← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 6/4/26
00:44:18
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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- [00:01]
Venture Global Representative
Never bet against American Grit or American Energy through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable Energy
- [00:30]
Charles Schwab Representative
Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests. And no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com Trading My mission is simple
- [01:00]
Jim Cramer
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 Kramer. I was doing my friends. I'm just trying to make it some money. My job is not just to entertain, but to do some explaining. So call me at 1-800-743-3-CBC or tweet me at Jim Cramer. So far, so good. That's all I can say about how the market's taking earnings disappointments and new stock offerings traditionally huge opticals to a raging bull. Yesterday, Output did a gigantic equity offering to fund its AI build at the same time that we learned about two very high profile alleged earnings disappointments from Broadcom and tonight's guest crowdstrike. But the market shook off the disappointments. The dow only surging 875 points, S&P jumping point for 1% and the tech laid Nasdaq dipping point or 9%. But it was a dramatic turnaround for look to be a miserable session the House of Pain, House of Pleasure as someone who counts himself very concerned about the new supply of stock that's about to hit the market right as we're getting not so hot earnings. Well, today's rally was truly a welcome surprise. Earnings disappointments and big chunks of equity flying around usually mean tough times are ahead. There typically isn't enough money in the market to take care of business when business includes the aforementioned Alphabet deal, plus the gigantic SpaceX IPO with its worrisome lack of earnings or anthropic, which comes under the category of who knows. Yet the market shrugged it all off even even though this is coming at a time when there's still no resolution to the war in Iran and only a paper thin ceasefire between Israel and whoever the heck is supposed to be run in Lebanon. I find that pretty amazing. I don't know about you, especially when you consider the oil companies are just now signaling there's no more inventory to cushion a hefty rise in the price of gasoline. So then what drove today's rally? Well, there are a couple things that could be at work here. Most obvious is that the disappointing earnings may not be as crushing as we think. This is not the first time that broken, which is by the way is a gigantic company has offered a measured forecast only to crush the numbers next quarter. The stock had gone parabolic into the quarter and as we told CNBC investing club members when we sold some stock ahead of this quarter this week, a parabola is never a good sign. Plus when we speak with George Kurtz, the CEO of CrowdStrike tonight, I think we get a much better sense of of how well the cybersecurity company is doing and the notion of earnings or a forecast disappointment, it may be misplaced. So when the disappointments really weren't all that disappointing. And now let's talk to the deluge of deals. Something may be going on with the underwriting process that we haven't seen very often. We just had a phenomenally successful Alphabet secondary price well by Goldman Sachs to the point that it looked like we had very few flippers and a lot more demand than we expected. Was an outstanding success. Just a huge amount of demand. Then look at this continuum which just started trading today. There was so much more demand. This is a, this is a company that doesn't make any money at all. There was so much demand than anyone expected that the unders had to upsize the deal dramatically twice. The stock was a big earlier today. Although pulled back at the close. Still it finished the session in the black, meaning most of the buyers held on to their shares rather than flipping them. That's nothing miraculous. I was prepared to see a sloppy deal that would go up a couple of dollars then roll over bringing the whole market down. Didn't happen. That is a huge load of worry taken off the table. It suggests that the next couple IPOs ahead of us may be better received than we think. Certainly that I thought the great news for Space X that's terrific. Free and throbbing, both of which are on the docket. And let's be honest, these companies need to help. We know SpaceX is losing a ton of money and Therefore, there's always a fear that buyers will just walk away, even if it is with Elon Musk. Plus, the level of skepticism around AI has become downright toxic these days I keep hearing that nobody's getting a real return all that spending except for in video which makes the chips. Yet the stock of video has a lot of. I don't know what's come. The technical term I learned when I was at Goldman Sachs, Mojo doesn't have it. The darn thing has been playing a game of chutes and ladders with its shareholders. It gets better. This morning the worries over private credit started all over again. Remember all the intelligentsia told how bad that was going to be with the talk of redemptions by individuals who didn't know the risks of these funds. Blackstone, a gigantic private equity shop, limited redemptions of a flagship private credit fund during its regularly scheduled opening. Normally that kind of news, oh boy, it would cause a lot of fear and sending tire market plummeting as it regularly did not that long ago. Instead the market just chose to overlook it. And in a sign that even the bears are wary of this yarn, Blackstone stock jumped 7.5% today. It was the best performer in the entire S&P500 2 months ago probably have been the worst performer in the S&P 500. The doomongers would have just taken this one to town. KKR and Aries Management, two more private equity firms have been inflicted by redemptions also rallied nicely. In fact they're among the top 10 performers in the whole S&P 502. Now I don't want to get ahead of myself. For one thing, tech didn't lead today's market but it got broad and a respite. What we saw the endless data center