Mad Money w/ Jim Cramer 2/19/25

Summary

Summary of "Mad Money with Jim Cramer" Episode – February 19, 2025

Release Date: February 20, 2025

Host: Jim Cramer
Podcast: Mad Money w/ Jim Cramer
Produced by: CNBC
Title: Navigating the Complex Business Cycles and Stock Market Dynamics

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Introduction

In the February 19, 2025 episode of "Mad Money," host Jim Cramer delves deep into the complexities of the current stock market landscape, dissecting various business cycles that are not moving in harmony. Cramer emphasizes his mission to educate and guide investors through the volatile jungle of Wall Street, ensuring they are well-equipped to identify lucrative opportunities and avoid potential pitfalls.

Jim Cramer (00:01):
"My mission is simple, to make you money. I'm here to level the playing field for all investors."

Market Overview

Cramer opens by highlighting the divergence in business cycles, noting that while major indices like the Dow Jones Industrial Average, S&P 500, and Nasdaq continue to reach new highs, underlying economic sectors reveal significant weaknesses. This dissonance suggests a fragmented economic environment where not all sectors are thriving simultaneously.

Jim Cramer (02:30):
"Right now we have multiple business cycles and they aren't trading together in any sort of harmonious way."

Bullish Industry Cycles

Travel and Leisure

The travel and leisure sector stands out as the most robust business cycle amidst the current economic turbulence. Cramer attributes this strength to the enduring demand for travel post-COVID-19.

• Airlines:
  The airlines sector is experiencing unprecedented strength. Cramer recommends buying stocks like United Airlines, which has surged 10% year-to-date and is poised to challenge its high of $116.

  Jim Cramer (03:15):
  "The airlines are breathtaking. Not need to think this one through, you just need to go buy United."

• Hospitality Giants – Marriott and Airbnb:
  Both companies have reported excellent earnings, transitioning from cyclical to secular growth models, ensuring consistent demand for accommodations.

  Jim Cramer (04:05):
  "There are two stocks that are roaring in this cycle, Marriott and Airbnb. They just reported excellent numbers."

• Disney and Cruise Lines:
  Disney's theme parks and cruise lines like Royal Caribbean continue to perform well, despite challenges in other segments such as cable.

  Jim Cramer (05:10):
  "Believe me, cruise lines haven't been cyclical since COVID. Keep buying Expedia and booking holdings."

Bearish Industry Cycles

Housing

The housing market is showing signs of distress, particularly among homebuilders like Toll Brothers. Despite potential rate cuts by the Federal Reserve, high mortgage rates are dampening demand.

Jim Cramer (06:00):
"How those prices have to come down before we beat inflation in this country."

Banking

The banking sector presents a mixed picture. While major banks like Wells Fargo, Goldman Sachs, and JP Morgan are performing well, transportation-focused banks are struggling amid regulatory pressures and competitive challenges.

• Strong Performers:
  Jim Cramer (06:45):
  "The whole industry seems very confident that Trump regulators will be more bank friendly than the Biden regulators."

• Struggling Segments:
  Transportation banks like Norfolk Southern and Union Pacific face recession-like conditions due to tariff-related issues and declining sectors.

Transportation

• Railroads and Trucking Companies:
  Companies such as Norfolk Southern and Union Pacific are experiencing downturns. Tariffs and competition from trucking firms like JB Hunt exacerbate their challenges.

  Jim Cramer (07:30):
  "Are we getting into a tariff for Mexico? To me, this group feels like it's practically in a recession cycle."

Food and Beverage/Drug Stocks

Contrary to their traditionally defensive nature, these sectors are under pressure due to political influences and changing regulatory landscapes.

Jim Cramer (08:00):
"With a Human Health and Human Service secretary who dislikes processed food and vaccinations, nothing would shock you about these industries."

AG Cycle (Agriculture)

The agriculture cycle remains strong, with companies like AGCO benefiting from consistent demand and favorable market conditions.

Jim Cramer (09:00):
"Buy the stock of AGCO tomorrow. It's unstoppable."

Aerospace

Aerospace remains a resilient sector, with companies like Honeywell and Boeing continuing to innovate despite market volatility.

Jim Cramer (10:00):
"The aerospace cycle is so powerful you can maybe get close to. You can even buy Boeing."

Retail and Technology

• Retail:
  Major retailers like Costco, Target, and Walmart maintain steady performance, though not without challenges in certain segments.

• Technology:
  The tech sector remains fragmented with areas like the Internet of Things and enterprise software experiencing mixed results. Companies like Analog Devices and Apple show promise, while others face headwinds.

  Jim Cramer (11:00):
  "In tech, it's a bull market in the Internet of Things because one of them, Analog Devices, said good things."

In-Depth Interviews

Semiconductor Capital Equipment – Lam Research

Cramer interviews Tim Archer, President and CEO of Lam Research, to discuss the semiconductor capital equipment sector. They explore Lam Research's innovative technologies, including robotic precision and AI integration, which are driving the company's impressive growth.

Jim Cramer (12:03):
"Can semiconductor capital equipment plays keep making their next major move? Let's dig deeper with someone who really knows this industry better than I do."

Tim Archer (14:26):
"We're building for the future. Our technologies like the Altus Halo system are shipping to production customers now, developed over the past eight years."

Grocery Sector – Spartan Nash

Cramer speaks with Tony Starse, President and CEO of Spartan Nash, about the company's strategies to combat inflation and maintain competitive pricing. Spartan Nash emphasizes their "people first" culture and investment in private label brands to offer high-quality, affordable products.

Jim Cramer (18:38):
"Are the semiconductor capital equipment plays finally ready to make their next major move?"

Tony Starse (19:03):
"We're fighting hard to keep our costs down, allowing us to pass fewer inflationary costs onto our customers."

Lightning Round

In the popular Lightning Round segment, Cramer offers rapid-fire stock recommendations based on caller questions and quick analyses.

• Celsius (00:01):
  Jim Cramer (07:19):
  "Celsius reminds me a lot of Celanese meets Eastman, but it's drinkable and reporting impressive numbers."

• New Balance and On Encounters (08:04):
  Jim Cramer (08:43):
  "On Encounters has done very good work and I'm right to pull the trigger."

