← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 7/14/26
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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- [00:00]
Jim Cramer
The board recommends approving regarding that seat on the committee. We're promoting quarterly earnings.
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Podcast Host/Announcer
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Jim Cramer
My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people make friends. I'm just trying to make you some money. My job in terms of to entertain, but to explain and to educate. So call me at 1-800-743-CBC. Tweet me jim Cramer. So I'm crossing Broadway right near the exchange, and John from Los Angeles stops me this morning. He wants a selfie. Hey, I'm always spilling to a selfie. I wouldn't have a show if I didn't, so of course I'm gracious. After the selfie, John wanted to ask me a question, even as a beer truck was backing up right into him. After I saved his life by telling him to move back, he asked me, isn't this market too frothy, Mr. Kramer? I said, no. Even as we had a fairly good day with The Dow rising 10 points s and be gained 0.38%. Nasdaq jumped point 9%. But he said, Jim, it seems like 1999 to me. I said, I lived through 1999 with hundreds of companies coming public that had no earnings and a ton of companies building out an Internet that simply wouldn't play ball. Many of those companies went under, taking trillions of dollars with them, souring a whole generation of buyers who got blown, never to return. I told him I didn't have time to explain and that dastardly beer truck was backing up new again tight spot. So I told him to watch the beer truck and watch tonight for more complete answer. So why isn't this 1999 then? First when you compare markets what you have to do is you have to make them apples to apples, okay? As I say in how to make money in any market, that means you're going to compare the price to earnings multiple of the indices or individual stocks to each other. A high PE multiple means a stock's expensive unless it also has an incredibly fast growth rate to justify the valuation, in which case that could be acceptable. You also need to measure prevailing interest rates because that's a good proxy for comparing the price earnings ratio and the value of stocks versus a risk free alternative. Let me knock out the latter first because there's pertinent information from today from this morning, thanks to a stunningly positive consumer price index reading we got 830 at the end of 1999 which was I regarded as the fulcrum of the overvaluation. The yield what you got if you owned bond, the Yield on the 10 year treasury stood at 6.4%. I'm going to repeat that because you don't hear that anymore. 6.4%. It's now just under 4.6%. Which means among other things we simply don't have the inflation we have back then. Something that would inflate the value of the entire SB500. We hear so many bears fret about 4.6, 4.5. But 6.4 is a very much vicious vicious competitor to stocks. So that cuts to making stocks a lot more compelling now than they were then on the basis of that risk free alternative. As I mentioned, the CPI came in very light today, much cooler than expected and rates dropped nicely. We know that there's a dip in gasoline but that won't last because the President's Iran strategy with the war back on oil is coming back up. But we got welcome declines in apparel, used vehicles, auto insurance and medical care, all of which have been high and sticky until now. Why do we care about this? Because as long as inflation stays very fairly tame, it's unlikely that the Federal Reserve will feel the need to or feel compelled to raise interest rates at the end of the dot com era. The Fed was not our friend then Chairman Alan GreenSpan hiked rates six times between June of 1999 and May of 2000. You don't get a dot com crash scenario without a series of tremendous rate Hikes and we simply aren't there yet. New Fed chair Kevin Marsh spoke today and he didn't sound. He's going to tighten if the CPI stays at these levels. I regard that as very bullish stocks in terms of valuation. What I know John was most concerned about going into 2000, the year of the dreaded decline. The s and P500 was trading at 25 times forward earnings. Right now the S and P trades at 20 times forward earnings. Remember, apples to apples, that's a big difference. And while 20 isn't exactly cheap, it's certainly not expensive like 2000 and the date myself, it's nowhere near the 29 times earnings we were seeing right before the crash of 87. That was the worst single day moment in the history of the stock market. But the real tale of the tape comes from the difference in everyday stocks. So let's go over a couple. Many of the major stocks back then at high, really high sky, high price earnings multiples. Cisco, one of the largest stocks in the markets by market capitalization back in 99 was selling at 95 times earnings even as those earnings were on the verge of collapsing. Now it's at 27 times earnings and they are on the verge of accelerating. I can go over chapter and verse how overvalued and frothy stocks were back in 99. I know because I bought a company. I bought a company public back then at $19 a share. But the stock opened in the low 60s. I screamed holy hell to the underwriters that they failed to control the deal and that's why it opened so high. And it made it ridiculously overvalued from day one. But the public was so crazy for dot com stocks that it was a common pattern. We had 330 stocks that came public and failed, many in a similar fashion the Street. Thank heavens we survived. They had no earnings, some cases no sales. Is that the case now? Not at all. Not one bit. Instead, let's talk about what happened today. I want to talk about some plain vanilla stocks that are shockingly cheap, that represent this market well. That and I spoke to the CEOs of these. They don't even get like what their stocks are doing selling so well. Let's start plain vanilla bank of America, which everyone knows to have important revenue growth of 15%. Asset management fees up 19%. Investment banking up 50%. Global banking net income up 20%. Global market net income up 72%. Much better credit quality and efficiency. And what happened? The Stock went up 1.8% to an all time high yet bank of America stock sells for 12 times next year's earnings. 