Mad Money w/ Jim Cramer 5/30/25

Summary

Mad Money w/ Jim Cramer - Episode Summary (May 30, 2025)

In the May 30, 2025 episode of CNBC's "Mad Money," host Jim Cramer delved into a variety of pressing financial topics, offering insights into the stock market's current trajectory, the impact of governmental policies on businesses, and spotlighting specific companies poised for growth or facing challenges. The episode balanced macroeconomic analysis with company-specific discussions, providing listeners with actionable investment advice.

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Market Overview and Economic Indicators

Jim Cramer began the episode reflecting on the recent volatility in the stock market, attributing much of the turbulence to the President's hostile stance towards China. Despite initial market dips, particularly the S&P 500's 1.2% decline, the Dow Jones managed to recover, finishing up 54 points and marking the S&P 500's best May since 1990.

• Notable Quote:
  "The S&P 500 ended with its best May since 1990," (00:01)

Cramer expressed cautious optimism, noting that despite the seeming market instability, upcoming economic reports, especially the nonfarm payroll data slated for Friday, could significantly influence Federal Reserve policies.

• Key Insights:
  • Nonfarm Payroll Report: A strong report could deter the Fed from cutting rates, while a weak report may leave rates unchanged due to persistent inflationary pressures from tariffs.
  • Inflation Concerns: Retailers face rising costs due to tariffs, potentially squeezing profit margins unless they can pass these costs onto consumers.

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Impact of Tariffs and Retail Sector Analysis

A significant portion of the discussion centered on the ramifications of the President's decision to impose widespread tariffs, particularly on China. Cramer highlighted the challenges retailers like Dollar General, Dollar Tree, and Five Below face in maintaining profitability amidst increasing costs.

• Notable Quote:
  "If we get a strong employment number Friday, then there's no way the Fed's cutting short-term rates," (01:56)

Cramer commended Costco for its robust performance, attributing its success to bulk purchasing and strategic supplier relationships that mitigate the impact of rising tariffs. In contrast, he expressed concerns over smaller retailers struggling to balance price increases with consumer demand.

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Spotlight on Agilent Technologies

Midway through the episode, Cramer hosted Bishop McDonald, President and CEO of Agilent Technologies, to discuss the company's impressive performance, especially in the Chinese market.

• Notable Quote from McDonald:
  "We've posted 10% growth in China this quarter, and our strong presence there is driving our momentum," (16:29)

Key Discussion Points:

• China's Role: Agilent's longstanding presence and deep connections in China have provided stability and growth, even amidst geopolitical tensions.
• PFAS Division: Agilent's analytical tools for detecting "forever chemicals" (PFAS) have seen a remarkable 70% year-over-year growth, contributing significantly to their revenue.
• Onshoring Investment: The company's $1 billion investment in CRISPR and oligonucleotide technology underscores its commitment to domestic manufacturing and expanding its CDMO (Contract Development and Manufacturing Organization) business.

Cramer praised Agilent's strategic positioning and adaptability, emphasizing the company's role in advancing healthcare and chemical safety standards.

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Retail Sector Deep Dive: Abercrombie & Fitch vs. American Eagle

Continuing the retail focus, Cramer analyzed the performance of Abercrombie & Fitch (ANF) and American Eagle Outfitters (AEO), highlighting contrasting quarterly results and future outlooks.

Abercrombie & Fitch (ANF):

• Performance: While the Hollister division saw a 23% increase in same-store sales, Abercrombie itself experienced a 10% decline.

• Leadership: Under CEO Fran Horowitz since 2017, Abercrombie has undergone a significant brand transformation, though recent mixed results reflect the volatile nature of teen retail.

• Outlook: Cramer remains optimistic, citing the company's strategic inventory management and planned participation in JP Morgan's retail analysis event as catalysts for potential stock appreciation.

  • Notable Quote:
    "If we get any improvement at all in flagship Abercrombie, this stock could go bonkers," (22:19)

American Eagle Outfitters (AEO):

• Performance: The company reported a 5% year-over-year sales decline, with same-store sales down 3% and gross margins suffering a sharp 1100 basis points drop.

• Strategic Moves: Despite poor performance, AEO initiated a $200 million accelerated share buyback, which Cramer criticized as a misallocation of resources given the company's financial struggles.

• Outlook: Cramer advises caution, expressing skepticism about AEO's ability to recover in the near term.

  • Notable Quote:
    "This is not my first rodeo with American Eagle," (various timestamps)

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Cybersecurity Sector Highlight: Zscaler

In the midst of the episode, Cramer shifted focus to the cybersecurity industry, specifically spotlighting Zscaler as a standout performer.

• Notable Quote from Jay Shor, CEO of Zscaler:
  "Our Flywheel is real innovation with zero trust architecture," (34:34)

Key Discussion Points:

• Performance: Zscaler reported a robust quarterly beat, with a 9% stock increase post-earnings, and an updated full-year revenue forecast.
• Zero Trust Architecture: Emphasizing Zscaler's differentiation, the CEO detailed how their zero trust model enhances security while reducing costs for clients.
• Market Position: With over 45% of Fortune 500 companies relying on Zscaler, the company is well-positioned for sustained growth.

Cramer lauded Zscaler's strategic innovation and customer-centric approach, positioning it as a resilient investment in the cybersecurity landscape.

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Lightning Round: Quick Stock Picks

The episode concluded with Cramer's Lightning Round, where he offered rapid-fire stock recommendations based on listener calls and his market analysis.

• Abercrombie & Fitch (ANF): Recommended as a potential buy, especially ahead of upcoming analyst events.

• American Eagle Outfitters (AEO): Advised against, due to ongoing financial challenges.

• Zscaler (ZS): Endorsed for its strong performance and strategic positioning.

• Gentex Corp: Mentioned briefly as a technology company with potential growth in the electro-optics sector.

