← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 4/1/26
00:44:17
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer
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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 Cramerica, friends. I'm just trying to make a couple bucks here. My job, not just entertain. Do some teaching. Call me 1-800-7-3 CBC Tweet me Jim Cramer. Whenever the market gets clobbered and then starts crawling back, you always hold out hope that there'll be a broad advance. Lots of different groups powering higher, easily accessible to the masses. That might have been blown out by the Justin Juror decline as we pound our way through our second day of this rally. I can definitively say that, well, this is not one of those moves. This one is limited, small, lacks any real leadership that you can hang your hat on. At least so far. It's worth filling you in on the disappointment after a seemingly strong day with The Dow gained 224 points as we jumped 0.72%. The Nasdaq went up 1.16%. Because I want you to understand my skepticism now about the rally. I was looking for more today. Why don't we start with a big winner so you put them in context. They're heavily involved with one industry. I want more than that. The data center, of course. First we have the big four of memory. Western, Digital, Sanders, Seagate and Micron. We often hear that the world's short of memory and storage. What they really mean is that we need to store a lot more data for AI to comb through. These four companies make storage their semi constant presence on the new high list. How come? Because memory was a bad business for so long. Almost a pure commodity loan margins. So when it turned out that they were sitting on a gold mine thanks to the rise of the data center, well they were quite flat footed. Only Micron is adding capacity at scale and it's still sold out near term. So are the others although they're trying to build new kinds of storage. But that's for 2028 and 2029. They just can't build capacity fast enough. And until someone can build a different kind of storage, their stocks might continue to roar higher. Even as a purist like me doesn't want the market to be led by the stocks of companies that are basically sold out and I can just raise prices but not do more than that. We want to be led by companies like in video which are producing product and selling it as soon as it comes out because it's so desired. Nvidia deserves a premium price during these multiple. These companies not so much, but it really hasn't done much. The second group of stocks leading us higher are the fiber optic plays that help transport data within the data center. Now we're talking about Lumentum and Coherent and Sienna. They're all part of the data center plumbing. Nvidia's put $2 billion each into Lumenum and Coherent cementing their relationships. Good investments. Again, not a lot of companies in the fiber network and connect business. Semiconductors and companies related to them are always on the biggest gainers list. This time it's intel that's leading because the company's buying back part of an Irish facility it sold to private equity when it really needed money. So see, it's a sign of strength that they're buying it back. Intel's balance sheet after cheating for so long is now rock solid. Then Turadine squeezed in the top gators list that's all about semiconductor test and measurement equipment. Again, narrow, narrow, narrow. Finally a lone non data center non semiconductor stock appeared on the list. It's new. My new, my mining. What a classic letdown to be led by a gold miner. Not even the best one, which is a Nico Eagle. Listen, I love growth stocks. I talk endlessly about the need to invest in growth stocks. Only a handful of these winners are actually growth names. The rest are companies that raise price for a living because they're benefiting from shortages. So what do I want to see next? If this rally is to be believed. Like the rally we had last spring as the President gradually rolled back his liberation day tariff announcements. Well, the first thing I'd like to see is actual data center leadership. Actual. And that would mean Nvidia, with a stock that starting started strong today but then fizzled. Or how about Quarterly, which builds and manages data centers and barely held its head above water today. Same goes for Amazon, Meta, Google and Microsoft, which need data centers and can't stop building them. Today wasn't a bad showing for Amazon. That and Google. But once again, Microsoft failed badly. I can't tell you how worried I am about the stock of Microsoft and what it's up to or not up to. There's a palpable sense that something's very wrong there, that it's lost its way. That Copilot needs to be redone. Now, I don't want to oversimplify things, but if you work in an office, there's a fairly good chance that that your procurement company gives you a company that's a computer that's loaded with Microsoft product. There's also a fairly good chance that if you can afford it when you get home, you got an Apple machine. Now think about this. The fact that you're given a machine at the office that's stuffed with everything Microsoft, that you're bombarded by Microsoft's internal and infernal ads, that you're told endlessly to use Copilot, that full screens pop up to get you to use various Microsoft products and the stock still can't go higher. That's just, just incredible. They have the biggest edge imaginable. A totally captive audience thanks to their dominance with Windows. The idea that people rather pay for their Apple device than use the computer they get for free with all sort of IT help. I find that almost unfathomable. It's downright painful. I know of no other product with that kind of head start that isn't the dominant part of your work life. I pay for every service out there except Copilot because I just don't see the value versus the others. But you know what? That doesn't mean anything. Here's what means something. I'm baffled. You know who doesn't seem to realize that things are awry? Microsoft. There's not a peep out of them that anything might be wrong. If you listen to management, they still seem to think they're kings of the world. Why do I own Microsoft for my child? Trust. At this point, because the people who run the company really are smart. They really are serious. Surely