12. Well that's exhibit against those like John who think froth predominates. How about Goldman Sachs? We're going to spend a lot of time on that later. But it had 78% net income growth, 92% earnings per share growth, 55% growth in investment banking, 32% growth in fixed income, commodities and currency trading. These are all pretty unheard of when it comes to the stats of the business. Best in the history of the firm yet even after its 9% gain. Today the stock sells for around 18 times earnings more than that one. The best blowout I have seen in many years and certainly the biggest non tech blowout that I have ever seen. When we come back from the break. I didn't know it was possible. Or how about JP Morgan? Biggest bank in the world. Get this. It had the highest debt income of all the banks, the highest revenue growth, the highest, the largest deposit base, highest return on equity, largest capital return, the highest investment revenues of all the major banks reported today. The stock which at one point in the gloom of this market was down $6.00. Down $6 closed up $8.36 or 2.5% all time high. The down $6 before the market traded. People are such dopes. But what does IT trade at? 15 times earnings, 15 below the market multiple best bank in the world. How so? These are ridiculously cheap. They're insane. And you think that's frothy. Oh, so you're worried about tech then you think it's way too high. Have you considered the $26.5 billion that SK Hynix, the Korean semiconductor company raised last Friday in our markets? What if I told you that stock even after it skyrocketed $41 today House of Pleasure still trades at about four times next year's earnings according to analysts at Barclays initiated coverage today. Yes, it's that cheap. It's downright nutty cheap. It's like ridiculous cheap. I mean you could like I don't know Gemini in a cheap and it should come up or maybe like I don't know Claude cherry picking. You think I'm doing that? Hardly. Micro another red hot commodity chip maker trades is 13.5 times earnings SanDisk stocks up 643% this year ready but only sells at 27 times earnings. Even though as stupendous earnings growth. Finally in tech world let's consider Nvidia, the world's largest stock. It looks to be trading in Slightly more than a market multiple by some measure. 23 times next year's earnings is the one that's prevailing. Dell, taking a lot of business from a flagging IBM, more on that one later, trades at 25 times earnings. And I think those estimates are way too low. Those stocks are going to turn out to be much cheaper than we think. Now there are plenty of stocks that do have higher multiples or no multiples, like Space X, which can call the perception of the market. I know something like SpaceX can feel very 1999, but those guys have huge revenues and I think a lot of hope. Bottom line. Well, I shouldn't use the word hope. A lot of. Let's say they're going to make a lot of money one day. How about that? Bottom line? What typifies this market is the inexpensive nature of so many big cap stocks in so many sectors. There is some froth, but the froth does not represent what we trade what we own. It just stands out like a sore thumb and nothing more. Or if you're into the canary metaphor and I just say this one's a canary, but it's at the wharf, not in the coal mine. Nick in New Jersey. Nick. Hi Jim. I'm into Boston Scientific at World to. What should I do now, Nick? You've got to wait two quarters. That's my rule. That was one of the worst misses. Even though I like the health care sector, I don't particularly like the equipment sector. A lot of those stocks are doing badly. Intuitive, hey, I got to tell you. Intuitive. Surgical and intuitive. That would have been a good piece to do today. I'm looking at my executive producer, Regina Gilgut. Should have done Intuit. Intuit? How? If you intuit, it's bad. If you think maybe it's good, there might be some froth, but it doesn't represent what we own. I'm telling you to, let's say don't let it dominate. And don't let a beer truck hit you. Oh man, money tonight. IBM just had its worst day ever. So what sent the big blue deep into the red on breaking down the surprise earnings disappointment then one bank has been outperforming the others in earnings season. I'm going to tell you where I come down on what I just mentioned. That beautiful Goldman Sachs quarter. And get this, Zoom. It just had its best growth in years. So is now the time to get a piece of this 15 times earnings company again, no froth. I'm checking in with the CEO, so stay with Kramer
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Eric Yuan
Foreign.
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Podcast Host/Announcer
Don't Miss a second of Mad Money? Follow at Jim Kramer on X. Have a question? 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 did you know that Neuro Symbolic AI can help your business find new ways to make money?
- [12:19]
Eric Yuan
E.Y.