  • Notable Quote:
    "I actually might even do it with deep in the money calls," (various timestamps)

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Final Thoughts: The Future of AI and Market Outlook

Wrapping up the episode, Cramer addressed the ongoing debate about the sustainability of artificial intelligence (AI) investments. He referenced Nvidia's (NVDA) CEO Jensen Huang's perspectives on the necessity for increased computing power to advance AI capabilities, arguing that AI technology still has significant growth potential and is far from reaching its peak.

• Notable Quote:
  "AI hasn't peaked and how the technology still has plenty of room to grow and improve," (43:58)

Cramer emphasized that while current generative AI tools have limitations, the continuous evolution and demand for more advanced AI solutions signal a robust future for the sector.

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Conclusion

Jim Cramer's May 30, 2025 episode of "Mad Money" provided listeners with a comprehensive analysis of the current financial landscape, highlighting the interplay between governmental policies, economic indicators, and corporate performance. From dissecting the challenges faced by retailers amid rising tariffs to celebrating the successes of companies like Agilent Technologies and Zscaler, Cramer's insights offer valuable guidance for investors navigating the complexities of Wall Street.

Transcript

[Jim Cramer]

As America's leading business lender, bank of America is on your corner and in your corner. With $215 billion in business loans and over 3,700 business specialists across the nation, we help businesses thrive so communities prosper. What would you like the power to do? Learn [e-mail] LOCALBUSINESS bank of America Official bank of FIFA Club World Cup 2025 Copyright 2025 bank of America Corporation. All rights reserved. Don't just ride the index. Seek to outperform it with FELC, the Fidelity Enhanced Large Cap Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other ETF. Discover FELC, the Fidelity Enhanced Large Capcor ETF, part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for prospectus and offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail in index as compared with passive ETFs. Fidelity Brokerage Services LLC Member NYSE SIPC.

[Caller]

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Cramer America. I'll be with my friends. I'm just trying to make a little money. My job is not just entertain you, but to educate, to teach you. So call me 1-800-743- CNBC. Quit me, Jim Cramer. Okay, we need to have a day where it doesn't feel like we're having an emergency tracheotomy with a ballpoint pen. I mean, today was still one more section where we saw that big pin coming right at us. A day where the President was just crushing the market with some postings that were extremely hostile to China. I mean, at one point the S and p was down 1.2%. Then the President had a goodbye press conference for Elon Musk where he said, sure, he'll speak to President Xi soon. And next, you know, we erased the vast bulk of those losses with The Dow finishing up 54 points, S&P dipping point on 1% and the Nasdaq declined.32%. The S&P 500 ended with its best May since 1990. An incredible statistic made even more amazing Given that the President the Elon send off actually ran some positive coverage of the economy by CNBC's own squawk box. Miracles all over the place and no emergency tracheotomy in sight. Yet it still seems like a monumental time. Sometimes you have to just take a breath and ask why things seem so momentous. Notice I said seem because there's nothing on next week's game plan that should have us all that worried. Yet here I am at this wall and and I feel like I'm staring down the barrel of a gun. The gun being Friday's nonfarm payroll report. That's because we have a hole developing. We have heard from retailer after retailer in the last few weeks and we can tell that the lid is about to be blown off of pricing. There's no doubt prices are headed higher for the month of June in all sorts of goods. So let's think about what can happen here. If we get a strong employment number Friday, then there's no way the Fed's cutting short term rates and and longer term rates are going to go higher too. If we had a weak employment number, then the Fed still probably won't cut rates because they know the tariffs are inflationary. You know, Jamie Dimon said stuff like this today, the CEO of JP Morgan. To which I say, what was the President thinking when he decided to raise tariffs on the entire world all at once? Did he believe that energy would come down so much it would make everything just fine and dandy? Does he know something about, say, that OPEC plus meeting this weekend that could send oil plummeting to $50 in the 60s? I hope so. Did he think that retailers would just say, you know what, our lot in life is to make less money now that we have a new President? I put it like that because I can't recall a time when I actually knew for certain that inflation would go higher? That's right. No. When you read enough conference calls, you begin to realize that rates cannot and will not go down on the short end or the long end. Not while prices are rising in every aspect of your life. The Fed doesn't cut rates when inflation is rampant. Your only hope is that retailers will eat the cost of tariffs. But why would the heck. Why would they do that? Retail is not a high margin business. They can't afford to eat the cost. My hope is on Monday when Jay Powell speaks that he explains is somehow better than I did. We don't feel like we're staring into the barrel of a gun now. We've begun to question the strength of all sorts of our institution these days. And we know that the presence of Soren Powell could be horrendous in if we get weaker employment on Friday. But we also know higher prices are coming. The retailers have pretty much all said that higher, with the exception, by the way of Costco. Nice quarter there. And it's the Fed's job to maintain price stability. You don't maintain price stability by cutting rates. Oh, and it's not like the President saying that he wants lower, low tariffs if you make a bunch of trade deals. I think he wants even higher tariffs because he wants to punish. He wants to punish China. He wants an embargo, I think so. The price increases we're hearing about could be the first of many. The creepers everywhere. You know, look, we're going to get earnings from Campbell's Monday morning. And here there was a time when I would tell you, listen, if I get the stock at 11 times earnings with a 4 1/2% yield, I got to buy. Bye bye now, though I want no part of it. Given the gross margin squeeze from the rising cost on everything in the can and the can itself. Oh, let's not forget the rise of GOP Dash 1's weight loss drugs which make you feel too full. They make it feel so you can't have a lot of goldfish. Goldfish. What did they do Tuesday? The kind of day that explains the pain of this moment. We hear from Dollar General in the morning and Dollar General's done a remarkable job at keeping a little prices. But how much longer can they do that? We got to listen. Same as Wednesday when you hear from Dollar Tree and five below. Hey, man, these are so called last resort retailers where you go when you have any trouble stretching your budget. They're masters at finding low priced merchandise, but with the tariffs on China, previously low cost merchandise, they got to scramble to find the equipment from countries that at this point might have more leverage than expect. I mean, they never expect all these orders. I think all three chains will have good quarters because they were able to bring in a lot of merchandise before the tariffs hit. It's the guidance I'm worried about because the tariff regime means that either they need to raise prices substantially or accept a much lower level of profitability. Their stocks could be terrible. I wish they could be as adept as Costco, which reported this outstanding number. Then Costco focuses on a relatively small number of items that it buys in extreme bulk. And it can always swap this stuff out if its suppliers get too greedy. Or nobody else has that capability. My hope is that the dollar stores can raise prices once and then keep them there until they find cheaper sources. That might be tough though when the White House seems to want everything made here and anything made here will be more expensive than made there. On Tuesday night to back up, we hear from Crowdstrike and we know plenty of nervousness here because we've had three cybersecurity plays in a row with poorly received quarters. Palo Alto Networks, Octa and Sentinel one. Meanwhile, there's only one winner, Zscaler, which is on tonight. But what a winner that is. CrowdStrike struck it out and struck out in the last quarter and we told investing club members that it was a buying opportunity. Now the stock's trading above where it was when that last quarter reported. I fear that it will be difficult to meet expectations. I'm sticking with it. Why? Because we're about to annualize the big glitch. Remember that when the crowdstrikes Clark Laura shut down an awful lot of terminals around Worldwide well before then it made a stunning recovery if it could survive that massive outage. You know what I say just own CrowdStrike. Don't trade it. Can I say Thursday morning we get a tale of well and a tale of success. The well brown format maker Jack Daniels and Cracker Barrel is the positive restaurant turnaround along with historically low prices. Now I don't think liquor's bottom beer was really bad last month. Too much shop dash ones too many younger people worried about their health and how they walk and prices that just won't come down. So count me out of brown format. As for Cracker Barrel, so many restaurant chains that offer value have seen their stocks pop and we've seen Darden pop Texas Roadhouse pop. Many things are you see Brinker today look fantastic. This one also has value and a CEO understands that we need to reinvigorate the company stores. Works for me. I want to do a show from the store after the close. We get from results from Broadcom, the trillion dollar tech company that no one seems to ever heard of. I think it's having a bang up quarter. We're telling club members that it could be reporting an excellent quarter because of software is getting great margins that could help us Lululemon. There you go. Ton of business in China. As a matter of fact it's actually been a real bright spot. We did a piece earlier in the week that said that this could be a bottom for the stock and I think it's just too cheap. I'm Sticking by that judgment. Then Friday, of course, is where we need a Goldilocks labor report. I got to tell you, there is one scenario where it won't hurt us, okay? No job growth and no wage growth. That's. Can you believe it? That's what I'm rooting for. This crazy, crazy thing about this whole week is that if we actually get that number, this market could rally so hard that it could make up for any previous losses and we could have a continuation of the great month of May. No job growth and no jobs. That's something to root for, ain't it? Because the bottom line is this ain't baseball. It's your money. Stay long, but no fence swinging, please. It's too momentous for that. I need to speak to Ann in Indiana. Ann. Hey, Jim, thanks for taking my call.