they're concerned that copilot may not be the answer. Definitely. They've got to understand the things that I've said. Do they use Apple at home themselves? Would they lose their job if they did? Either way, I think Microsoft gets its act together and I am hoping they do be good for the country. But the stock in my trust portfolio, it's on borrowed time and I've done a bad job owning it and that's up to me. Like I said yesterday and today with Nike, I screwed up by owning this stock. Made me a lot of money for a long time. What does that mean? Second, I'd love to see some strength in the retailers. Don't look now but the stock of Wal Mart is barely up on Costco and Target both down. Home Depot's up lows is down. Pathetic parody of strength. I always want to see some strength in the financials, if only to see if there's a hangover from the problem that caused the downturn. The war with Iran. But JP Morgan and Bank of America barely up. America's press unchanged even as it's down more than 18% for the year. I would have expected more. Finally, because we need rate cuts to sustain this rally. I would have liked to see the homebuilders rally, but other than Dr. Horton we're just not getting the pin action. That we need. Remember, housing punches above its weight class in the economy because of all the accoutrements that go with a home sale, including RH by the way, which is down a cool 27 points or 19% thanks to a bad quarter last night. RFH has a mountain of debt, 2.4 billion. It missed the quarterly estimates and bought back a lot of stock at higher prices. It's a suboptimal situation. Here's the bottom line. This second day rally isn't necessarily a failure. But students of rallies know that the second day should be powerful with new leadership and a follow through that's broad, that lasts until 4pm and doesn't quit in early afternoon. That didn't happen. This rally started losing stream around 1.30pm Still a good day, but it could have been much much stronger and much much worse. More powerful. Let's go to Julian, Florida please. Julian.
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Hey Jim, how's it going? Thank you so much.
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Oh sure, thank you.
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Yeah, just wanted to ask a quick question about Snapchat Inc. And yeah, just how you feel overall about the future of the company and I saw there was an update on them charging more for storing memories and just overall on the future growth of the company.
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And the company that I've been recommending is short for many, many years now. It does have an activist investor. Maybe they can get them to do something or even sell themselves. But you know, five bucks maybe, I don't know what a couple bucks up, one down. Not a bad ratio, but nothing I'm interested in. All right. We want to rally with broad leadership that lasts throughout the day, not one that quits in the middle. Well made money tonight as we cap off the first quarter of a volatile year, I'm taking a look at the leaders and laggards of this market. First, I'm running through the top 10 best performers yesterday. See what's working and whether the themes have any Stay then. Tech has been the leader of the laggards this year, so I'm honing in on the worst of the worst when I look at the bottom 10 performers in the NASDAQ 100 and private player Semianalysis has become one of the most trusted voices in chips. Don't miss my exclusive with the founder and CEO. Stay with Kramer.
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Don't miss a second of Mad Money. Follow imkramer on X. Have a question? Tweet Kramer Madmentions. Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com
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What made you confident that you could do something that hadn't been done before?
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I have no fear of failure. Trailblazing women, changing the game One of
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my favorite pieces of advice Think about what your boss's boss needs.
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Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get. Your podcasts.
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Finally close the books on a pretty terrible first quarter. Even if yesterday's phenomenal run. The Dow finished the first three months of the year off 3.6%, the S&P tumbled 4.6%, and the Nasdaq lost 7.1%, mostly thanks to the war with Iran causing a monster spike in oil prices. Still, there were some real winners out there, even if they were pretty hard to find. Which is why tonight I want to go over the 10 best performers, the S&P 500 for the first quarter after the break. We're going to come back with the 10 worst performers in the NASDAQ 100, because that's the tech heavy index where the most heinous declines were in tech. I just felt we should put those two different ones in nice contrast with each other. Let's start with the best of the best. We're coming back to the worst of the worst after the the break. When you look at The S&P510 biggest winners over the last three months kind of looks like what happened today. Most of them are either tech hardware plays with exposure to the data center as I talked about at the top of the show, or their materials and energy stocks that soared thanks to the war with Iran, causing shortages. Let's do tech hardware first. The number one performer in the S&P was SanDisk, up 167.7%. The maker of flash memory storage products more than quadrupled last year, and it kept running in the first quarter thanks to the data center induced memory shortage this year. This time Sandisk broke away from the rest of the PAC, Western, Digital, Seagate, Micron, which are up 18 to 57%. It's still pretty darn good, but nowhere near close to sandisk. The thing is, while the memory stocks were all white hot in January, then resilient in February and early March, they did get obliterated over the last couple of weeks. Micron, for example, reported incredible quarter mid March, but its stock fell from 461 on March 18 all the way down to 321 on Monday, even though it was a good quarter. Can these stocks recover from the recent pullbacks and start moving higher? Well, if you're a memory