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Podcast Host/Announcer
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- [14:13]
Jim Cramer
This morning was supposed to be about bank earnings. Five major banks reported, but then IBM preannounced some hideous numbers and the stock got torn to pieces. Down over 25% in a single session. All right, look, I've been an optimist and IBM for two and a half years now, but the stock's back down to a level it first reached nearly two years ago. So we have to ask what the heck happened? First, let me set the scene. Not long ago, IBM software business was Posting its best growth in ages in large part because much of their software seemed very useful to AI developers. At the same time, their consulting business was on fire as they helped other companies harness AI without spending for Porsches. Little over a year ago they also launched a new mainframe model that was selling very well today that got derailed this morning. IBM preannounced weaker than expected numbers pretty much across the board. CEO Arvind Krishna explained that because IBM was lapping the launch date of its latest generation mainframes in the second quarter, its infrastructure business was up against frank very tough comparisons. But what played out was even worse than expected, driven by a shortfall in both mainframes and related software. Here's how we put it. I'm going to quote in the last few weeks of June we saw clients shift their quarterly capex spend towards servers storage and memory purchases to secure supply constraint infrastructure ahead of expected price increases. End quote. Basically there's all this tech hardware that's in short supply that we talk about all the time. Prices have soared so companies are spending a lot less outside of the data center in order to cover the costs. They can't cut their cybersecurity budgets. That's too dangerous. So anything outside of these core areas could be in big trouble. And anything includes IBM. Now Christian took ownership of the mission, which was certainly nice to see. He's not one of those CEOs who's in denial about reality. He knows IBM dropped the ball and he admitted it. He then went on to note some of the limited highlights from the quarter Queen Double digit growth from my favorite business that they have red hat strong performance from its acquired business Hashicorp and confluent good numbers from the distributed infrastructure division. Continued growth in signings for the consulting business and and some cost cuts. Krishna also noted that the company launched a new cybersecurity initiative called LIGHT. Well, he had some positive things to say about IBM's quantum computing business as well that I have spoken to you about many times. But when we saw these numbers and Krishna's explanation, what instantly struck us is that this is the first tangible evidence of a trend that we've been hearing about for the past few weeks. Right now the people in charge of corporate IT budgets are being forced to prior prioritize into three buckets of spending. You want to take these down if you can because you're going to start hearing more and more of it this earnings earnings season they spend on cybersecurity, tech hardware and a I tokens. Anything outside of these Buckets is a much lower priority, which is how you get a quarter like this from IBM. Let's take them one by one, starting with cybersecurity. Back in April, Anthropic released its Mythos cybersecurity model which then fully launched in June. And this thing scared the heck out of most companies, thousands of companies frankly. And it's for good reason. Mythos, or Fable 5 is the publicly accessible version of the model is called has the ability to identify security vulnerabilities in a way that no human or a model has ever been able to before. It's proof that hackers using AI is can indeed tear through most of these corporate networks, hence the need for more cybersecurity spending. Why crowdstrike was up so much. I'll tell you that's one of, that's the antidote, I think. But we're talking IBM here. Second bucket hardware. This is a bucket that's become much more expensive over the past year because of the explosion in memory and data storage pricing that's caused huge gains in stocks of Micron, Seagate, Sandisk, Western Digital, sk, Hynix. You saw that tonight. Because their products are in very short supply to the point where they can charge insane prices for the stuff. And you need all of this to build a computer or a phone or a tablet, let alone an entire data center. IBM explicitly said the customers were prioritizing this stuff over their mainframes. Everyone knows these shortages could last until 2028, which means prices could go ever higher. So big spenders are eager to lock in as much supply as possible right now. So pretty much all tech hardware has gotten substantially more expensive. And this might just be the beginning. Bad news for IBM because it means there's less money left over in IT budgets for IBM. Finally, a third little harder to understand third bucket is AI tokens, which means more use of the leading AI platforms which have mostly moved to a consumption based pricing model with tokens being the basic unit of measurements. Companies don't want to get left behind in AI right in the air they've got, they got to be present. So they've been willing to let their employees use tokens liberally. Whether that means using AI platforms for some productive process like the rewriting your software code or just experimenting with AI to try to find new ways to use it. See a lot of that. We've started to see griping about the ballooning costs of AI this year. So maybe there could be a crackdown on token usage at some point. But for now, that type of spending is being allowed, if not always encourage. What happens when those three main buckets of IT spending get prioritized as they have been? Other types of spending need to be deprioritized. Unfortunately for IBM, they have too many products and services that fall into the other types of spending, even if they also have a decent overall narrative as I've been talking about for a long time. So even though IBM stock plunged 25% today, which certainly seems excessive compared to compared to the size of disappointment, I can't tell you to buy this stock and weakness because I think the weakness could very well be persistent. Sure, the stock now is pretty cheap, okay, it sells at around 17 times this year series estimates, but those estimates want to come down overnight. Yes, IBM's dividend yield is back above the 3% level. It's nice, but that's not a good enough reason to buy the stock. I like that question. Took ownership of the missed quarter. He's a good guy, good executive. And I think that IBM still has some tailwinds that were totally disregarded in today's beatdown. But frankly, I'm too worried about these trends to say that IBM is now safe to buy after this decline. We're at the point in the year where IT managers are putting together the budgets for 2027 and you have to assume that these three priorities that I just identified will continue to dominate, which means anything outside of them will still have a real problem. I hope that IBM truly is just seeing its deals get delayed and not cancel. But I can't tell you to buy a stock because I hope something is true. Hope should not be part of an equation here. So let me give you the bottom line. Corporate IT budgets are getting squeezed by sky high prices for all the hardware that's in short supply, which means less money to spend on stuff from IBM. That's the new reality and I have no idea when it will change. Which is why I can't recommend IBM, not even after today's severe decline. Debt money is back after the break.