• Meta Platforms (09:38):
  Jim Cramer (09:44):
  "Meta is still an inexpensive stock. If you like what you own, just stick with it."

• Confusion in Tech and AI Networking (11:14):
  Jim Cramer (11:54):
  "Semiconductor capital equipment plays like Lam Research are poised for growth despite market volatility."

• AGCO (25:09):
  Jim Cramer (36:25):
  "The AG cycle is now bullish. That's when you buy Deere."

• ARM Holdings (36:00):
  Jim Cramer (36:07):
  "ARM is a very good company and it's a long-term hold."

• Vital Farms (37:26):
  Jim Cramer (37:41):
  "I'll come back to Vital Farms; it sounds like a really good company."

• Bristol Myers (38:06):
  Jim Cramer (38:33):
  "Bristol Myers is the most attractive drug stock other than Lilly. Their drug Benfi is a game-changer."

In-Depth Analysis: Wingstop

Cramer provides a critical analysis of Wingstop's recent performance. The company's same-store sales growth significantly declined, leading to a sharp drop in stock price. Cramer questions the management's lack of transparency regarding the slowdown, emphasizing the importance of key growth metrics.

Jim Cramer (39:49):
"Same store sales is the key metric in the fourth quarter. Wingstop's guidance without explanations caused the stock to fall dramatically."

Jim Cramer (43:45):
"If Wingstop can beat that guidance, this will turn to be a fabulous buying opportunity. However, without an explanation for the slowdown, it's a risky buy."

Conclusion

Jim Cramer wraps up the episode by reiterating the importance of understanding the nuances behind company guidance and key performance metrics. He emphasizes that while market volatility presents challenges, it also offers opportunities for savvy investors to capitalize on undervalued stocks.

Jim Cramer (43:45):
"I'm a stickler for key metrics that measure growth, and no matter what, same store sales growth is the most important metric when you're dealing with a restaurant stock or a retailer of any sort."

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Notable Quotes:

• Market Fragmentation:
  "Multiple business cycles and they aren't trading together in any sort of harmonious way." (00:01)

• Bullish on Airlines:
  "Don't need to think this one through, you just need to go buy United." (04:15)

• Housing Market Concerns:
  "Prices have to come down before we beat inflation in this country." (06:00)

• Banking Sector Dynamics:
  "Wells Fargo, Goldman Sachs, JP Morgan screaming higher." (06:45)

• Tech Sector Fragmentation:
  "In tech, it's a bull market in the Internet of Things because one of them, Analog Devices, said good things." (11:00)

• Semiconductor Innovation:
  "Robotic precision, artificial intelligence, and equipment are driving our growth." (12:49)

• Grocery Pricing Strategy:
  "We fight hard to keep our costs down, allowing us to pass fewer inflationary costs onto our customers." (20:10)

• Wingstop Critique:
  "They didn't make it crystal clear why same store sales are slowing." (39:49)

Final Thoughts

This episode of "Mad Money" provides a comprehensive analysis of various industry cycles, highlighting both opportunities and risks for investors. Through in-depth interviews and sharp market insights, Jim Cramer equips listeners with the knowledge needed to navigate the ever-changing financial landscape effectively.

Transcript

[Jim Cramer]