bull, the last two days have been pretty darn encouraging. As soon as President Trump started talking about unilaterally ending the war, Sanders and his compositors caught fire. I always tell you this is inherently a boom and bust industry, but we've only had four quarters in the boom so far. Historically, I've found that they tend to list at least six. Still, my guess is that the Easy money's already been made here. I don't blame if you want to try to be in, but it's not my style. Next up, the second best performer in SB was Lumentum Holdings. That's a fiber optics play that just got out of the index last week. Hence the 90.7% gain in the first quarter after the stock quadrupled last year. As long as the data center build out continues on a bit, I think these fiber optics stocks can keep winning. Although maybe not as much as they've been winning over the last 15 months. Still good for them. Welcome to the big show, Lumentum. Going further down the list, the eighth best performer, Siena is. It's in the same boat. It's another fiber optic play that's up 66% thanks to surging demand for networking from the data center. Sienna also returned to its place in the S&P 500 back in February. As long as we keep building these things that are need companies like Sienna. So again, you see the pattern that I'm concerned about. These stocks just came right back today and they provided the leadership for the first two days of the quarter of today and then last day of the quarter. Here's the problem. We know how bad the last quarter was, right? So therefore we know these don't have a lot of followers and they don't have a lot of followers even today. Let's talk about the next group. The companies that benefit from Iran's shutdown of the, of the Strait of Hormuz. You got Lynde El basel, it's up 86%. Plastics. Dow up 78%. Polyethylene, chiefly the third. Well, they make a lot of this, but that's really the driver. The third and fourth best performers in the sb. These are two commodities. Commodity chemicals companies and their stocks were some of the worst performers in the index last year. But they are already starting bouncing back in January, weeks before the war with Iran kicked off because everybody thought we'd get multiple rate cuts this year. And that's true for textbook cyclical stocks like petrochemicals. Turns out they benefit even more from petrochemical shortages caused by the Iranian government. I think Dow and Lionel Basel might be at risk of a pullback of the war ends and the Strait reopens. But then again, there's a real possibility Iran will come. Keep the straight closed after we leave just to show us they mean business. I don't want to, I really don't want to mess with these. I think you should. Kitchen. Kitchen. The seven best performing the SB was CF Industries, up nearly 68% which makes some of the key inputs for fertilizer. Even before the war, we had the beginning of a bull market in agriculture. Then when the Persian Gulf got blocked off, we realized there would be a fertilizer shortage. Now that's bad for just about everybody, including you, because food price could have gotten, but it's terrific. CF Industries and its compadres, not that many of them. Next up, I was a little surprised that the crude oil up more than 70% year to date, there were only three oil plays among the SB's top 10 performers. APA, Texas Pacific Land, which you know we've liked a lot, and Oxidants Petroleum, which frankly we haven't liked at all. Apa, the old Apache finished the quarter up nearly 75%. That's good for fifth place in the index. This is a major independent oil and gas producer that's been a long term underperformer. But crucially, they have no exposure to Persian gold. Next was Texas Pacific Land. That's a quirky story since 65% gain, making it the 9th best performing the SB. These guys own a bunch of land in the Permian Basin and while they don't own the mineral rights, they lease their surface holdings to energy companies that want to drill while also selling them water, which is essential for fracking. But the stock's down more than 14% this week, which is what you would expect if the war ends. This is kind of a prelude. The strait reopens and the price of oil comes down. How about Oxy Oxygen Petroleum is up 58% ever since Oxy is known acquired Anadarko nearly seven years ago, it became the higher risk way to play the price of crude. People do that instead of buying a crude index, they buy Occidental. When oil goes higher, this stock rallies hard. But when oil comes down, the stock gets pulverized. Basically, Oxy is a big loser. Peace breaks out and a big winner for Renaissance System. Keeping the straight close. Finally, aside from the datacenter plays and the commodity plays, there's a one off in the top 10 list and that's Moderna, up 72% in the first quarter. The sixth best performing, the S and P Moderna cleaned up during the pandemic, but then spent years lost in the wilderness as they never came up with anything that could replace the COVID vaccine. Lately though, the stock's been breaking out, settling key lawsuits that have been an overhang. Getting its new flu vaccine reviewed by previously hostile FDA and Then last month we learned that Dr. Vinay prior facade, that's the vaccine skeptic who are of K junior put in charge of the vaccines at the fda. He'll be leaving at the end of this month. Great news from Moderna, which is primarily a vaccine company. So here's the bottom line. When you look at the top 10 best performers, the S&P 500 last quarter, you find a few IT hardware names, some commodity chemicals and energy stocks that benefit from high prices thanks to the Iran induced shortages. And then Moderna, which had one positive catalyst after another. But what about the underperformers? I want you to stick around after the break. I'm going to go over the worst of the worst in the Nasdaq 100 a little bit eye opening. Mad Money is back after the break.
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Coming up amid a tough first quarter for the Nasdaq, which stocks were the worst of the worst? Kramer's revealing the bottom 10 next.
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What made you confident that you could
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do something that hadn't been done before? I have no fear of failure. Trailblazing women, changing the game.