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Podcast Host/Announcer
Coming up on a day dominated by big bank reports, one emerged head and shoulders above the rest. Cramer's explaining which next which are America's top states for business?
- [22:03]
Jim Cramer
Get all the data and complete state by state analysis.
- [22:07]
Podcast Host/Announcer
See how your state measures up America's top states for business. See the full list now at topstates.cnbc.com.
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Jim Cramer
Today, earnings season kicked off in earnest with a parade of bank quarters. And I thought they were all terrific. Typically on the first real day of earnings season, we get Results from a few banks, usually three or maybe up to four. But today for the first time that I can recall, we got results from five major banks on a single morning. The first national, the four national commercial banks with large investment banking businesses. And that's JP Morgan, bank of America, Wells Fargo and Citigroup. And we also heard from Goldman Sachs, the preeminent investment banking pure play, the only one bank left as reported Morgan Stanley. We hear from them tomorrow morning. Honestly, it feels like the banks are trying to give me a heart attack here. As I mentioned at the top of the show, these results were generally pretty good. But one bank quarter was clearly the best of the bunch and that's my former employer Goldman Sachs, which I haven't known. For the Chapel Trust. Expectations were very high for Goldman coming in, meaning both the literal consensus estimates from the analysts who cover the company and the general expectations reflected in fact that the stock was indeed up 48% over the last 12 months going into the quarter. You'd have to believe it's going to be unbelievable. Move the needle here. Generally speaking, we all knew that Goldman's results would be strong because there's been a bonanza of IPOs in debt offerings and M and A transactions. Those are the investment banks, bread and butter. But even though Wall street had great expectations, the company still managed to surprise the upside in Midway. Throw in a fantastic story told by management of the conference call and you can see why the Stock Shot up $94 or 9% today to another all time high. Just how great was this quarter? Let's start with the headline numbers which were truly extraordinary. Goldman generated $20.3 billion of revenue in the quarter, up 39% year over year and more than $4 billion ahead of its of expectations. That's an insane beat. The company's efficiency ratio, which is their expenses divided by revenues, giving you a percentage where lower is better. Lower came in at 57.4. That's down from 63.4 the year before. That is a staggering improvement, almost impossible to execute. Needless to say, that decline in cost produced astonishing earnings. Goldman earned $20.98 per share, more than six bucks higher than Wall street was looking for. Nearly double what they earned the year before. When I was speaking to Dave this morning, I was glum. He said, what's the matter, Jim? I said, I'm glum. I don't work at Goldman Sachs anymore. I mean, holy cow. With these numbers and whether you use return on tangible equity or return on equity as your preferred measure of profitability, Goldman came in well ahead of expectations and saw a huge jump from the second quarter of last year. I mean these guys, they're practically, they're probably pretty money. The driver of Goldman standout results was the stalwart investment banking in the sales and trading businesses which Goldman collectively calls global banking and markets. That division had revenue of $15.52 billion up 53% year over year and well ahead of the 11.72 billion that the analysts were looking for. Now all the subsegments within that division had substantial growth. Investment banking fees were up 55% year over year three to up $3.4 billion thanks to all the M&A IPO secondary offering debt offerings that we've seen. Fixed income currency Commodities trading grew 32% year over year. That beat expectations handily. But the biggest upside surprise came from Goldman's equities trading operation which which grew an incredible 72% year over year to 7.42 billion. I never thought it could have that kind of firepower. That unit was only expected to have just over 5 billion in revenues. Meanwhile, Goldman smaller asset and wealth management business also had a very good quarter revenues up 20% year over year. 4.6 billion when the analysts were looking for 4.3 billion asset and wealth management unit had 20% growth in management fees reflecting higher assets under supervision. But a 222% year over year surge in in that segment's investments revenues certainly didn't hurt either. This kind of performance is incredibly important because it is not episodic. It doesn't need big deals. It's sticky with big gross margins regardless of M and A, regardless of whether they're more SpaceX deals. Now when the conference call CEO David Solomon explained that his firm's benefiting as its corporate clients seek more scale to quote, invest and compete more effectively. That desire for scale has driven a significant increase in dealmaking. As we know with large cap corporate M and A up 90% through the first half of 2026, boy they've been getting their fair share. On top of that, Goldman's