Mad Money w/ Jim Cramer 7/29/25

Summary

Mad Money w/ Jim Cramer – Episode Summary (July 29, 2025)

Hosted by CNBC’s Jim Cramer, the July 29, 2025 episode of “Mad Money” delves into the tumultuous landscape of Wall Street, analyzing recent corporate earnings, market movements, and future investment opportunities. This comprehensive summary captures the key discussions, insights, and conclusions presented throughout the episode.

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1. Market Performance and Overview

Jim Cramer opens the episode by addressing the recent downturn in the stock market. Highlighting significant losses, he emphasizes the disconnect between Wall Street’s performance and underlying economic challenges.

• Market Declines: “The Dow lost 205 points. The S&P dipped 0.3%. The Nasdaq declined 0.38%.” (01:10)

Cramer attributes these declines to a combination of unmet earnings expectations, tariff-induced economic strain, and weakening consumer sentiment. He underscores the skepticism surrounding potential interest rate cuts by the Federal Reserve in response to these challenges.

2. Impact of Tariffs and Consumer Sentiment

The episode focuses on how tariffs have adversely affected major corporations and, by extension, the broader economy. Cramer scrutinizes the earnings reports of several household names, illustrating the tangible impact of trade policies.

a. United Parcel Service (UPS)

UPS reported a dismal quarter, reflecting the strain tariffs have placed on its operations.

• CEO Carol Tome: “Despite uncertainties around trade policies in the second quarter, the overall economy remained resilient.” (04:15)
• Consumer Impact: “Our sector, specifically the U.S. small package segment, was unfavorably impacted by U.S. consumer sentiment at historic lows.” (05:00)

Cramer's analysis reveals that UPS’s stock fell over 10% following the announcement, signaling investor concern over sustained consumer weakness.

b. Whirlpool Corporation

Whirlpool, expected to benefit from tariffs, instead faced significant setbacks.

• Earnings Forecast Revision: “We took our earnings forecast down from $10 per share to the $6 to $8 range.” (07:30)
• Dividend Cut: “We are reducing our quarterly payout from $0.75 per share to $0.90.” (08:15)

Cramer notes Whirlpool’s 13% stock decline as a direct consequence of failed tariff advantages, highlighting the volatility introduced by international trade tensions.

c. Stanley Black & Decker

Another casualty of tariff pressures, Stanley Black & Decker experienced a 7% drop in its stock price.

• Weak Consumer Spending: “A weak consumer who seems to have backed away from do-it-yourself projects, coupled with an inevitable $800 million tariff hit.” (10:45)

Cramer criticizes the impact of President Trump’s policies on companies moving jobs overseas, exacerbating financial strains.

d. PayPal

Contrary to robust consumer spending reports, PayPal reported slower growth, attributing it to tariff fears.

• CFO Jamie Miller: “We observed a slight softening in retail spending in the U.S., most apparent in areas likely impacted by tariffs.” (12:20)

This led to an over 8% decline in PayPal’s stock, surprising both Cramer and the market given recent positive consumer spending indicators.

3. Federal Reserve’s Policy Implications

Cramer discusses the dilemma faced by the Federal Reserve in light of mixed economic signals. While some sectors show strength, others indicate significant weaknesses that may necessitate policy adjustments.

• Interest Rate Cuts: “Only some strength in a handful of industrials and taxes seems to cut in favor of standing pat today.” (02:45)

He questions whether the Fed will act to mitigate economic slowdown or maintain current rates despite growing concerns.

4. Positive Earnings Highlights

Amid the negative reports, Cramer briefly touches on companies that bucked the trend, though he suggests skepticism about their long-term resilience.

• Boeing: Despite hitting a 52-week high and reporting strong cash flow, Boeing’s stock saw a slight dip, indicating investor caution.

Cramer remains bullish on specific companies but warns of potential overvaluation.

5. Takeover Activity and Market Consolidation

Cramer highlights ongoing merger and acquisition activities, noting that while some deals are progressing, antitrust concerns could delay approvals.

• Union Pacific and Norfolk Southern: “Assuming the deal gets approved, it will create a continent-wide railroad colossus.” (09:30)

He remains optimistic about the likelihood of these consolidations under the current administration but acknowledges regulatory hurdles.

6. Deep Dive Interviews

a. Merck CEO Rob Davis (16:17)

Cramer interviews Rob Davis, Merck’s Chairman and CEO, focusing on the mixed earnings report and Merck’s strategic acquisitions.

• Keyqudra Success: “Winreld reached a $1 billion sales run rate, demonstrating meaningful impact on patients with pulmonary arterial hypertension.” (18:10)
• Gardasil Challenges: “In China, we faced an overall softness in the market due to economic struggles, impacting vaccination rates.” (19:19)

Davis emphasizes Merck’s diversified pipeline and strategic acquisitions to mitigate the looming patent cliff of Keytruda.

Cramer praises Merck’s resilience and strategic direction, considering the stock “very inexpensive.”

b. Waste Management CEO Jim Fish (35:12)

Cramer engages with Jim Fish, CEO of Waste Management, discussing the company’s robust performance and strategic initiatives.

• Forever Stock: “A stock that performs well, quarter in and quarter out, year in and year out.” (35:31)
• Acquisitions Success: “The acquisition of Star Cycle has been fantastic, enhancing our resilience against economic fluctuations.” (36:02)

Fish highlights Waste Management’s steady growth, strategic acquisitions, and defensive positioning against regulatory challenges. Cramer lauds the company’s stability and growth prospects.

7. Figma IPO Analysis (25:39)

A significant portion of the episode is dedicated to analyzing Figma’s Initial Public Offering (IPO), assessing its valuation, growth prospects, and market reception.

