Transcript
Jay Sri La (0:00)
Hiring isn't just filling a role, it's
On Deck Advertiser (0:02)
about finding people who can drive results.
Jay Sri La (0:04)
Indeed Sponsored Jobs helps you match with
On Deck Advertiser (0:06)
the right candidates faster. Target candidates by skills, certifications or location.
Jim Cramer (0:11)
Join the 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs.
Jay Sri La (0:17)
And listeners of this show will get
Jim Cramer (0:19)
a $75 sponsored job credit to help get your job the premium status it
On Deck Advertiser (0:23)
deserves@ Indeed.com podcast, terms and conditions apply. Hiring do it the Right way with
Mad Money Announcer / Advertiser (0:29)
indeed, homes.com knows that when it comes to home shopping, it's never just about the house or condo. It's about the home. And what makes a home is more than just the house or property. It's the location and neighborhood. If you have kids, it's also schools, nearby, parks and transportation options. That's why homes.com goes above and beyond to bring home shoppers the in depth information they need to find the right home. And when I say in depth, I'm talking deep. Each listing features comprehensive information about the neighborhood, complete with a video guide. They also have details about local schools with test scores, state rankings and student to teacher ratio. They even have an agent directory with the sales history of each agent. So when it comes to finding a home, not just a house, this is everything you need to know all in1place.homes.com We've done your homework.
Jim Cramer (1:42)
Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other boom. My friends, I'm just trying to make you a little bit of money here. My job is not just to entertain, but but to explain. To put all this stuff in context. Call me 1-800-743- CNBC. Tweet me at Jim Cramer. Wall street can overreact better than anyone. Earlier this week, an alpha called Citrini Research put out a paper titled the 2028 Global Intelligence Crisis that presented our country as a vast wasteland of white collar unemployables thrown out of pretty much anywhere they previously worked. Because of what we talk about all the time, AI. This piece of science fiction caused a huge downturn in the market, although we've now spent the last couple of days bouncing right back down, gaining 308 points today. S&P advancing.81%. And the NASDAQ, which was really hard hit the other day, up 1.26%. All right, let's deal with this thing's research thesis was pretty much as simple as it was wrong. Anthropic the lovable business to business AI disruptor has such a powerful hand. Trini says it'll pretty much be able to eliminate all white collar office jobs, effectively take out a huge chunk of America's middle class. It doesn't matter. It's real estate, it could be travel, it could be bank, it could be credit. Lose those jobs and you lose all the businesses that cater to them. You lose the economy, recession, depression, massive bankruptcies, the Great Recession too. Now the Great Recession to will include the downfall of a ton of software companies that get their funding from private credit funds firms. The private equity and debt mongers love the steady flow of cash coming from those cloud software business models that are going to be obliterated. And of course here you're thinking about Salesforce which reported tonight close delivering by the way, a robust top and bottom line beat. But their full year earnings forecast came in a little light. I thought it was conservatively made and that was enough to send that stock down in after hours trading as if it fit the Citrini model of Monday. On the other hand, though, they talked about spending $50 billion in buybacks which is equal to more than a quarter of the share count. They're sick and tired of the sell off and they're not going to take it anymore. I don't blame them. I saw a company called Workday report a really horrible number, opened down 12 and ended up finishing almost three bucks. And now Salesforce trades at 15 times earnings. Weird dichotomy. And that's why I'm very glad you'll hear from Salesforce CEO Marc Benioff later in the show. I bet he comes out fighting today. The Citrine worries were viewed as being way overblown. I say you got to take them with a box of Morton Salt. But you know what I like to hear? Contrary views to my own, by the way. Contrary views that include the idea that maybe in video won't be any good. We're going to talk about that in a second, but I wouldn't describe it as being bad as the bear. See it Monday's meltdown gave us a glimpse of the future, but two days later we've been brought back to reality after what's looking like one of the biggest overreach overreaches of all time. Which is right? The enterprise software domino theory or