[Jim Cramer]

I'm a club member.

[Caller]

Yes, calling about their Isaac. Look, you know, I've got to tell you, I think fair Isaac's gotten a. An unfair joust from the government. Fair Isaac. You know what? Let's get Will Lansing on the show. He can tell the story better than I can, and he is one dynamite guy. We are going to get him on. I'm going to make it my life's work. Well, I have other things to do, too, though. Let's go to Lewis in Massachusetts, please. Louis. A big Friday, end of May, Nixon 7. Booyah to ya. Oh, my. Oh, wow. This fired a fella. Fired up fella. Help time. All right. First time, long time, member of all your clubs, and thank you for your tireless work you do for us day in and day out, your mentor to me. Thank you, man. I aspire to be the hardest working man in show business. And some people would say I've been making it. How can I help? You're the best. I'm calling about Uber. It seems to me that with pending tariffs in whatever capricious and arbitrary form they'll come in, that new and used prices for cars will begin to shoot through the roof. And with this, I believe more and more people will simply shift a ride share to travel and do things like loading up at Costco. However, on the flip side, there's an argument that robots are going to make them obsolete over time. What's the deal? Can it break through? $100. Give me your. All right, here's my deal. Louis, I've got to tell you, David Faber talked about this today. David Faber killed Kill it. When he was interviewing Elon Musk and there was this thing underneath his picture, said Tesla's not going to buy Uber. I say you buy Uber. I think Uber is the right level down. Huge since that interview. Bye, bye, bye. Hey, why don't we go to David in Tennessee? All right, what's happening? I wanted to get your opinion on Pfizer. It appears that they have six drugs.

[Jim Cramer]

That are in the pipeline to be released, are in phase three and they.

[Caller]

Just bought the rights to another drug.

[Jim Cramer]

From a Chinese company that appears very promising.

[Caller]

They appear to be trading at a pretty low price. They are. You know something, David? I'm with you. 7% yield. It's got to be something big coming out of that CGEN acquisition real soon about some hard to beat cancers. I am with Albert Bourla and I am with you. I think we can own the stock of Pfizer. All right, look, the biggest thing matters next week is the Friday job report. I think it's a kind of a wait and see market. Until then, it's got to be no job growth and no wage growth on Monday. Monday, yeah. Wow. That's what I got. You know, I don't like the weekends. You know, I like to be here, but I like to just so we could just have Friday moon to Monday. But other everybody tells me you have to have a couple days off Anyway. Agilent Letter A for you. Home gamers reported top and bottom line beat earlier this week. With growth in China of all places. I'm seeing what led to the strength of co. Then we're wrapping up our series on beating down retailers to see if Abercrombie and Fitch and American Eagle are worth trying on for size and earnings. Season has not been all that kind of cybersecurity cohort. Unless you with Zscaler. I'm seeing what helps. Send that Stock up nearly 10% today we're going to talk the company's top brass, so I want you to stay with Kramer Foreign.