• Revenue Growth: “Figma achieved a 48% revenue growth last year, maintaining strong growth rates this quarter.” (28:10)
• Operating Margins: “Operating income grew by a staggering 369% last year.” (29:00)

Cramer evaluates Figma’s impressive growth metrics against market skepticism, citing concerns about overvaluation despite strong foundational numbers.

• Rule of 40: “Their revenue growth and positive operating margins exceed the Rule of 40 benchmark, indicating a solid business.” (31:20)

He expresses cautious optimism, suggesting that while Figma’s IPO is poised for success, potential overpricing could limit long-term gains.

8. Lightning Round Highlights (42:47)

In the rapid-fire segment, Cramer addresses listener questions on various stocks, offering succinct investment opinions.

• Toyota Motor Company: “The new deal with Japan could act as a catalyst, but after recent gains, I’m taking a pass.” (43:20)
• Advanced Auto Parts vs. AutoZone: “I’m saying no to Advanced Auto Parts and yes to AutoZone.” (44:30)
• ServiceNow: “Despite fantastic guidance, the multiple is high, and I’m moving away from enterprise software.” (44:50)
• Fortinet (Fortnet) and CrowdStrike: “Wait for a dip before buying CrowdStrike.” (45:00)

Cramer provides actionable insights, balancing optimism with caution across various sectors.

9. Energy Sector and Deregulation Insights (45:20)

Cramer explores the impact of deregulation on the U.S. energy sector, particularly focusing on liquefied natural gas (LNG) exports.

• LNG Export Capacity: “We have between 40 to 60 liquefaction trains operational or under construction, each costing $4-5 billion.” (46:10)
• Global Demand: “Europe has committed to spending $750 billion on American natural gas over the next three years.” (47:05)
• Regulatory Shifts: “The Federal Energy Regulatory Commission is fast-tracking pipelines, revitalizing the LNG industry post-deregulation.” (48:00)

Cramer advocates for the benefits of deregulation in boosting the fossil fuel industry, enhancing U.S. geopolitical influence, and driving economic growth. He highlights recent acquisitions, such as Baker Hughes’s $13.6 billion purchase of Chart Industries, as indicative of the sector’s bullish outlook.

10. Concluding Remarks

Jim Cramer wraps up the episode by reinforcing key investment themes: the mixed signals from corporate earnings, the strategic importance of deregulation in the energy sector, and the cautious optimism surrounding high-growth IPOs like Figma. He encourages listeners to stay informed and seize opportunities in both established and emerging markets.

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Notable Quotes Summary

• Jim Cramer (04:15): “Our sector, specifically the U.S. small package segment, was unfavorably impacted by U.S. consumer sentiment at historic lows.”
• Rob Davis (18:10): “Winreld is reaching a $1 billion sales run rate, demonstrating meaningful impact on patients.”
• Jim Fish (35:31): “A stock that performs well, quarter in and quarter out, year in and year out.”
• Jim Cramer (25:39): “Figma achieved a 48% revenue growth last year, maintaining strong growth rates this quarter.”
• Jim Cramer (46:10): “We have between 40 to 60 liquefaction trains operational or under construction, each costing $4-5 billion.”

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Conclusion

This episode of “Mad Money” presents a critical examination of current market dynamics, emphasizing the repercussions of trade policies on major corporations and the broader economy. Through in-depth interviews and strategic analysis, Jim Cramer provides listeners with actionable insights and a balanced perspective on navigating the complexities of Wall Street.

For those seeking to understand the interplay between corporate earnings, regulatory changes, and investment opportunities, this episode serves as a valuable resource, encapsulating the volatile yet opportunistic nature of today's financial markets.

Transcript

[Jim Cramer]

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[Sam]

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[Jim Cramer]

