Mad Money w/ Jim Cramer 2/18/25

Summary

Mad Money w/ Jim Cramer – Episode Summary (February 18, 2025)

Release Date: February 19, 2025

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Overview

In the February 18, 2025 episode of "Mad Money" hosted by Jim Cramer, viewers are treated to an insightful analysis of the current stock market landscape, CEO sentiments towards political figures, in-depth discussions with industry leaders, and a dynamic Lightning Round featuring buy, sell, and hold recommendations. Cramer's candid commentary and strategic insights aim to empower investors to navigate Wall Street's complexities and capitalize on emerging opportunities.

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Market Recap and CEO Sentiments

Jim Cramer's Opening Remarks ([01:22] - [08:33])

Jim Cramer begins the episode by addressing the day's unexpected market movements, highlighting a significant late-day rally that pushed the S&P to a record high. Despite the Dow rising by 10 points and the NASDAQ advancing by 0.07%, Cramer expresses skepticism about the sustainability of this surge:

"But it seems suspicious and I didn't like the way it happened." ([02:15])

Cramer delves into conversations with various CEOs, revealing their perplexity towards Donald Trump's administration and admiration for Elon Musk's business strategies. He notes that these leaders favor cutting federal bureaucracy and defense budget waste, aligning more with globalist perspectives despite his personal disagreements with certain policies.

"Nobody can figure out Donald Trump. These CEOs are baffled." ([03:45])

Cramer's analysis underscores a shift from momentum stocks to classic growth stocks, a trend that has significant implications for market dynamics.

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Interview with Rick Wallace, CEO of KLA Corporation

Discussion on the Semiconductor Industry ([15:47] - [22:14])

Cramer welcomes Rick Wallace to discuss KLA Corporation's pivotal role in the semiconductor ecosystem. Wallace elucidates KLA's advancements in AI and high-performance computing, emphasizing their integral position in the semiconductor manufacturing process.

"We have AI in every one of our products, but it's also enabling an industry which is transforming not just because of AI, but high performance computing as well." ([16:27])

Wallace addresses recent challenges, including export controls imposed on Chinese entities, affirming KLA's commitment to a level playing field while navigating regulatory landscapes. He assures that despite geopolitical tensions, demand for semiconductors remains robust due to advancements in AI and data center expansions.

"From semiconductor demand, we're lights out. This is a perfect time for the industry and for KLA." ([18:38])

Cramer commends Wallace on balancing shareholder interests with strategic growth, highlighting KLA as a stalwart in innovation and execution.

"You have to deliver for shareholders. And our view is they want predictability and they want us to do what we say we're going to do." ([21:14])

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Deep Dive into Disney's Financial Performance

Jim Cramer’s Analysis of Disney’s Q4 Earnings ([23:15] - [30:08])

Cramer scrutinizes Disney's recent quarterly report, praising the company's profitability across its segments despite a stock sell-off post-earnings announcement. He highlights significant improvements in Disney's Direct-to-Consumer (DTC) segment, particularly Disney Plus, which transitioned to profitability.

"Streaming business has now turned a profit in three of the past four quarters." ([24:50])

The Experiences division, encompassing parks and cruises, showed strong performance, contradicting investor concerns about recent hurricanes impacting operations. Cramer expresses confidence in Disney's ability to maintain robust performance, attributing the stock's decline to cautious forecasting rather than fundamental weaknesses.

"This dip here has created a terrific buying opportunity for you with the stock now trading at bargain levels." ([26:52])

He concludes that Disney remains a solid investment, urging listeners to capitalize on the current undervaluation relative to the company’s strong financial health.

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Lightning Round: Buy, Sell, Hold Recommendations

Dynamic Stock Suggestions ([39:25] - [43:28])

In the high-energy Lightning Round, Cramer interacts with callers to provide real-time stock advice:

1. Dutch Bros (BROS) ([39:32] - [40:04])

   • Caller Barbara inquires about taking profits on Dutch Bros after a 63% year-to-date increase.
   • Cramer's Advice: Encourages taking profits while acknowledging the stock’s strong performance.

2. Archer Aviation ([40:13] - [40:31])

   • Caller Jackson considers investing in Archer Aviation for his son's portfolio.
   • Cramer's Advice: Supports the investment, highlighting recent FAA certification as a positive indicator.

3. Amazon (AMZN) ([40:58] - [41:15])

   • Caller Bob is concerned about Amazon’s struggle post-earnings.
   • Cramer's Advice: Reiterates confidence in Amazon’s long-term growth, advising to buy on dips.

4. Alphabet (GOOGL) ([41:47] - [42:01])

   • Caller Foster questions Alphabet’s high capital expenditures amid rising competition.
   • Cramer's Advice: Suggests selling Alphabet due to overvaluation and strategic concerns.

5. Redcat (RDCAT) ([43:56] - [44:19])

   • Caller Layla Bear seeks recommendations on future stocks under $10.
   • Cramer's Advice: Highly recommends Redcat, emphasizing its growth potential and technological advancements.

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Final Thoughts and Market Outlook

Jim Cramer's Concluding Insights ([44:19] - [48:09])

Cramer wraps up the episode by reflecting on the evolving IPO landscape, citing companies like Applovin and Palantir as examples of overvalued stocks driven by retail investor enthusiasm rather than sustainable fundamentals. He underscores the importance of discerning true value amidst market hype, advocating for strategic investments based on intrinsic company strengths and long-term growth prospects.

"I have no idea. It's whatever the market will bear and I can't invest like that." ([48:09])

Cramer emphasizes the enduring presence of bull markets within various sectors, encouraging investors to remain vigilant and opportunistic in their investment strategies.

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Notable Quotes with Timestamps

• Jim Cramer on Market Rally:
  "But it seems suspicious and I didn't like the way it happened." ([02:15])

• Rick Wallace on AI and High-Performance Computing:
  "We have AI in every one of our products, but it's also enabling an industry which is transforming not just because of AI, but high performance computing as well." ([16:27])

• Jim Cramer on Disney's Stock Opportunity:
  "This dip here has created a terrific buying opportunity for you with the stock now trading at bargain levels." ([26:52])

• Jim Cramer on Palantir’s Valuation:
  "Palantir is something the retail investors fall in love and stay in love. That means this trio will just keep going and going and going." ([43:56])

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Conclusion

This episode of "Mad Money" offers a comprehensive examination of current market trends, strategic investment opportunities, and the interplay between corporate leadership and political climates. Through expert interviews and interactive segments, Jim Cramer delivers valuable insights tailored to both novice and seasoned investors, reinforcing his mission to educate and empower his audience in making informed financial decisions.

