in the year on tariff worries and the stock never really recovered. Basically trading sideways since early April. A lot of people try to bottom fish in this one. The company's growth engine, Hoka has seen a slowdown for the past couple of quarters. And if you believe that Nike can turn itself around, which we do, or we would not have bought it for the Chapel Trust, well, that's very news, very bad news for the sneaker competitor. Honestly, I think most of the pain in Deckers and Hoga is already baked in with the stock trading at about 16 times this year's earnings estimates. But I feel very alone on this one. Every time people have tried to come in, they just had their head cut off. Finally, the fifth worst performing, the SB 500 in 2025 was Gardner. Oh my God. This was formerly really hot stock, the tech research firm, down almost 4,48% last year. Gardner produces detailed research reports and offers advisory services for its most mostly enterprise customers, helping them choose what technology products are right for their business. Now this is another company I think has been hammered by the rise of AI, which makes it easier for businesses to access this kind of information on their own. No need for research middlemen like Gardner. I guess I don't feel compelled to stick my neck out on this one at all. Bottom line, those were the best and worst performers in the S&P 500 last year, and there's a lot you can learn from them. I want you to stick around after the break and I'll cover the best and worst of the NASDAQ 100. But mad money is back in a moment.
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Coming up, Kramer's tackling the winners and losers of the tech heavy NASDAQ from 2025 and what could be next for the index in 2026.
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Next.
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Hi, I'm Lewis Howes, New York Times.
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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.
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Out because each week we bring you.
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An inspiring person and message to help you on your journey towards inner greatness. You're going to hear from the world's top experts around relationships, health, mindset, money and more.
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If you're ready to join me, you.
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Can find the School of Greatness on Sirius, xm, Pandora, or wherever you get your podcasts. Make sure to hit the follow button so you never miss an episode. Thank you so much for your support.
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D
Support Sling is the live TV service that puts you in charge. Choose your plan Orange for sports and entertainment favorites, Blue for news and reality or select for the essentials. Only pay for the stuff you actually watch and pause your subscription anytime. Because paying for TV or not watching, that's just rude. No long term contracts, no nonsense. Pick your plan, add what you want. Sling lets you do that. Visit sling.com to learn more.
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Department of Rejected Dreams if you had a dream, rejected IKEA can make it.
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Possible so I always dreamed of having a man cave, but the wife doesn't like it. What if I called it a woman cave?
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Okay, so let's not do that. But add some relaxing lighting and a comfy IKEA hofburg ottoman and now it's a cozy retreat. Nice.
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D
A cozy retreat, man.
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C
Cozy retreat, sir.
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Okay, find your big dreams, small dreams and cozy retreat dreams in store online@ikea.us Dream the possibilities.
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Before the break I went through the best and the worst performing stocks, the S&P 500 last year and I'm now going to cover the tech heavy NASDAQ 100 because it was the NASDAQ that led the way. It was up more than 2020% for 2025. Now look, there's some overlap here. The top two performs NASDAQ 100 were remember the memory and storage plays at Western Digital Micron and Seagate. Whereabouts discovery was in 4th Lam research was in 6. So why do we do this? Let's focus on the five best performers in the S and P that I didn't already cover. First, there's one that she's eluded me. It's called Insmid. That's a biopharma company that ended last year up 100% 52% for the fifth best performance, the NASDAQ 100. Now this company focused on developing drugs for rare diseases and they got an FDA approval from one of their top drug candidates last year. It was a treatment for a lung condition called non cystic fibrosis bronchitis. Now Wall Street's bullish because the drug seems to be a powerful anti inflammatory. And remember, these are what's known as orphan drugs and they are protected by them Congress for a long time ago and been for a long time now. Insmet has come down a bit from its highs. The stock pulled back about 18% from its early December peak, largely because the drug that just got approved saw a disappointing clinical trial result in chronic sinusitis still, this one is worth keeping an eye on. And I admit I had not been following it until the review. That's one of the reasons I like these reviews so much. Insbed I didn't know it. Now I do. Next, how about Palantir, which finished 2025 up just 135%, good for 9th place the S&P 500 7th place the Nasdaq 100. It's still tough to justify I know Palantir's valuation with the stock trading at around 175 times this year's earnings estimates. But as usual, the Palantir bulls don't care