benefiting from the rise of artificial intelligence. As Solomon said, quote the investment cycle is expanding capital needs beyond core technology into infrastructure, energy and data centers, generating a ripple effect across industries. This is creating significant opportunities for Goldman Sachs to provide structuring financing, risk management and capital markets execution across both public and private markets, end quote here. It's worth noting by the way, that Goldman was not only the lead left underwriter for the SpaceX IPO, meaning they're in Charge. It also led Alphabet's huge secondary offering, which was the largest equity offering of all time for about a week until SpaceX came public. Anyway, these are two very lucrative pieces of business again with terrific gross margins. Now Goldman, even when times are good, there's always a question of how long can the good times last. That's why the stock's price juries multiple currently around 19, never gets all that high. It doesn't get above the market multiple. But one analyst thought this up, brought it up today on conference call asking to compare the current moment to quote the dot com year or even during the 2021 period, end quote. The implication was, well, maybe we are at peak period because 2021 happened to be the top of when we had a lot of IPOs. But Solomon's answer was interesting and I thought pretty encouraging if you were bold. He said, basically the Goldman is so much larger now, so much more diverse and I'm paraphrasing here, but so capable of making money in very different ways that he feels as though the current moment is much more durable. That's the keyword than in significant investment cycles of the past. I think that helped contribute to today's terrific rally. We found felt a little more confident. Here's the bottom line. The five big banks report that we got this morning were all pretty darn strong. But the report from Goldman Sachs was indeed a cut above the rest. This investment bank is seeing incredible strength across the entire business right now. And while it's fair to ask how long the strength can continue, Magic believes the business is more durable than it's ever been. And personally, I think we're still in relatively early innings of this fundraising and dealmaking cycle, which is why it is a top five position in the charitable trust. And an important point we'll be discussing when we convene our club meeting this Thursday at noon. Join up now. I'm promising you won't want to miss it. Let's go to Venus In Michigan. Venus. Mr. Kramer. Woohoo. We're Kramer at the Michigan. Me and my daughter Katya. She's 10. Say hi, Katya. Hi, Mr. Kramer. You're. Hi, how are you?
- [29:23]
Eric Yuan
How are you?
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Sponsor/Disclaimer Voice
Good.
- [29:24]
Jim Cramer
We just left the beach. We're doing awesome. It's 100 degrees here in Michigan today. I feel like it's 100 degrees right now. I'm under a lot of pressure from this, from a kid who's got some horse sense. Let's see what you got. Let's see what you got in mind. Tell them what Stock we're asking about so far. So this is what I want to know about Sofi, Mr. Sanders. Okay, well, she should be a client of SO5. You got to get young people involved there. No, come on. That's what I was trying to do. Get the younger people to save. And I agree with them. The stock's been stuck a little bit around the 18 half level. I think that's a great level to get involved. I think that this is much more than a bank. I think it is more of a service company that happens to be in banking. And I like everything that Anthony's doing there. He is the CEO. All right. The bank earnings have all been strong so far, but Goldman stood out even amongst among a strong card. And yes, I think City was not that bad. Come on. I think the strength in Goldman can continue. Now, there's much roommate money, including my excuse with Zoom Communications. Then there's a lot of negativity out there that's starting to bring even me down. I'm telling you how to fight the negative headlines and keep your head in the game. And it is really difficult, of course. All your calls, map and fire. Tonight's digital lighting round. So stay with Kramer. Oh, we got a real treat for you tonight. We're going to speak with Eric. You on. He's the founder and CEO of Zoom Communications. Now, you may first heard of Zoom during the pandemic, Zoom was on the present, but then we got over Covid. And while Microsoft Teams and Google Meet became much bigger competitors, led to a tough, let's say tough, decline in the stock. But over the past 12 months, Zoom stock has rallied almost 22%. But you know that even up here, it sells for just 15 times earnings. In the latest quarter, the company had its best growth in years. Management raised their full year forecast across the board, even adding $1 billion to their buyback authorization. Zoom is pushing further into phone contact center, workplace tools, AI products that can turn conversations in, notes, follow ups, completed work. It's like a brand new company to me. Plus, they made a $51 million investment in Anthropic back in 2023. While it's currently valued at 1.3 billion, could be worth a lot more as we get to a. Who knows, an IPO event. So tonight I want to check back with Eric about the journey he's had with Zoom. Eric, welcome back to buddy.