the idea that the global intelligence crisis is all smoke and mirrors? Wait a second. When AI tsunami really wipe out the entire white collar class? Oh come on. That's just not right. This is a case where Wall street took a tiny kernel of truth and extrapolated into a financial tragedy of ridiculous proportions that caused many people to completely freak out and you know, sell, sell, sell, sell, sell, sell. Panic is not a strategy now. It's a case where Nvidia seem winter and even that goes away in a depression. I'm going to tell you one thing, it sure isn't going away tonight. Not after that blowout quarter. Of course I am concerned about most enterprise software companies. They are in the crosshairs of the bears because they may not be able to reinvent themselves fast enough but not because they're threatened with extinction. I don't see this anthropic great firm wiping them out. I just think they maybe won't be able to make as much money as they used to which is why they're now getting lower and lower priced earnings multiples salesforce 15 times earnings. I do believe that some of the private equity and private credit firms that we're so worried about will have to take real hits. Maybe some of these funds can bring in money from individual investors because these companies are campaigning for the uninformed to come in to get those high yields. I don't like that. I agree with my old friend Lloyd Blankfein, former CEO of Goldman Sachs, author of Streetwise comes out today a great new book where he questions the goal of these private equity firms that are so desperate to get liquidity they want to hit up regular people. They would hit a view for cash in order to make their more sophisticated investors whole. Don't be fooled. But in the end I think most of the private equity and private credit firms will simply make less money. That's my theme. No apocalypse, just less money. They're going to have to be more realistic. They're going to have to do a little bit worse and accept that maybe some of the funds may disappear but the overall industry I do not think is truly about to blow up. At the same time, I don't believe in the white collar job apocalypse. Maybe I can eventually place most of the positions but it's going and that's very bearish. But it's going to take many many years for that to happen in many new jobs will be created in the process. So tons of stocks this total for Monday. Retailers, credit cards, banks, travel, should all come back. And which ones in particular? You know, I like names. I like to mention companies. I like TJX which had a terrific quarter. Homegoods was amazing. Marshalls, TJ Max. But it stock got hit anyway because it had been straight up. Management's always cautious in the conference call. I like the credit card companies. American Express got killed. That's a great company. Capital One, so good. I like Booking Holdings. I like Marriott for travel. I think the travel bull market lives. They won't be brought down by Anthropic. My favorite, the banks, Wells Fargo, Goldman Sachs. The former because it's doing the best job of integrating. I just hired a whiz from Amazon Web Services. The latter because it's the closest we have to a pure play of investment banking at a time an investment bank is on fire. These are entrenched companies. They're not going to blow up. Many of these will use AI to cut costs. Perhaps better than a salesforce or servicenow or workday could. Maybe not though. Maybe these software companies can do it cheaper to stay competitive and just make less money in the process. You see my theme, make less money. Price, earnings, multiple goes down, but no apocalypse, no extinction. Okay, there will be some earnings degradation, but I accept that. And you have to look, the software companies are survivors. They can merge, they can adapt, they can do whatever is really necessary to get it so they stay in business. They're priced for perfection though. And they do seem to have, let's say, kind of a rugby scrum feel about them. And we don't pay up for scrum. 15 times earnings for Salesforce. Something's wrong there. I'm talking real earnings here. When you include the impact of stock based compensation though, so am I worried. Well, look, you have to be worried. But I am not worried about the impact on the broader economy. I think AI helps the broader economy and for that we have to look no further than the most important company in the universe, which is Nvidia, which just reported a healthy top and bottom line beat. 75% growth in a data center, also gave better than expected guidance for the current quarter, enough to send the stock higher. Although remember, there'll be people who will say it's the end. They always say it's the end. You know me, I say you own in video, don't trade it. Even better, it