about that. And it is one of the great fastest growing large cap stocks I've ever seen. It just needs. It needs a fresh jolt. Now maybe another stunning earnings quarter could do it. Or maybe Palantir doesn't even need that. The Stock did jump nearly 4% today on nothing more than a positive tape. You know, I am a big believer in this company and the stock. I see no reason to back away from it now. The eighth best stock in the NASDAQ 100 was App Lovin. Now that's an advertising software company that helps its customers, like many mobile game developers, grow their reach and monetize their platforms. Now this is another one with the big retail following. The stock put up huge gains earlier in the year before flattening out over the past few months, but did finish 2025 up 108%. Of course, like all some people call these cult stocks, App Love is expensive, trading 43 times this year's earnings estimates, which only seems cheap in comparison to Poundier. That said, this company has legitimately great growth and the business is incredibly profitable right now. You know what? I can't name a single competitor Applovin. It's like this company has the whole market to itself. Specifically, Applovin has seen its revenue roughly triple in the past four years. Meanwhile, the earnings per share have gone from next to nothing to an expected $9.37 for 2025, which would be more than double 2024. Number the best part, Apple Oven's growth is expected to continue or even accelerate. Wall street's looking for 37% revenue growth and 56% earnings growth. And that's why I'm more comfortable recommending this one. Because even though Applovin trades like a speculative stock, the business really isn't that speculative. Next there's KLA Corp. There's a it's another semiconductor equipment company just like lamb Research, up 93% last year this one's all about the data center's voracious demand for memory chips at this point, frankly, in the cycle, you have to expect companies like KLA to keep racking up big orders because there's simply not enough production capacity to make all the chips we need. Rounding up the NASDAQ 100 top 10 is the 84% gain from intel after years of underperformance. Intel showing signs of life under this terrific new CEO by the name of Lip Bhutan. And the stocks had a major comeback in the back half of the year after the Trump administration invested almost 9 billion in the business and Nvidia invested another 5 billion a month later. These cash injections help intel clean up its balance sheet. It'll take a long time to truly turn this company around, but I am confident it is indeed headed in the right direction. All right, how about the worst performers in the NASDAQ 100 this year? @ the very bottom of the index was strategy. That's formerly known as MicroStrategy, which ended the year down 47.5%. Now this is the original Bitcoin treasury strategy company, meaning a company that's just buying crypto for its own account. For all its heads and purposes, strategy has become nothing more than a leveraged bet on Bitcoin. You like Bitcoin? Go buy Bitcoin. See the leverage bet work great when Bitcoin is going higher, but not so great when it started pulling back like it's been doing for the past three months. Although it did have a nice bounce from the bottom at the end of the year, it's nice today. My view, joint Bitcoin exposure. Avoid this one. There's better ways. Okay. Second worst stock in the NASDAQ 100 was Charter Communications that tumbled 39% last year. Now this is a sectorally challenged cable business. You may know them as Spectrum with a chart. With a stock that's been sinking for three years now. Tough to be a cable company these days. Third worst performer 100 was a company called Atlassian symbol team TAM, down over 33%. Now this collaboration software plays a proxy for enterprise software sector as a whole. The whole industry has been shaken up by AI because these platforms are genuinely great at writing code, making many companies more willing to develop software in house and not needing assistance from company like Atlassian at the same time. Many of the cloud software place charge per user and if AI makes those users more efficient, then customers won't need to pay for as many people. Atlassian is really in the crosshairs here. Because it's software exists to help software engineers collaborate. If you want to bet on enterprise Software, come back 2026. This is not the one to go to. Go to Salesforce. Okay, had nice bounce today. Fourth worst performer in the NASDAQ 100 was a really, for a long time, very reliable company called Copart, which helps insurance companies, banks and rental car outputs to process and sell salvaged vehicles, mostly via the Internet. Copart tumbled roughly 32% last year because they're losing market share. Is it salvageable? Look, with the stock trading at over 23 times this year's earnings business estimates, no bargain. Too soon to stick your neck out. Finally, the fifth worst performer in the NASDAQ 100 was real conundrum. PayPal was down more than 31% last year. PayPal's classic payment offerings have mostly become commoditized, and the company's been late to new technologies like Buy Now, Pay later, or stablecoins. That said, PayPal just keeps growing and the stock's gotten very cheap. You know, this thing only sells for 10 times this year's earnings estimates so far, that hasn't mattered much to date. But maybe 2026 is the year when PayPal becomes too cheap to ignore. I am flabbergasted, but how poorly this stock has acted under not just one, but two different CEOs for multiple years now. So bottom line, now you know the highlights of what really worked in 2025 and what really didn't, which is going to inform our predictions for 2026. More on that later in the rest of the week. Why don't we start with some calls? Let's go to Robert, in a way.