Transcript

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[Jim Cramer]

My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Crame America. I've been with my friends. Let's try and make a little money. My job is us to entertain, but to educate and teach the combat 1873 CBC. Tweet me Jim Cramer now you may think of the NFL's big game as a contest among great teams in the gridiron test of wills was only one winner for the Lombardi Trophy. You know I feel about that. Yet I'm always struck by how the event draws CEOs like flies to honey. It's impossible not to notice even when the Eels come home with a resounding victory. Go birds. The CEOs are all there. Especially when the games in New Orleans. Which is why on a day when it took a shocking late day rally to finish a positive territory. Dow rising 10 points. SB gaining.24% NASDAQ advancing.07% I want to talk about what I heard at the beginning, what people are worried about and how those concerns are colored in your decisions and your stocks. I'm not overlooking what happened in the bizarrely positive close today by any means. I am saying that there did seem to be a gigantic program money switching out of momentum into classic growth and it gained speed in the last few minutes of trading, taking the S and P to a record high. But it seems suspicious and I didn't like the way it happened. Now back to what matters. These CEOs I talk to most of them are not political. They tend to be somewhat old fashioned. Mitt Romney, Republicans, Bill Clinton, Democrats. They can remember a time when there was a lot less vitro in Washington, a lot of love, more teamwork. And they loved that they didn't really fit into the current environment. So they dismissed Washington as much as possible, focusing on their knitting. So what are their views on the current situation? Well, let me give you a distilled version called Sanitize. I'm going to limit it to business because while I too am sicken to my knitting, this is after all a business show. First, nobody, I mean nobody can figure out Donald Trump. These CEOs are baffled. They're confused. They mostly like like that he's attacking the federal bureaucracy and not the deep state. They don't call it that the bureaucracy. And they like that Elon Musk is doing it for him. While almost everyone caveat they had personal views actually at odds with Musk, they universally respected him as a business person. Bus fascinates them as much as the seeds fascinates the media is fascinated by. They are adamant that if anyone can succeed in cutting the fact, it's Musk. They all want him to take on the entitlements, Medicare, Medicaid, Social Security. And they want him to cut out budget. The, the waste in the defense budget, let's call it that, because they think there's a lot of waste there and that's because of a lack of competition among the defense contractors. They don't know why Musk is wasting his time on the small stuff. It makes no sense to them too. They all hate Trump's tariff plans. They do. These CEOs think that they're disorganized, make the real sense, won't raise any money and are real bad for business. Now, given my acknowledged and outspoken support for some of these tariffs, especially the ones that keep Chinese steel say out of the country by shutting it down the Mexican border, I thought they might tone down their criticisms, but nope, they're free traders at heart and are totally befuddled by Trump's tariff agenda. I said we should putting tariffs even on South Korean and Japanese cars that are imported here. And they just. That just provoked more skepticism. Look, I'm not a globalist. They're globalists. 3. There are admitted there's been a shocking amount of new business going on in this country. They all admit that. And to them it's just sort of a wicked witch is dead mentality because business people no longer feel that the government is out to get them. There was a palpable dislike of the last administration's policies. Even among the Democrats. They still can't believe how disrespected they were by the Biden White House. And that includes many big Democratic donors I spoke to. They all thought that the previous administration viewed them as rapacious capitalists even when they had ideas that might work to slow inflation. It was so grim, so gratuitous on the part of Biden. Although many now question whether Biden himself even knows what was happening News. Real bad news for the Democratic candidates of the future. I was struck by that. For even though today the head of the FTC and the Justice Department said they would stand by the doctrine of the previous administration comes to antitrust, something sounds as onerous and ominous as it gets, right? These CEOs aren't really worried. Why? Because they know the new regulators won't be as dismissive as the old ones. They won't be hit by lawsuits out of left field. They'll be able to talk to defend themselves before going everything goes fluid. They believe there will be some respect between them and the regulators. They look forward to constructive dialogue even if the regulars end up siding against him. They despise the needlessly adversarial nature of both justice and the FTC under Biden. They've got me convinced that they're right. Absolutely. 5. They all want to know about Nvidia. They're shocked at how this company came from nowhere. Now Jensen Wong became king. I always say the same thing. He didn't come out of nowhere. He's been laboring for years and years and years. It's just now paying off. They were shocked at how the media portrayed the Chinese as being well ahead of Invader, even though Metta, Amazon, Tesla, Alpiti keep ordering billions of dollars worth of video technology. Do you think that these titans didn't know about Deep Seek and they bought anyway? Give me a break. That was their only conclusion now there, it's just funny the way things go. They talked about video, the dog, my dog. That's because they're in awe of Jensen. They regard him as the classic American success story and they're cheering for him. They all wish they bought the stock 6. They think is real, but they really haven't figured out how to use it to save money, make the business more efficient. Almost every one of them seen the Salesforce ads with Matthew McConaughey. I think they're really funny, but they're trying to think what Salesforce can do for them. Are they baffled by AI? You bet they are. 7. They're all hoping there'll be some sort of rollback of regulations. Even as they said they can handle the regulations better than little guys, which only works in their favor. Doesn't matter. They just think that the civil servants in Washington never worked in private industry and don't know how onerous all the new rules are. If the regulators ever labored in real companies, these execs think it would be obvious that they're stagn clean creativity. Remember, this is them, not me. Although my experience as a small business entrepreneur, I totally agree with them. 8. The question about Europe. Seem to think that it's just decided to not compete in anything except tax and tech and finding tech. They don't. They have total contempt for Europe in the way since you were nine. This is a wild one. They're all rooting for Brian Nichols Starbucks. Because they often find themselves with no choice but Starbucks. They tend to hate the licensed ones like the ones in the airport which Brian could fire. The managers bring in better people. They actually talk about this all the time. It's a high priority for the CEO demographic. They want a better Starbucks. Two of them are happy they got their drinks in four minutes time. From water to drinking. Yay. That was fantastic. 10. They almost all think the stock market's too high, but their stocks are too low. When I tell them that the market's low and I like their stocks, they nod. But they think I'm a dreamer. When I say to them, I don't question you about how to make and sell your product. Why question me on how to value your stock? They almost always come back to as a person, they say, yeah, you really did like Apple and Nvidia. Thank you. Which I say I still do. Bottom line, after talking to so many CEOs at the big Game, I can give you a sense about what they cared about. And even though their views definitely aren't the same as Say the average American, there's a. They're a lot more relevant to the way we do business this country and to why the stock market just hit a new high again today. Let's go to Barbara in New York. Barbara.