stocks running. Guess what? We saw a host of non data center stocks do well today. Let me, let me go over a couple of welcome signposts. First, the banks went up. Glory be, the banks went up. The financials are the most important sector of the year and if it's out there and they've been the worst performers of the year. Goldman Sachs and Morgan Stanley are both winning big in the hyperscaler stock derby. Running away with the honors and deals. But they have been in a club of their own. Today we saw something like so real life and real banks like JP Morgan, pnc, Citigroup, bunch of the other large banks. A sign that the economy may be healthier than we think. Now we're on the eve of the monthly employment numbers so perhaps people are Betting on a bullish labor report tomorrow morning. Meaning decent hiring, low no inflation. Either way, the left for debt bank showed some real resilience and it was a welcome sign. Health care had been a total no fly zone for the last few months other than Kramer. Fabulous Lilly. Now this time we saw a host of drug companies and health insurers rally something. It shows there's a pulse away from tech. Oh, in this market saw a standout performance in a trucking company. We just featured FedEx Freight, an alpha we had on the show earlier this week. An unhealthy market is not led by a trucking company. Just like the banks, the transports make for great leaders. I'm not a dreamer though. I know that if the Alphabet deal go on poorly you can expect that big institutions will be less inclined to buy the money losing space X. And you can't pull off the biggest IPO in history with just the little guy. You need the big money too. And yes, we're unsure of the capital needs of the hyperscalers, but if anthropics grow as rapidly as we hear, maybe those worries are misplaced to all right, enough. I throw a lot of pangloss at you. All I can say is that at 4am this morning we deemed we seem to be on track for one of the worst days of the year. But at 4pm this afternoon all the boy we left here thinking how did the bull run over the matador? Tremendous display of power despite Broadcom, despite crowdstrike, despite a surprise gigantic equity offering from Alphabet that did so well. Alphabet bought back 45 billion dollars worth of stock in the first quarter of this year. It snapped up another 15 billion. So it's last year 45. This year 15. Now it is selling similar volumes. Can you believe that? Sold it all the stock they bought last year. Wow. Here's the bottom line. The word I have to use to describe this market is appetite. Right now ahead of some gigantic underwritings. This market has a huge appetite. One that could shrug off a bear with a gigantic GLP1 hypodermic needle and still be hungry for more. Let's go to Jim in Wisconsin. Jim.
- [09:25]
Caller
Hey Jim. Love your show. I love your book how to make money in any Markets. Fabulous.
- [09:30]
Jim Cramer
What a gent you are. Actually was with a CEO today who read it and said I finally understand what a price earnings multiple is.
- [09:36]
Caller
How can I help you make it understandable? My question today is on Uber Technologies. I bought it back in January of last year for about $63. Sold it in Dec. Number 483 now I've been watching it since February of this year. It's been ping ponging in a small range of about 72 to 77 with much movement. I know this competition. What should read on this reasonable growth and scale in the next year or two. What do you feel?
- [10:02]
Jim Cramer
I think the next year or two you want to buy this stock and settle down. I like a stock that's come down heavily that is still doing well. I think you got horse sense. Listen, this market's still got a huge appetite for all this new supply getting thrown at it. So I'll take today's rally as a welcome surprise. My man money tonight CrowdStrike sold off today despite a top and bottom line beat. So is Wall street getting something wrong here? I'm going straight to the Source CEO George Kurtz to find out. Then shares of a Honeywell spin off Quantinuum started trading today. So should you be looking to start a position in this quantum play? I'm sharing where I come down and Timken might say seem like an old school industrial, but it's entering a new age amid the restoring effort in the US I'm learning more about this company from its top grass. So stay with Kramer.
- [10:56]
Venture Global Representative
Don't miss a second of Mad Money. Follow imKramer on X. Have a question? Tweet Kramer MadMentioned. Send Jim an email to madmoneynbc.com or
- [11:08]
Jim Cramer
give us a call at 1-800-743-CNBC. Miss something?
- [11:13]
Venture Global Representative
Head to madmoney.cnbc.com Never bet against American Grit or American Energy through innovation. Venture Global is not only building some of the largest energy facilities in the world right here in the United States States, but delivering American energy at a fraction of the cost and a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
- [11:50]
Jim Cramer
My community gives me the confidence to
- [11:52]
Bank of America Representative
ask myself, what would you like the power to do? So every time I'm on the pitch,
- [11:58]
Jim Cramer
I played for more than myself. Oh, what a tackle from Naomi Girma. Absolutely brilliant.
- [12:05]
Bank of America Representative
Bank of America champions U.S. women's national team member Naomi Girma and everyone who dares to ask, what would you like the power to do? Bank of America Proud to be the official bank of US Soccer bank of America NA Member FDSE Hey Fidelity, what's it cost to invest with the Fidelity app? Start with as little as $1 with no account fees or trade commissions on US stocks and ETF'. Hmm, that's music to my ears, I can only talk.
- [12:35]
Jim Cramer
Investing involves risk, including risk of loss.
- [12:36]
Lucian Boldea
0 account fees apply to retail brokerage accounts only.
- [12:38]
Jim Cramer
$0 commission does not apply to customers.
- [12:40]
Lucian Boldea
Designated by Fidelity as a professional equity trader. A limited number of ETFs are subject to a service fee of $100. See details@fidelity.com commissions. Fidelity Brokerage Services, LLC Member NYSE SIPC.