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. I feel my friends, I'm just trying to make you some money. My job is not just entertain, educate, teach you. So call me 1-873-CBC. Tweet me. Jim Cramer. When I first got in this industry as a kid, I knew that what mattered was the business cycle. Business was too strong. The Fed might raise rates things off. If business was too weak, you might have some rate cuts. You always have to pay attention these things right? Because you want to fight the Fed. But today, with Dow gaining 71 points, S&P advancing point to 4% to a new all time record, Nasdaq edging up.07% I'm starting to think, wait a second. I'm starting to really wonder if the business cycle is coming out more in term. Right now we have multiple business cycles and they aren't trading together in any sort of harmonious way. Some businesses are going bonkers, others going fall. This seem to be falling apart. And that's why it feels so weird that the NASDAQ, the S&P 500 keep bumping up the new highs. And yet so much bad is happening underneath. So many of the stocks in these indices are simply not that hot, including some of the Mag 7. But that could change on a dime. Same with a bunch of others. And heaven forbid, if the President takes action, he loves taking action. For better or worse, whole cycles can be torn asunder. Let me give you the rundown of the biggest bullish ones and the biggest bearish ones so that you can figure out which ones are worth playing and which ones just may be too dangerous. First, the most insanely positive cycle out there is travel leisure. This was mostly a holdout from the days of COVID when we discovered that we were long on money and short on time. I think the best of the bunch are all worth buying into. Weakness. The airlines are breathtaking. I've never seen anything like it. All hands like me are used to seeing the airlines collapse once or twice a decade. Not anymore. Don't need to think this one through, you just need to the obvious you go go buy United. It's up 10% year date. I think you can challenge a sold high of 116 given the people seem to want to travel no matter what. We're well past the initial post Covid boom here. I think it can absolutely justify paying eight times earnings for United. When you travel, you need someplace to stay, don't you? There are two stocks that are roaring in this cycle, Marriott and Airbnb. They just reported excellent numbers. These were cyclical stocks before COVID Now they're secular, meaning they seem to have growing growth. No matter what, you need someplace to go, don't you? I keep hounding you to buy the stock of Disney Buy because it's doing so well. Yet all people seem to care about is it some weak link in the cable business that I think is going to pick up this quarter anyway. Theme parks, yes, they are expensive, but doesn't seem to stop people from going them. Go to a cruise cruise, a Disney cruise or buy the stock of Royal Caribbean. Keeps beating the numbers and beating numbers and beating numbers again. The cruise lines haven't been cyclical since COVID Need a way to pay, need a way to book. Okay, that means buying Expedia booking holdings while using your American Express card. They have no quitting them. What's the opposite of the bullish travel leisure cycle? How about the bearish housing cycle? Last I told Brothers Loan, one of my favorite homebuilders reported a quarter that was mixed and the stock just got hammered. The entire group took. Took down. While conference call was instructive because it showed there are cracks developing with lower average housing prices around the country. Some very soft markets. Something that's not supposed to happen when the Fed's cut rates, Mortgage rates are still way too high for this group. I want you to listen what CEO Doug Yearley on the conference call said, quote, those areas where the buyers are a bit more hesitant. I think it's number one those areas that have had more significant price appreciation through the COVID years than other areas. So instead of a 40 or 50% pricing percentage price increase of the last five years there in markets where there did a 60%, 70%, 80% and 100% price increases, that includes Florida, primarily Austin, Texas. Those prices have to come down. That's. That's raw inflation. Those have to come down before we beat inflation in this country. Toll Brothers created the entire industry. Everything from Lenore, Dr. Horton to Home Depot and Lowe's and everything they sell. Then there's the banking cycle. Now that's in fuego. It's smoking. I mean it's crazy. The lack of democratic regulatory headwind and slower rate cut cycle. Good for them. Wells Fargo, Goldman Sachs, JP Morgan screaming higher. Doesn't hurt that the whole industry seems very Confident that the Trump regulators will be more bank friendly than the Biden regulators. Well, no kidding, who wouldn't be? On the other hand, you got groups like the Transports. They're just getting clocked at a conference call today. Norfolk Southern, one of the big east coast railroads, traced out a soft picture. Union Pacific didn't seem all that exciting either. Coal, Sweet chemicals, horrible. Those are the ones that go to plastic. Plus, talk about being the crosshairs of the tariffs. Do we want to own a rail that runs from Mexico to here? A trucking company like JB Hyund? If we're getting into a tariff for Mexico. To me, this group feels like it's practically in a recession cycle. Today the food and beverage and drug stocks all got some lift. But you want confusion. These are supposed to be anti cycle companies. They don't have a cycle. But now that we have a Human Health and Human Service secretary who dislikes processed food and vaccinations. So you may be thinking it's not so much of a cycle as it is an entire blight on these industries. In this administration, nothing would shock you, would it? What if RFK Jr wakes up tomorrow, says I'm banning Fruit Loops stopping weight loss shots. I mean, everyone in this administration seems to think that the federal government could do whatever it wants. That's not how our system works. Or at least it's not how the Constitution says it works. But the blights very much with us, even with today's reprieve. Then there's the AG cycle. Deer stock can't stop. I think you just go buy the stock of AGCO tomorrow. Pharma equipment maker. Come on, it comes on the show all the time. Pretty good. How about another unstoppable cycle? The aerospace cycle. Love aerospace, but we bought some Honeywell for the Chapel Trust. As you can find out if you tune in to tomorrow's club called Noon. However, the aerospace cycle. So powerful. Get this. I'm going to say it's so powerful you can maybe get close to. I'm not going to say too loud. You can even buy Boeing. All right. Retail. Yeah, just the big three. Costco, tgs, Wal Mart, Airport tomorrow. You straight from those. Look out my fail. Use the button. Group of cards that make this economy almost impossible to understand. Sure, we know there are cycles in tech today it's a bull market in the Internet of things. Why? Because one of them, Analog Devices, said good things. We have a strong semiconductor capital equipment company. That's why I brought on KLA last night. Lam tonight at the same Time. We have a PC cycle from hell. We have a data center business has been rocked by some outfit in China no one ever heard of. And we have a new product cycle from Apple itself that's both inexpensive and fabulous. I'm going to buy one tomorrow. But people are putting a real hate on enterprise software now. Think of Workday and Kramer Uber unbelievable, amazing fave service now it's a horrendous cohort. Here's the bottom line. Can things stay this tenuous? Sadly, yes. I mean today. I shouted over to Jeff Marks runs the Chapel Trust with me will be on tomorrow's noon CNBC investing club call. I said hey man, how's the market looked at? I heard him say Toppy and I agreed. I said oh yeah, Toppy. If the one we thought he said no, not toppy. Choppy. I said oh yeah, that's right. I mean yes, sure, it's real choppy. It's not toppy. And doesn't that level of conviction or lack thereof say it all right now? All right, I want to go. I want to start with old friend David in New York. David.

[David]

Good evening Mr. Jim.

[Josh Brown]

How are you?

[Jim Cramer]

I am good. How are you?

[David]

Good, good.

[Tommy]

Half question about C It has went up today.

[Jim Cramer]

It went up today. This thing has been stuck never feeling come on the show this is that Celsius by Jeff loves Celsius. I looked at Celsius it reminds me a lot of. I don't know, it's kind of like Celanese meets D and kind of like Eastern Chemicals Eastman but it's also drinkable and it's going to report on Thursday so let's see what happens. The shorts could be on the run in Celsius because everybody likes a good chemical in their drink. Let's go to Josh, Josh Brown perhaps Josh in Arizona. Josh.

[Tommy]

Hey Jim, thanks for taking my call New to the club. Thank you in advance.

[Jim Cramer]

Thank you.

[Tommy]

I took a note from Peter lynch and I went to the mall okay, fairly new to stocks and I came across O n o N on Cloud Premium shoe apparel company I started doing research. I realized a my daughter wanted these for Christmas. I see all of her friends wearing them. I also noticed that a 65 year old sports reporter was wearing them. I worked in professional baseball for almost 30 years. I walked in and saw my equipment manager with their website on his computer. I said is it on cloud? He said yeah man.

[Jim Cramer]

I was at Dick and I think you're right now Peter Lynch. Peter Lynch. What David is saying is basically the way you need to do. I'm sorry it wasn't David, but it was on one. It was Josh in Arizona. This is what he's doing is really important, which is what he's basically saying is he saw it on many, many people checked it out. And I think he's right. I think they're on a tear. I think they're still there. I see Nike maybe coming back and I know that that New Balance is back. But I've got to tell you, I definitely think that on, we've had them on many times and I think that Josh has done very good work and he's right to pull the trigger. Tommy, New Jersey. Tommy.

[Tommy]

Hey, Jimmy. Welcome back.

[Jim Cramer]

What? Shake it. Thank you, man. You get a couple of days off. Thanks. You can see you're refreshed.

[Tommy]

This is Tom Lafayette, New Jersey and I have a two part question with Meta's latest sell off. What's your thought on that?