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One of my favorite pieces of advice, think about what your boss's boss needs.
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F
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Change Makers and Power Players. New episodes every Tuesday, wherever you get your podcasts.
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For the break. I went through the top 10 performers in the SB 500 during the first quarter. But the winners really don't tell you the full story, especially when the quarter was pretty terrible for the market. Now we also need to focus on the losers. For the first quarter, they're the worst performers. It was very tech heavy and that's why we want to go with the NASDAQ 100. That's the hundred largest non financial companies in the NASDAQ composite. Every single one of these. This is amazing. Every single one of these is an a displacement story. Even if competition from AI hasn't really started hurting them yet. Premature, but Wall Street's convinced the damage is coming and I've got to tell you, I'm starting to agree with them. The worst NASDAQ 100 stock first quarter wide margin Atlassian down nearly 58%. Covenant makes collaboration software, particularly for software developers, hence its symbol Team tam. Given that AI has gotten very good at writing code, that's the basis of the displacement narrative. Atlassian is basically ground zero. Investors think that there's no need for software developers to work together on Atlassian Tools. Oh God, they were so popular at one point. In fact, they may not need to work together at all. They can all just work with Claude. Of course Atlassian still doing fine now they reported a beat and raised a quarter in February. But good luck telling the sellers that there are places where where I'm willing to stick my neck out and bet against the displacement trade. This is not one of them. I think it feels too darn risky. Second worst performer wow. Much loved company App lovin down almost 41% this is a former market darling which helps mobile game developers and other digital businesses to grow their reach and monetize the platforms through advertising. Had the business to itself. It's honestly it is a very fine business by the way, with fantastic growth, impressive profitability. But the stock got really expensive entering this year it was selling for more than 45 times earnings. That left the stock of Applovin very vulnerable. If your stock has a high multiple and there's even a whiff of concern that it could be displaced by AI, then investors will sell first, sell, sell, sell and ask questions later. Third worst was one I really wasn't that familiar. It's called costar group, down 40%. Now you can think of it as kind of the Zillow of commercial real estate. Problem is, this quarter was brutal for companies to compile and organize useful data, a business model that can easily be duplicated by the big platforms. Is that the right read though? Doesn't really matter for now. The fourth worst name in the NASDAQ 100 was a company that I used to adore and it's called Workday. And its stock was down 40%. The company makes enterprise software for corporate finance and human capital management. Hey, you know what? This is another double whammy situation. It's an enterprise software company. Strike one. And it's a it's focused on human capital management tools. Strike two. You know why? Because the rise of AI means layoffs. I have a lot of respect for Workday and like to say that the concerns here are overblown. But I tried to say that at the end of January and then almost immediately the company CEO at that point, Carl Eschenbach, stepped down and worked there in Porter mixed quarter with plenty of issues for the bears to be pick at. I've learned my lesson. Don't try to be a hero in this group. The fifth worst NASDAQ 100 while you've seen this fellow on Jay Shorter, Zscaler, down almost 38% in the first quarter. Zscaler is a cybersecurity play and Wall Street's convinced cybersecurity is vulnerable to AI displacement as any other kind of enterprise software. Now, as you heard directly from crowdstrikes George Kirsch last week, Palo Altos, Nike Cash Flow last night, that's actually dead wrong. And here I will draw the line. It's dead wrong. Of course, if you want to bet on cybersecurity, I'd much rather own CrowdStrike or Palo Alto Networks then Zscaler. We own both the Chapel Trust. But in fairness, Zscaler shouldn't have been hit all that hard. Six worst. Another one. I want to kind of stick my neck out a little bit here. Intuit was down nearly 35% in the first quarter. I'm willing to stick my neck out why for into it. Because if the Even if the platforms can develop similar software, they don't have the brand that consumers and small business owners know and trust. Nor do they have Intuit's network of experts that can get you out of a jam. And by the way, the accountants liken to it. Remember that this stock got hit hardest in January and February, but then actually up 8% since CEO Sassan Gadargy spoke to us on February 26th. I'm hoping that's the start of a larger comeback and I think it deserves to. But I know it's going to take time because people have written it off. Number seven, odd one. DoorDash. Down nearly 34% in the first quarter. That's right. Doordash displacement bears have been coming for all the sorts of online marketplace stocks. Why a company like Doordash is all about network effects. But the doomers say these network effects go away once all information is available to everyone via AI platforms. I don't buy that. Once the user base is there, I think it's very hard for these marketplaces to be toppled world and DoorDash is now the cheapest it's ever been. I like it. I think the stock of Doordash can be bought here. The eighth worst name in the NASDAQ 100 was Thomson Reuters, down nearly 32%. This is another example of a business services play getting hit by a competition fears. Thompson makes software that compiles financial data which we use here. Mad money. And they also own Westlaw, a similarly essential online legal research service service. You don't need Westlaw though, if you have a system that can comb through all the decisions Ever written Just a few seconds. Can Claude do all the things these platforms do? Wrong question the right