[Caller (Barbara)]

Hi, Jim.

[Jim Cramer]

Barbara.

[Caller (Barbara)]

Of your club.

[Jim Cramer]

Fantastic. All right. You'll be there Thursday, right? We got a Thursday conference call. You know that.

[Caller (Barbara)]

Yeah, your monthly meeting.

[Jim Cramer]

Exactly, exactly.

[Caller (Barbara)]

I am losing big time over 10% on sales force since I bought it. What should I do?

[Jim Cramer]

Should I sell it? Let's get Benny off the phone right now. We're gonna give him a little. Give a little spanking. Oh, shoot. He's texting me all day now. Okay, look, Mark's got. Done a great job. And look, absolutely, Bob, this is just a time this. This happens. Now. We own Salesforce. We started buying it when it was at 8 bucks. It's had a big run. I don't blame you one bit for feeling like, ouch, that one's down a lot. And I. All I can do is say, and I'll say it on Thursday, is it's worth buying more and getting a better average. Why? Because I think the company's going to have a blowout quarter and I don't get it from more. I just. That's what I think. Mark doesn't violate any rules. Although he did wish me a nice happy birthday and so did his mom. Joel, it's really sweet. I. Jo. Let's go. Love the show. Let's go to Robert in New York, please. Robert.

[Caller (Barbara)]

Jim, I want to wish you a happy belated birthday. Your birthday was last week on February 10th, buddy. And I was thinking about you and God bless you and have. I hope you had a great birthday.

[Jim Cramer]

You're very good. I had all the buddies down in the Atlantis and we had the Eagles game. It's really probably one of the greatest, greatest times of my life. Thank you. My wife was dynamite. She became, you know, she was real nice to me.

[Caller (Barbara)]

Did she give you a nice cake? Did she give you a birthday cake?

[Comcast Representative]

Birthday cake?

[Jim Cramer]

No.

[Caller (Barbara)]

All right, well, forget about that, Jimbo. I'll get you. I'll send you.

[Jim Cramer]

Yeah, I know she didn't get that.

[Caller (Barbara)]

All right, forget about the birthday cake. I'll send it.

[Jim Cramer]

Yeah, forget that's a show. So this is just between you and me anyway. We're not gonna. We're gonna cut this part out of the show. Okay? We'll just cut it out.

[Caller (Barbara)]

All right, Jimbo. So Anyway, Jim, on December 22nd, we spoke about this company that was trading at 72 dol a share. They offered the convertible note deal back then. And they also did a purchase of the stock back, which was brilliant because it stopped the shorts. Okay. And Jim, if everybody goes to the videotape, this is a fact, go back to December 22nd and even before that last year when you were constantly telling me, robert, this is a good one. You made me over 168% in the last six months. You have been firm. You listen. Thank you. Thank you.

[Caller (Robert)]

You.

[Caller (Barbara)]

You left Chin. You've interviewed this guy. Affirm, baby.

[Jim Cramer]

No, no. It's like, you know what Tepper said to me yesterday? The big shot, you know, the Panthers guy, He goes, know what I like about you? You're smart enough to know you're stupid. I know I'm smart to know I'm stupid. And Max Levchin's real smart. And a firm which has had a remarkable run is not done. It hit a high today. Could back off a little. Leften's got it going. He's a great lender. Is he? Is he dynamite? I mean, is he gets together with me? Not at all. But that doesn't matter anyway. The views of CEOs are so relevant to how we do business in this country. And after talking about the big game, it's more clear to me than ever how the current landscape is shaping up. And it ain't so bad. How could this deep sea shake up the semiconductor stocks? I'm going to check with Kayla. I can't believe we have KLA on top brass. To get a read on the landscape. Then does Disney stocks need some pixie dust? After that post quarter pullback, I'm going to eye the streets concerned. Tell you where I stand. And later this way. Got J Bill to hear about the latest tariff headlines. Could it impact the contract manufacturing? And man, is their business spoken. So stay with Kramer.

[Mad Money Production Team]

Don't miss a second of Mad Money. Follow imKramer on X. Have a question. Tweet Kramer. Madmentions. Send Jim an email to madmoneycnbc.com or give us a call at 1-800-743-CNBC. Missed something? Head to madmoney.cnbc.com the $150 billion pet industry is booming as people absolutely love their dogs. If you're looking for a solid investment, Dogtopia is the name to know. With 300 locations across North America, it's the largest, leading and fastest growing pet franchise offering a recurring revenue membership model. Dogtopia offers safe, open play, dog daycare, boarding and spa services. Want a recession resistant franchise. Check out Dogtopia because every dog and dog parent deserve it. Go to dogtopia.com to learn more.

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[Jim Cramer]

Okay, regular viewers know I'm a huge believer in the revolution. Aside from video, it's made tremendous comeback over the past few weeks. There are a bunch of winners here that tend to stay out of the headlines. I want to get them in the front of the headlines. Take Cala. All right. You may know it as the old KLA 10 core. They dropped a 10 core which is a semiconductor capital equipment play. You understand that we're finished. When semiconductor plants want to expand production, especially for high end chips, they need catalyst process controls, their yield management equipment. This a company reported an impressive set of results at the end of January. Upbeat guidance for the current quarter has helped the stock recovery after it got hammered by this deep sea scare. We're going to talk about that too. Sent down anything connected I probably wrong even now ever still down more than 10 bucks from its January highs. Despite the fact that those deep seek hardware numbers were incredibly misleading. I think. Could this be a great buying opportunity? Let's check in with Rick Walsh, he's the President CEO of KLA Corp. Learn more about Mr. Wallace. Welcome to Money Jim.