[Jim Cramer]

Okay.

[Tommy]

And as well, what do you what's your thought on Meta split at this point?

[Jim Cramer]

Okay. I know Mark Zuckerberg like these but I'll make you have a little sense on Metta. It went up so much that we actually did a little bit trim for the trust because it got so huge for us. But not a lot because I tell you it's still inexpensive stock in your Mark. I know you know Mark's, you know Mark's, Mark's, Mark. But I really, we own it. We have a lot of business cycles right now and they're not trading together in any harmonious way. I think that that makes it so it's a little more tenuous. But if you like what you own, just stick with it, man. Money tonight, pressure on some investor day announcements from Lambert Search what a stock sitting down with the CEO to hear if the semi stock can keep running. Then how are higher egg prices affecting grocery companies like Spartan Nash? That 48% yield, let's check them in the top. And later, one of my absolute favorite risks to networks falling. But it fell what I thought was a really terrific quarter. Let's talk it over with the CEO and stay with Kramer.

[Tony Starse]

Don't miss a second of Mad Money. Follow imkremer 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.

[Jim Cramer]

Are the semiconductor capital equipment plays finally ready to make their next major move? These stocks did get clobbered over the summer. They spent months Trying to find their footing. But I'm starting to feel pretty sanguine about the industry thanks to what we've been hearing from Lam Research. Late last month, Lam reported excellent quarter with strong guidance which sent the stock up within 7% single day. Then today, right here in New York, the company held an investor day. It rolled out some impressive long term financial targets, made some major technology announcements. Thanks to these moves, the stocks now up more than 20% year to date. You got asked. Can it keep running? Let's dig deeper with someone who is just really, really knows this industry better than I. Maybe everyone. It's Tim Archer. He's the presidency of Labor Search. The more you got money. Great.

[David]

Thanks Jim. It's great to be here.

[Jim Cramer]

Okay.

[David]

I have to admit, Jim, I'm a big fan of the show.

[Josh Brown]

Thank you.

[David]

And I have to say I love it when people call in and ask about Lam research on the lightning round.

[Jim Cramer]

Well, you know, I always say I love it. A lot of that's because I love the Bellas before you. And you worked there for what? 18 years?

[David]

30. 30 years between novellas and lam and.

[Jim Cramer]

Well, thank you Run. Thank you for those kind words. I was going to start by saying, I said, look, we all didn't go to Caltech like you, so we do need to know what it means to have an Atlas halo, which is atomic layer deposition harnesses capable of metal. Metal molybdenum. But what I really want to go into is human ingenuity meets AI speed. And robotic precision is one of the most important slides in your deck today. And what it says is if you want to know where the intellectual property of this world is located in this high tech business, it's right here. It's, it's semiconductor capital equipment. And you.

[David]

Well, thanks for saying that, Jim. I mean let's, let's start with that. Yes, Robotic precision, artificial intelligence and equipment. You know, we spend a lot of time developing these new materials like molybdenum and how to deposit those on the wafers. But ultimately our customers have to put that into mass production. They have to make these chips and they have to make them at a cost and yield that works for the industry. And so we've really been spending a lot of time looking at how to engineer the fab. And about two months ago we introduced the use of collaborative robots, cobots, as part of the maintenance for fabrication facilities. This was driven by a couple of ideas. One, it's about making these more productive. And two, the chips act programs that are happening all over the world are going to put fabs in places where we just don't have enough skilled workers. And so we see this as a potential solution to that problem as well.

[Jim Cramer]

Now Tim, most people think we can't make anything here, it's too expensive. Tell, tell me how you could have so many great plants here if it's too hard to make things.

[David]

You know, Jim, I think that technology is, is usually the cost, the solution to any cost problem them. And so, you know, what we introduced today at our investor day was sort of the next level of technology to help our customers continue to scale. And we think that every region of the world can pick and be highly competitive in some aspect of the semiconductor market. And at the leading edge, it's companies like Lam and others that are going to help enable our customers to be successful regardless of where they build those fabs.

[Jim Cramer]

Now are you building with the idea that five years, are you thinking right now about something that they people may need five years from now? Are you taking calls from people who are saying please build this for us?

[David]

You know, we talked about a number of different things today, but for instance, the Altus Halo system that we announced, this tool is actually shipping to production customers today. But you're right, we actually started working on this tool six, seven, eight years ago. You know, big materials transitions, they don't come along very often. In fact, Jim, we talked about the fact that I've been at the company 30 years. The first tool I worked on was the Altus tungsten system. Here we are 30 years later and Mali is now replacing tungsten. So these are kind of once in a generation type inflections and lam prepared hard to be ready to meet this need.

[Jim Cramer]

Now I didn't, I didn't go to, as I said, I didn't have a degree in Caltech. I do have a degree in the following. Delivering compelling profitability for shareholders. Your record is extraordinary. I mean we're talking about a 10 year. The CAGR here is just, I don't know how you do it, but you have to talk about how earnings per share growth of 10x since calendar year 2013. I don't have a lot of companies that have done that.

[David]

Yeah, there aren't many companies done that. But I mean, first of all, we focus on again our customer success and working with them to create the types of technologies they need. And we've also been very focused in our, in our approach. We look at where the market is going to be expanding the fastest, fastest. And frankly, about 10 years ago the industry transitioned to from 2D NAND to 3D NAND. And we saw that in the coming inflections of of semiconductor devices to the three dimension scaling, etch and deposition would play an outsized role in that growth. And so we've stayed focused in that area. That's allowed us to be very efficient in our R and D of new systems and working with customers. And in the end, you know, we just have put that money back and our profitability back into making the company more efficient, driving future growth and really returning a lot of cash to our shareholders.

[Jim Cramer]

Now I think people have to send these numbers were done. Even though you took what looks to be a $2 billion hit, not being able to sell China certain cutting edge products because of our government. I know you've complied fully, but that was kind of a big hole for your earnings. Yeah.

[David]

Jim, as an American technology company, we of course have to comply with the rules in every jurisdiction we operate. But when I step back and I think about those restrictions and kind of the broader sense of what's going on around the world, I think it's just further confirmation that semiconductors are absolutely critical to everything we do. I think what's little known about our company is that whether you're using a smartphone or using a PC or you're calling up AI, the chips that are powering all of those technologies are made using equipment from LAM Research.