question is do you want to stick with Thomson Reuters while we wait to find out? Money managers won't do that. The ninth worst decliner is Adobe, which was down over 30% in the first quarter. But that's really just the latest indignation. Indignity, I should say, for this snake bitten former cloud king, which everyone knows is, or at least they assume is toast. At $241 and change, Adobe stock is down more than 65% from its all time high set in November 2021. Stock now trades at just 10 times this year's earnings estimates. It's trading like a homebuilder for heaven's sake. But any time OpenAI, Anthropic or Gemini comes out with some new design tool, Adobe stock goes lower. They now have new competition Figma, which is. It's also been terrible to the stock Canva. There's. That's an ultra cheap option. So why am I. Who am I to say that Adobe stock has gotten too cheap? It can always get cheaper. One day the design schools will leave behind Adobe and start their students on Canva. That will make the end of Adobe's design dominance and it could be existential from there. Finally, There's Shopify, down 26% in the first quarter. This one's like app love and it's got a great business with tremendous growth and impressive profitability. But its stock just got too high. Even here it sells for 64 times this year's earnings estimate. Frankly, I don't think there's a compelling disruption case against Shopify. These guys are mission critical for small medium sized businesses that operate online. Unfortunately, money managers are no longer willing to pay a premium multiple for this kind of company. And 64 times earnings ain't cheap. Here's the bottom line. The biggest losers of the first quarter were nearly all victims of a displacement worries. Even if some of those worries are less legitimate than others. Still, unlike the war, this is a problem that's not going away. Iran might stop shooting at oil tankers in the Strait of Hormuz, but Anthropic will never stop gunning for the enterprise. Software plays. Let's go to Chuck in Florida.
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Chuck, Dr. Kramer, a big, big, big snowbird Buckeye. Booyah to you.
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C
Well, I'm liking that and I like the spirit of it. I like the intent of it. How can I help you?
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D
Well, first let me let you know I'm a club member and I'm digging it.
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C
Oh, fantastic. You know, Jeff Marks and I work pretty darn hard and it's obviously well received. I know we're doing a promotion for the club that I'll probably talk about at one point if I haven't already. Ah, okay. Let's go to work.
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D
Yes, sir. Hey, my question is about that rule of 40, juggernaut palantir.
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Well, you know what? Palantir, right now I have to tell you. Here's what's going on with Palantir, Chuck. It was a very hot stock. It was. It's a great company, first of all, I mean a great company. And sometimes stocks mirror how stocks do and sometimes stocks just get overheated and sellers come out. Palantir is basically building a new base because boy, their business is strong. I'm relying on the customers. The customers love them and therefore I think they've got a great product and therefore I think they will have a great 2026 and 2027. Anyway, the biggest. And thank you for the. Thank you for the nice comments. The biggest losers of the first quarter were nearly all victims of a displacement worries. I think this is a problem that's not going to go away and I'm going to keep highlighting for you in all the shape year because you need to know why these stocks are going down. Now there's much more made money ahead including my exclusive with Semianalysis. The founder of this research company has become a go to voice in the chip industry with his work reaching all the way up to Jensen Wong. Don't miss our wide ranging conversation then. Big news out of Eli Lilly is pushing the GOP Dash 1 space further in the future. I'm giving you my takeaways and of course your calls. Rapid fire at tonight's edition of the Lightning round. So see stay with Framework. I think this is going to be a terrific segment. When you look at the best performers in the first quarter like we did earlier, you remember them are a data center plays when you look at the worst performers, well they're practically all victims of AI displacement. That means it pays to know more about the entire AI supply chain. Which brings me to Semi Analysis. That's an independent research company specializing in chips and AI. They formed from a substack account into a global team of analysts and engineers that recently got a shout out from Nvidia's Jensen Huang at the keynote speech at gtc. These guys are the gospel. So let's check in with Dylan Patel. He's the founder, chief analyst and CEO of Semianalysis to get a better read on the industry. Mr. Patel, welcome to Mayor Money.
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Thank you for having me I don't know for the gospel, but certainly I'm happy to be here in April Fools, especially to thank all the fools who have sold memory the last few weeks.
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C
I like that. I like it because you're iconoclastic, but you're accurate. You do the benchmarking, which is the most important thing. So I, yes, do regard you as gospel and what someone in your position, I think, can help us. Is there a misconception between what Wall street thinks of tech and what you know to be the case when it comes to actual tech?
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I think absolutely. The street often overreacts to a lot of things that are happening. Some of those things include the last few weeks, a lot of the compute names that fall, and of course there's volatility and worldwide panic and geopolitics happening. But in many cases it's like, well, the last few weeks the price of H1 hundreds have gone up empirically within the market. Everyone sees the compute crunch happening and yet for some reason the cloud stocks are going down. It's things that Wall street versus what the actual technology and what's actually happening in the market differ.