[Jim Cramer]

Don't miss a second of Mad Money. Follow at Jim Kramer on X.

[Caller]

Have a question.

[Jim Cramer]

Tweet Kramer. Hashtag mad mentions. Send Jim an email to madmoneycnbc.com or give us a call at 1-800-743, CNBC. Miss something? Head to madmoney.cnbc.com don't just ride the index. Seek to outperform it with FELC, the Fidelity Enhanced Large Cap Core ETF. Unlike passive ETFs, FELC is run by a team of experts to adapt to market conditions and pursue upside potential wherever it's hiding. And while you get the potential outperformance of an actively managed fund you can still buy and sell it on your terms just like any other ETF. Discover FELC the Fidelity Enhanced Large Cap Core ETF part of Fidelity's suite of active ETFs. Learn more at fidelity.com felc before investing in any exchange traded fund, you should consider its investment objectives, risks, charges and expenses. Contact Fidelity for a prospectus in offering circular or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with the passive ETFs. Fidelity Brokerage Services LLC Member NYSE SIPC For 140 years, MultiCare has been in Washington prioritizing long term solutions, partnering with local communities and expanding access to care. Together, we're building a healthier future. Learn [e-mail] Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nell for many, many years.

[Caller]

The arms dealers for the life sciences industry were some of the most consistent outperformers around. They got a huge boost from COVID but once the pandemic passed, their numbers came down and their stocks came down with them. It's taken years for their customers to work through the excess inventory they brought during the COVID year. And by the way, now many research institutions are getting in with funding cuts for the Trump administration. But man, on Wednesday night we heard from Agilent Technologies, Letter A, a key member maker of instruments, software and services for life science, diagnostics and applied chemical industry. And they reported a very solid quarter response to stock pop more than 2% yesterday. So is the has the Agilent found its foot here? Let's take a closer look reporting McDonald, he's the President CEO of Agilent Technologies. To find out. Bishop McDonald, welcome to Money.

[McDonald]

Hi Jim, great to be here.

[Caller]

I'll be honest sir. When I saw the business you have in China, I was worried. I said oh my God, Agilent's booked. China's going to bring him down. It's going to be like danaher. I'm going to have to deal with this and feel bad and stuff. But it didn't happen. China led the way.

[McDonald]

Yeah, we posted 10% growth in China this quarter and we have a lot of momentum in China for, with Agilent. We've been decades in China. You know, we've been there for many decades. We have a great manufacturing capability and a very tight knit connection with our customers. So I would say the business is pretty stable. We did very well on the last stimulus. We're expecting another stimulus this year. But having met in China and having good technical teams in China is making all the difference.

[Caller]

No comparisons are odious, but we got GE Health care with Danner. These are good companies. What are you doing that is so different? Is it a particular kind of safety that you're offering? Is it the multiple years? Maybe you were there before when you were part of Hewlett Packard. I just don't understand how you're doing it and they're not.

[McDonald]

Yeah, so it's, I think it's our longevity in China and also our connection with, with the industry. But, but our technologies are really crucial for some of the markets in China, some of the secular growth markets. You know, everybody can see the innovation that's happening in China. You know, the second largest drug molecules are coming out of their clinical trials and our tools are really important for it and we're there to help. We have an amazing service business in China which is really important because that ring fences us and also our ability to help customers with pfas testing Forever Chemical testing and also food testing has really helped us over the years. So we're in a very strong position.

[Caller]

In China that you brought up as that your pfest division is maybe it's your fastest growing. It's incredible. So why don't you tell our viewers about it? Because when people hear Forever Chemicals they get scared. They want to know how can people find out if you have them and what's the test?

[McDonald]

Yeah, no, we had 70% year over year growth and fast. It's $100 million business for us and we, our systems are at the very cutting edge of detecting pfas. To put it into context for your viewers, Jim, it's finding a drop of water in an Olympic sized swimming pool. And our systems can do that. So we grew, we grew in all regions and that's in water testing, it's in food testing and it's. But it's also moving into air testing and currently the market for air testing for PFAS, which are forever chemicals, which can be quite dangerous. But 2% we see that market part of the business growing 8 to 12% and we're very well positioned for that. So extremely pleased with the business. It's very fast growing and we expected the market to be in 2030, about $1 billion market.

[Caller]

Now I know people, they get confused about China. They think that, well, China is a great manufacturing country. They don't care about people, just the opposite. What I find is whether I'm talking to Judy Marks, the CEO of Otis, where they test that, they test the elevators more intensely than we do or Costco, which is they want. The Chinese want them because the food is so safe that the Chinese care. The government cares tremendously about safety and, and food safety and water. And people here don't give them that credit.

[McDonald]

No, absolutely. I mean if you look at the long term China plan from the government's food safety, water safety and of course testing their products for pfas, making sure those are safe are right at the top of the agenda. And the Chinese government and the industries are really investing in it. So we see great growth and a long trajectory for pfas in China.

[Caller]

We are believers that the gop, just one drugs will be the greatest drugs of all time. We think there'll be 40 million users just in the United States within the next five years. You're part of the manufacturing, what you do.

[McDonald]

Yes. So we have two businesses. We do the analytical testing for drugs, of course, which is a very important business and Pharma Biopharma. We also have a CDMO business which are contract manufacturing. We have cutting edge CRISPR technology and oligo oligonucleotide technology in Colorado by the way, which we've invested a billion in over the last three years. So a huge onshoring investment. We acquired a company called Bio Vectra which is a $1 billion acquisition for the CDMO and they're right in the sweet spot of GLP1. So a lot of the peptides that you hear a lot about, Biovectra is right in the supply chain for that. So it makes us very vertically important with Pharma both on the analytical side and on the CDMO production side.