Hey, I'm Creamer. Welcome to Mad Money. Welcome to Crane America. I'd be with my friends. I'm just trying to save you money. My job, not just entertain. Put everything into context. So call me 1-800-743- CNBC. Tweet me at Jim Cramer. When you've moved up as much as we have since the post Liberation Day lows, you better hope that earnings can justify that run. Today though, the earnings came up short. While there were many bright spots, there were enough negatives to offset any talk of a potential trade deal with China, or the strength of the economic data, or the continual parade of takeovers that would have been blocked by that previous administration. They wouldn't even thought about doing them. And that's why The Dow lost 205 points. The S&P dip 0.3%. The Nasdaq declined.38%. In fact, on the eve of wait and see Fed meeting, there was enough negativity about some parts of the economy, especially the consumer, that you might wonder if Jay Powell should simply do what the President wants and cut interest rates. Only some strength in a handful of industrials and tax seem to cut in favor of standing pat today. You know what? That might not be enough. Let me start with the negatives, because they are visible, they matter, and they cut President Trump's way. Today, three very big household name companies reported jarring quarters that made me feel like the stock market's becoming divorced from some real, real problems out there. Problems that should have been obvious given all the tariff turmoil. Consider the following from Carol Tome, CEO of United Parcel Service, after reporting a dismal quarter. Quote, despite uncertainties around trade policies in the second quarter, the overall economy remained resilient and quote, Just a second. Here we go. Quote. But our sector, specifically the U.S. small package segment, was unfavorably impacted by U.S. consumer sentiment. That was at historic lows, end quote. Wow. Very bad. Historic. A win for the president in his tip with the Fed. It gets worse. Quote, on the commercial side of the economy, manufacturing activity in the United States remains soft, end quote. Average daily unit volume declined by 7%. Now I know the UPS had its props. Profitability has been hurt by the labor agreement the company reached two years ago. Its pivot to cut dependence on Amazon traffic hurt. But Big Brown is a huge company that controls a major chunk of American shipping. So when its stock plunges more than 10%, I regard that as right. Now, did UPS present plenty of evidence of a weakening consumer? It also documented how the tariffs are already beginning to hurt consumer spend sentiment and consumer spending now. It kind of took my breath away when CEO Tomei pointed to some very strong business between lots of countries that did not include the United States. It was among the first quarters where I heard the damage that's being done to American commerce by our tariffs, damage that's not being replicated in country to country business that are not impacted by new tariffs, alas. But UPS wasn't the only one. Whirlpool, which was supposed to be helped by the tariffs at least eventually, instead got wallowed by them. Crushed. Ugly. Whirlpool's last man standing when it comes to appliances. The only one that's still domiciled this country. But the big appliance makers from South Korea and China, they're not dummies. They knew they'd struggle with the tariffs on their countries, so they front loaded their inventory, shipping lots of appliances here ahead of time. The result? The foreign onslaught crushed Whirlpool. Sell, sell, sell. It reported an astonishing weak quarter, taking its earnings forecast down from $10 per share to the 6 to $8 range. Worse, they took a meat axe to their dividend, cutting the quarterly payout from A$75 per share down to a shocking 90 cents. Let's call it a collaterally damaged situation. Because tariffs were meant to help Whirlpool, instead they blew up the divide. Include a dismal outlook is why the stock was down an astonishing more than 13% today. Oh, and if that wasn't enough, Stanley Buchan Decker, another name look in your house. You've got these really, really just whoa. It shocked me. A weak consumer who seems to have backed away from do it yourself projects, coupled with inevitable $800 million tariff hit as the company imports a huge amount of product from China and the so called reshoring safe haven of Mexico. It took my breath away. As I read over the quarter, all I could think about was that Stanley Black and Decker is the kind of company that President Trump was trying to punish for moving too many jobs overseas. That's some real punishment. With their stock down 7% today, the house of UPS, Stanley, Black and Decker Whirlpool. They form a trio of well known household companies that tell me this economy might be substantially softer than we think, at least in part when it comes to consumer and some heavily tariff businesses. Which means the Fed might really need to think about cutting rates to offset the damage in cutting sooner rather than later, these companies are experiencing the true worries we had about the tariffs while they were being slapped on earlier this year. It's entirely possible that the negative effects are one time only and will go away as we get more trade deals. Right now we're in the thick of it. You know what, it just doesn't feel good. And honestly, it's hard to dismiss them as one off when Even fintech giant PayPal revealed slower growth in payments. Blaming tariff fears, the chief financial officer Jamie Miller said, and I quote, we observed a slight softening in retail spending in the U.S. most apparent in areas likely impacted by tariffs, end quote. After all the robust consumer spending we saw when the banks reported two weeks ago, I was, I was surprised by the news from PayPal. So was the market with the stock falling more than 8%. I say out, when you rally as hard and as high as we have, you really can't afford to see this kind of weakness. Today's earnings made me feel like we'd forgotten the impact of all the tariff turmoil on the consumer. Some of the decline I think was an overreaction. Royal Caribbean went down on its outlook, but I got, I checked that one out. I think the expectations simply got too high. People got used to this cruise line just crushing the high end of the estimates didn't have now I felt the same way about Boeing. Now here's a stock that just hit a 52 week high after giving you almost a double from its low in April. Thank you Kelly Ortberg and even though reported a great quarter with beautiful cash flow, the stock still got hit today. But unlike all the others, just call me a buyer of that one. The rash of takeovers didn't for once sour didn't it didn't create any buying and not even Union Pacific buying Norfolk Southern truly creating a a continent wide railroad colossus assuming the deal gets approved. Now that's much more likely under Trump than it was under Biden. But there are legitimate antitrust concerns. I think they will get the deal done but not for a long time. Hence why Target Norfolk Southern saw its stock drop $8.72 although it's still up nicely. From my colleague David Faber broke the story a few weeks ago when you could still profit from it or Baker used buying Chart Industries gtls, a very large facilitator of capital goods including those connected with the selling of LNG liquefied natural gas. That didn't help either. Nor did the potential combination of Palo Alto Networks. She's the Castro Kramer fave and Cyber Arc, a one time Kramer Fade which is an Israeli cybersecurity company. Not even the incredible earnings news from Cadence Design Systems also a favor of the show and Celestica could help things. Cadence, a good partner of Nvidia blew away the numbers with a tremendous quarter. But who cares. I mean we knew their business was great. Sam Soleska which along with Sam Mina and Flex belonging an elite camp of contract manufacturers to vote largely to tech. They have more than their fair share of orders. It's a great time to be in that line of work as we know when we had Flex on recently after their amazing quarter. Long story short, today was a wake up call. The tariffs, even reduced tariffs are starting to roil things. The consumer is not spending as much as I thought. There is an acknowledged slowdown there. The bonds, that's right, interest rates are singing. The same rates are going down. But how much of that slowdown is because of higher prices. Something that bolsters a wait and see attitude from the Fed at tomorrow's meeting. And how much is because the consumer is worried and insecurity secure and needs a rate cut. Bottom line, I think it's a mixture of both. But that mixture might not propel the Fed into action. Without a rate cut though, we could see more quarters like we got from ups, Whirlpool and Stanley, Black and Decker, all of which are a heck of a lot more important than a Cadence or Soleska and all which are crying that a rate cut must occur sooner rather than later. It's a conundrum that makes me think that Fed chief Jay Powell's and a real pickle when he speaks. Tomorrow, I want to go to Dina in Kentucky. Dina. Jim Cramer, I'm so excited to talk to you. I'm. I just started in August and I'm really old and I have to play catch up on my retirement and. You're really old, let me tell you. I got you beat on that. I know that. I mean, don't even go there. All right, what do you got? I'm so excited to talk to you. Yesterday you were just so on fire. I just loved it. I laughed all day long. But listen, yesterday I was an arsonist. Oh, okay. It was awesome. I laughed all day. My question to you, I was so far up on Netflix, so far up. And now I just hear that it's flattened and it may not go anywhere. And I just need to know from you, should I buy more or should I? Look, let me tell you, this is something, this is an anecdotal stock. And I think right now people feel like, I don't know Netflix. What's on? Nothing. I was watching Amazon last night, for heaven's sake. So that's what I think is causing it. Don't worry, it's going to be fine. They're smart fellas. All right. I think the earnings today was a wake up call. Whether the Fed thinks so, I don't know. We gotta wait and see. Mad Money tonight, Merck reported earnings beat expectations, but the stock fell. What gives? I'm Jake Kimber, the CEO. I'm digging into a new web based design IPO launching this Thursday. And it's called figma. I'll give you everything you need to know. And Waste Management now called wm, beat earnings expectations earlier today. I'm see the CEO has to say about the positive quarter and the stock's forever strong reaction. So stay with Kramer.