[Jim Cramer]

And you are at one point we would think about you as NAN and dram and those are important technologies, but you have gotten higher and higher. High bandwidth memory. You've got a great slide about what you do with Micron. You have what you do with Taiwan Semi. You have taken it to another level. It's not just the build and then serve service. You're doing really cutting edge stuff now that you didn't do, say 10 years years ago. Yeah.

[David]

As we, as you know, as I said earlier, the scaling roadmaps of our customers are getting a lot more difficult. And what we've seen is in both dram and foundry logic, the 2D shrink that's been the heart of our industry for so long is kind of run out of steam. And so customers are looking now to, to build DRAM in the third dimension. And that's by stacking chips on top of chips to create high band memory. And in Foundry Logic they're going to to vertical transistors, which also is driving tremendous opportunity for a deposition company.

[Jim Cramer]

When I talk to you and other people in this industry, I'm always proud that we still make the best and Lam is the best. That's Tim Archer, president CEO of Lamb Research lrc. Probably from my first show I thought that this was the company and the predecessors company that you should own if you want to own technology. That money's back at the coming up.

[Tony Starse]

Is a time to fill up your grocery baskets. Kramer is getting a read on inflation and food prices with the CEO of Spartan Nash. Next.

[Jim Cramer]

We got this incredible quarter for Spartan Nash. That's the food wholesaler supplies grocers running nearly 200 retail stores of their own across the Midwest. When these guys reported last week they delivered a much better than expected quarter, stocks shot up more than 11% in response. That was correct. Since then though, it's pulled back giving back most of the gains. I like this. Let's take a closer look with Tony Starse. He's the president CEO of Spartan as find out what's happening his company and in the broader industry. Mr. Sarson, back to that money.

[Josh Brown]

It's great to be here, Jim. Thanks for having me.

[Jim Cramer]

All right, we have a budget. We had a bunch of tech companies today and they're hard to understand. Here's what I think that's easy Understand you have 4 and a half percent yield with very safe. You're you've inflected your since you were here last. The turnaround plan is in place. Tell us what it's going to do for shareholders. Great.

[Josh Brown]

Excited to do that. Quick backdrop though. Just a reminder what we do. We are at the delightful intersection of wholesale and retail. As you mentioned, we are a food solutions company. We have a wholesale business that provides food solutions, groceries and consulting services to over 2300 independent grocers including the about 200 that we run ourselves at those stores. We're also very proud to serve the US military system through the commissary system, giving our men and women in uniform and taste of home wherever they might be. And so with that we serve communities and we serve communities in a way that that that speaks to those shoppers and those specific communities. And it is part of what we call our people first culture. Our people first in our organization. We think about our communities in that in that same way.

[Jim Cramer]

Now people first in this at this particular juncture is about fighting inflation. And I think of the companies that I've seen, maybe you're the best fighter inflation. Tell us how you've been keeping prices down for regular people in this country.

[Josh Brown]

Yeah, it's an important task for us. So as you think about even like the last time we talked we were admitting that that Merchandising transformation. We talked about fighting for the absolute best prices and the best variety from our supplier community and looking for deals and things that speak to shoppers, the things that they want to save money on, things that excite them around, the types of promotions that we can offer. So we worked very hard on that. We spent a couple of years and we call that merchandising transformation. And, and we fight hard to keep our costs down, which allows us to not pass on any additional inflation. So we actually passed on less inflation than our supply to us was because we feel so strongly about that for our communities.

[Jim Cramer]

Now you did say in the conference call, and I was surprised about this having been the supermarket a couple of times the last five days, inflation has largely returned to pre pandemic conditions at around low single digits. I think a lot of people feel that's not true, right?

[Josh Brown]

Yeah, well, statistically it's true. We had about 1.9% last year. And I should remind that this is growth, growth in costs over year. So last year was less than 2% inflation versus 2023. This year out of the gates about the same can be a little lower. We're forecasting be much lower, closer to maybe 1%, that is 2%. So food is stabilized in terms of what people are seeking and those are really, really important fundamentals in life. They will see that the groceries are not increasing as much anymore. Back to those, those kind of pre pandemic days of what the inflation might have been.

[Jim Cramer]

Okay, now I do want to talk about what you're doing in private label because your private label is the lowest cost of the low and yet high quality family fresh, fresh and finest brands. Where will we find these?

[Josh Brown]

Well, you find them in our, in our stores that we run ourselves in Michigan and much of the upper Midwest are for example, our family fairs. BMW is our Martin stores in Indiana and a great many other banners. And they are also carried by all of the 2100 other independent grocers in that same territory that we serve through our hotel wholesale services.

[Jim Cramer]

Now what kind of work have you been doing with one of the great companies that we all know, Amazon, with Amazon.

[Josh Brown]

So Amazon has, has had a journey about trying to bring in more food into their Amazon stores. Right. They have been a great partner for us. They have massage their model a little bit. So their growth is not as strong. Actually they've pulled back quite a bit.

[Jim Cramer]

And that's one of the reasons why when people look at the numbers, they may be confused, they don't see underlying underneath what's really happening here?

[Josh Brown]

Yeah, so that's, that has been one of the, the, the sources of our overall, you know, the overall story on our top line. But we still see them as an important partner for us. We're working with them through their piece. If we talk for a minute about growth broadly ex Amazon. So we have, we're going to invest in growth both organic and inorganic. And you see we saw both expressions of those here recently. Recently on the inorganic side, we made some acquisitions last year. Those acquisitions that we made last year, grocery stores and some sea stores, they outperformed versus their expectations the fourth quarter. One of the reasons why we managed to have a third consecutive record EBITDA year was a strong performance. Those acquisitions late in the year we also give us a lot of confidence. The investments made in our stores and what we are doing to actually invite shoppers into the excitement of our grocery offering paid off big time. During the holidays, both Thanksgiving and Christmas, we're over double digit performance for the, for that, for that season, which is part of the strength we've had coming into this year. So we're investing in making sure that we have a great offering in that neighborhood store that we run. And we're doing it through what we call this consumer customer value proposition. And the customer value proposition looks at what are the prices that make sense for our shoppers, what are the things they need to save on the most. We've been really aggressive on pricing those items and there's another macro trend that's really important to people right now. It's all around health and people interpreting health largely as fresh. So what kind of produce, meat, deli, bakery. Those things are really important to people looking for that, for that overall fresh experience. And we're going to invest in that to make sure we have a great offering there and we can export that offering to our, our wholesale grocery customers as well. So see that as a really important way for us to grow organically.