- [12:56]
Jim Cramer
Last night, CrowdStrike reported what I thought was an excellent quarter. But the stock got hammered today, mainly because the cybersecurity company didn't beat the estimates by as much as we've all become accustomed to. The guidance was strong too, and they even announced a 4 for 1 stock split, which shouldn't matter in theory, but in practice tends to attract more individual investors. And I think this is a buying opportunity. But don't take it from me. Earlier today I had the chance to speak with George Kurtz, the founder and CEO of CrowdStrike. Take a look. George. Welcome back to Mad Money, Jim.
- [13:31]
George Kurtz
Great to be here.
- [13:32]
Jim Cramer
You know, George, I gotta tell you, I followed your company since you came public and I was sawing you had record new annual recurring revenue, yet accelerating revenue growth. You had record cash flow, free cash flow, that was terrific. Yet new new ar that was great. But somehow it was regarded as disappointing. So I have to believe that at some level you might have been surprised that this quarter was disappointing.
- [13:57]
George Kurtz
Well, Jim, the way I look at it is we have the best products and we're taking care of our customers in an era where AI is obviously going to be pervasive and you're going to need security. So I thought we posted a fantastic quarter. Obviously you went through some of the stats. The other stat that I'll point out to you is our rule of 40 was 59. So when you think about the growth and the cash flow generation, it's insane at our scale. So we're very proud of the quarter and we're excited about the future and the tailwinds that we're seeing from AI.
- [14:27]
Jim Cramer
Let me, let me posit something. We've had this terrible discovery, basically this mythos where it looks like that things are way out of control. And I figured that you would have a huge amount of business when this news broke, but it doesn't seem like maybe it turned into a lot of business. Was I wrong?
- [14:48]
George Kurtz
Well, Jim, you have to look at the calendar. You're talking about methods breaking in the middle of April. Our quarter ends at the end of April, Right. So we're selling enterprise software, not necessarily shipping boxes. So these things take Time to get into customers hands, you got to go through a sales cycle. But what I want to point out is you have to look at the guidance of the next quarter. We raised the full year guidance across the entire year, our net new AR guidance by over 50 million, over 520 basis points, which is an incredible raise. So we have the confidence to do that because we see the opportunity that's in front of us and we see what customers are looking for, which is crowdstrike, which is our technology, AI detection and response to be able to identify rogue AI agents and be able to protect those and allow people to actually accelerate their AI adoption in an enterprise.
- [15:37]
Jim Cramer
Well, I mean is it possible that people are concerned that you did not raise your near term. You came in with 5.51 billion versus 5.5 or 3 billion and people thought that maybe the spring rally wasn't justified.
- [15:58]
George Kurtz
Well, I would point you to the whole year Jim. You know, 520 basis points is a big move and we see this taking place across the entire entirety of the year. So we feel really good about the raise. I think we feel fantastic about the pipeline. As an example, our air technology, we're entering the pipeline with over 50 million in Q2 alone. We saw 250% quarter over quarter growth just in that, that product alone. And what I know from talking to customers is they want to roll out more AI. And if you need more AI, you want to consume more AI, you're going to need security. So you know, I thought it was a great Q1 and we're excited about the future and the guidance that we provide.
- [16:41]
Jim Cramer
Well, I couldn't agree more. It's why I told our people who belong to the investing club, don't believe what you read. This is an amazing quarter. I want to ask about Project Glass Wing from Anthropic. What I understand from the people I talk to, you're pretty much leading the cybersecurity efforts to try to figure out what to do here, despite the fact that Anthropic thought at one point that they could handle it themselves. I don't think that insurance companies want an Anthropic to handle it themselves. And I think they wanted you to do it because I think you actually know how to stop it.
- [17:18]
George Kurtz
Jim, what's important to realize that security is an ecosystem. And to be successful you need to have an ecosystem that's going to help customers and help partners. So when you look at what Anthropic has come out with, they've got some great models no doubt, but in order to be able to work with customers, you have to take advantage of those deep, trusted relationships with which companies like CrowdStrike have built over the last 15 years. You have to leverage the deep data moat that we have with our Falcon technology, and you have to leverage the fact that we're in the middle of helping to stop these big breaches or helping non customers respond to the breaches they have, and then we turn them into customers. So I think the ecosystem is a key part. They recognize that, and we're happy to be part of that coalition. And, and you know, again, we're also working with, with Open Air in, in their tech program. So we're at the epicenter of AI and security. And I think that goes to show you the leadership position that we have.
- [18:15]
Jim Cramer
Well, can you talk to me about Project Quilt Works and what you are doing there? Because that seems to be equally as important for the future as what you might be doing. Glassware it is.
- [18:26]
George Kurtz
Well, when you, when you think about Glassman, when it came out, you have only a handful of companies that have access to Mythos. So you have a lot of customers, their boards, their CEOs saying, what can we do? I mean, if CEO is calling me in the middle of the night, Fortune 10 companies go and meet those, you know, help us. What can we do? How does all this work? And, you know, how do we make sure we're secure? So we're in the middle of these conversations and the opportunity is so large that you need to create a coalition around this, the Accentures, the eyes of the world, etc. Where they can work using our technology to help customers understand where those, where their exposures are. We're finding millions of exposures in companies that we go into. Those need to be prioritized, and you need to understand what mitigating controls like Falcon are in place to be able to prevent against those. So the great opportunity here is we have our partners drop into either customers or non customers that we turn into customers because they're using our technology as part of this AI readiness assessment. So it's really a multiplier effect for us.