Don't miss a second of Mad Money. Follow IM Kramer on X. Have a question. Tweet Kramer. Hashtag mad mentions. Send Jim an email to mad moneynbc.com or give us a call at 1-800-743, CNBC. Miss something? Head to madmoney.cnbc.com.

[Rob Davis]

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[Jim Cramer]

A fifth Third better Comcast business helps retailers become seamlessly restocking, frictionless paying favorite shopping destinations. It's how nationwide restaurants become touchscreen ordering, quick serving eateries, and how hospitals become the patient scanning data managing healthcare facilities that we all depend on. With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business is powering the engine of modern business powering possibilities. Restrictions apply.

[Sam]

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[Jim Cramer]

What do we make of the numbers that we got from Merck? This morning the farm titan reported what some thought was a mixed quarter. I actually liked it. Small revenue missed paired with an 11 cent earnings beat. Stock got hit, finishing the day down nearly 2%, although it was a lot lower than 1 point. Merck's had a tough time over the past year, falling 45% from its highs in June of 2024, but recovering only modestly over the past couple of weeks. Wall street seems to be worried about that looming patent cliff for their blockbuster. Patent cliff, best drug ever. Keytruda, which accounts for about half of the company's sales, doesn't help that Gardasil, their HPV vaccines really struggled thanks to persistent weakness in China. We got to drill down on that. While Merck's made some excellent acquisitions to expand the drug pipeline, stock hasn't gotten much credit for it. I think that's wrong. Let's check in here with Rob Davis, the chairman and CEO of Merck. Get a better read the situation. Rob, welcome back to money.

[Rob Davis]

Well, great, Jim, it's good to see you again. Thanks for having me.

[Jim Cramer]

Of course.

[Rob Davis]

I really appreciate it.

[Jim Cramer]

Of course, Rob, thank you. Now, before we get into some of the nitty gritty of the quarter, I saw that the numbers from Key Trudeau were excellent again, when Revere, which you and I have talked about multiple times, the treatment for pulmonary arterial hypertension. That's it's proof. Last year it's already reaching a $1 billion in sales run rate. Tell us about some of these insights because there's quite positive news here.

[Rob Davis]

Yeah, well, no, I appreciate that. You know, obviously you mentioned about the quarter, I think it was, you know, we had a solid quarter, $15.8 billion in sales strength in oncology, as you mentioned, animal health did quite well. And really importantly, increasingly our growth is coming from new products. You mentioned Wind Revere and also we launched Cap Active. So we're really on the precipice, frankly, of a wave of new product launches coming. We have over 20 new products that we'll be launching over the next five years, including the two we just mentioned. But on Wind river itself, you know, this is an important therapy. We've had great additional data readouts. We recently had a positive data readout from the Zenith study and then most recently from the Hyperion study. And what is so important about that study? It showed that in patients in their earlier stage of disease who are on less therapy still significantly benefited from Winravir. So this is important as we continue to see the evolution of this drug as an important therapy to address what, as you mentioned, is a devastating disaster disease. So we're excited about what that can be, but excited about the pipeline.

[Jim Cramer]

We have could you put, let's say into the parlance of just regular people how it's possible to have a drug reaching 1 billion in sales in just over a year. I mean, this is an extraordinary thing for a drug, a new drug to do, Right?

[Rob Davis]

Yeah. And it's so it's cumulative sales over the first 15 months to get to a billion dollars. And I think what it really speaks to is the meaningful impact this, this drug is having for patients. You know, pulmonary arterial hypertension, and we've talked about this before, is a devastating disease. Almost half of the people who face this, many in the prime of their lives, many who are women in the prime of their lives and in childbirthing years, face this. And so the fact that we can now potentially extend their life through this drug and give them meaningful quality of life is why I think you see it do so well. And it really speaks to the strength of the science and the strength of the benefit to the patients. And that's, that's what is Merck, we're always focused on.

[Jim Cramer]

Thank you. Rob, can you speak to me that these ongoing issues with Gardasil in China, this is an incredibly important drug. I would think a countryman would be sure that everybody had the option for it, at least the opportunity. But something's going on in China that makes it so that demand continues to be soft. I don't get it, Rob.