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Robert, aloha and happy New Year to you, Jim. And mahalo for taking my.
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Call. You are very kind and I'm so thrilled that you're here on the first day of the year. How can we go to work together? What are we doing? What are we thinking about?
- [32:17]
E
Robert? Okay, first. First, I want to mention that you have two wonderful gentlemen working there. And Mr. Josh and a Mr. Josh. Josh and Mr. Sean. Wonderful people. Okay.
- [32:29]
C
Now, the best, right? Go ahead. I'm sorry, the best. Go.
- [32:34]
E
Ahead. Now, after a great earnings report and many analysts, upgrades and price target increases, etc. You had the CEO on your show. Basically you agreed with his presentation. However, the stock collapsed. Now, finally, it seems to be stabilizing. Hallelujah, snowflake. Is it a buy? Is it a buy.
- [32:55]
C
Now? I have to tell you, I thought the quarter wasn't that bad. Robert. I was quite surprised about the negative reaction. Now it is a highly valued company but I think Sridhar Ramaswamy is a terrific CEO and I think the stock is quite frankly a buy. And thank you for mahalo, thank you for the call and thank you for singling out two of the best people we work with. Now you have a sense of what worked and what didn't in 2025. And I hope the breakdown helps shape your investing strategies. Going to 2026. I know I learned a lot. Much more mad money and owning Costco for the child trust was no easy task in 2025. But we have to ask ourselves a better times ahead for the retail giant. Or is it really just done? I'm going off the charts with up a bit little legendary Larry Williams to see what's next for the name. Then it never pays to be pessimistic in the stock market for too long. I'll break down why 2025 was the perfect example of this and what could be in store for the year ahead. And of course, all your calls, Rapid Fire. Tonight's edition of the Lightning round. So stay with Kramer. Oh Lord, it is tough to stick with the stock that keeps getting hammered. Take Costco. Now we've owned this Costco for ages. For my travel trust. I've long said that I'm happy to stick with it forever because it's the greatest retail club on earth. And I never minded the high price journeys multiple because the company runs like clockwork. 2025 it tested my resolve. The first worry, the stock itself. Now I'm never oblivious to the action in the stock. That's for fools. You don't just sit there and watch a stock drop more than 200 points or 20% since June without thinking something has changed. Remember last year's pretty good year. By late last year, Costco had become a regular guest on the 52 week low list. Couldn't be evicted. Second issue. Most of the time I really don't worry about management changes. But there's this fellow named Richard Galante. Now he had been one of the longest serving CFOs in the United States. He retired in 2024 after almost 40 years on the job. And he left the company for good about a year ago after taking on a brief advisory role. Now glad he was no ordinary cfo. He influenced every aspect of the company. He knew pricing, he knew volume, he knew what customers wanted, what they pay for it. He was super important. When it came to the treasure hunt, the process, we actually get excited about the $70 bottle of Keymus that retails for 95 bucks. He knew that people would think that they were getting one over on Costco. They brag about the Camus, which would then cause membership to grow and that's where they make their money. He even had a sense of humor about it. His conference calls were the best, hands down. I say that as someone who comes from a retail background. My dad sold trousers at Gimbel's. My mom sold lingerie lingerie at Litz. When my dad got fired, he sold toys and games out of our station wagon. He was one of those flea market guys in the tailgates on Saturdays. Now, I didn't know the pecking order retail. I just loved when Popping brought me to the big parking lot. Later on, Pop sold boxes and bags and scotch tape to men's and women's shops. Pop drilled it in my head. I've never ever seen anyone better than my Pop at explaining retail than Richard Galante. He's a retail king and he's a great teacher and he knew the numbers like no one else. Now, I have no problem with the successor, but he has some mighty big shoes to fill. And I wish he would stop using words like choice fault to describe his customers because that implies that they don't like the pricing. Even though Costco is almost always the cheapest place to shop, is the consumer at Wal Mart choiceful? True? Doesn't look like it. Finally, there's the re ups for Costco's membership program. They've you know what? They're ever so slightly below plan. Specifically the E Commerce