- [31:52]
Eric Yuan
Thank you, Jim. Thank you for having me. It's awesome to be back.
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Jim Cramer
Well, I'm so thrilled you're here. To have you in person before we go over all the things that are extending Zoom, we well beyond core collaboration, broader modernization engine you've got going. I thought it might be good for you just to talk about how Zoom came about the journey, how you got to this point. Because people don't know the story.
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Eric Yuan
Yes. So I left Cisco back in 2011, I started Zoom and today we just celebrated a Zoom 15 year anniversary. Over the last 15 years we were focusing on the product and truly build a greater product to delight our customers. And we are onto a Zoom to do journey now.
- [32:34]
Jim Cramer
Now we are talking about some tremendous, really some great AI use cases. I'm talking about transcribing calls, summarizing notes, generating potentially executing next actions. You're starting to get some pretty great enterprise work and a nice acceleration. What are the things that are really making people excited, including the enterprise, about what you're doing now?
- [32:53]
Eric Yuan
So first of all, Zoom's value goes far beyond the meeting. We power the preparation before the meeting, the collaboration during the meeting and action that follows. Essentially we embed AI into every state of the work conversation, collaboration, action and completion. And we really want to become a system of action that can connect work from a conversation to completion. That's why enterprise customers really like our mission.
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Jim Cramer
So I mean for instance, you mentioned Raymond James firm I really like and that they become a client, really very large client. Would they be looking up some contact center interactions and finding out maybe some commonalities or are they just using it to be able to figure out how to make it so everybody's better at sales. What's the, what are the use cases?
- [33:44]
Eric Yuan
So they are a customer for a long time when we shared our vision with them, they really get it, you know, from a combination to completion. That's why they deploy our customer company and with our technology to improve their day to day workflow.
- [33:59]
Jim Cramer
And how about a Figma? What a great client. We think that they might be taking over in that particular segment of AI. What, what are you doing with them?
- [34:08]
Eric Yuan
Also, you know figma, right? Is a design company. They focus on the vertical market. We leverage AI also focus on the vertical use case as well. Like we have a product for the sales department, a product for HR department, the product for the contact center. We also the product to leverage AI focused on the vertical market as well.
- [34:26]
Jim Cramer
Okay. Now I love the Zoom customer experience insights, the inquiries, the query contacts. And it would seem to me that these are the kinds of things that you could always take a Zoom client that found and you've got that great method. You let everybody Kind of try it and sample it. And then how do you get them to know about these products? Because it seems like when you tell them about them, they take it. That's great request.
- [34:49]
Eric Yuan
That's one of the problem we are facing. As I mentioned, Zoom the value goes far beyond meeting quite often customers. They do not know that so many vertical products, beautiful lens of the business or vertical use case. Our marketing strategy is to make sure first of all make sure the product works. And then gradually less customer. Understand we have, we have our entire platform now.
- [35:13]
Jim Cramer
You do have some very tough competitors. Big, big companies. How are you distinguishing yourself from them? And how can you have good growth knowing that they are. Well, let's say they're very well known companies that already have a lot of business with different companies that you might be calling on.
- [35:31]
Eric Yuan
Yeah, I was ready to always look at everything from customer perspective. For sure, we have a few very big competitors. But I was ready to always to build a better product to delight customers and essentially build their trust. Because when customer when they are using Zoom, if you're very happy. Because our culture is to deliver happiness to our customers.
- [35:51]
Jim Cramer
And how are you able to grow AI companion paid users 184% year over year. And my notes reach 1.5 million licensed users in just four months. What are you doing?
- [36:04]
Eric Yuan
So first of all, product just works. The second, ease of use and also the, you know, especially like company is a part of our package is for free at no cost. You know, customer love that it works very well. Ease of use and also for free. That's the reason why, you know, in terms of a year over year growth and 184 gross.
- [36:25]
Jim Cramer
Now the company, the growth here is rather astounding versus where it was a couple of years ago. Do you think that you bought back so many shares? When will you get that recognition that I see? Which is that this is a very new Zoom faster going. Or will you just keep buying in the shares? If they keep it at this level?
- [36:44]
Eric Yuan
Yeah, we have a strong budget shape.
- [36:46]
Jim Cramer
So, you know, you always had a strong balance from the very beginning. I know you always cared about that.