- [19:26]
Jim Cramer
Aren't you surprised that when everything first broke even in the winter, when we realized all the different vulnerabilities, that somehow all this stuff was, there was a belief that it was bad for CrowdStrike. When. I know, I know when I first saw it, I said, oh my God, Bonanza. And yet all I read for so long was, this is the end of CrowdStrike. What do you think went wrong with that narrative, how did people just get it completely backward?
- [19:54]
George Kurtz
Well, Jim, you have to look at security. There's many different facets and finding vulnerabilities in source code is one facet of it. Okay. And that's what the LLM models do pretty well. But then you have to look at the overall purpose of security. It's to stop the breach. You have to be in line, you have to be, you have to get it right. You know, the first time you see a threat. You've got to be able to create data that allows you to understand what's happening and train that data. And we have a massive proprietary data mode from, you know, over a decade of doing this. So at the end of the day, we can use these elements to be more successful and have greater impact with our customers. But it's only one aspect of what you need to do to build a security platform like Falcon. So when this came out, I think a lot of people were confused that if you got rid of all the vulnerabilities that the world would be safe. That's not the case. You can get rid of all the vulnerabilities in the world and you would still have break ins, but because you have things like identity theft. And what I mean by that is your credentials, your username, your password, your tokens get stolen. People log into a system and steal all that data. So there are many ways to get into a system. Exploiting a vulnerability is just one of those. And you're never going to get rid of all of them. And you're still going to need a full lifecycle system, a system of record like Falcon to be able to stop those breaches.
- [21:12]
Jim Cramer
And look, I know that I've been limiting my questions to this notion of what happens with the anthropic mythos. There's been no diminution of the just plain vanilla, I'm going to wreck your company, pay me kind of things that CrowdStrike does for a living.
- [21:28]
George Kurtz
Absolutely not. You know, Jim, we have talked extensively about extortion wear and ransomware, right? Where these, the cyber gangs will basically get into a large company or even small companies that don't have the level of protection. It's really shameful. They get in and they extort these folks and, and you need security up and down the entire business stack, right? Whether it's a small business or whether it's a large enterprise. And we're only seeing more and more of these sort of attacks. What AI has done is it's created more adversaries with greater sophistication because they're leveraging the models themselves. So what does that mean? Means more tailwinds for companies like CrowdStrike.
- [22:07]
Jim Cramer
Okay, last question. There were so many people in cybersecurity when I first started talking to you. I kind of feel like that it's gotten so, so big and the threats are so horrible that you need a complete suite, and the only one other than you that has a pretty complete suite would be Nikkei Nikash, Aurora. His company, Palo Alto Networks. Is it just you and them is just duopoly now?
- [22:32]
George Kurtz
Well, I think the platform vendors are ultimately going to win. Obviously, it's a big market and it's a competitive market, but we like where we are, given our position, given how we've built the technology from the ground up as being sort of native integrated technology. And, you know, we come at it just from a different approach to how we drive innovation as as opposed to just acquiring a bunch of technologies. But at the end of the day, you have just a few big players that are out there, and I think there's a lot of opportunity for. For the companies that are out there, but there's only a handful of them, as you pointed out.
- [23:05]
Jim Cramer
All right.
- [23:06]
George Kurtz
And I like. I like our chances.
- [23:08]
Jim Cramer
I don't blame you. I'm going to do something. I think someone at least should last night. Congratulations on a good quarter. George Kurtz, founder and CEO of CrowdStrike. Good to talk to you.
- [23:19]
George Kurtz
Thanks so much.
- [23:23]
Venture Global Representative
Coming up, the summer of IPOs is officially heating up. So Kramer's taking a microscope to today's scorcher quantinuum next. Never bet against American grit or American energy. Through innovation, Venture Global is not only building some of the largest energy facilities in the world right here in the United States, but delivering American energy at a fraction of the cost in a fraction of the time. So while others are busy talking, we're busy building. That's Venture Global. That's unstoppable energy.
- [24:06]
Jim Cramer
You never forget your first fan.
- [24:08]
Bank of America Representative
So how was practice, kiddo?
- [24:09]
Jim Cramer
My mom inspired me to dream big and ask myself, what would you like the power to do? My answers helped me become the soccer player I am today, trusting my instincts and stepping onto the pitch without fear.
- [24:20]
Bank of America Representative
Bank of America champions U.S. men's national team member Tyler Adams and everyone who dares to ask, what would you like the power to do? Bank of America proud to be the Official bank of U.S. soccer and FIFA World Cup 2026 bank of America NA
- [24:34]
Charles Schwab Representative
Member FDSE trading at Schwab is now powered by Ameritrade bringing you an expanding library of education with even more ways to sharpen your trading skills. Access new online courses, insightful webcasts, articles, engaging videos and more, all curated just for traders. Plus guided learning paths with content designed to fit your unique interests and no sifting to find exactly what you need so you can spend your time learning to trade brilliantly. Learn more@schwab.com trading.