[Jim Cramer]

All right, now I looked at price check on, you've got a great website, you got family fare, it's buy one, get one week, maximize your savings for some really great brands that we all know. A lot of fresh stuff too. So it's not all just canned process. You're so off the mark to be lower than everybody else. So I think people out here have to recognize how did it happen? Because maybe the prices we're seeing are too high at other places given the fact that you still make pretty darn good money with the prices I'm seeing here.

[Josh Brown]

Yeah, And I think it is a, you know, this is a very competitive industry, as you know. And so we have, and I would say we have the absolute lowest in the marketplace. But we are fighting that fight. And we are, we are trying to establish a. The. What does, what does that neighborhood grocery store mean? There's something that's important about some of our competitors who may be very deep discounters. They offer something and there's folks who offer, offer a variety of different types of things and service for their shoppers. Our shopper wants, kind of wants the whole, the whole pizza. They want to have great prices. They want to have it away. They want to be able to get the birthday cake for their kids. They want that service. They want to get. Talk to the butcher about what's the best bratwurst we have that we're serving up that day. Those things really matter to them. So that, that personal touch and the service they get in the whole store with good pricing, it's, it's a little bit of a balancing act, but that's where, that's what we're doing. That's what we're fighting for.

[Jim Cramer]

There's some cases where I just, I. You can't control the price of eggs, sir.

[Josh Brown]

We cannot. Yeah. So. So eggs have been, eggs have been a little bit of a challenge the last two years.

[Jim Cramer]

What do you do now?

[Josh Brown]

Well, it's, it's, it is, it is a constant, constant effort to kind of get the right price. So as you think about, it's a complicated story with eggs, right. So I'll take a crack and try to, try to open up a little bit. So we had two years in a row of avian flu, which, that kind of really priced up. Those are temporary events. Right. But we're in the middle one right now, so it's tougher for customers. So, so we work to make sure that we had longer term supply agreements with a lot of the farmers so we can actually get lock in on a great price. And we are, right now we have a head price that is lower than the market overall and we're passing that all onto our customers and to our shoppers. So we think that eggs are such an important way for people get protein and nutrients. So I make sure we're very, very competitive on that. And we look at prices on eggs all the time. We actually have a very competitive offering our eggs.

[Jim Cramer]

Well, you sure do. You better offering. Anyone can see the offerings. They're all there. I looked at all of them and I can tell you that, that if you Want value at a price with a dividend and growth. It's this quarter was the real quarter that I've been waiting for. Which is why I'm so happy to have you on Tony Starse, the president and CEO of small Barton Nash. Take a look at this. Not everything has to be semiconductors. Money back coming up.

[Tony Starse]

What's the read on AI Kramer's got a one on one with cloud networking giant Arista. Fresh off the company's latest earnings report. Next.

[Jim Cramer]

For years now, risks and networks has been one of the biggest winners out there and one of my favorites. This maker of cutting edge networking equipment has become a major part of the infrastructure story too, which is why its stock has rallied from the mid-30s to the triple digits in just two years. But is this a kind of a one of your dunkirk lately market and lately Wall Street's gotten skittish on Arista. After hitting a new all time high of just under 130 last month, it's pulled back now just under 104 as of today. Now some of that's from this deep seek news we're going to get to. That stock fell 22% on the day that story came out crazy. But risk has been making its way back from the event. Ford fell over 6% today in response to last night's quarterly report. Look, the headline numbers are strong. Some investors looking for some different kind of things. We're going to get into that too. Look, there was also some concerns about competitive pressures with certain large customers. So what comes next? Let's check in with the one and only Jason. You all a J Street old friend of the show is the chair and CEO of Aristide Evers. Welcome back to Man Money.

[Jason]

Thank you Jim. The one and only Jim Cramer.

[Jim Cramer]

Oh, I just think I will get it. What you've done, what you've accomplished, it is just awesome. People should read the deck because it's all very clear. Now before we get to why the stock went lower, I don't want to forget the fact that you first of all revenue up 25% year over year. An acceleration for the previous quarter better than Wall street was expecting. Better than expected. Gross margins and operating margins 8 cent bottom line. Beep. So before we start talking about what people didn't like about the quarter, why don't you give some of the highlights of what really happened during the quarter.

[Jason]

Well, I think I want to step back and tell you what really happened over the entire year. We had first guided from 10 to 12% and we're targeting 6.5 billion and we kind of skipped the six digit entirely and went to 7 billion. Chantel, my new CFO and I are very proud because we navigated, you know, very high expectations, as you say, also a pivot from our customers from the cloud to AI as well as growing the enterprise. And I always like to say, you know, when the tough, the tough get going, when the tough have to get going. And we are now fulfilling both networking for AI and AI for networking. So it's a very exciting year and of course the quarter contributed to that as well. And we beat all expectations.

[Jim Cramer]

You've changed the lexicon of the industry. We think about the tech titans and out of nowhere suddenly Oracle has become a huge tech titan. And I'd like to know how important is Oracle to the mosaic of your business?

[Jason]

If you step back and look at our cloud titans, we now call these tech titans, as you say, cloud and AI titans. And it's a class of customers who historically helped build the cloud and now, you know, deploy hundreds of thousands of servers, megawatts of capacity in their data centers. What happened in the last couple of years is not only did they build the cloud up, but they also built this air cloud. And so they're building some of the world's largest, not just data centers, but what I call AI centers, weaving in the back end of the infrastructure with the front end of the AI and cloud infrastructure. And to your point, we have some pretty major customers there, including Microsoft Matter and newcomers into that are Oracle and Google. So these titans are indeed huge and their capex is indeed very large. Where are we? Small piece of that in terms of networking.