[Rick Wallace]

Thanks for having me. And really appreciate this opportunity.

[Jim Cramer]

This is great because I think a lot of people, they their eyes clear on kla. What is KLA do? And I always tell people KLA is the brains behind a lot of what you hear when you talk about semiconductor companies. So I think that this is a good opportunity for you to just set the records straight about where you sit in the process because you're a lot bigger than people realize in terms of the whole ecosystem, semiconductors.

[Rick Wallace]

Yeah. Well, a couple of things. One, the reason I want to join you and share a perspective because I think there's part of the ecosystem that the public doesn't understand. That's the part that we play and also the history that we've had with high performance computing and how that fits in there.

[Jim Cramer]

Okay, so the floor.

[Rick Wallace]

So if you just back up a minute. We were founded almost 50 years ago as a computer vision company. So kind of forever we've been processing data. So we were into big data before people talked about big data. We were into machine learning. And in about 2012, you remember there were some breakthroughs in what was called AI and it was being used in search engines to find cats. Right, right. We were at the same time in 2012 using it to find defects on advanced processes processing. So we started deploying AI back then. And if you fast forward till today, it's a big part of our competitive difference, the fact that we have AI in every one of our products, but it's also enabling an industry which is transforming not just because of AI, but high performance computing as well.

[Jim Cramer]

Now I think that one of the things that's in this news is the deep sea. One, there's like this Sputnik component of it. Like maybe the Chinese are catching up to us. But there's something that's also really important, is that your stuff is so important that our government has to be sure that the Chinese don't necessarily get what they might fully want. And it's cost your company a great deal of money, but all you're doing is doing the right thing and you comply fully. But it has nicked your earnings.

[Rick Wallace]

Right. And so two things. One, on that moment with the deep sea, I mean, I think it's important to recognize that was really just a more efficient model. There's going to. They're going to be more efficient models. But if you noticed all the hyperscalers since that announcement up their capex.

[Jim Cramer]

Right, right.

[Rick Wallace]

All four of them. And the reason they did that is we're in this period and I know you've talked to others, this is a transformational period for the data center, not just because of AI, but because of high performance computing. We have our own examples of it, but we're also so, so our, our story is we're a user of IT and we're an enabler of IT in.

[Jim Cramer]

The fabs right now. When it comes to advanced demand environment in the foreseeable future, you see no impact from deep sea. From deep sea. Is it possible that might actually turn up? Be positive that you have more companies be able to get through the first part and then go to the more complicated stuff because they get through the first part so easy.

[Rick Wallace]

Yeah. And I think if you look at AI deployment and as you know, any technology as it comes down in cost has more applications. Right. And so one of the challenges I think we've had with AI is how is it going to perform on the edge. And this is just another iteration in those models. But from a semiconductor demand we're lights out. I mean in terms of the forecast, this is kind of a perfect time for the industry and for kla.

[Jim Cramer]

Right.

[Rick Wallace]

Because of all these drivers are hitting at once now.

[Jim Cramer]

In December 2nd of 2024, the government put on export export controls. 140 Chinese, Chinese groups added to the entity list. It's a blacklist. Your stock went up that day. Is it possible that maybe things aren't nearly as dire between the two countries? I mean I'm kind of hoping for world trade, but I also don't want us to give away everything.

[Rick Wallace]

Well, so not my area but I can tell you that our attitude toward export controls is we just want a level playing field.

[Jim Cramer]

Barren.

[Rick Wallace]

And when we look at that, some of the actions that have been taken, they applied to US companies but they didn't apply to our allies. So what we're hoping out of this administration is level playing field.

[Jim Cramer]

Right. And it's entirely possible. I mean we don't know yet, but it's not because that not everybody's been confirmed. Now there's one other business that I think is important that want to just talk about is that everyone's mystified by Taiwan. Semi it is a big customer of yours. How do you interact? They buy your equipment. And the reason I mentioned is because everyone thinks that we don't make anything in this country.

[Rick Wallace]

Right.

[Jim Cramer]

But we make the most sophisticated equipment in the world.

[Rick Wallace]

We do. And we As a KLA, as a net exporter we export 88% of our product. But when we look at time, Taiwan or any customer, we have a model we use for years. We collaborate very closely with them. We have to work on problems five years in advance. And then the key to our success is collaboration, understanding their requirements maybe sometimes better than they do from our standpoint, but then we have to innovate. And what drives our differentiation in our margins is our innovation. And if you look at the money, the percent of our revenue we spend on R and D, it's kind of unparalleled. And then the last part of this is you have to execute. So nothing frustrates customers more than a great idea that you can't execute. So we go around that wheel with, with all our customers. But as you've noted, TSMC has made tremendous progress and they are clearly well known to be in the lead.

[Jim Cramer]

But I also, I'm not going to disagree with you, but you have treated shareholders really well. You have. I know you spend R and D, but you also have been consistently doing the right thing for your shareholders.

[Rick Wallace]

Thank you. I guess when I got in this job, we met with shareholders and I was an engineer.

[Jim Cramer]

Right.

[Rick Wallace]

So I didn't understand this part of it, but I realized we had to have a strategy that we could execute on. Right. And consistently. It's their money. It's not our money, it's their money.

[Jim Cramer]

Clear over and over again in your documents.

[Rick Wallace]

Right. And so we have to deliver for shareholders. And our view is they want predictability and they want us to do what we say we're going to do. Part of why you haven't seen us, we want to be the stock you put away in the drawer.

[Jim Cramer]

Right.

[Rick Wallace]

No drama.

[Jim Cramer]

And I want you to be that.

[Caller (Barbara)]

Yes.