- [25:10]
Jim Cramer
Everybody's focused on the Space X deal next week, but we've got some substantial IPOs happening right now. Take Continuum, which just raised $1.68 billion in a deal that was pretty well received. This is Honeywell's former quantum computing subsidiary that's being spun off as an independent company. There was so much interest that they had to upsize the deal twice. Originally they were looking for a price between $45 and $50, but Continuum ended up pricing its deal at 60 and they sold nearly 7 million shares more than they planned. Wow. In short, there's a lot of demand for this one because many investors are still excited about quantum computing. And if you have to own a quantum computing play, even though the technology is still in sympathy, you can do a lot worse than continue Unlike your typical venture capital backed tech startups, this is a business that was started by Honeywell way back in 2014 with the goal of creating the world's most advanced quantum computers. Then in 2021 they merged their quantum business with a British company called Cambridge Quantum Computing, which is all about the software side. Honeywell then poured almost $300 million into the new venture and retained a majority stake in the business. Since then, Quantino has launched multiple generations of quantum computers and last September they raised $600 million in a private funding round that valued the company at $10 billion. Now, a couple of years ago, Honeywell started breaking itself up. They spun off their advanced materials business as Solstice Advanced Materials, I love that company. Last fall, and they plan to spin off their aerospace business sometime this month. We own it for the Travel Trust. At the same time, they decided to take Continuum public. Now I think it's the right move. The quantum computing business really doesn't fit with any of Honeywell's big divisions. More importantly, it's a speculative money losing venture that might pay off big debt years down the road, but not now. Very different profile from specialty materials or aerospace parts or automation technology. Of course, Honeywell's hanging on to a sub of 50%. That's a 50% staking continuum, which will go with the automation side of the final split not the aerospace side. They're happy as long as the market can assign this company its own independent valuation. Especially because the market can't seem to get enough of these quantum computing stocks for the last couple of years. That's how we get here. But what do we do now? In other words, is Continuum worth owning now? These guys make actual quantum computers along with the software they need to connect to real world environments. And Magic says they can potentially be a big help to artificial intelligence. They also license out some of their technology in order to dominate the emerging quantum computing ecosystem. But what sets Continuum apart is its technology. Now, I'm not going to get too deep in the woods woods here, but most of these quantum companies, they make tiny electrical circuits out of superconducting materials. They need to be kept extremely cold, continuums different. They use charged atoms that are held in place by electromagnetic fields and manipulated by lasers. That's the same approach as Ion Q. And for what it's worth, IonQ is the most richly valued of all the quantum computing players right now. Of course, Quantinum says that their technology makes for better accuracy and system level performance, which in turn makes it more most useful for commercial applications. That's what we want. We want to make some money. I'll take them at their word. But I don't candidly have a degree in quantum physics and managed to avoid those subjects studiously when I was in college. More important, Quantinium says their technology is more scalable than the competition. If that's true and they can ramp up production rapidly, that really does mean something. We know that the US government just gave them 100 million bucks. It was under the Chips act, and they already have a long history of working with Uncle Sam. But nearly all of the independent quantum computing players got $100 million from this round of grants, so it doesn't tell you that much about the company. Plus, I wish it had happened after the ipo, not right before. Still, let's talk numbers. Like I said before, anything Quantum is inherently speculative, as this remains a very early stage technology. Quantinium had just $30.9 million in revenues last year, up 35% year over year, but still a paltry number considering the stock's valuation. After the stock opened for today at $68, it sunk to $60 and change at the close, up just 0.6% from the offer price. Still, at that level, the company is being valued at over $15 billion. Somewhat worse, the company's losing a ton of money. Last year, Quantinum had a pro Forma net loss of 515.6 million. Now, primarily because of 381.3 million in R and D expenses. Even when you look at the more forgiving EBITDA numbers, we're still talking about $171 million loss. In short, this is a very unprofitable venture right now and it will likely remain unproportable for years to come. In the first quarter of this year, Quintinum had $5.2 million in revenue. Okay, that's down nearly 70, 73% year over year because of a lumpy transaction in a year ago quarter that didn't repeat. In terms of earnings, well, they lost $130.6 million. And keep in mind that's just one quarter. Now I'm trying to give you, I'm just trying to put it perspective. Now Quantinium does have a good balance sheet with basically no debt, but it's also deeply cash flow negative at this point. As you might expect with those losses, sooner or later these guys are going to have to raise more money, either through borrowing or maybe through additional stocks. But honestly, those current numbers are basically irrelevant here because the buyers just don't care. This is pure rank speculation. It may very well be the case that continue that Quantum should be considered one of the leaders in quantum computing technology. I don't have enough degrees to assess whether that's true or not. But even if Quantinum is the best operator, we have no idea how many years it will take for quantum computing becomes commercially viable. Think years and years of potentially huge losses. Now, I never want to stop someone from speculating a story that they truly believe in. So as long as they understand what they're doing, it's fine. As we've seen over and over again in the past year, speculating the Quantum stocks have been pretty lucrative. Though not for the poor souls who bought these stocks at the top last October. So you got to be careful. But for me, the story is too speculative to recommend right now, especially with the sky high valuation, the stocks getting right out of the gate. The moment Wall street turns against the speculative stocks, we always see that happen. It happened last fall. Then this stock will get hammered. So let me give you the bottom line. After long existing as a sub of Honeywell, Quantinum is finally coming, finally came public. And while it's got a good story to tell, this is just not enough of an actual business yet. If you want to buy it, only use money you can afford to lose. Because this really is the most extreme form of speculation. I just wanted to put it out there. Everyone's so excited about Quantinum. I just want to invoke a little bit of caution. Vernon in Vermont.