[Jim Cramer]

I know you can take a lot more share. I did want to ask you, were you shocked about how shocked the market was about Deep Seat? Even as one after another of your tech cloud titans was placing huge orders as if they didn't know about Deep Sea. Everyone in your business must know about Deep Sea. So you probably were dismayed that the stock took such a hit.

[Jason]

Well, you know, over time, like, like you, we get used to the volatility of a stock and we try to do the right thing and then eventually the stock also does the right thing. And you pointed out over the last decade since, since you've been observing us after, you know, it's been over 10 years since we went public. So not disturbed, but surprised for sure. And the reason I'm surprised is I think all of these AI models for large language training, whether it's OpenAI or Grok or all the different ones, are contributing to massive bandwidth pressure. And you know, AI workloads are very different from cloud workloads in terms of diversity, type of flow and they're very intensive. So you have to handle them a special way. Now while deep seat deep six to a number of stocks, including us, I think the realization now for everybody is it's yet another model and it's a model based on reasoning, mixture of experts, more inference and isn't the intense training model that OpenAI and others are doing. So it's different strokes for different folks. And I think a mixture of these models only puts more pressure on the network and requires us to build more robust scale out AI networking.

[Jim Cramer]

I wish I speak that day, I wish I spoke to you that that is the crucial part. You maybe need more equipment. Now there are people who are concerned J3 that that matter went from 21% of your sales in 2023 to 15% in 2024. I thought you explained it perfectly. You talked about the year of efficiency and then and how it was very hard to be able to equal the bump that you got. But I just want people to know from you Matter is not a problem. Right. That is, that is more of a key complete component and supplier. You're a key supplier.

[Jason]

Yeah. I would hardly call Metta a problem. Eminem, I like candy and they are my favorite customers among many others. And what I'll say is rather than a problem, we actually look to solve problems and jointly innovate. Just a few months ago we introduced the distributed ether link switch which is yet another form and a new form of AI networking, bringing a distributed leaf and spine together. This is a third product that we're jointly engineering with Metta. So yeah, we will deal with the ebbs and flows and the years of efficiency and it's not ever right to look at just four quarters. But I believe Matter and Microsoft will continue to be important greater than 10% customers. And we increasingly will have other strategic customers as well, which is the way it should be. We should have a diversified suite of customers.

[Jim Cramer]

The only, the only line in the whole call that did concern me was when you said, while I do appreciate the exuberant support from our analyst community on our momentum, I would encourage you to pay attention to our stated guidance. To me, that was somewhat like my friend Frank Slootman said on the show once. I said, you got to be. You can't. You must be. Be too negative. He said, the guidance is the guidance is the guidance. The guidance meaning don't go beyond that. And then you'll otherwise you'll be led astray.

[Jason]

Well, first of all, I want to go on record saying, you know, Frank Sleuthman is one of my favorite CEOs. I'm on the board of Snowflake.

[Jim Cramer]

I know.

[Jason]

So if he said it, if he said it, it must be right, and if I said it, he must be right. And all I'll say is, you know, why ask a company for guidance if you're not going to take it seriously? Obviously, as the year progresses, if we find things are more positive, we'll let you know. But things can change in a very volatile fashion very quickly. And while I really appreciate the support and momentum, I wanted to add a dose of reality. That growing 17% year over year on large numbers is a pretty damn good thing.

[Jim Cramer]

Well, look, I, I want people to know that because the reality is, is that every single time I was telling my staff, every single time, you've had one of these declines because there is a road to 70 billion total addressable market you must buy. And I don't think this is any time different, but I did want you to just talk about how huge this market really is so people don't think that we're anywhere near being tapped out.

[Jason]

Now, this is a really good point. You may have seen some of the tech titans tap capex. They add up to a lot of money. There are 250 billion or whatever. Obviously we're not going to get all of it. But our own TAM, our total available market in 2028 is north of 70 billion. And here we are excited about reporting a year that 7 billion last year going to 8.2 or heading to I would say 10 billion and many, many more in the future. But we've got a lot of headroom here and a lot of opportunity in three areas. The enterprise and campus, the data center, both cloud and enterprise as well as the cloud and AI titans and their infrastructure. Three huge markets for us to execute and navigate and do much better than we've even done so far.

[Jim Cramer]

Well, then I will say what I would have said if I were in the queue of the conference call. Congratulations on a great quarter, Jaishree Yalal. And it's always good to see you.

[Jason]

Great to see you, Jim. Thank you for having me.

[Jim Cramer]

People, this stuff never comes down and when it does, it's your chance. Handmite's back in.

[Tony Starse]

Coming up, Kramer takes your calls. And the sky's the limit. It's a fast fire lightning round next.

[Jim Cramer]

It is time. It's time for the lightning of Christmas A rapper. The star side of ice also so don't know the cold star but it's on my step and then the lightning round is over. Are you ready, Ski guys out of the light round. Crazy round. I'm going to start with Richard in California. Richard.

[Jason]

Jimmy, chill.

[Jim Cramer]

It'll be you. Yeah, most definitely. You bet it is. What's going on? What's going on? Probably not.

[Tommy]

I calling today about a stock that had a couple of good pops recently.

[Jim Cramer]

Last seven days and wanting to know.

[Tommy]

If I should hang in there. It's part of my stock, one of.

[Jim Cramer]

My big stocks, one of my five.

[Tommy]

Featured stocks and I want to know if I should continue gone or share a little.

[Jim Cramer]

The stock is deer. The ag cycle switch. It's now bullish. I've got to tell you that's when you buy deer. I'm going to throw an adcom, give it a two forgivement twofer. Let's go to, let's go to Shelly in West Virginia. Shelly. Hey Jim, how are you? I am good, Shelley, how are you? I'm good. I love your show and congratulations on the Eagles win. Oh, thanks a lot. That was, it was a big deal for me. Thank you very much. I really appreciate you mentioning it. How do we help? My question is about arm holding. I bought it around one around 160 a while ago and then it went to 180 to and change and I was making a decent bit of money but I didn't get out. Don't worry about it, Shelley. I've got to tell you, ARM is just a very good company and it's renewals and we can own it for the long term. That's what I encourage you to do. If it got down to 120I would buy more. I could double down on position. Let's go to Brett in California.