[Jim Cramer]

I don't want drama. I love your industry. I always have. If people put these stocks away, they'll become. I say they'll do a lot better than a lot of other investments. And that's why I want to leave that this Rick Wallace, President CEO of KLA Corporation. You know, I'd like this industry because I've talked about it over and over again. This is where the real intellectual property resides. This is what we do best in America. May have money's back every.

[Mad Money Production Team]

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[Comcast Representative]

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[Jim Cramer]

I was fishing last week. They told me they only had steak verbat I didn't know fish like steak. I got a little sidetracked because I couldn't stop thinking about something that happened earlier this month when Walt Disney reported what I thought was pretty fantastic quarter on February 5th, yet the stock sold off down nearly 2.5 the same day at the time. I think investors will quickly snap up this one by the tip. In fact, I don't think it even should have been down, but it's now been two weeks later in the stock of Disney still hasn't recovered. So I break this one down for you. Full disclosure, we've owned Disney for the chapel trust since 2018 and during that time the stock's going from a huge winner to being a frustrating holding. But I've been willing to stick with it, especially since Bob Iger came back as CEO near the end of 2022. Sure, I threw my sport behind Nelson Peltz, the famous activist investor, when he made a run at Disney last spring to get a board seat. I still think the company could have benefited from his advice. Long story short though, I like Disney's entertainment portfolio and its underappreciated parks business, which is why we've stuck with the stock for years of underperformance. I think we are going to win big on this one and I am patient now. After the proxy fight, this thing started showing signs of Life. Climb from 83 and change in August 218 at the highs last year, largely thanks to a strong quarter in November. By the time we got the next earnings report a couple of weeks ago, the stock had pulled back to 113, but it was still looking pretty good. And then the company reported the stock sold off. I think it's crazy this report a modest revenue beat paired with a major $0.31 earnings trouncing of a $45 basis. That's thanks to very successful cost cuts. Eight those matter. They still count. The key theme of the quarter was impressive profitability as all three of Disney segments beat operating margin expectations. Entertainment Was poor. Division had a slight revenue miss. Easily explained. And the cost cuts translated into much better than expected operating income. Or just look at the turnaround in their direct to consumer business to dc which is mostly the Disney plus streaming platform. This used to be a money pit, constantly burning cash. In the latest quarter though, it generated 293 million in operating income. That's way ahead of what the analysts were looking for. Why didn't many care? Substantial improvement for the previous quarter. Streaming business has now turned a profit in three of the past four quarters. I'll take it. The next big next biggest division is Experiences. Right now. This includes the parks business. Criminally underrated Disney Cruises. You know we had a good special night. Excellent. A lot of investors were worried the business would be damaged by the hurricane, especially since one of them forced Disney World to close for a couple of days. But now the Experiences division did great with a terrific top and bottom line beat. I love this business, by the way. Show me Netflix's Experience division. They don't have. Meanwhile, there's the smallest segments sports, which is mostly espn and also the top and bottom line beat. For heaven's sake. Right now, Disney Sports division is focused on the upcoming launch of a new flagship ESPN app. Should offer meaningful improvement from the current ESPN plus streaming platform. Although it's probably not coming until next fall. Still, it's nice to see the sports business delivering on profitability expectations ahead of time. Why didn't people focus on that? So if everything was so darn great, why does heck did the stock pull back in response to the quarter? All right, there generally was not much hair on this one. I saw a couple of things cited. I mean, first, despite the generally strong results for the reported quarter, Disney didn't raise its full year forecast for the 2025 fiscal year, reiterating its call for high single digit adjusted earnings per share growth for the year. Approximately $15 billion in cash flowed by operations. But I'd like the guidance hike. Sure. But I'm fine with management being cautious on the conference call. CFO Johnson, one of the all time great finance great guys out there, really explained that the company felt it would be premature to raise its outlook so early in the year given the quote revolving, rapidly evolving, end quote economic environment.

[Mad Money Production Team]

Okay, that's.

[Jim Cramer]

He's a pro. That's what he should do. He did a great job for years as CFO of PepsiCo. He's handled this stuff. He knows how to handle it. He knows how to do these calls, right? The other source of potential disappointment, Disney plus subscribers fell from 125.3 million 224.6 million during the quarter. I didn't like this. That slip in the subscriber count came after Disney put through a $2 price hike in mid October for most of its subscription plans. So a lot of hammering about it. The fact that hundreds of thousands of people chose to cancel. Now Disney also had the misfortune of being compared to the aforementioned Netflix, which had just reported that it added a record 19 million subscribers in the same period. That hurt again, though I still feel pretty sanguine about Disney plus. As we used to say in law school, Netflix is sui generous. It's in a class of its own. Disney plus will probably never be that good, but it's delivering profitable growth right now and that's enough for me. It should be for you too. On the conference call, CEO Bob Iger offered some more encouraging commentary on streaming subscribers, saying the churn in the quarter was not as bad as management expected given the price hikes. He noted the total streaming subscribers still grew in the quarter, thanks to 1.6 million gaming from Hulu. Disney expects overall subscriber growing growth for the streaming business this year. That's thanks to a great slate of movie titles, along with their password sharing crackdown and improved algorithm to recommend content. Finally, on the weekend after the quarter, there was this really tough piece of the Wall Street Journal. It was called A High Cost of Disney Vacation. It mentioned that even Disney is worried about the issue. We think that spooks some investors too, even if it's not exactly breaking news. Still, you don't want to be reading that your tickets cost too much. I come back though and I say if prices are so high up, why is the place always packed? Overall, however, I found a lot to like on the conference call and at that moment it certainly seemed that Wall street agree with me, at least initially. On the day of the report, I was watching closely. Disney opened up more than $2. At one point in early trading, the stock hit a high of $118 and change. That's up nearly 5% from the previous day's close. Then the stock reversed hideously, finishing down that day almost 2.5% and it has not recovered since. However, after looking into the reasons why people sold Disney after the quarter, I got to tell you, I think the bear case then I'm sticking with my gut that this was an excellent quarter for Disney and the weakness in the stock since the quarter is indeed a clear buying opportunity, especially if you don't already have Position this one. We bought some more last week for the trust and on Thursday's noon club meeting. I will certainly be pounding the table on this one too. Right here. The kicker at this latest pullback, Disney trades is just under 20 times this year's earnings estimate. Premier Growth stock, it's cheapest it's been in Asia. So here's the bottom line. Did you reported an excellent quarter a couple of weeks ago, but didn't get any credit for it? Mostly because management didn't want to aggressively raise their full year forecast so early in the year. But the dip here has created a terrific buying opportunity for you with the stock now trading at bargain levels relative to the kind of valuation it used to get. So you know what time to take a page from Jalen Hurts because we're going to Disney World. Let's take some questions. Let's go to Bill in Matthews.