[Caller]

Don't you have to make a decision yourself that this is going to be big before you commit that capital? And therefore you might even agree with me that this could be one of the biggest class of drugs in history?

[McDonald]

Yeah, I mean we, we, we looked at that, we looked at the trajectory of all therapeutics. We looked at where we're going. We really invested early on, which is really important in capacity. Capacity. This is a really constrained market from capacity. So having the capacity upfront was really important for us and that's why we invested $1 billion overall and in our oligo business.

[Caller]

I deal with a lot of companies who say, you know what, I don't know why the president thinks we can can onshore, it won't work. Supply chain no good, don't have the workers. America can't do it. You please disabuse us of that because you're doing it real well.

[McDonald]

Yeah. I mean if you look at our customers, I think it was announced just in the equipment for the onshoring. It's about a 20 billion opportunity to 2030 which we are part of. Right. So a lot of the announcements on the onshoring, those plans are being met now and of course details need to be worked out. But 20 billion in equipment for these capital expenditures is really a lot and we believe with our analytical tools we will be there to really help. And we have global businesses, we know these companies very well. And one of our sweet spots is we are very early helping them set up labs, but also making sure labs are productive over time. So we're very excited.

[Caller]

Well, you've always been the gold standard for as long as I've been in business and I'm fortunate. I've been in business for many, many years and I knew when I knew you guys would well when you were with Hewlett Packard. So it sounds like this was just a terrific quarter. It's going to be a very big year that's pouring. McDonnell President CEO of Agilent Technologies. Good to have you on the show.

[McDonald]

Yeah, thanks a lot, Jim. And it's a really exciting time for us here at Adjunct Transformation on and look forward to speaking to you again as the story.

[Caller]

I remember when Agilent wasn't that interesting in company. But that's all right. It's really interesting now. Thank you so much. I'll talk to you soon. Thanks a lot, Jim, Buddy's back there for the break.

[Jim Cramer]

Coming up, try these stocks on for size. Kramer's diving into apparel brands Abercrombie and Fitch and American Eagle next. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update. Wherever you get your podcasts. Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days. Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide, and every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nelson report.

[Caller]

It'S time to wrap up our series on fallen retail angels, the stocks and companies you know and haven't loved it. At least not lately. To recap, we started with VF Corp. The maker of North Face and the unfortunate vans, and I told you that I don't see this one making a comeback anytime soon, although CEO Bracken Dow recently bought $1 million with the stock. So not enough to get me off the sidelines, but certainly enough to encourage me. Then I said it was worth buying some Lululemon head of Next Thursday's earnings report because expectations simply got too low. Next was Nike, where I want to wait for a turn in the business. For now, it's too early to make a move. And while we're on the subject after speaking to Gaps Richard Dixon last night, I think the selling there is way, way overdone. There's too much good happening at this company, including strong same store sales from both Gap and Old Navy. Plus the company's gotten immensely profitable and sitting on a ton of cash. With the stock down over 20% today, I think it's worth go just outright outright buy the stock on Monday. The sellers will be shamed fall into the Gap. Now let's take on the last of the fallen Abercrombie and Fitch and American Eagle Outfitters. Tipped off my hand on that one, didn't I? I want to start off by saying that these are both known as teen retailers, even as Abercrombie has been chasing after its customers as they age. Maybe to those as ancient as 40 years old. That's good because teens are notoriously fickle, which makes them very difficult to bet on. Hence why these two socks are total sink or swim. Sometimes their sink and swim. And that's how I feel about ANF right now. Abercrombie has two divisions, the flagship Abercrombie and Hollister, roughly of equal size. Hollister's more cool and laid back, while Abercrombie is more reserved as a little older clientele than its teen center partner. Or to put it bluntly, I could walk into an Abercrombie, not be too embarrassed. Hollister I'm grandpa trying to buy some jeans for my grandchildren. Hollister had a remarkable quarter with same store sales up an incredible 23%. I haven't seen that kind of strength from anyone in the industry. On the other hand, Abercrombie's brand had a 10% decline in same store sales. I haven't seen that kind of weakness from anybody either. Haas has got amazing momentum, is on trend with good price points. Abercrombie was off trend. The company was abject about how they missed the mark. Now we have to put this company in perspective. Abercrombie was a disaster until Fran Horowitz took over as CEO in 2017. She's brought it back from the break and we can't ignore that context when we're thinking about one bad quarter from a half the business. My colleague Sarah Eisen knows this company called. She told me the Horowitz has pulled off a total reset and brand transformation, especially at the division that faltered Abercrombie, it had been toxic. She's gotten the classic playbook including a great online presence and good instant marketing. But it's still team retail, so it can be up and down. As Horowitz told her, and I quote, when we align product voice and experience, our customer spends, as evidenced by the strong results we deliver for Hollister, end quote. Obviously though, we have the opposite occurring at Abercrombie now. But that's the way it is in teen retail. To me, it's also the opportunity here. Right now, Abercrombie is clearing out the wrong inventory, bringing in fresh product and given Horowitz's tremendous track record, possibly a big turn. I'm calling it huge. Bye, bye bye. We know she believes in the most recent quarter she had the company repurchase $200 million with the stock 5% of the total outstanding shares. Strong commitment. Now Amercrombies, a small company, market cap of just 3.7 billion and a huge short position standing at 13.8%. If you think that Hollister can stay hot for another quarter and the Abercrombie brand can turn, this one could be explosive. Plus, unlike so many other retailers, Abercrombie really got ahead of the tariff issue. Listen to this from CFO Robert Ball. Quote, for China specifically, we work for some time now to relocate resources of supply and this year's sourcing volume from China will be in the lower low single digits, end quote. They source from 16 countries. Nice diversification. And then here's the real opportunity. Write this down. Next Tuesday, Matt Boss from JP Morgan on our network today. He's the best retail analyst in the business. He has a buy on the stock. He's hosting ANF Chief Financial Officer, the aforementioned Robert Ball and the chief operating officer which is Scott Lupusky in New York City. Further boss is hosting Horowitz herself on June 10 in Toronto. If there is any improvement at all in flagship Abercrombie, this stock could go bonkers. As people remember a year ago when this $78 stock stood at $178. As Horowitz said on the call, quote, Abercrombie has a history of capitalizing on moments like these to further strengthen the business. End quote. I believe her got my blessing to buy the stock on Monday. Especially if President Trump keeps trashing China over the weekend and people dump the stock even though Abercrombie's made itself pretty China proof. Next up, American Eagle. I should say next down American Eagle because this as smaller. This one had a miserable quarter. Sales down 5% year over year. Same store sales down 3% gross margin off a staggering 1100 basis points. I don't even know how you do that. This next quarter looks no better. They're. They're guiding for a 5% revenue shrinkage again. Now American Eagle is beset with problems. The company's abject to CEO Jay Schottenstein started his conference call by saying the results were disappointing. $75 million inventory write off which contributed to a $68 million operating loss. They had product misses to too much inventory and were highly promotional to get stuff off the floor. Strangely, even though the business is awful, American Eagle initiated a $200 million accelerated share buyback and separately bought $31 million of stock in the open market. If I were then might be a little more cherry with these repurchases. Companies have all that much money in the bank. 88 million in cash at the end of April. If you're a retailer, you need to have some more flexibility. Look, if you're wrong, I think you're flushing $200 million worth of flexibility down the drain here. This is not my first rodeo with American Eagle. My travel trust took a very big hit in the stock a few years ago. When they held on. We held on way too long because they promised one good quarter after another and they could not deliver. It was a nightmare. I am not inclined to give them the benefit. The doubt again fool me. One shame on you for me twice shame me. I don't usually recommend options here, but I can tell you the teams are so fickle that if I were to Buy Abercrombie ahead of the talk on JP Morgan on Tuesday. I actually might even do it with deep in the money calls. And I never, I never mention or recommend calls. Bottom line, I want you to limit your downside with these team retailers. You never know when a company like this may go from sink and swim to just plain sink, at least for the next quarter. But to me, Abercrombie, I think that's worth buying. Perhaps as soon as next week. Let's speak to Jackson in North Carolina. Jackson, Jim, hope you have a fantastic day. You know what? This has been a great day. I have been. I've spent the day working 100% since 4am that's my kind of day. I don't know about you, but that's mine. What else? What's going on? Not that early for me, but was curious if you had any opinion on Ross stores. Yes, I do. I have. I. My opinion is sell Raw stores and buy tjx. That's my opinion. And you know why that I have that opinion? Because I'm right. Let's go to Tina in Florida. Tina.