customers. They seem to be less wedded to Costco than the in store shoppers are. Now, given that Costco trades at nearly 40 times this year's earnings estimates, making it the 35th most expensive stock in the S&P 500, anything less than perfection makes it tough to own. And that re up number was distinctly not optimal. So watching the stock go lower and lower, we could no longer justify sitting there and take a beating. That's why we did the unthinkable. We sold some Costco for the charitable trust. Frankly, we would have sold all of it, but the company's too good. And the shopping experience, Most recently at My1 in Neptune, New Jersey remains second to none. Still, I was about to dump the whole rest of the position in the San Jose retailer when Larry Williams, the legendary technician and market historian, wrote me and said it was time to buy Costco. As much as I don't like to stick with a stock that slides endlessly I also don't like to bet against Williams because he's quite possibly the best in the tech business. Well, he's more of a technician historian than he is just a person looking at charts. So let's take a look at what he sees. All right, first take a look at this weekly chart. The blue line near the bottom is Williams's proprietary valuation gauge. It's not a timing tool, though. He used it as a setup for confirmation indicator. Currently it reflects the Costco stock is undervalued. Williams points out that in the past stock has often rallied from these undervalued levels. Meanwhile, when the stock gets overvalued according to this indicator, it's historically been a good time to sell. Well, we're under. We're undervalued now. Now go down further. You see the red line, which is Williams measure price professional accumulation, meaning whether money managers are buying or selling any notes that Costco stock has been under accumulation pretty steadily even as its share price has been coming down. Put it all together and he thinks that Costco is just like a coiled spring waiting for the right moment to soar higher. And was not necessarily today was a good day for Costco. But when you see this, it's very rare in these index indices. By the way. These are all proprietary and yet a lot of people have adopted them. So this is just not some, you know, something just put down for us. So when will we get that moment where the stocks the coiled spring that takes off once you take a look at this weekly chart of Costco going back to your blue line here represents the long term cycle that's influenced the stock over this period. Larry's always looking for these cycles to identify when a stock's ready to change its trajectory. Costco's long term cycle peaked in early 2025. That was followed by the incredible length lengthy beat down. Okay, really bad. What does the cycle predict for 2026? Let's zoom in. Zoom in on the last year with a cycle projection through 2026. Last year at this time, the cycle forecast said you had to prepare yourself for pain in Costco. What a good call that was, huh? But now, Larry, cycle forecast suggests that the stock is ready to roar. In the past, at this point in the cycles, Costco's rallied 85% of the time. Given the stocks undervalued, most money managers seem eager to buy it. Williams says that the cycle forecast is telling you this one is now a screaming buy. This is Costco where everyone was sweating that this is over now. How about the shorter term pattern? Check this one out. Williams has layered the stock short term cycle in red on top of the longer term cycle in blue. Meaning if history is any guy, this cycle forecast holds true. Then he thinks Costco can rally into late February. All right, so you can see before experiencing any sort of pullback, then another rally into this coming June. In other words, the short term cycle indicates that the next five months should be pretty darn good for Costco. It's funny because it was like bad for about five months. Clearly some people, Wall street agree with them because Costco just caught an upgrade from Mizuho today on the strength of its core business and the Stock really jumped up 2, 2.5%. But since a lot of stocks were up a lot, I don't think that we've seen the big move. If you want more detail, Williams has released his 2026 forecast on his website I really trade.com which is pretty influential. But here's the bottom line. Even though Costco has been a painful investment for the Travel Trust over the past year, when Larry Williams says the stock's ready to run, my inclination is that with him, not against him because his track record is just that good. I would change my mind only if I had an awful experience at a Costco that's never happened, including my last three visits at three different stores around the country. Larry Williams says buy Costco. Deadline's back with.