[Rob Davis]

Yeah, well, you know, it is, it's an interesting situation we faced in China as, as you know, last year we saw a significant slowdown in vaccinations happening there with Gardasil, our market share in the private market has largely held pretty, pretty much stable. But what you're really seeing is just an overall softness in the market. And in continuing to try to understand what's driving that demand, I do think a lot of this is this is a cash pay drug. In the space we play, the economy continues to struggle and people are making choices with their dollars and unfortunately they're not prioritizing vaccinations. But for us, the story is much more about what we're seeing globally with Gardasil, which is continuing to do overall well and grow. And frankly, as we look at the total company, you know, we're moving to a period as we get to the back half of this year where we're going to be returning to growth because we'll be lapping increasingly that that effect of what you saw in Gardasil China last year. For the full year, we expect Gardasil actually to show growth this year and we continue to expect good growth going forward for the overall franchise. So it's an important franchise. HPV vaccination is the simplest way to avoid cervical cancer. You know, I always say the best way to cure cancer is never to get it in the first place. And that is what this Vaccine does. So we continue to try to tell the story, to beat the drums for why everyone should be vaccinated because it's an easy way to prevent cervical cancer for yourself and or for your loved ones if you happen to be a male. And increasingly it also is showing and now has indications in head and neck cancer, which is also important because that's actually a growing cancer and affects males much more than females. But for us, this is just one part of a story that's really about the broader growing diverse pipeline of opportunities we have across cardiometabolic continuing to show strength in oncology and really to start to position us to go post keytruda and transform the business to be more than just a keytruda story, but to be truly a diversified pharmaceutical company driving growth and benefiting patients. And that's really what we are all about and where I'm starting to really pivot my, my efforts. And one thing I just want to quickly mention, I'm sure you'll bring it up, but you know, we're very excited about the acquisition of Verona.

[Jim Cramer]

Right.

[Rob Davis]

$10 billion deal brought in otiver, an important new mechanism. New mechanism of action. First one in 20 years for people facing chronic obstructive pulmonary disease or COPD. So another important addition to the armamentarium we have and a multibillion dollar potential drug in a period where we're really looking to drive that of kind growth. So really excited about what.

[Jim Cramer]

That's a very good idea. Now let me just do one thing here. You have some of the finest vaccines in the world. We think of you as just being the most pristine company when it comes to these things. Are you worried about the FDA slow rolling or blocking new vaccines given the fact that yours are both lifesaving and so far that I can ever tell, about as safe as I've ever seen a vaccine.

[Rob Davis]

Yeah, you know, we continue to be quite confident and have strong belief in the safety and efficacy of the vaccines we're bringing to market. I will say actually Klas Rover, mab, which is, it's really, it's a monoclonal antibody, but it operates similar to a vaccine for rsv. We just got FDA approval and did receive a positive opinion from the acip. So we're excited about that. So they are continuing to take action, I think when they see good science. And we're very excited about what that can be because RSV continues to be a really tough, a tough disease and particularly as it faces children in the first year of life, which is, you know, where we are focused well, Rob.

[Jim Cramer]

Look, thank you for coming on again. I think that when Gardasil laps, boy, it's going to be terrific to be no negatives and you're dealing very well with the patent. Cliff. I think Keytrude is just one amazing drug. It's not going away way. Anyway, that's Rob Davis. He's the Chairman CEO of Merck. This stock is very inexpensive. Rob, thank you for coming on the show.

[Rob Davis]

Great. Thank you very much.

[Jim Cramer]

Appreciate it. My back after the break.

Coming up, Kramer is giving you his take on the FIGMA IPO ahead of its debut and whether it's time to buy into the air. Name Next how will you shape the future of banking with confidence? Industry consolidation, crypto, the rise of fintech all create a complex landscape for banks to innovate and grow. EY provides domain led insights to navigate today's fragmented banking sector. So whether you're tackling regulatory complexities, integrating digital assets, or seizing M and A opportunities, EY sees your business from every angle, working together to deliver outcomes that create strategic value. EY shape the future with confidence.