[Jim Cramer]

Hey, Jim.

[Caller]

Yeah.

[Jim Cramer]

Thank you. And congratulations on 20 years.

[Caller]

Oh, hey, wow. Thank you. Thank you.

[Jim Cramer]

Oh, thanks to you and your help, my husband and I are enjoying a nice. A nice retirement in Florida. So. Yes, appreciate that.

[Caller]

Yes. Yeah. What people understand. Again, it's not. This is. I don't know. I do not know Tina that well from Florida. I just met her, I don't know, about 38 seconds ago. But thank you so much for saying that. How can I help you now? Well, you don't know me, but we.

[Jim Cramer]

Know you over 20 years. You're welcome.

[Jay Shor]

Thank you.

[Jim Cramer]

There are a couple stocks in our portfolio that we really like. They've done well for us. You recommended them. And now we'd like to invest more money and we'd like to choose one over the other. Which would you choose? Starbucks or Dutch Brothers?

[Caller]

Oh, my God. Brian Nickel be so mad at me. Oh, my God. But I've got to tell you, at this very moment, Christine Barone has got the mojo. She has got the mojo. And I think that, that the Dutch Bros. I think that I happen to like them from the times. My daughter lived in Oregon. Dutch bros got 100 rich all over it. And thank you for the kind words, Tina. All right, look, I don't feel perfectly confident about the stock of Abercrombie or American Eagle here, but you do have my blessing to buy some, some Abercrombie. And you do not have my blessing to Buy any American Eagle. I must want to make money. Including my exclusive with cybersecurity player Zscaler. How can I help you? We've been hearing about companies having a soft April, but I don't think that's really happening this way. Have you seen that chart? Then we keep hearing that the spend on AI has peaked, but I don't think we're anywhere near it. I'm going to tell you why. And of course all your calls. Rapid fire in tonight's edition of the Lightning round. So stay with Kramer. Heaven knows we've seen so many cybersecurity firms drop the ball this quarter. But when Zscaler reported last night, they knocked it out of the park. This cloud based cybersecurity alpha delivered a robust top and bottom line beat with management raising their full year revenue forecast in response. The shock shot up even though it had been up a lot already. Up over 9% to the new 52 week high. But it's still down more than 100 bucks from its all time high at the end of 2021. So could this thing have more room to run? Let's check in with Jay Short, the old friend of the show, Chairman CEO of Zscaler. Get a bettering quarter. The quarterback Sergeant, welcome back to Money.

[Jay Shor]

Thank you, Jim. All right, time flies. It has been a year since we got connected.

[Caller]

Too long. Too long. Sir, if one of the things I want to say is that I was worried. We had a tough April for CyberSecurity. There are three different companies, I don't need to call them out, that faltered and what they said was look, you know there's a lot of confusion in the market. I don't think that. You had a soft April, did you?

[Jay Shor]

We did not, Jim. The market is tight, there's deal scrutiny, but CIOs are looking for better cyber protection but they want cost savings. At the same time, Zscaler is one of the few companies that not only provide best zero trust, but also we remove a lot of legacy point products, actually save money for CIOs and CISOs. That's what drove our growth last quarter.