[Caller (Barbara)]

Bill, Jimbo, it's your friend Boston Bill. Happy belated birthday, my friend.

[Jim Cramer]

You're terrific for mentioning that. My historic birthday. Thank you very much.

[Caller (Barbara)]

Listen, everything's been doing great. I've been with the club. This is going to our fourth year with the club and I'm loving it.

[Jim Cramer]

Thank you. I hope you're on call Thursday. Hope you're on the call Thursday at 12. We'll give a shout out. All right. Thank you.

[Caller (Barbara)]

Absolutely. Your staff's incredible and I just wanted your opinion on Netflix. It never seems to come down enough to really buy it, but today it came down a little. I wanted to know your opinion. Thank you.

[Jim Cramer]

A lot of the momentum stuff. First of all, Bill, thank you for being so loyal. Thank you, member of the club. I look forward to Thursday's call because I know people. You like it? Let me give you the Netflix story. It's skinny. Very quickly, every momentum stock came down today. This was an attack on momentum and back into other classic growth stocks. And what an opportunity to buy the stock at Netflix. I do like that company very much. You know from the club that Disney's cheap but Netflix is sui generis. None like it. Anyway, look, Disney did report an excellent quarter and the stock shouldn't be down. It's trading. It's one of the cheapest valuations. I rarely pound the table at this. I think it's probably a time for you to start a position. Hey, much more made money, including my student with J. Bill. Oh my God, what a stock that is. If they hit a new all time high last month, then what should you make of the valuation? Some of These decades Standout IPOs I'm breaking down the perspective of the retail investor. And oil calls rapid fire. Tonight's just a lightning round, so stay with creep. All right. What in the world has gotten to the stock of J Bill? The outsourced manufacturing formerly known as J Bill Circuit Company. Now here's a company that does contract manufacturing for everything from electronics to autos to health care. And its stock has been on fire ever since the company reported a tremendous quarter back in December, down more than 25% in the past two months. Setting foot into fresh all time high territory. I have always loved this company. Now there's a wrinkle here. Jabil is a global operator in a world where the President says it's gotten pretty aggressive with these tariffs. Can Jabil keep thriving in this environment? I think they can. Let's get a closer look with Mike dastard. He's the CEO of Jabil. To find out more, Mr. Dasher, welcome to Matt Money.

[Caller (Robert)]

Thank you for having me.

[Jim Cramer]

I'm very excited to have you because I think that we finally get to explain to people that there are American companies that literally can make anything and make anything anywhere better than anyone else. I've always been proud to know what your company does, explain them how you are worldwide. But everybody seems to count on, you.

[Caller (Robert)]

Know, so one of the things we do, a lot of people think we're just a manufacturing company. We're actually an engineering led supply chain enabled manufacturing company. We have thousands of engineers, about 10,000 engineers, be it in design engineering or production engineering, mechanical engineering. We have supply chain teams that handle 38,000 vendors, 700,000 parts. So it's a huge organization that does supply chain for us as well. And then manufacturing in 30 countries. Like you said worldwide, we're in almost every single manufacturing company there is. And if you look at the brands that we have, they're the top brands in the world today. So it's just a perfect layer.

[Jim Cramer]

Now you seem to be, I don't want to say experts at everything because that's the jack of all trades based or dub, but gop, you do the, you've got the injectors, but then next thing you know you're doing auto assisted driving, but then you're doing data center. I think we should start with the latter just because they're so in the news. If I go to a data center, it may be a J Bill center. It.

[Caller (Robert)]

So one of the things, if you look at the whole ecosystem of that whole data centerpiece, it starts with the semiconductor piece. We actually build wafer Fab equipment for foundries. We actually build the testing equipment as well on the back end of boundaries and then we have all set silicon photonics and servers and racks. We do thousands of servers and racks.

[Jim Cramer]

We enable including for Amazon which just did a deal with you that makes it cements the relationship a hugely important warranty.

[Caller (Robert)]

Absolutely. And then if you go further beyond that we actually do the power from grid to the chip and cooling from chip to outdoors. It's a, it's a complete ecosystem them a complete package solution that we provide.

[Jim Cramer]

So who would call you to do that? Is it the oracles of the world, the Dells, the HP who brings you in?

[Caller (Robert)]

So today our largest customer is. Is the hyperscaler you mentioned. Obviously we do different pieces for them. What we're looking at is customers coming individually for the different pieces. So equipment makers on the foundry side, somebody a switch maker might want silicon photonics. We can do all set packaging to sort of reduce the amount of ping pong that takes place between the Americas and Asia. Pack the wafer has to get packaged comes back. We can avoid all those by doing it all in the, in the Americas.

[Jim Cramer]

So I know you have huge American. You tell you giant American footprint don't feel like that they're not going to, that you're all overseas and therefore you have no place to go up. There's a lot of tariffs. I am interested. I think our viewers are very interested in this. Do people have just drawings like plans that that's all they do and then they give them to you.

[Caller (Robert)]

Is that what happens in specifically on.

[Jim Cramer]

The hyperscale contract manufacturer anything for a data center they have a, they have a something in mind but then they give it to you to make.

[Caller (Robert)]

Correct. So I think it's, it's not the construction per se it's all the components that go within a data center. And I think the, the power requirements are so critical today that you have to get that power from the grid to the chip. And the cooling, the liquid cooling air cooling technologies are evolving rapidly there. We actually made an acquisition recently on liquid cooling and that was to give us a heads up on the stage.

[Jim Cramer]

Data center which is sensational because everyone's worried about liquid cooling. They want to have. You can't just have these data centers burn so hot.