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C
Well, do you find things too doctrinaire? For instance, when you talk with people on Wall street, they'll say sass is finished. There's no value SaaS. Any of the companies that were taken private that are SaaS are finished and they're part of the private credit morass. Whereas other companies that anthropic and open air seemingly can do no wrong.
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I mean, I think we were some of the first people to push this narrative. You know, even late last year, we were talking about how the cost of software is collapsing. And so it really depends on what the software business is. If your customer acquisition cost is extremely high, then the companies that have existing customer bases are worth something. If your customer acquisition cost is not high, then your business is finished because your product can be replicated at a much lower cost than the R and D you spent over the last X amount of period of time.
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C
Well, I can tell you, Dylan, that that is a metric that doesn't get much attention on Wall Street. We do air are and we, we talk about who's got the best promote and who's the most exciting. But that is a terrific metric that I have to start incorporating. See this example I wanted you on. I think we make, we, we oftentimes judge companies by how they were in the past and we don't think about how they will be in the future. And how they will be in the future is about scale. And they can't have scale if they charge too much. I'm going to ask you about the most controversial stock that we think, Adobe. We don't understand how Adobe can still be, say, $100 billion company or close to it when they're charging so much and people are willing to get a product that's very similar for far less. What happens?
- [31:57]
G
Adobe is the funniest one because we see it oscillate between being, you know, oh my God, they're dead from AI to oh my God, they're incorporating AI so fast, they're great to oh my God, they're dead for me. And I think right now it's still, you know, they're great because they're incorporating AI quickly. It's pretty abundantly obvious that the average user does no longer need, no longer needs Adobe subscriptions. And what's actually happening is that a lot of video production and video editing is starting to require it less and less as well. Now Adobe thankfully has this entrenched market position and so, and people are pretty stubborn in terms of moving off tools. A lot of their markets actually hate AI, so they have some durability here. But ultimately, at the end of the day, people are going to be transitioning away from using a lot of these classical style video editing. Adobe has to reinvent themselves now, will they? I think they're trying really hard. I think they recognize they have to reinvent themselves. But today the cost of editing video and image is much lower than it was even two years ago. And that is a real impact on their value long term.
- [32:57]
C
Totally right. Totally right. There's just been this legacy of love that doesn't work now. When I was at gtc, I was watching Jensen and he was trying to figure out how we could describe that. He understands inference when a lot of people feel it. I don't want to get too, too in the weeds for our audience, but that he's training and inference is so important. He used you your date, he used your benchmarking to show that he was the king of inference. What did that feel like for you? Because I know that was not why you did it.
- [33:31]
G
So, so to recap, right, we run over $50 million of GPUs that are provided to us from companies like OpenAI, Microsoft, Crusoe, Oracle, Core, Reeve, etc. They donate the GPUs to us for this open source benchmark where we run all the world's open source models and we run them every night because software changes every day and we didn't we didn't expect Jensen to call us out, but hey, he called us out. And it felt surreal to be, to be recognized by the world, you know, one of the world's most important executives, most important people. To recognize the work that we do, a lot of it for free is, is so exciting. And it took so much blood, sweat, tears from the team to build this benchmark that we open source entirely so we don't even make money off of it. Of course it spawns all this other consulting and data business downstream. But ultimately it's something that we give away to the world for free. And so it's really amazing that people
- [34:20]
C
recognize that free work, well, it's an honor deserved. No one else is doing the kind of work you're doing. I want to ask you about another misconception when it comes to Wall Street. We just chronically talk about we in because I do mouth some of what Wall street says says I admit that, that these companies are overspending and that the Capex is a disaster and yet I look and see we can't even spend as much money as they're talking about. But I need you to tell me whether we are over focused on overspend.
- [34:52]
G
You know this is the, this is Capex is sort of like the bullwhip. And at the end of the day right now every dollar they put to work they're getting multi year contracts with gross margins that are pretty good. Whether it be a Core Wave or a Microsoft or an Oracle or an Amazon or Google, these companies are putting money to work and they're getting really attractive returns from it. It could be one day all of a sudden as this, you know, they're spending 30% or more each year on year. At one point the amount of money they're spending could not have a contract backing it and then it all collapses. But currently there is no compute in the market. The price of compute is going up for old compute because there is no supply even though we're building hundreds of billions of dollars of capacity this year. So right now every, every dollar they put to work is them winning the future. And when you look at Hey Amazon, 200 billion Google, $180 billion of CapEx, you look at Microsoft, they're being much more tepid. Is Microsoft correct or is Google and Amazon correct? And I think in my view Google and Amazon are the ones that are right because they're going to win the future and they're going to get good returns on that capital. And the real scary thing that the public markets still haven't recognized yet is draw the line. Look at, look at how many data centers Amazon, Google, Matta and Microsoft are all building next year. Google's free cash flow will be basically zero next year. I don't think the market is ready for this revelation and at the end of the day I actually think that's the correct decision because these are the best capital allocators in the world. These are the best returning businesses that the history of humanity has ever made. And today they stand here and look at us and say this is the most important thing that we can do and this is going to accelerate our earnings in the future. And if you don't agree with them, that's great. But you're on Wall street. You're not the one who actually understands the technology. And not to say that the markets aren't efficient, the markets are smart and efficient. But I trust what they see more than, than what Wall Street.