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Oh, later this week we got a big IPO coming. Figma, the design software company is looking at an initial valuation, the neighbor of 20 billion bucks, making this the largest enterprise software deal since 2021. Now my gut says that this stock should be able to roar right out of the gate. But you know what? I'm hesitant to recommend it, even though the underlying business is excellent because I'm betting it'll quickly get way too expensive. Now if I'm wrong, if I'M wrong. You got my blessing to buy this one because this is some great company, but only in weakness. Assume we get any See figure makes design software that's as ubiquitous as it is invisible. If you've looked up direct directions on Google Maps, if you book the ride on the Uber app, search for flights from JetBlue, stream shows on Netflix, try to use Duolingo to learn a new language or networked on LinkedIn. Do you know that you've used a product that was designed with Figma software? They already have 95% of the Fortune 500 is clients. Basically this company has a whole suite of software that makes it easier for their clients to design apps and websites. And their product is so good that, well, Adobe tried to buy the entire company a few years ago. Who could blame them? Blocked by antitrust. You can tell by looking at the numbers. Last year Figma put a 48% revenue growth, although that slowed to 46% in the first quarter of this year and somewhere between 39 and 41% the second quarter. These guys have more than 10,500 customers paying more than 10 grand in annual recurring revenue. RR. That's how you measure this kind of company. Last year up 45% year over year, 963 customers pay 100 grand in annual recurring revenue. And these numbers have both grown nicely this year as well. Now figures net dollar retention, which measures how much money a software company's existing customers spend versus the previous year, came in at 134% in 2024, up from 122% 2023 and only slipped to 132% in the first quarter of this year. That means their customer base keeps giving them additional business love to company. Best of all, FIG was actually profitable last year. The operating income grew by a staggering 369%. And the first quarter this year was up 122%. Based on the preliminary second quarter numbers, that growth seems to have slowed though free cash flow looks very nice Now. I could talk about this thing you know, I like to talk about called the rule of 40. This is a back of the envelope way to judge enterprise software companies. You take the revenue growth, you add some version of the profit margin and if the sum is above 40 you get a solid business with figure. We don't even need to do any arithmetic because even in the latest quarter the revenue growth was around 40%. Operating margin positive rule of 40 excellent. So the numbers look pretty good here. But beyond the numbers, there's some issues. The first thing is I'm watching is what will prevail when two contrasting themes collide with this Figma deal. On the one hand, we've had a white hot IPO market these past few months. Few winners are Core Weave Circle Internet Group. You see that. Wow. But plenty of more modest winners too. On the other hand, even though tech's been doing well, enterprise software specifically has been pretty weak, maybe the weakest of all areas of tech. And some of the software companies that make tools for other software developers, they've really struggled, particularly software as a service or SaaS companies. Of course, the best comparison for Figma is Adobe. And we know that because Adobe tried to buy Figma a couple of years ago, announcing a $20 billion acquisition September 2022. I thought it was so brilliant for eventually throwing in the towel at the end of 2023 after the regulators on both sides of the Atlantic refused to approve the deal. Unfortunately, Adobe hasn't been doing too well lately. The stock, by the way, is down 41% from its recent high set early last year. Figma has much better revenue growth numbers than Adobe, but Adobe is much more profitable. In the end, if this market doesn't like Adobe, you got to be at least a little worried that it won't like Figma either. And look, let's talk about why enterprise software is doing so badly. It's because this industry could be the first victim of new generative AI technologies, which have proven to be very adept at writing code even from very simple text prompts. Adobe has some solid AI offerings of their own, but the newer AI companies, they keep rolling out products that can be based on basically do basically the same thing in a much, let's say more basic, less artful way. Now, Figment does have some of its own AI technology at this point, but CEO Dylan Field also noted that I'm going to quote a spend will potentially be a drag on our efficiency for several years, end quote. And that makes me worried that the company might take a real hit to profitability for an extended period of time. Now, I recognize the need for these companies to spend fortunes on AI, but if Figma's operating margin goes negative, well, I don't think Wall Street's going to be too forgiving, frankly. At the same time, I am not thrilled that most of the proceeds from this IPO, roughly 2/3, are going to existing shareholders, not the company itself, expects to bring in $360 million in the deal and they plan to spend nearly all that paying down debt. I like that. Not paying for investments that could grow the business. I would have wished that they got that more. Now there's nothing wrong with keeping your balance sheet proceed. And these guys don't really need the money. But you know what I always notice when insiders are looking to sell a ton of stock white as they're asking you, asking new investors to buy them. Throw in the fact that Figment was willing to sell itself to Dobby for 20 billion a few years ago, it makes you wonder just how optimistic management is about the future. All that said, based on the strength of the IPO market and the quality of Figma's numbers, I expect this deal will be very well received by Wall Street. In fact. In fact, that's already the case. As the book runners, the people who manage the deal had to raise the price range for the deal last night. Take it from 25 to 28 all the way up to 30 to 32. Wow. There are reports that this IPO is approaching 40 times oversubscribed even at the higher price. I get it. Figma is a love product. According to everyone I surveyed, using the new high end of that new price range and making some assumptions on what to include in Figma's fully diluted share count, this company have an implied market cap of roughly $19.4 billion. So if the stock pops a little bit from there once it starts trading, it'll be worth more than the $20 billion that Adobe is willing to pay almost three years ago. Is that reasonable? Should you be looking to get into the stock around that level? Well, let's assume a 40% revenue growth rate for Figment this year, which is below the first quarter's growth rate but around what they did in the second quarter quarter. In that case, the company would have just over 1 billion in sales this year and the stock can be valued at roughly 20 times sales. Not earnings sales if it rallies a bit from the high end of this price range. Adobe the closest comparison trades at less than seven times sales even when screen for software companies with 30% plus revenue growth. That elite group mostly had price to sales ratios in the teens. Only the hottest of the hot Palantir technologies comes in above that level. Could it happen for Figment too? Maybe, but I don't think this one has that Palantir magical elixir, although I think Figma is going to be steaming hot. Plus, there's been a scarcity of quality deals and the market will most likely go nuts when it gets one like this. So here's the bottom line. There's a lot to like about figment the company. But it's already coming public at a pretty expensive level. And if the stock works right out of the gate, I'm going to tell you it'll be too pricey for. For me. Eva's. I think the company's got a tremendous product at a very reasonable price. Let's take questions. Let's go to Jacob in Alaska. Jacob. Hey, Jim. I wanted to get your thoughts on a company that recently had its IPO with shares doubling right out the gate, only to give back a good chunk of those gains after the initial euphoria wore off. Considering all the interest in the sector and increase in space and defense contracts, what are your thoughts on Voyager Technologies? Okay, that didn't come out too hot. This is a good example and I'm glad you're bringing it to our attention. It's a good example. It's a sword, but now it's coming in softly. My experiences. Now this is my experience. Not what anybody said to me about the level. But my experience is this is precisely when you want to start a position in Voyager. You buy it slow. You want to buy 100 shares, pick up 25 here and then wait till it falls another 5 and just keep at that level and you have a great position. All right. I think the Figma IPO is one to watch. But if it moves any higher than where it's priced now, it's going to be too expensive for me. I know people still go for it, but I'm just telling you, for me, too expensive. Much more Moneyhead could trash bring you treasure. I'm checking in with the CEO of wm, fresh off its earnings to make sense that the stocks come back and the Runway it sees ahead. Then I'm often asked about what deregulation really means for the economy. You know what I'm going to tell you, I see it. And I got to tell you, I like it. And of course, all your calls. Rapid fire in tonight's edition of the Lightning Round. So stay with Kramer. Last night we got an excellent quarter from wm the garbage disposal operation slash provider of Comprehensive Environmental Solutions formerly known as Waste Management. This company delivered a healthy top and bottom line beat driven by strength in the core business along with mostly positive guidance. That's why the stock jumped more than 3%. They were the few that I have really looked great. This one's important because the garbage business can actually give you a great read on the economy. So let's take a closer look with Jim Fish. He's the CEO of wfish. Welcome back to my money.

[Jim Fish]

Thanks, Jim. How are you?

[Jim Cramer]

All right. Now, Jim, I got to tell you, typically do not do this, but I have to congratulate you for saying something that really made my day. You called your stock a forever stock. We used to have some of those. We don't anymore. What makes a forever stock?