[Caller (Robert)]

Correct. And if you look forward so today retrofitted most of the data centers are retrofitted and that's liquid to air.

[Jim Cramer]

Right.

[Caller (Robert)]

The newer data centers because of the power requirements, because of the thermal management requirements will all have to be liquid Liquid. And that's the acquisition that, that we've made. It's a technology, it's the engineering, it's a design piece.

[Jim Cramer]

I thought it was brilliant. Now I do a lot. My family does business in Mexico. You're in Chihuahua, Guadalajara. You're in Monterrey. You're in Tijuana. You're in Juarez. The president, we don't know what they're going to do. Peter Navarro is an old friend of mine, teacher by a college. Representation just wants to really make a point that you can't move Chinese steel through Mexico. But then everybody gets hurt. But now you're a manufacturer, you kind of want to do what your customers do. What are you telling your customers that they should do?

[Caller (Robert)]

So one thing with tariffs first before anything. Tariffs to us are a pass through cost.

[Jim Cramer]

Right.

[Caller (Robert)]

So we don't take on the tariff costs. It's a, it's a, it's a customer issue. Now there might be a customer and demand issue. The costs go up quite a bit, but it's not enough. So I think the, the tariffs situation, not just Mexico, the reciprocal tariffs, everything is going to create a little bit of volatility. And one good thing for j well is in these volatile times, it's actually an opportunity for us. Who would you go to to move your manufacturing around? We are in 30 countries. We know the local jurisdictions, we know where to get labor from, we know what the rules are, the laws, taxes, etc. So we're in a really good position to move, move product around, shift a lift and shift and lift and shift is important because sometimes when you move products of manufacturing across the labor is not available, in which case you need automation and robotics to go with that lift.

[Jim Cramer]

And I know somebody asked you which is cheaper to make in Mexico. It's an unfair setup because obviously the two countries are very different. But if you can have robots, you can have manufacturing, then it doesn't matter. And that's one of the things that I think whatever is the best way for the customers. What you do.

[Caller (Robert)]

Correct. And I think if you look at what we have in the US we have 30 sites in the US so we're really well positioned. Whether people want to move from overseas here or they want to move from one jurisdiction to another, we have sites across.

[Jim Cramer]

My wife says we should go to Croatia. Suddenly you got a plan. Croatia. Maybe we bring a film crew. Supposed to be fast. Obviously that's for injectables, right?

[Caller (Robert)]

Correct. So it shows how nimble we are because we actually started that facility for EVs and then we quickly adopted to GLP1s and the GLP1 automation scale. An interesting fact. We make 500 million diabetes insulin and GLP1 pen.

[Jim Cramer]

What a business.

[Caller (Robert)]

We're the last largest manufacturer of which is incredible.

[Jim Cramer]

People always want to know whether it's a Lilly or Novo that makes it. They got a company that does make it. I want to thank Mike Daskor. He's the CEO of Jabo. You've got to look at this company jbl. As soon as I started reading I said this is one I should have for my child. Spare money is back in it is time. It's a. The lightning comes back to our back romance talks about buy sells super shape for grandfather but you played yourself and then the lightning round is over. Are you ready, ski daddy? Time for the lightning round. Crazy. I'm gonna start with Dan in Washington. Dan.

[Caller (Barbara)]

Hey. A big evergreen steak. B B Booyah to you, Jim.

[Jim Cramer]

I'm liking that. I'm liking that a lot. What do you got for me?

[Caller (Barbara)]

So Dutch Bros. B R O S. I've been in it for about a year and a half. Had a solid run up great earnings last week. Just wondering if I should take profits here or if this thing.

[Jim Cramer]

Chief, there's never anything wrong with taking a little profit. Absolutely not. This stock has been a rocket. She was at 63% for the year. That said, you know how I feel a long time about the Annihilator, all the other drinks and I was on this touchpost before anybody. That was because my daughter Cece who just told me, listen, there's nothing like it. And she was right and they're right and I do like the company very much. How about we hit Lamont in Tennessee? Oh my.

[Caller (Barbara)]

Hey, Jim. Lamont in Nashville. I've always got that standing. Music. Have you stayed in my Airbnb on music roll and some hot chicken.

[Jim Cramer]

Best hot chicken in the nation, sunshine. You got me on. You got me on the first words there.

[Caller (Barbara)]

Hey. My son Jackson and I are looking to build up his stock portfolio. I'm thinking about Archer Aviation probably six year play.

[Jim Cramer]

Okay, okay, here's the. Here's the deal. Because you said it was for your son, I'm gonna. Okay. And I'll tell you why. Because the strangest thing happened. A lot of people think this thing's a little like, I don't know, a little out of, you know, kind of, I don't know, lost in space. But Archer received its FAA certification to have a public training academy. So maybe this thing is for real. And who if it's your boys, fine. He's got his whole life ahead of. Don't put your money and put his. Okay, now we're going to Bob in New York. Bob.

[Caller (Barbara)]

Hi Jim. Ever since earnings Amazon has struggled. It seems as though folks are ignoring that investing for the future as Amazon is doing with their AI expenditures. They seem to be forgetting it's for the future. Am I wrong?

[Jim Cramer]

No, you're totally right. Amazon is what I call money side up. And I think you ought to understand this about the, this thing. This thing can go down and when it goes down, what do you do? You buy it. That's what we tell club members. I regard going this stock going down as a gift. Well, you wouldn't be able to get otherwise. This thing is amazing. Hey, you know, it's like people who are like ordering from Amazon are selling the stock. I mean think about that. That makes no sense to me. Let's go to Foster in Kentucky. Foster.

[Caller (Barbara)]

Booyah. Jim. Oh my God, I'm such a long time fan. So happy.

[Jim Cramer]

Fantastic man.

[Caller (Barbara)]

My question's about Alphabet. 75 billion in CapEx expenditures. Seems a little desperate to me when you consider all the new competitors in the air space. Do you still think they're a good buy at this point?