- [36:45]
C
Well, I've been schooled by Ruth Poor at many times from Google so I know that you're absolutely right. Now, one last thing. I saw a little post that you made about Microsoft 365. I'm not as big a fan. Obviously your comments yesterday indicate the same. I find Copilot to be just unusable and I wanted to know where you came down versus say the others that we all tend to use, whether it be Plexi or Grok. I've been grown comfortable with Gemini Chat. CBT is too chummy with me. How do you rate Copilot as part of the mix?
- [37:18]
G
I think Copilot, you know, Microsoft, if they executed they would be in a golden spot. They'd own and win everything. But they've just failed at executing. And it's really sad when I look at my company's total spend on wages, it is, it is 20 to 25 million dollars. And when I look at my company spend now on AI, primarily Claude code, it is $5 million. And so we're at 20% of my spend. 20 to 25% of my spend is actually on AI now as a percentage of total. And none of that goes to Microsoft, basically none of it. I just buy Microsoft 365 licenses and that's it.
- [37:52]
C
Oh my God, that's devastating. And it's not. That's devastating.
- [37:57]
G
I mean it's fantastic for me because my business is accelerating faster than ever because we're able to do more work than ever. But the fact that Microsoft solutions are just a bare minimum now they are there. Right? I do need sharepoint for everyone. I need Excel for everyone. But more and more I have people who have worked as hedge fund analysts or financial analysts in the past. That's about a third of my company who barely use Excel to make charts, barely use Excel to run regressions. They actually just tell cloud code to point at this data set, look at the CSV and do it. And it's better, more efficient, faster, and we're able to get more work done. And so the tools are changing of the trade and Excel and Microsoft 365 were made in an era where humans worked with computers, but now humans tell the computer what work to do. And that terminal, that vision Microsoft has had, that base layer for everyone. And as we go forward, they don't. And what are they going to do to regain it? It's a truly scary situation.
- [38:47]
C
For that I've been feeling it's existential too. I was actually kind of looking for a little bit more hope than I feel about it. But I can't get that because I will pay Microsoft.
- [38:57]
G
I will pay Microsoft $20 per user or $40 per year.
- [39:01]
C
Look, you're an honest broker. I mean there's a lot of people who need business from Microsoft. You're not one of them. You're just so. You're someone who looks at the facts and the facts are obviously not in their customer. They're not.
- [39:12]
G
They're a big customer. But people pay us for being truthful.
- [39:14]
C
Absolutely. Well, look, I hope you come back, Dylan. You're a great truth sayer and I'm saying gospel. Whether you, whether you think that that's too extreme or not. I'm going with the dope attack. Dell is the founder, CEO and chief analyst of Semianalysis. By the way, guys, if you get it, you can learn so much from semi analysis. It is serious. Mad money is back after break.
- [39:38]
E
Coming up, you've got questions. Kramer's got the answers. Get charged up for a fast fire lightning round next.
- [39:55]
C
It is time. It's time for the white ladies and S rapport Go standard Bye bye by itself as close ahead of time. I stand first to grab some of the implanted sound and then the lightning round is over. Are you ready? Skate D line with Bill Mattress Bill.
- [40:11]
D
Jimmy Jams. How are you today?
- [40:13]
C
I am doing well, Bill. How about you today?
- [40:15]
D
Hey, I wanted to make a quick comment on how to make money in any market. I really enjoyed Mr. Hank. I enjoyed the 10 less. I enjoyed the whole book. I just wanted you to know.
- [40:26]
C
Thank you very much. Yeah, it's a story about me and Pop and how Pop bought the wrong stock and Mr. Hank bought the right stock. Thank you very much. How can I help you?
- [40:34]
D
Beautiful, beautiful story, Jimbo. Should I at this point still add to my Boeing?
- [40:41]
C
Yes, I think Boeing is going to be Bill, one of the big stocks of 2026. I think it can run. I was talking, talking about with Jeff Marks yesterday, of course my colleague on the Chabel Trust that we. I just felt when it was up six, I couldn't pull the trigger. But this thing is going up much higher. It's refreshed and ready. Let's go to Alex in Oregon. Alex, Booyah.
- [41:04]
D
Jim, thanks for taking my call and thank you to your team for always being awesome. The company I'm calling out today is kind of a under the radar civil infrastructure software company with a SaaS apocalypse going on. I wonder if it's worth to go long with this company. They do have kind of a cool moat with their like digital twin. I'm calling about Bentley Systems. The ticker symbol is bsy.