- [40:52]
A
Me. Coming up. Kramer takes your calls. And the sky's the limit. It's a fast fire lightning.
- [41:00]
C
Round. Next. Time it's time for the light and round quizzer revisit wrap for cooler season Stockton by sell Discord. Another horse stock quench that tell my stamps and quiz why you play the sound and then the lightning round is over. Are you ready? Ski dag? Time for the light round Quivers with Danny.
- [41:26]
A
Wisconsin.
- [41:26]
C
Danny. Booyah. Jim, hello from Wisconsin. Oh, Danny, glad you called. What's.
- [41:33]
E
Happening? I'm interested in voyager.
- [41:37]
C
Technology. What do.
- [41:38]
E
You. What's your thoughts on.
- [41:39]
C
That? Look, it's got its space and it's national security. Those are two of my favorite teams. I think it's a very good speculation. Now we go to John in California. John. Hey.
- [41:50]
E
Jim. Dr. Kramer, thank you for taking.
- [41:52]
C
My call and Happy New Year and thanks for all you do for us. I've been looking at this company, Immunome, a clinical stage biotech company developing targeted cancer therapies. Now I know you've urged caution in investing in these companies due to extreme volatility. Well, also because this is this money. This company's losing so much money. I know, but it's Dr. Siegel who. Remember Seattle, Jen. So therefore, if you want to speculate on it, fine, but we do not think that you're investing. Let's go to Roy in Pennsylvania. Roy, good afternoon, Jim. Or good.
- [42:23]
E
Evening. Thanks for taking my.
- [42:24]
C
Call. Of course.
- [42:25]
E
Roy. Jim, considering your editor energy over the years, if the chip industry could share your energy, your incredible energy, they.
- [42:34]
C
Could save billions and billions of dollars getting to my. It's Nokia. Oh, Nokia is tough. Nokia is very tough. And I'll tell you why Nokia is tough. Because it's up against Apple. It's up against a lot of different great companies. Hey, by the way, Apple was down badly today. I have to tell you, I think there's a pretty good level to buy some Apple down four bucks. I think I buy a little Apple, then it comes down a little more. Buy some more. Let's go to Rebecca in New York. Rebecca, hi, good evening. Good evening, Rebecca. Good.
- [43:06]
D
Evening. Thank.
- [43:07]
C
You. I'm honored to talk to you. I enjoyed your discussion at the 92nd Street Y in New York when you said you read Holocaust books. I just want to recommend you a very good book. I'm reading now the Delayed Life by really good book. Okay, thank you. Thank you. So I'm calling it out. The stock a dense fly, the ticker X ray, you know. Do you know that this used to be a very expensive growth company and now it is worth very little? And I think it absolutely represents some value here. I'm glad you brought it to my attention. I'm going to suggest that you buy some and put it away. And that, ladies and gentlemen, conclusion of the Lightning.
- [43:46]
A
Round. The Lightning Round is sponsored by Charles Schwab. Coming up, the bears said tariff policies would ruin the market in 2025, but instead we saw gains across the board. Kramer's diving into why the pessimists got it.