- [31:57]
Caller
Vernon Hi Jim. I'm 92 years old and probably the oldest person that ever called into your program that could be an activist faster and I'm concerned about the valuation of IBM which has gone down 100 and then back up 100. I do you think that at present valuations of 300 or above IBM can meet its earnings requirements at that level?
- [32:32]
Jim Cramer
Okay Vernon, look I think you raised a really interesting question. You said it was up, down, up, down. This stock is up about 80 points in like a week. I think we got to give it a chance. I want it to come down before I can give it my seal of approval and I like it very much but it's up on a spike and you know I don't recommend parabolic move buy it's hardly ever worth okay, Quantinuum's got a great story to tell but it isn't much of a business yet. Maybe a little more of like a science project. I can't recommend anything more than than a speculative position in it right now. Much more man Bunnyhead. Shares of Tim can are up nearly 90% over the past year. So how is this 125 year old company been able to reinvent itself? I've got the CEO to find out then we are witnessing a permanent change in the investment thesis around the dollar stores. I'm telling you and it's not a good one. I'm going to share how I feel about this cohort and all your calls. Rapid fire tonight's just have the lighting round so stay with frame. Today all sorts of non tech industrial stocks soared higher. That makes you want to circle back to the Timken company a manufacturer of all sorts of engineered bearings, industrial motion equipment. They keep the industrial world moving. This stock's actually been on a tear. It's up almost 59% year to date including a nearly 25% gain over the past month after Tim reported a blowout quarter at the beginning of May. A couple of weeks ago the company held a very exciting investor meeting where management talked about how they could grow earnings by 55% from last year through 2028. That's pretty impressive. Yes me so can the stock keep running? Let's check in with Lucian Boldea is the president CEO of the timing company to find out but you'll welcome the man.
- [34:20]
Lucian Boldea
Thank you for having me.
- [34:21]
Jim Cramer
It's a pleasure to be here. We Used to talk a lot about Timken. Then it kind of fell off the radar screen. Now it' but in a different formulation. Can you tell people first before we get dig deep what you guys do and how you're so integral to the new industrial economy?
- [34:36]
Lucian Boldea
Absolutely. It's really, really a pleasure to be here to describe the company. We're 125 year old company and we started out being a bearings producer and we really added in the last 10 years an advanced motion technology portfolio. 14 acquisitions in total. What this allows us to do is goes from a component supplier, which a bearing is more of a component component, to a whole system. Designing a system a part of a total integral assembly. So for example, think of a gearbox on an aircraft carrier. Think of a transmission gear reduction unit on a utility and power gen. Think of a micro robot for microsurgery. We're in all those applications, so very interesting applications that are bringing as AI touches the physical world and impacts it, we transmit that motion. So we play a critical role there.
- [35:19]
Jim Cramer
Now what nip first went over your documents, I frankly couldn't figure out who you compete with. Does anyone do these things besides you?
- [35:28]
Lucian Boldea
Yeah, we're fairly unique. You know, every one of these technologies might have other players. But when you're talking about a system, when you talk about a component engaging really with a brand owner, with an OEM to this to solve their problem, we bring a series of unique solutions together. There's few people who do this. I would say the closest would be someone like Regal Rex, that is in a similar space. But then we have our bearings, legacy competitors, but they don't have all the motion systems that we have. So we're pretty uniquely positioned, I would say.
- [35:55]
Jim Cramer
I think people have to understand that if you move something constantly, it doesn't work. You move robots around, they'll come up, so to speak. Can you tell us what happens in a new factory, the kind of factories that we now talk about with you or and then without you, what would occur?
- [36:14]
Lucian Boldea
Yeah, Jim, that's a, that's a great question. And the factory of the future could be a dark factory, could be an autonomous factory. The excavator or the mining truck of today is a driverless truck. As we sit here and speak today. That requires a totally different level of reliability and dependability because there's not a maintenance man or a human watching it all the time.
- [36:35]
Jim Cramer
Right? Well, I mean if I go to one of your factory that has you, it may be that there's nobody else there, right?
- [36:41]
Lucian Boldea
That's correct. That's correct. And so you need a level of reliability, need a level of predictability, you need a level of service that's completely different. Which means we as suppliers need to take a different role with the customer, a bigger role with the customer, which translates into a share of wallet, which is what part of our strategy is.