- [41:24]
C
Okay. This is one of those that I've got to tell you, Alex. It should work theoretically. But you know how people feel. If it's a software company, they think it can be disintermediated by AI and there's just no turning back. They're not going to let it go up. So I'm going to have to say no. Let's go to Andrew in California. Andrew.
- [41:42]
D
Howdy Jim. Thanks for taking my call.
- [41:44]
C
Of course. What's happening?
- [41:47]
D
Hey, I was wondering with Silver going up if VZLA Bisla stock was a time to get bullish.
- [41:54]
C
No, no. We're late in the game there and if you still want to go long term, you want to own an Aggo Eagle. I don't want you to own that stock. I think it's a Vancouver risky stock. Let's go to Joe in New Jersey.
- [42:04]
D
Joe. Hello Mr. Kramer and thank you for taking my call.
- [42:09]
C
Of course. Joe, good to have you back on the show. What's happening?
- [42:13]
D
Yes, I bought a third of a position in acm.
- [42:17]
C
Should I continue? I think AECOM is a great company. I'm surprised to see it so low. People like Quanta and people like the letter J AECOM they think is too expensive and there's nothing I can do about it. And that, ladies and gentlemen, conclusion of the Legend round,
- [42:33]
E
the Lightning round is sponsored by Charles Schwab. Coming up, Kramer's tracking the latest developments at Eli Lilly, including approval for its new GLP1 pill which could completely change the game next.
- [42:53]
C
Booyah.
- [42:54]
D
Jim Cramer. I'm a first time caller, a happy club member. I want to thank him for being the people champion of investing. Thank you for helping me become a millionaire.
- [43:23]
C
Today we got big news from you Lilly. The Indianapolis Colossus got approval for Foundeo, which is now the only GOP Dash 1 weight loss pill that can be taken any time of day without food or water restrictions. It's almost as strong as the injections charged at $25 per month. Commercial coverage between 149$349 per month. If you're paying out of pocket when placed head to head against the competing pill from Novo Nordisk, I think Lilly's got a winner. Novos pill has a bit of an edge in terms of weight, but you have to take it in the morning and you can't take it on a full stomach. Among other restrictions. Louis pill you can take whenever regardless of what you've eaten. These little things do add up to a gigantic advantage. Now we know the old GOP one shots have been a big impediment to getting people to take this stuff. Nobody wants to get an injection if there's a pill available. Plus the pill is much, much cheaper. You don't have to store it in your fridge. There's a reasonably pre built inventory for this thing. They are ready for the on onslaught. Ironically though, the biggest news from Lilly may have been something that happened yesterday. That's the acquisition of Sentessa Pharmaceuticals, a biotech company for $7.8 billion. Sentessa is trying to combat narcolepsy and other neurological disorders. They're working on a neuropeptide called orexin, which is apparently something that people with narcolepsy are missing or don't have a lot of. It's possible that orexin can be used for much more than narcolepsy. It could potentially treat drug and alcohol addiction may also be used to combat mood disorders which are all related to sleep in one form or another. Whether it's depression or anxiety or bipolar disorder, they rarely come with a healthy sleep cycle. I like what Lilly's doing here. It's tackling some of the hardest to treat illnesses. Ones that have often baffled and befuddled as drug companies that have attempted to beat mental illness. The path towards successful neurological treatment is littered with failures. The money that Lilly gets from its weight loss drug is being used wisely to come up with breakthrough drugs. As a one time spokesperson for the American Brain Foundation, I can't stress enough just how important Lilly's work is not that long ago I went out west to check in on some of the incredible things that Nvidia is working on in health care. Elon Lilly's partners with them for the Intractables treatments that can only be discovered by using AI. It's expensive to develop drugs for diseases where so many have failed. The hope for their partnership is to look through millions of pieces of data to find out something that might be workable. Let's hope that the Nvidia Lilly Partnership bears fruit. Let's hope that the peptide erection helps treat sufferers of narcolepsy and so many other mental illnesses. And let's praise Lilly for going after health issues that few else would attempt to try. Most importantly, though, let's own the stock because I think this weight loss pill will be a blockbuster. And that's why we've stuck with El with Eli Lilly for the Chabel Trust. Hey, by the way, we're running a special promotion right now where you can save $100 on annual membership and you also get a signed copy of my new book, how to Make Money in Any Market. Just scan the QR code or head to cnbc. Kramer Book Pretty simple, I think. I like to say there's always a bull markets on my podcast just for your man Money. Andrew Kramer See you tomorrow.
- [46:29]
F
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subscribers 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 what made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women Changing the game One of
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C
my favorite pieces of advice Think about what your boss's boss needs.
- [47:15]
F
Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just gotta think big to accomplish big things. Julia Boorstin hosts CNBC Changemakers and Power Players New episodes every Tuesday. Wherever you get your podcasts.