[Jim Cramer]

Not as much. I mean people know members of my club, they know I've been selling it down and selling it down and selling it down. Would it be the first one that I leave of the mag? Yeah, except for does sell only for 20 times earnings. But I think they really gotta rethink what their game plan is here because I feel like Gemini competes with the Google search and the things like the ads is like endless and they don't know how to monitor the YouTube and next thing I know it's like would you please put me in charge? I will clean up that son of a. It'd be a 250 hours there. I'm not kidding. I'd run that thing, I get it to 250 and then it's see you later. Let's go to Jeff. Oh, he's a short term guy here. Let's go to Jeff in Michigan right now. Jeff. Boo.

[Caller (Barbara)]

Yeah, Jim, that's good work Eagles. I bet you didn't watch them to face the Lions in the NFC championship.

[Jim Cramer]

Well, all I can, all I can tell you about the birds is that that was a beat down of a lifetime. Let's go to.

[Caller (Barbara)]

It was, it was, it was great. And all of Detroit was rooting for him. I know that.

[Jim Cramer]

Well, look, if you didn't have those injuries, you would have been in there. I know that. You're a great team. Let's go to work.

[Caller (Barbara)]

Yeah, well, we beat ourselves on that Washington game.

[Jim Cramer]

That's very true.

[Caller (Barbara)]

Okay. All right. I'm going to get straight to it. I know you don't have much time.

[Jim Cramer]

That's right.

[Caller (Barbara)]

I'm a long.

[Jim Cramer]

Why did they flip it out to Williams? What was Williams think? That was like, the dumbest play. I mean, I like Dave, okay, But like, are you kidding me? Williams, you flip it to me, I'm going to do better than Williams did. And he was SSPD in the mid season. That's what that was all about. Now we go to work. Okay.

[Caller (Barbara)]

All right. I'm a longtime investor for myself and my kids, but I recently had a grandbaby, and she's almost 2 years old. Her name is Layla Bear. We call her Layla Bear. So I've been looking at future stocks, like, low, like under $10. And I was gonna get Palantir when It was like 27. And I wish I would have done it. I could kick myself for not doing it. But I started looking into some of the companies that they're partnering with, and Redcat is one of them.

[Jim Cramer]

It's a. Yeah, well, this just happens to be a personal favorite of our chief scientist, Ben Stodo. We talk about redcat a lot. Look, he's a data analytics company. You know what I'm gonna tell you for spec? You can buy it. You really can, Red Cat. I mean, only because if it doubled, you'd feel like an idiot for not buying redcat. And that. Ladies and gentlemen, conclusion of the Lightning Round.

[Mad Money Production Team]

The Lightning Round is sponsored by Charles Schwab.

[Jim Cramer]

You may not know it unless you're a member of the CMC Investing Club, but every Sunday, I pour my heart out into a piece about what frustrates me, what I think is really going on. I was going to wait till my talk this Thursday's noon Investing Club meeting, but I don't want to wait. I want to give you a glimpse of what I bring to the weekend reading party. My premise, while it's become a lot harder to launch a successful IPO in the last decade, every once in a while, you have some spectacular offerings that make people just fortunate. They tend to fall into two categories. Either they're highly accessible, or they're so dominant in their industry that they're widely seen as unstoppable. Let me give you a sense of what I mean. Let's start with a company that almost nobody's heard of called Applovin which one came public in 2021. Now this is $180 billion company helps mobile video game developers with in game advertising which is how most of these games make money. You might wonder how in the world app love and got that kind of valuation. But when you look at last week's quarterly report they earned a dollar 73 per share. Wall street was looking for a buck 26. That's up from 49 cents year four. That stock is up because they've got a level of stunning growth. Hard to believe. There's just one problem. The people who know Applovin took it to ridiculous levels. 380 to 510 two day rally after the quarter today it gave back $14. Yet it still sells for over 75 times this year's earnings. Which brings me to the chief conundrum of this new class of companies. How do you pick your value? What do you pay for that kind of growth? Honestly, I have no idea. It's whatever the market will bear and I can't invest like that. I just came back from the Bahamas where I stayed at the Atlantis. Played a lot blackjack. The rules of blackjack, when you hit, when you split, when you double down, they're much more clear than what you're supposed to do with something like loving. This one feels like you have a nine and a face card and you hit and you pull it too. Let me give you another example. Palantir. Yeah, this Kim Public 2022. I'm sorry in 2022 and is now so beloved by home gamers that it doesn't even matter what the company has to say. Paltier now is a $292 billion market cap. Something it seems downright preposterous with the stock selling it for 235 times earnings. Obscenely expensive. But then again the numbers also are extremely great. Every time the stock gets hit, this data analytics company that very few people understand goes bonkers. CEO Alex Karp was on Squawk Box this morning promoting his new book for the second time on our network I should add. And anytime he speaks, the stock goes higher. He did it again today, a five bucks. Another all time high. Then there's a lot of talk the Elon Musk may tap Palantir to help out find costs to be cut in the defense department. If the company gets that contract, the stock's recent rally will be entirely justified. Right now though, people are valuing Palantir like they valued Gamestop at the absolute high except all like GameStop. Palantir has a brain in a real growth story. Five is the Reddit that's the one. The red hot recent IPO ran to 230 last week for being clobbered by a quarter that Wall street didn't exactly love. Reddit had a little problem unexpected miss in daily average users, but apparently was caused by a change in the Google search algorithm. No company with a smoking hot stock can afford to have that happen. However, as someone who started a website journalism business, the Street, I can tell you this stuff happens all the time. Google changed its algorithm every several times without my knowledge and we'd miss our quarter by mile. I think you should take advantage of this pullback and do some buying because loving Redditors are confused about the worth their institution. Now this one had a $40 billion valuation, is highs now under 34 billion, but it's the repository of so much content that can be gobbled up by the likes of the Chat box of Grok or Med AI or Chachi Beauty. All three of these stocks have one thing in common. Their shares are controlled by what we call retail. The retail investors fall in love and stay in love. That means this trio will just keep going and going and going, maybe even to even more absurd levels. But we have to respect the return of the public and they're our door for super growth companies because that order is what sends their stocks higher. After every single dip, I like to say there's always a bull market somewhere. Problems I'd find just for you right here may have money. I'm Jim Cramer. I'm going to 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, NBCUniversal or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet, or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular 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 when you're with.

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