- [36:58]
Jim Cramer
Okay, I have to believe that the kind of numbers you're talking about, the. Yes, the data center, including the power and electrification of a data center are really going to be important to you because that's that kind of growth market. What would you do, say for power and electrification in a data center? Yes.
- [37:16]
Lucian Boldea
So in a data center, we used an example at Investor Day. For example, if you take a gas turbine from one region to another, the frequency is different, which means you have to adapt, you have to have a gearbox to adapt that frequency to adjust for that frequency on the RPMs that it turns and generates the power. That's a gearbox that we would make and we would would supply there. But any clutches, any drives, any couplings, all the things that move that turn, not to mention the bearings that are in there, they're all part of it. Then you have all the infrastructure that needs to be able to enable the data center that also drives demand for off highway equipment that we enable with our technologies.
- [37:52]
Jim Cramer
Now I also have to believe when I look at the evolution of the company, you've been systematically getting out of different, different tasks that are very kind of prosaic, that don't require a lot of electrification engineering, done a lot of high precision, and then moving up the food chain to things that are really much more difficult to make. And it's worked, right? I mean you're kind of out of the slower stuff and into the better stuff.
- [38:18]
Lucian Boldea
That's exactly right. I mean we, this company started when cars in America used to ride on Timkins, not bearings. We've exited that business. Automotive is going to be below 4% of our business. The automotive OEM moved into mission critical applications where now we're enabling surgical robots. Were really working on a completely different world than we were before. But this happened gradually. We're now at a pivot point where we really can take this to the next level and really enable our strategy. And that's what we were able to share at Investor Day is really leveraging not only the portfolio, the markets that we're in, where do we focus on our customers and then these great regional opportunities. We have a huge portfolio of businesses that are single region business businesses. All these acquired companies, they're a Third of the revenue of the company. Each one of them on their own is a single region business. So imagine you have really a bucket of self help. I can take these one at a time and take them to new regions.
- [39:11]
Jim Cramer
Finally, you are a multinational company. You're not an American. You do a lot in America though I have to believe that the whole reassuring effort matters. Have you seen a pickup in your business in America from reassuring? Yes, you have.
- [39:26]
Lucian Boldea
The. The majority of the revenue as a company is still a North America revenue for us, for ourselves. One of the things that's helped is it's produced in regions. So we produce wherever we are. We have a lot of factories around the world but we transport very little across regions. So what we sell in America, we make in America. And then our customers obviously are driving a lot of demand. Whether it's infrastructure spend, whether it's data center build, whether it's defense and aerospace spending, all that pulls on our demand. But reshoring is definitely a big trend that's helping us.
- [39:56]
Jim Cramer
Well, I wish that I had followed your company more closely because I know there's been a huge run in it. But if you make the kind of, if you make those projections, I know the stock has barely moved versus where it can go. I want to thank Lucian bold days, the presidency of Tim can company tkr. Wish I hadn't lost track of you guys because what a great story you have. Mad money's back at the coming up you've got questions. Kramer's got the answers. Get charged up for a fast fire lightning round next. It is time stop the white round by know the call and then the lightning round is over. Are you ready, ski daddy? The lightning round comes over. And start with Jim in Colorado. Jim. Hey Kramer, this is Jim in Colorado. Good to have you.
- [40:56]
Caller
Yeah, I noticed Photronics was taking a dumper about two weeks ago and I just wanted to get your opinion on.
- [41:05]
Jim Cramer
They missed the quarter. Really, sir? They missed the the quarter really badly. So what we do when we have something like that, we put it in the penalty box until we see the next quarter because we just can't believe that there was just one. It was very disappointing. Let's go to deep in Georgia. Deep.
- [41:22]
Caller
Hey Jim, first of all, a very
- [41:25]
Lucian Boldea
big thank you to you and your staff for everything that you do.
- [41:28]
Jim Cramer
Okay? Thank you very much.
- [41:30]
Lucian Boldea
I started a small position in this
- [41:32]
Jim Cramer
company but I haven't heard much about it. I was wondering if you could give
- [41:36]
Lucian Boldea
your opinion on Woodward wwd.
- [41:39]
Jim Cramer
You know, it's a very highly engine it's kind of like a company we have on tonight. I happen to think it's a very, very good company. You're not going to get this coming for less than 30. It's going to be 40 times earnings, which it is. But engineered products, industrial engines, it's what's working now during this administration and I recommend it. Let's go to Katrina in New York. Katrina. Hi, Jim. Booyah. Katrina. I thank you.
- [42:05]
Lucian Boldea
My question is about mankind.
- [42:07]
Jim Cramer
After recent approval, I'd like to know your opinion. 100% speculation, a total speculation. In my book I talk about how you can have one speculation and then you have to have other stocks that are, you know, to be a little bit more earnings oriented. This would fit as that speculation. So I bless it for that purpose only. Let's go to Adrian and Marilyn. Adrian. Yes.
- [42:30]
Caller
Hi Jim.