- [36:51]
Eric Yuan
Yeah, because we look at it for shareholder perspective. We just issued $1 billion buyback. Make sure, you know, and the focus on, you know, anti dilution. I make sure your shareholder they feel happy. You know, make sure we have a long term shareholder. So.
- [37:04]
Jim Cramer
Well, it does seem when you speak with people Zoom became like the old Xerox or like Kleenex or these. It's just one of these names where said let's just do a zoom call. And then when you find out it's not a zoom call, it's the other guys, you panic because no one knows how to use those guys. We all learn how to use them. Have you ever noticed the strangest when people say oh I do want to do a X call that's not yours, people want to do a zoom call.
- [37:32]
Eric Yuan
So Jim, you are right. Why receive a link from other solutions? I'm panicking too. The good news is for the few minutes it did not work and other side. Eric, can you send me a zoom link?
- [37:44]
Jim Cramer
It works. We see zoom now. Anthropic. Did you just have a good feel about it when you you saw the product? I know you've always been a very wise investor but from day one I'm
- [37:56]
Eric Yuan
a huge fan of what they're doing such as greater company, such as greater model and they are a great customer, a greater partner and yeah, we love this partnership.
- [38:06]
Jim Cramer
Now you're a good partner. Salesforce too. Are they doing okay? ServiceNow. I know you know them because some people are worried about these kinds of just traditional software companies. Will they do okay? I mean, I know that you can really from where you are, you send in a good product, let us know.
- [38:21]
Eric Yuan
I think not only they are doing okay, I think they would do very well in the future as well. I think the market is sort of overreacts. I think you look at their product, they consistently deliver huge value of business impact to customers. Right.
- [38:36]
Jim Cramer
Well, look, I just got a. It's just exciting to have you. You changed the world and we all know you as the person who created a new way that we talk to each other. And they really ought to know that there's a new way, that your business is a very strong corporate business, enterprise business because it still doesn't get the credit it deserves. That's my view. But I think it's going to be many others soon. That's Eric Yohan. He's the founder and CEO of Zoom Communications. Guys, I know it's had a big move but when you take a look at the fundamentals, the enterprise business, how inexpensive it is, I think it makes a lot of sense to be able to buy right here. Eric, thank you so much. Thank you for having Man Bunny's back after the break.
- [39:18]
Podcast Host/Announcer
Coming up, you've got questions. Kramer's got the answers. Get charged up for a fast fire lightning round. Next.
- [39:35]
Jim Cramer
It is time for the right round. Christmas time for our call. Sam Socks here. Bye bye, bye. Just be turned into the four Stop questions at them. My step pairs the grabs on the fly. We play the sound and then the lighting round is over. Are you ready, ski daddy? Turn the right home crane. Let's start with Dan Mattress Dan. Hi, Jim. Thank you very much for taking my call. I appreciate it. Of course. Okay, I need your most trusted advice on a company called Kratos Dependent Securities. Kos. Absolutely dependent. Stocks have literally been cut in half, including this one. I think that they've been punished enough. I actually want to buy Kratos. I've been a quarter for a long time. It did go up to 120 with Albie. I think it's good level here. Let's go to Dave in Texas. Dave. Evening, Jim. Good evening. Questions for. My question is for equipment share. The stock continues to fall, hit a two week low recently compared to its peers. Is it a buy? Which one is it? I'm sorry? Oh, I got that one wrong clip and I got that wrong. I thought this would be like United Rentals and it wasn't. It's disappointing and I can't stick with it. I just didn't see the difference between this URI and I made. I made a mistake and I'm sorry. Let's go to Tom in Connecticut.
- [40:49]
Eric Yuan
Tom.
- [40:51]
Jim Cramer
Hey, Jim. Tom.
- [40:53]
Eric Yuan
What's up?
- [40:53]
Jim Cramer
What's up? Wondering what your thoughts are on Cheniere lng. I've never lost faith in Cheniere. We actually were the first people nervous people of Cheniere and they are still doing great things with LNG and I want to continue to back them because I think we're going to own the LNG export market because we have the most of any country in the world. Kenny. And Florida. Kenny. Hello, Uncle Jimmy. Beautiful Delray Beach, Florida nephew. You know I love it there. Hey, next time you're down here, let's go go down to Atlantic and get
- [41:25]
Eric Yuan
a drink
- [41:27]
Jim Cramer
out to the rooftop bar at that hotel right there.
- [41:30]
Eric Yuan
Okay.
- [41:31]
Podcast Host/Announcer
All right.
- [41:32]
Eric Yuan
Way to go.