[Caller]

Now you do have a Flywheel. I'm going to preface this by saying everybody comes home since they have a Flywheel. I think you actually have a real flywheel. Please explain it to our viewers.

[Jay Shor]

Yeah, our Flywheel is real innovation with zero trust architecture. Everyone is taking traditional firewall based technology, calling it zero trust, which really tries to secure the network. It's a complicated thing in the world of Zscaler. You could be sitting anywhere. Your device simply connects through Zscaler Zero Trust Exchange. We connect you to right application, right service, irrespective of the network, irrespective of the device. It's elegant, it's an innovative architecture, it gives far better security, saves a lot more money and gives great user experience. That is why over 45% of Fortune 500 companies depend upon us.

[Caller]

Well, when you say zero trust, most people, again, they just found it. What I like about you is that you don't trust everybody isn't trusted. You got to prove yourself. And I don't know any other company that does that. Explain that to our viewers, because I think that that's crucial.

[Jay Shor]

So Zero Trust is fairly simple. Trust no one. But if you don't trust anyone, then how do you communicate? That means you need to give a little bit trust to do only a certain thing. I'll give you a simple metaphor. In the old world, if I come to see you at your headquarters, they stop me at the reception, check my id, give me a badge and say, go inside. Once I'm in, I go anywhere and everywhere. Not very good in the world of Z0 Trust and Zscaler. We escort you to the meeting room and once the meeting is done, we escort you out. You're given access to only certain things. That's what sets Zscaler apart from other security companies. And that's why zscillar customers have far fewer ransomware attacks than other customers out there now.

[Caller]

In other words, they don't have the keys to the kingdom. They can't get to the top, they can't shut you down. Right, they can't shut the company down.

[Jay Shor]

Exactly. If they can do something, they may affect one application, but they don't impact the whole thing. It's very, very powerful concept and customers are embracing it. And customers now are going from Zero Trust for users to Zero Trust branches. Zero Trust workloads, we call this concept Zero Trust everywhere. That keeps you much safer.

[Caller]

Well, everywhere also includes mobile banking, which is something I always am worried about. I have someone who just checks my balances now twice a week because I'm afraid now there's apparently a seven figure ACB deal you did with a global bank. Other people must feel like I do.

[Jay Shor]

That's right. And in this case of a bank, they want their workloads to talk to other workloads in a zero trust fashion, which is a very novel and great approach. So banks are embracing it. And then there are other customers who are saying, if I have a thousand Branches, those branches can't talk to each other openly. So they only talk to each other through Zscaler Zero Trust policy which gives far better security.

[Caller]

Now some people say to me, how could a stock go straight up like this? It must be something. It's trickery, it's a short squeeze, whatever. I come back and say, well wait a second. If you have total contract value bookings of over 1 billion, if your remaining performance obligations are now nearly 5 billion, that's what happens.

[Jay Shor]

That's right, Jim. And it's not only the top line. Our top line and bottom line both are very good in the industry they call something rule of 40. That means if your revenue growth percent plus free cash flow margin is over 40, it's a good thing Z score has achieved this, achieve this performance 21/4 in a row. This last quarter it was 52%. So we run good top line business. We run good bottom line business as well.

[Caller]

I think that some people need to know this. I only know two companies that are in your league. There are so many companies out there. So I mean you're obviously just doing something that everybody needs that creates some value. Most people think cybersecurity is just actually a deadweight loss. But you bring value and you catch people and you what 50 million lives you now protect.

[Jay Shor]

Yes, that is correct. And Jim, the reason, number one reason that's happening is our innovation. Number two reason it's happening is because we are obsessed with customers. Customer obsession is one of the Zscalers key values. It starts with me. There are more and more customers who come back. Then when they go move from one company to other company, they call us and say Aziz killer, I need you. Our customers who are paying us over $1 million in ARR went up 23% last quarter. So very proud of the way we serve our customers and very proud of the innovations we are driving.

[Caller]

Well, I want to congratulate you for a remarkable post so called Liberation Day. You're the number one stock that I follow. I want to thank Jay Schrodry. He's the CEO of Z Skiller. Tremendous work sir. Thank you so much Jim.

[Jay Shor]

Thank you so much.

[Caller]

Of course Mid Bunny's back after this one.

[Jim Cramer]

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

[Caller]

Next it is time to set up the white round co driver and for rubber for Portuguese Hannah Santa Barbara. I sell some sunburn center my steppers. Williams let us down and then the lightning round is over. Are you ready? Ski dag to the light round. Crazy. I'm going to start with Corey in New York. Corey.

[Jim Cramer]

Boo.

[Caller]

Boo. Boo. Boo. Boo ya. Jim, right back at ya. What are your thoughts on the Brad Jacobs sled? Qxo. All right, listen sunshine, I'm going to tell you this and tell you this but good. I think this stock actually is going to go higher. Why? Because it's Brad Jacobs. He will not let it stay down here. The man is. When I think of him, I think of billions. Billions. All right, let's talk to A.J. in Florida. A.J. booyah, sensei. Kramer. Jojo, man, what are you saying to me? What do you got? Sunrise. Thanks for getting back to me with your segment on striding. Since Tuesday, I've been doing my homework, as you always say. Been studying the potential of the smart glass industry, especially how it's being used in vehicle and interiors and energy saving architecture. I've learned that it's playing a big role in reducing H vac costs. So I'm really interested in your broader take on electrochromic glass. But today I'm talking about a US based company with a core focus in electro optics and dimmable glass. The company supplies long term partners like Tesla, Boeing and Toyota and providing its reach in multiple markets. So I'm wondering what you think of gentlemen, Gentex Corp or anybody. Gentex is down so much I'm actually willing to take a flyer on. I cannot believe how low it's gotten. It's a very good company. It is a tech company, I've got to tell you. I'm gonna say my highest praise for you. Got horse sense. Let's go to Raymond in Pennsylvania. Raymond. Hello Jim. Thanks for taking my call and for all that you do for the home gamers. Love the speakers. Love the gamers. And speaking of games, it's good to see that the Eagles can push the push for at least another season. Yeah, plus we got a guy. Got rid of a guy. To the Niners. The Niners are becoming kind of like the waste management of the west there. With oil floating around $60 and possibly dropping, will energy transfer have enough energy to transfer to maintain its 7% dividend? Yeah. ET by the way, the Niners. I didn't mean that like I like waste management very much. ET Is an absolutely terrific company. I slagged it for the first 10 years of the show. The last 10 years I've liked it a lot. It's got a good pipe. I think it's terrific. I do prefer one. Oak Moore. Hey, we gotta go to Barry in Connecticut, please. Barry.