[Jim Fish]

Well, I think it's a stock that performs well, quarter in and quarter out, year in and year out. And I would tell you, over the last decade or so, we've. We've done exactly that. So I think investors should look at it as a stock that you buy and hold indefinitely.

[Jim Cramer]

Well, I think that some of the reasons why is because you've made acquisitions. Some people call them tuck in. I disagree. You put Star Cycle, that turned out to be a fantastic acquisition. That certainly doesn't seem to have any. That seems to be completely resilient to the economy.

[Jim Fish]

You know, if you look at the aging population, I mean, I think I read somewhere that in 1980 we were 29 years old and now we're 39 years old. So, you know, it seems like a kind of a normal path, secular trend, I guess, that, that you would take advantage of. And that's exactly what we're doing with that acquisition.

[Jim Cramer]

Well, it was fantastic. Health care solutions, EBITDA margins, the health care solutions improved 170 basis points. You actually raised. You raised your gross margins pretty much everywhere. How are you able to consistently do that?

[Jim Fish]

The business, the core business itself continues to drive gross margins. In addition to what you just mentioned with, with health, Health care solutions. At the same time, we had, you know, a bit of kind of headwind as well, but the business overall is doing so well that it was able to overcome some of the headwinds. The core business, whether it's, you know, whether it's pricing, whether it is cost control on both the operating expense line or the SGA line, both of those continue to really perform well and therefore the raise and in our margin expectations.

[Jim Cramer]

Well, it's terrific. I also felt that there'd be a time when I would interview you or your predecessor. And if commodity prices declined 15%, we would have had to explain why this hurt the business. It didn't.

[Jim Fish]

So my predecessor is running the post office now, so hopefully paying attention to this.

[Jim Cramer]

That's why he's got a great job. He's going to make that thing work, isn't he?

[Jim Fish]

I think he is.

[Jim Cramer]

But the recycling. He talked about that when the Chinese pulled the rug from under waste management, then it hurt, but not now.

[Jim Fish]

You know, that's true. And years ago we were, we were pretty susceptible to, to these big fluctuations, big peaks and valleys in the recycling business. We've really smoothed that out by, by, you know, putting some, some things in some of these contracts that, that protect us a bit. And at the same time, while the recycling business has grown, other parts of our business, like the health care solutions business, provide a little bit of a natural hedge.

[Jim Cramer]

Definitely. Now help me. I've been trying to figure out what to do if I were Fed chairman, and only mostly because David Faber, my colleague, says I'm going to get appointed. I don't think that's true, but I feel like that you would give me a good view about both the consumer and industrial because you do a lot of stuff in residential, because the residential seems a little bit weaker. I would understand the President's position, but industrial doesn't seem all that bad. I understand the Fed's position.

[Jim Fish]

The residential business is really not driven as much by the economy. It's really driven by, you know, kind of population and the, the piece of the economy that's, that are. The piece of the business that really looks like it's driven by the economy is our commercial business, our industrial business. And then on the landfill side are municipal solid waste, construction and demolition. And, and really all of those are either very healthy or, you know, improving from where they've been. So while I'd love to see a rate cut, I'm not sure that the economy is, is, is weak at this point. In fact, it looks like it's strengthening.

[Jim Cramer]

To us, you and me both. This is what's so difficult. I know yesterday on air I kind of got a little bit too exuberant, but this is, is the big Fed conundrum, which is that what you just described. I think things, some, some stuff is definitely getting better. Some industrial stuff is just playing out strong.

[Jim Fish]

In our construction and demolition business is probably the business that the best indicates what things are going to look like going forward. And sequentially that continues to improve. It's improved every quarter for the last four. This was a very strong quarter in Q2, and the month of June itself was the strongest of the three months in the quarter. So I do think the economy is starting to show some real signs of improvement.

[Jim Cramer]

Now, how about the California economy? One fifth of the country I know you've got, you had wildfires. They're hard to determine how well or how poorly it did.

[Jim Fish]

I mean, our California business is very important to us. It always seems to do reasonably well. This Year, you know, it was, we were impacted by the cleanup and we participate with these communities in cleaning up after natural disasters. And certainly the fires were no exception. We do the same whether it's in Florida with, with hurricanes or the Midwest with tornadoes or whatever the case is. So the California business was actually up a bit this year because of the fire cleanup. We certainly don't like to see those things happen, but when they do happen, we're good partners to our communities.

[Jim Cramer]

One last question, Jim. Actually have friends who are in your industry, but they're still much smaller than you are. The regulatory problem for them is very, very difficult. They have to spend a lot of money to do it. Their margins go down some size. They just leave the business. Increasing regulatory requirements for you, as you mentioned, page 18 of your deck, they actually work in your favor to some degree, don't they?

[Jim Fish]

To some degree. I think that's right. You and I have talked about that in the past. It's, you know, we kind of self regulate above the minimum. And so what we've said is that regulations to, to an extent, I mean, look, if you close down landfills, that wouldn't be good for us. But, but we, we regulate our landfills at a much higher level than, than is required. And so to some degree added regulations work in our favor.

[Jim Cramer]

Well, you do have declining landfill airspace availability. You mentioned that landfill is expected to close in next 15 years. Quite a few. 400.

[Jim Fish]

So the entire industry is seeing a decline in landfill airspace and it really starts to ramp up this year. So if you look over land, landfill airspace does decline quite a bit. We're in an advantaged position there because in nine of the 10 biggest MSAs in the United States, we have the best located landfill and we have longer lives to those landfills. So that ends up being a positive for us.

[Jim Cramer]

Well, I got to tell you, I think that your, your commercial works really great. The one where it looks like, you know, it's a nice park and that people should realize that it does. It's not the end of the world. When a landfill fill in, sometimes it could look pretty darn good.