- [42:30]
Jim Cramer
I hope all is well with you
- [42:32]
Lucian Boldea
and thank you for everything that you share.
- [42:35]
Jim Cramer
Oh, thank you. Things are good. I hope the same. How can I help? I'm calling about Occidental Petroleum. What's your take on that? Okay, you. At this point I don't want to make it sound like I'm pro war or anti war Jesus, but I'm going to say it. If the war ends, that stock's going to go down a lot. Okay. And that's the way you have to look at it. And I just offer that advice. And that, ladies and gentlemen is the conclusion of the Lightning round. The lightning round is sponsored by Charles Schwab.
- [43:07]
Venture Global Representative
Coming up, Kramer's dissecting what is becoming a dollar store doomsday on Wall street
- [43:13]
Jim Cramer
and whether any of these stocks can be bounce back.
- [43:17]
Venture Global Representative
Next.
- [43:22]
Caller
I'm a first time caller, a happy club member.
- [43:24]
Jim Cramer
I want to thank you for being
- [43:26]
Caller
the people's champion of investing.
- [43:28]
Jim Cramer
Thank you for helping me become a millionaire. Was this the quarter when we lost the dollar stores as places that benefit from a weaker economy? For the longest time we assumed that when the consumers feeling hard pressed, they go to the dollar stores and we go for the dollar store stocks. But it didn't happen this time. In fact the opposite occurred. One after another. The bargain chains talked about how their sales were hurt by the cash trapped consumer. And the stocks have become pariahs on Wall Street. Back when I was edge fund manager, these stocks were exactly what I reached for when the consumer was struggling. Saxiomatic. But this was the quarter where that trade just blew up because the lower income shoppers just didn't flock to them with their spare dollars. Consider these statements from the kings of low priced merchandise. This is Michael Creeden, CEO of Dollar Tree. Quote we recognize the consumer environment remains dynamic, especially for lower income households navigating higher fuel costs and broader macro uncertainty and translation. A strapped consumer isn't shopping as much as we thought. Todd Vassos, CEO of Dollar General noted quote Our core customer continued to be financially constrained as any benefit from tax benefits was largely offset by higher fuel prices and reductions in SNAP benefit payments. SNAP being food stamps goes on. Notably during the quarter, many of our core customers reported cutting back on other household expenses, including food purchases for rising gas prices. This pressure has been more pronounced on customers in rural communities as they work to minimize trip distances and make tradeoffs in their search for everyday affordability and value, end quote. Hmm, I thought that pressure brought more shoppers and not kept the regular shoppers from shopping as much. How about all these boring athletes Holdings? Here's CEO Eric Vanderbilt. Quote in the first quarter the environment shifted very quickly with surging gas prices impacting shopping patterns with a focus on trip consolidation. End quote Trip consolidation. Let's shorten for less shopping. Finally, consider former market darling five below which reported just last night. Now here's a store with a little higher price point, but it's been viewed as the real bargain for discretionary toys. But as CFO Daniel Sullivan pointed out the conference call last night quote we remain cautious with respect to the macro environment, consumer sentiment and buying behaviors. As such, we have left our half two comparable sales assumptions unchanged from our previous guidance, end quote. And you wonder why the Stock fell almost 14% today. We're used to having them raise guidance. Now let's consider the consequences of these consumer works. First, we talk about a case shaped economy on the network all the time. I think that letter may be a little, let's say less descriptive because the bottom half of the economy is going straight down if the lowest price retailers are struggling like this and a huge number of people must be doing very badly in the the country. Second, after years of being able to offer $1 items, the combination of inflation and tariffs, particular in China, has totally busted the buck. The dollar stores no longer feel like bargains. Ali's isn't low priced enough either. 5 below is barely below its barely below its losses. Lost her. After all, when the economy is doing badly, these are the companies that normally do well as consumers trade down. If even they're getting hurt, you know people are really feeling the squeeze. It's just, it's just not happening anymore. Now you might be saying wait a second, how about TGX that's been aware that's a discount. All right, well you need to know TGX is not a play on price as much it is about selection. When there are a lot of full price outlets trying to offload inventory, TJX is the winner. That chain can offer great value for much less than expected. You're getting quality goods on the cheap, very different from the dollar stores. That's why it's soft hangs in while these others just don't seem to have the traction anymore. In fact, go one step further. Perhaps the bargain stores after inflation, after tariffs, after the oil shock just aren't bargains anymore. The days when these stocks were the go to way to play a weaker economy may just be over. Terrific while it lasted. I like to say there's always a bull market somewhere and I promise you how to find it. Just for you. Right here on Mad Money. I'm Jim Cramer. See you tomorrow.
- [47:42]
Bank of America Representative
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 previous 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. Cramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit cnbc.com madmoneydisclaimer hey Fidelity, what's it cost to invest with the Fidelity app? Start with as little as $1 with no account fees or trade commissions on US stocks and ETFs. Hmm, that's music to my ears. I can only talk Investing involves risk,
- [48:31]
Jim Cramer
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- [48:31]
Lucian Boldea
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- [48:33]
Jim Cramer
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- [48:37]
Lucian Boldea
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