[Jim Cramer]

Hi, Jim, how you doing?

[Caller]

Hope you're having a great day and plans for this is a dynamite day. I have so many people working for me today. It's a pleasure, but I'm working for them, too. We're all going to work till 20 midnight. Then I got a wedding I have to go to and then right back. Adam, what's up? I. I picked up the stock on Liberation Day. Started position because it was a good price, obviously, and it's moved a lot.

[Jim Cramer]

Faster than I thought. It's up 50% in like the last six weeks. And I was wondering, you know, it seems a little steep now in price.

[Caller]

To keep adding to the position, but.

[Jim Cramer]

I was wondering, you know, your thoughts.

[Caller]

On the trade desk. Oh, you know, look, I should have told people to pull the trigger after that one unfortunate quarter that Jeff Green had. But I've got to tell you, I want Jeff on. Jeff has been elusive of late. I think he's got the right. He's got the mojo. Jeff's got the mojo now. And mojo's being a technical term for really good stuff and that. Ladies, up to the conclusion of the Lightning Round.

[Jim Cramer]

The Lightning Round is sponsored by Charles Schwab. Coming up, is AI here to stay? Cramer's giving you his take on why AI hasn't peaked and how the technology still has plenty of room to grow and improve.

[Caller]

Next. We keep hearing that spending on artificial intelligence will peak soon. Doubt has never stopped. Yes, I'm Jensen Wong, co founder and CEO of Nvidia, which makes the platform that is based on. In other words, Jensen is the most to lose. So maybe she's talking his book. But as the steward of the second largest company on earth with a market capitalization of $3.3 trillion, that's only a little shy of Microsoft's, I think he deserves the benefit of the doubt, even as his stock has given up everything it made since the bang up quarter Wednesday. That's why when I say that we need, and he says that we need a thousand times more computing power than we have now, I think that means we're nowhere near the peak in AI. Why the heck do we need so much compute power? Several reasons. First, there are a bunch of these generative AI platforms. ChatGPT, Anthropic Perplexity, Claude, Gemini, Med, AI Grok, to name a handful. They're all out to prove they're the best because if any of them becomes the default agent agentic, they'll own the market. To win, though, they have to have differentiation so they're all fighting for personality or the risk irrelevancy. You may not remember when Google got started, but many people thought Yahoo or Microsoft's Bing would own the search business. Why even bother competing against them, right? But Google won. And now the search business makes 200 billion a year. That's billion with a B. Everyone else, jump change. Second, as it stands, the gen AI tools aren't that great. They often get things wrong, which makes them unusable for anything really serious. Let me give you an example. Yesterday was interviewing Richard Dixon, the CEO of Gap Inc. Ahead of that, as part of my research, I asked Grok, what are the top denim brands in the United States? When a few seconds it told me it first was Levi. Second was Citizens of Humanity, then Madewell. Huh? I know Levi's, but Citizens Humanity premium jeans brand Maywell. That's a J. Crew brand that has some stretch denim. No way. Those are the top three, right? Today I went back, I same I asked him the same question because I thought maybe he thought about it or she had thought about it and sure enough, she had. He came back with leave. Same question. Levi's Wrangler and Lee. Hey, at least they're normal jeans. But there's not a lot of consistency. Day to day chat. CBT gave me Levi's, American Eagle and Wrangler. Perplexity gave me Levi's Wrangler and American Eagle. Claude gave me Levi's Wrangler and Lee. So did Gemini. There was a little bit of consistency, but most of the gave different answers. These gender platforms are just authoritative enough to fool you into thinking their answers are definitive. The issue is the prompt. If you know the right prompt, you might get the right answer. But more important, these platforms just aren't ready yet. They're underpowered. That's why Nvidia believes you need a lot more computing power. But let's go to the real issue. Jensen looks at this issue from a completely different angle from the doubters. He thinks that these generative AI platforms are fast ways to look things up. Sure. Instead of not so fast ways. They're simply stepping stones. Something much more important right now that they can't do. Reason. They can't reason. We need to have agents that can reason, think, reach conclusions. For example, last week we had Dr. Artopol on to discuss his book Superagers. Loved it. Almost every point he made, he gave citations. Studies done from all around the world all grouped together. When I was younger, you would have had to hire three researchers to look all over the Globe for several weeks to get that data. Now it probably takes a couple of hours, but can your agent reason with you about the citations like a smart colleague? That's what Jensen wants to get to that's when the spending might wind down. The idea that we're somehow almost there? That's a fantasy. Oh, and when it comes to Nvidia stock, don't fool yourself. It got hit today because of China. Nvidia would be at $150 instead of 135 and one for our ever worsening relations with the PRC. But we can't asteroid China, at least not yet. Maybe next year, when I sense it'll be probably a much smaller percentage of in videos business. I'd like to say as always, bull markets Summer. I promise I find it just for you right here man Money. I'm Jim Cramer. I will see you Monday.

[Jim Cramer]

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

[Caller]

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