- [41:32]
Jim Cramer
Give me a call. Hey, just want your thoughts on Pico and where you think it's going. I don't know. See, my problem is I don't know what it owns. And so therefore I'm afraid after this tremendous run that I'll be coming in late to the party and I can't opine on what it has. Let's go to Glenn in New York. Glenn. Hey Jim, it's Glenn from Staten Island. Prices being so high, I'm vacationing in my backyard. What's your opinion on Pool Corp? P O O L. Pool needs more transactions in the housing Business and transactions are at a 40 year low, so I cannot recommend pool. Let's go to John in New Jersey. John. Jim. How are you? I want to thank you for all the good that you're doing for the little guys. Oh, thank you, man. That's the game plan. You got the game plan? How can I help? Thank you, sir. Super Micro smci. Now, I think that team is. I think that team is a suboptimal, suboptimal group of executives. I prefer either Dell or even HPE to those guys. And that, ladies and gentlemen, is the conclusion of the Lightning Round.
- [42:45]
Podcast Host/Announcer
The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's going on the offensive and taking the doomsayers head on to show you there's still good in this market.
- [42:58]
Jim Cramer
Next, We all have stories we grow tired of, sick of even, but are afraid to call them out. As an avid reader of the business sections for the last 44 years, I'm going to give you some of mine. The first are tomes to start with. Something cute about how stocks may look cheap but. And then there's some statistic of some short seller who tries to tell you why stocks are overvalued and you should get out now. These kinds of stories must be sold in Kansas. The supermarket. There's so many of them, they're endless and they always sound so darn authoritative. We had one yesterday talking about how the earnings estimates could prove to be far too high or the current earnings are overstated. All of them. I had a laugh. I mean, as a young investor I might have even been tempted to sell my stocks if not for my experience as a journalist, which taught me that press loves negativity. I own a cyberpaper myself. So hard to get the journalists to write anything positive about. Then there are the stories like the ones we're seeing right now about semiconductors and how they are no longer going to be able to better. Let's say they're going to be able to go up on better than expected earnings. That's the big move is over. Sure, but after today's rally, I wonder if they're getting oversold. Maybe they were just recharging that whole time. Fact is, we don't know if the sellers are almost done. Nor do the journalists. Selling without knowing more could be a big mistake. The semiconductor next was up almost 3% today. Maybe that's the restart to be bearish in the group because it went down. That make a lot of sense to me. How about stories covering the importance of the bond market and of given Fed honcho who we all seem to be keen on suddenly because that's what the media says we should be keen on. One Fed official who was a dove, now wants rate hikes. Who that's causing otherwise smart people to blow out of stocks. Because you can't fight the Fed even if that one official doesn't represent that. These stories have cost people fortunes, but they keep coming and coming. In fact, they're sought after by people who don't know they're misleading investors. Especially on a day when the CPI actually fell month over month for the first time since 2020. Believe me, if the CPI is going down, rates aren't going up. I wish you could sticker these stories as possible irrelevant or wrong, but they won't let you do that. Hey, maybe they just shouldn't be highlighted. Maybe they shouldn't be done. Oh, I got a bunch of other favorites. There are a couple of people who are over the years have shorted stocks, been negative for ages, their records are never talked about. Yet when they bring up a stock that they hate, it's presented as something groundbreaking. The press, not the short sellers. Then knock the stock down. It's painful, especially when there's no follow up. You usually end up kicking yourself for taking these stories seriously. Or how about when there's an analyst and ice cold one who talks to you about how you got to say sell Dell because of the rising cost of memory price. As if Michael Dell hasn't thought through yet. You got a lot of those at 150. Now it's a 457. We had a downgrade of Apple today from a guy who hasn't been right for Apple about Apple for ages. He missed the whole move. Could have cost you fortunes. Now he made a splash with his downgrade. The worst, someone who warns you that if the 10 year goes over 5% or the 5 year goes over 4%, you got to sell everything. I hear this stuff every day. It's incredible. Now let's talk about the truth. The Dow has gone up 51,000 points since I first started to hear this garbage. It's meant to have an impact. The garbage. It's meant to make you take action. It's meant you to get out. It wants you to sell. Now that we have a new Fed chief, I'm hearing he's going to take up rates even though the CPI was tame today. Now that we have a new earnings season, I'm hearing the stocks already too high. Now that we're back at war, I'm hearing that there's huge downside to which I say, do you like the companies you own? Then get ready to buy more into this heavily crafted negativity, are you in an index fund? Get ready to buy more. And if you're short, well, then you don't need me. You have the rest of the media to do your bidding. I like to say, as always, bull markets are my props. Started just for you here, Mayor Muddy, I'm Jim Cramer. See you tomorrow.
- [46:55]
Sponsor/Disclaimer Voice
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. 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 which are America's
- [47:28]
Podcast Host/Announcer
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