doesn't seem like they're feeling much of a pinch from the memory shortage because their margin guidance was strong. We know Nvidia has been cleaning up with these hyperscalers and once again demand is off the charts. So for all the hammering about how I will be an engine of wealth destruction, it's hard to deny that it's also an incredible vehicle of wealth creation. And that's where I come down. Of course, regardless of where Nvidia trades tomorrow, what matters is that Nvidia has created the Entire AI boom with its ultra fast chips that can reason and accomplish time consuming tasks for a fraction of what you pay a human. Which means a plentiful amount of new businesses are coming. Nvidia is the bedrock of the fourth industrial revolution that will create more jobs than it destroys. I, I can't promise you that, but I'm sure, sure optimistic that that's going to occur. And, and that's certainly at odds with Monday's doomsday paper and doomsday stock market. I know those who just started, you may think maybe I'm just a Pollyanna, an older Pollyanna, but I'm old enough to remember what happened when the PC wiped out most of the big iron in tech except for IBM. The cheap PC was ascendant. Seemed like nothing would take its place. And then this was born. The iPhone. This was a total revolution in itself. It was, it was creating an app store that only employs millions upon millions of people. From the apps themselves to hardware to software to phones to PCs to all of the, let's say the accoutrements. And I say this to all of you naysayers out there. Did the iPhone destroy more jobs than it created? Did the PC? I don't think so. Don't think that this is either. Don't get pessimistic. Don't get sucked in. Here's the bottom line to all you naysayers. Tonight in video reported a picture perfect quarter. It shows me that is alive and well and actually making a ton of money for more than just Nvidia. Oh, we're going to have speed bumps. We're going to be fooled periodically. But let me tell you something. My optimism, which is including this moment, it has put me on the right side of 49,000 Dow points as I first walked down this street. And I got to tell you, I'm not changing sides anytime soon. Let's go to David in Louisiana. David. Greetings Jim and Sample Paradis from the Big Easy. Got a question, Got a question concerning Yum Brands. They recently announced they might spin off their pizza business. What's your opinion on a stock after seeing Domino's? Decent results in that. Okay. I'm so glad you asked about this. I was doing a piece about fast food. I will tell you, I think Yum brands, the stock has been a horse lately. It's up 9%. I want you to hold it. I would buy any Yum brands if it dropped because that plan to shed Pizza Hut, spin it off, whatever is going to give you amazing numbers because of how well Taco Bell is doing Taco Bell will shine, will know how great it is. Own Yum Brands. Kurt in Tennessee. Kurt. Mr. Kramer, how are you doing? I am doing well, Kurt. How about you? I'm good. My question is I bought a lot of this when it was $68 a share and it ran all the way up to 350 or 360 the stock today and it's had a pullback. I want to know what your opinion is on Visa. Okay. Right now there are people who are actually, there was a piece that came out on Monday talking about how Visa is going to be in huge trouble. Visa. All right. Here's the way I feel. I like both visa. I like MasterCard a little bit more. These are terrific growth companies. Periodically they sell off. Periodically they are cyclical companies. What? Not cyclical in their business, but cyclical. Whether they're loved by the stock market, whenever they're not loved. Like right now. I got it. I got a solution for you. What can I say to all the naysayers out there? Look at the quarter Nvidia just reported. The trade is alive and it's not wiping out anybody anytime soon. You may have to pay a little less for some companies, but you'll be paying a lot more for others. Homemade money tonight, shares of Arista Networks, one you're going to pay a lot more for. Stolen out so far in 2026. So what? What's going to get the AI networking player that has been one of the best performers in my lifetime moving again? Well, let's just check in with the company's top brass. And salesforce has been in the eye of the software storm. The stock's trading down. Why don't we do this? Why don't we do this? I think it's a good idea. Let's listen to CEO Marc Benioff. Maybe he sets the record straight after the company reported a great number. I know people want to sell. They wanted to sell workday this morning and how long were they. And Snowflake is also on the move after reporting earnings. I'm going to sit down with the CEO to see what's next for the company. I suggest you stay with Kramer.