[Jim Fish]

Yeah, absolutely right. You're right about that.

[Jim Cramer]

Well, anyway, thank you so much. Congratulations. It is a forever stock. It's a great term because we don't have many of them anymore. That's Jim Fish, wm. CEO. Thank you, Jim.

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

It is time. It's time for the light round. Christmas events raptor Colson on the University of Stockholm. Bye bye bye. So this is my top producer Gram for the movie. Play this out and then the lighting round is over. Are you ready Steam deck? Time for the lightning round comes over with Mira in Texas. Mira. So excited to talk to you Jim. Right back at ya. With the new deal with Japan, is there a catalyst for Toyota Motor Company? Well, I think they now get to downside which is gonna have to raise prices a little. I'm gonna say I'm gonna take a pass in Toyota only because it just went up so much. But I like your instincts. Let's go to Dave in New York. Dave. Jim, what's going on? My man Dave from New York checking things out. Quick shout out to my man Tommy Cassa and Bob Bonozzi. Just calling what you think about advanced auto parts. I'm gonna say no to advanced auto part parts because I'm going to say yes to autozone. Get into the zone, my friend. Let's go to Mike in Pennsylvania. Mike. Hey Jim.

[Rob Davis]

Happy, happy, big booyah from Lehigh Valley Penns.

[Jim Cramer]

How are you? Oh man, I love. That's where we used to practice. I love you. What's going on? So listen, I have a position already in Palo Alto. My question is I'm looking to add to the cyber security arena and my.

[Rob Davis]

Question is what do you think about Fortnet ft?

[Jim Cramer]

No, we don't want Fortnite. We're going to wait till crowd circuit portion is going to go down because that's what always happens and then you're going to snatch some crowd strike. Let's go to Dan in Missouri. Dan. Hey Jim, this is Dan from Missouri. This had recent fantastic, gave fantastic guidance. What do you think of service now? Well, I think the multiple is a little high and I'm starting to get away from that kind of enterprise software. It's beginning to make. Which could you wear on me? How about that? It's wearing on me. All right, let's go to Mike in Pennsylvania. Mike, how are you doing? Jimmy, nice to talk to you. I'll get right back to it. What's happening? I gotta stop. UGI comes out. Oh my God. King of Prussia. Come on. Upper Marion. I crushed them. But I'll be a buyer of the stock most certainly. And that, ladies and gentlemen, conclusion of the Lightning round.

The Lightning round is sponsored by Charles Schwab. Coming up, Cramer is talking all things energy and how deregulation could be a major boom for the US both overseas and at home.

Next. People often ask me what deregulation actually means to the US Economy and your investments. It's like there's some amorphous notion that deregulation might do something, but who knows what and why? How does it really help? Well, it depends on the industry. But we're getting our first real sign of the positives from deregulation, and it's a lot more straightforward than you might realize. Take what's happening in Louisiana and Texas right now. Our country has been building these massive liquefied natural gas export terminals so we can ship the stuff overseas. It's monumental. We have anywhere between 40 to 60 liquefaction trains that are operational or under construction. These are gigantic efforts. Each train, a technical name for the processing unit, cost as much as four to five billion dollars. Payoff's huge, though, because natural gas is much more expensive overseas. So to export, it's quite lucrative. We are the world's largest LNG exporter, but we have the capacity to produce a lot more as we are the largest repository of natural gas. We just out of all the pipe trains to transport it, in theory, we could produce enough to wean Europe off Russian natural gas, which is part of the trade deal that the President just worked out with the European Union. They committed to spending $750 billion on American natural gas over the next three years, which is staggering given that we only sold the Europe $76 billion worth of fossil fuels last year. That's all fossil fuels, not just natural gas. Is that even possible? Okay, here's where the deregulation comes in. We currently send a lot of our liquefied natural gas to Europe. But Japan, China, and South Korea, they're also big clients. We need a lot more capacity if we're going to meet the new demand from Europe. We need to put up more trains. I wouldn't be surprised if we actually double our current capacity. Unfortunately, In January of 2024, the Biden administration imposed a temporary pause on approving these new LNG terminals. They wanted to study the environmental impact. While the administration regarded the ban as temporary, the Wall Street Journal opinion section called it a political ruse, assuming that it would be permanent, curtailing a robust fossil fuels industry dramatically. Either way, the pause on approvals froze the entire industry. And it called into question whether there were even enough LNG terminals to help our current clients. Many plans to were put on hold. Others were scrapped. But then Trump won the election. And you know what? Things. Well, they change dramatically. The Federal Energy Regulatory Commission is fast tracking pipelines that are needed to get natural gas to the Gulf in time for the next trains, the entire process goes upside down, and an industry that was looking stunned is now humming. We have so much of natural gas here that we can spy everyone. Apparently there'll be a lot more coming. Now, if you step back, you can see the power of deregulation, especially an industry where there was just way too much regulation under the previous regime. In fairness, if you're genuinely worried about the environment, you probably don't want to see an explosion in US Fossil fuel exports. I acknowledge that global warming is a real problem, but honestly, we don't have the political will to solve it. So you might as well have a booming natural gas industry, one that gives our country a lot more geopolitical clout, especially when some of our trading enemies are still heavily into the dirtiest fossil fuel, coal. We're already seeing the benefits. This morning, Baker used the oil Service Company paid 13.6 billion for Chart Industries, a company with expertise in building out these LNG facilities. It won't be the only deal there, believe me. So whether you love deregulation or hate it, you should try to take advantage of it for your portfolio. Right now, there's a lot to take advantage of, including anything L and G. I like to say there's always a bull market summer, and I promise I'd find it just for you right here on Mad Money. I'm Jim Cramer. See you tomorrow.

All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of cnbc, NBC Universal or their par company or affiliates and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer'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 trading@schwab is now.

[Sam]

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