[Tommy]

Brett, Jim, thank you so much for getting a lightning round. I really appreciate it. Thank you.

[Jim Cramer]

Oh, it's fun to have on. Thank you. Glad you're on, Jim.

[Tommy]

So I've been did a lot of research on this company. I mean I have a really good network of farms. I'm just trying to find a good A company premium A company I use them and I just thought they have a great balance sheet. It's called Vital Farms. Do you recommend that or you have something better than that?

[Jim Cramer]

I don't know Vital Farms. I, I don't. I'm gonna have to come back on Vital Farms sounds like a really good company. I mean I was thinking maybe you were talking about like sprouts which is a real good company but we're gonna do work on vital farms when we were going to come back and I really appreciate you stumping me. I don't mind that it sounds like a new one. Let's go to Dean in Ohio. Dean, will you.

[Tommy]

Jim Carter, club member, third time caller.

[Jim Cramer]

Fantastic.

[Tommy]

Thank you. I am looking at a stock I'm very interested in. On February 10th it was added to the investing club. Prior to that, on the 6th I declined the decline was commented that it's a gift to investors. Is the new product line for this company going to make it a strong buy worth the waiting? The stock is Bristol Myers.

[Jim Cramer]

I think Bristol Myers is the most attractive drug stock stock other than Lilly. I think Benfi is going to be one of the largest drugs of all time because it's going after schizophrenia. It's a great drug for the brain. Really incredibly hard. I do a lot of stuff. I used to do the chief spokesman of the American Brain Foundation. I still work for the American Migraine Foundation. I can tell you that this company really has the silver bullet for schizophrenia which is one of the worst diseases in the world. And it can be expanded beyond that. It's a multi multi billion dollar drug and it is going to be great. While you wait. 4.5% yield own Bristol Mars. And that, ladies and gentlemen, conclusion of the Lightning Round.

[Tony Starse]

The Lightning Round is sponsored by Charles Schwab. Coming up, time to put away the wings. Kramer is giving you his take on why Wingstop shares are down after earnings and how the company's guidance may be a warning sign for investors. Next.

[Jim Cramer]

I always tell you to wait until you hear the guidance for you buy or sell anything in response to an earnings report. What I don't say often enough though is that it's just as important to find out how the guidance is given.

[Josh Brown]

That's right.

[Jim Cramer]

The actual wording, the context. Frank Slubin, former CEO of Snowflake, famously told us that the guidance is the guidance when he gave us a downbeat forecast. I was asking if he was maybe being an extra conservative, which is what he lashed me. He lashed me out with that guy. Just the guidance line. I never forgot it. The numbers are real though. Slim was right. That's quote, nothing to write home about. It would have been irresponsible, damning frankly if he tried to downplay it. But he's a straight shooter who didn't want to sugarcoat the future of Snowflake, which by the way is moving back up. Jay Sri La from Arista Networks, whom You just heard from did a version of this on her conference call last night that I mentioned. She said while I do appreciate the exuberance of support from our analyst community on our momentum, I would encourage you to pay attention to our stated guidance. See, that's a gauntlet says keep your numbers reasonable. Analysts, we are trying to do our best and this is the most accurate guidance we can give given the circumstances. Makes sense to me. I can't stress how important the wording of the guidance is. Which brings me to Wingstop, a one time favorite which has seen a rather dramatic and unexpected slowdown. Same store sales play Wing stops doing so many things right. The average unit volumes per square are spectacular. The unit growth is amazing. The profit margins are extraordinary. Wings taste great, but what matters in retail is frankly the same store sales. That's the key metric in the fourth quarter. Same store sales results today? Well they were 10.1% was pretty disappointing compared to the growth that they put up in the preceding quarters. 22%, 29% and 21% respectively. Now understand when we stop had last reported in November the company guided for full year 2024 same store sales growth of 20% which implied that the fourth quarter would certainly be weaker. That guidance back then caused the stock to fall from 3 or $69 to 290. So it should have been shocking when Wingstop did a little better than 10%. Even though we were used to getting some terrific upside to surprises from these guys. They told you implicitly that this was coming. But they didn't make it crystal clear. Wingstop also doesn't seem to understand that Wall street wants to know why is this happening? Why don't we get anything, any color about what's going on? So why did the stock drop so much today? Again it was the guidance this time. They told you the business would put up low to mid single digit domestic same store sales growth this year. Look. That's perfect for McDonald's. It's extremely disappointing if you're Wingstop shareholder people who've gotten used to at least 20% growth. And the pain wasn't mirrored by positive talk about average unit volumes or more new stores. In fact, it made management seem oblivious because they didn't tell you why these all important numbers were slowing. And the guidance drove the stock from 306 to 265 dollars today. One day. None of this would happen if Wingstop had a lower price earnings multiple. But it doesn't. Even falling close to 40% from its highest last fall. It still sells for 60 times earnings. I can get the same get same store sales growth of 27% from Brinker parent Chili's. That stock only sells at 22 times earnings. Who the heck would pay 60 times earnings for a stock like Wingstop? Now it has low to mid single digit same store sales growth. Nobody. Hence the vicious decline. Look, I'm not being belligerent here, don't mean to be. If Wingstop can beat that guidance, this will turn to be a fabulous buying opportunity. However, again with this company the guidance is. Well, the guidance and this dip can't be bought. Not without an explanation for the same store sales slowdown. They haven't given us one. They just want to tell you how great they are doing. And that is not enough for me. I'm a stickler for key metrics that measure growth growth. And no matter what, same store sales growth is the most important metric when you're dealing with a restaurant stock or a retailer of any sorts. Nothing against Wingstop Love the wings more than ever, but in the old days I wanted to buy a franchise. Now with this kind of slowing again without any explanation, I just want to buy the wings. All I said is always bull market summer. I promise. I find it just for you right here Made money. I'm Jim Craver and I'll see you tomorrow.

[Tony Starse]

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of cnbc, NBC, see Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer'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.