- [44:03]
C
Wrong. We just finished another fabulous year that wasn't supposed to happen. We were told there was no way the S P could possibly be up a little and be up 16% with more big gains than some of the most iconic tech stocks. The president seemed less interested in the stock market, more interested in tariffs that could crush stocks of all kinds. Last April, you might have thought we finished the year deeply in the red. So why wasn't this a miserable year? I can recount the reasons for you by memory. The price earnings ratio is supposed to be too high. Something that still lose many people. Hence my obsession with. Explain it and how to make money in any market. And I thank viewers for making it number one. Number one on Amazon, the category since it dropped in the last first week of October. We were supposed to be seeing just skyrocketing interest rates all year because the big beautiful bill was so inflationary. Remember that canard? The critics ignored accelerated depreciation in the Trump accounts where people in 2026 who have children get free money as long as it goes in the SB 500. How about that? We heard endless reports from Federal Reserve officials about rates going higher. Their mutterings are always considered newsworthy, even when they're really not. Remember, as I said at the top of the show, not everything that's newsworthy can produce a return in the stock market. Sometimes it's just not actionable. At the same time, Wall street seemingly didn't appreciate the impact of a new FTC that would finally stop blocking mergers. Netflix and Paramount going after Warner Brothers discovery that was unthinkable under the previous regime. Deals like that are incredibly great for the stock market, turning the ugliest of ducklings into the most beautiful swans. The banks famous for their M and A power were screaming higher today from the get go, just like 2025. And I think they'll continue to do so. Yet somehow, even after last year's tremendous run, the pessimists remain in charge. They're in charge of the narrative, and they rarely get called out for being wrong. They're almost always the ones who set the tone. They're the ones who advocate endless trading. They don't talk about investing in American companies and letting the the dividends compound over time. When you emphasize index funds, it's bloodless and stands for nothing. And it means nothing. Index funds are just a list of companies maintained by faceless people who pick winners to replace companies that are taken over or losers are just too small to remain in the index. Of course, we're told that you can't consistently beat the averages by actively managing your money. This whole beat the index thing is what keeps so many investors in their chains. They're supposed to turn their brains off and not use their eyes or listen to their ears and take advantage of their curiosity and powers of observation. And I'm not buying it. No wonder the average Joe doesn't get rich in the market. He trades his way out at the low and wades back in at the top. He doesn't own stocks and companies that can grow and grow. He owns a piece of nothing. It matters to him. That's a big reason why the pessimists always seem to prevail, even if they keep getting it wrong. If you don't have faith in American companies because you're just buying an index, you'll listen to those who fixate on the negatives. And that includes Berkshire Hathaway. Hathaway, where if you listen to former CEO Warren Buffett, you would have sold his stock to own the S&P 500 and missed out on gigantic gains. Irony One reason the CBC Investing Club helped to create so many millionaires last year in Nvidia is simply because you didn't have a chance to sell. It happened that fast. Thank you for Jensen Wong, even as the Dowers were back with a vengeance today. If you sold it recently, please read my weekend CNBC Investing Club piece about the lies the Bears insist on telling you about Nvidia. You might regret your sales. You might want to buy tomorrow. So welcome to 2026, where the Bears say long term interest rates will rise, inflation will raise, stocks are too expensive, and the President will crush the averages. I actually don't believe any of that will happen, but when the Bears say this stuff and they get it wrong, they're never held accountable. And hey, they make a mistake, there's always 2027. I like to say there's always a bull market somewhere. I promise I'd find it just for you right here. Money. I'm Jim Cramer and I see you.
- [48:13]
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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 or accuracy and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer Real talent.
- [48:49]
A
Is defined by what people can do, not where they learn to do it. So by stopping at the education section of a resume, you might throw away the perfect hire Skills first. Hiring helps you see talent others miss, like more than 70 million stars skilled through alternative routes let their story unfold and gain a competitive advantage because hiring managers who start with skills are 60% with more likely to find a successful hire higher skills first learn why at tearthepaperceiling Org, brought to you by Opportunity at Work and the Ad.