Transcript
Narrator/Commercial Announcer (0:00)
Introducing the new Dell AI PC. Powered by the Intel Core Ultra processor, it helps you do your busy work for you so you can fast forward.
Joe Hendricks (0:08)
Through editing images, designing presentations, generating code.
Narrator/Commercial Announcer (0:10)
Debugging code, summarizing meeting notes, finding files, managing your schedule, responding to Jim's long emails, leaving all the time in the world for the things you actually want to do. No offense, Jim. Get a new Dell AI PC at Dell.com AI PC how those ahead, stay ahead.
Homes.com Advertiser (0:30)
Homes.com knows that when it comes to home shopping, it's never just about the house or condo. It's about the home. And what makes a home is more than just the house or property. It's the location and neighborhood. If you have kids, it's also schools, nearby, parks and transportation options. That's why homes.com goes above and beyond to bring home shoppers the in depth information they need to find the right home. And when I say in depth, I'm talking deep. Each listing features comprehensive information about the neighborhood, complete with a video guide. They also have details about local schools with test scores, state rankings and student to teacher ratio. They even have an agent directory with the sales history of each agent. So when it comes to finding a home, not just a house, this is everything you need to know all in1place.homes.com We've done your homework.
Jim Cramer (1:43)
Hey, I'm Kramer. Welcome to Mad Money. Welcome to kramerica. I feel, my friends, I'm, I'm just trying to make you a little bit of money here. My job is not just to entertain, but put everything in context, including tonight's trading. So call me at 1-800-743- CNBC. Tweet me at Jim Cramer. Hype cannot destroy the hope of artificial intelligence, even though many investors have begun to turn on the entire concept of machines that you can talk to or even replace your workforce with. But perhaps hype has taken stocks involved with artificial intelligence too high versus reality. Have expectations at last gotten too high to be equal, let alone beaten? Well, you know what? That is. Tonight's quandary. As I survey the battlefield, the negative drumbeat kind of lurking like white noise in the background wafted center stage this afternoon as Nvidia, the king of AI, reported earnings the market didn't like. While the averages matter, with The Dow gaining 147 points, S&P advancing point to 4%, Nasdaq edging up 0.21%, the looming in video quarter dominated the market's mindshare in a very negative way. So when Nvidia actually reported to the close, it's kind of a climax company reported a healthy top bottom line beat with robust guidance for the current quarter. That's excluding any new Chinese business now that they can sell decent chips there. But Nvidia's all important data center sales came in a tiny bit light, surprising and frankly fitting the negative wrath that we've been hearing. So the stock got dinged in after hours trading. I think that's mostly because it was up 35% for the year going into the quarter and expectations were indeed sky high. But that's the charitable explanation. The damn one. Things are slowing and perhaps the $4.4 trillion emperor has fewer clothes than we thought. All in all, though in reality it's good quarter, it just wasn't decisive enough to settle the biggest conundrum of AI which is a sense that perhaps companies aren't getting the return the bang for the buck that they should when they're buying in video stuff. Mind you, I am not talking about China. That also remains a quandary for the company. I am talking about the giant spend that has boosted Nvidia's market capitalization to the biggest land, $4.4 trillion and maybe that so called peak. So tonight I want to explain why even after this poorly received in video quarter I think is worth every penny, even as many seem to believe that it's nothing more than a parlor game brought to you by some high tech hucksters who buffaloed the entire world first. In the wake of these in video numbers, let me just give you the negative briefs. You know what I'm talking about, which is often expressed by younger people as reminiscent of the dot com bubble. Something that occurred, by the way, while they were in their Dr. Dentons or maybe their huggies, if not their respective mother's wombs or even the proverbial twinkle in the eye. In the late 90s we discovered that we could plug our computers into phone lines. They would make this really funny noise and then bring you something called a website. Some people really got it. As someone who could actually arguably be described as an Internet pioneer, I actually suggested to the Wall Street Journal that they could post the whole thing online. They laughed me out of the room. So I decided to do it myself. It was called thestreet.com. no one really knew what the heck they were doing back then. People just throwing nearly as much money, at least $1990 as they're throwing now. Okay, I got money from a bunch of venture capitalists. We worked for a couple of years, put about $75 million to work and voila, the stock opened at an insane $1 billion valuation. Now that was a bubble, especially because we went to $2 not that long after 330 companies went through the same process as we did at the Street. At least we stayed alive. Those didn't. Most of them only went under. Very few came through the other side. But people remember the losses. The worst losses came from the fiber optic companies that laid the track that powered the Internet. Okay, get that because that's the latter day Nvidia. The second worst came from the search engines. The third came from the phone companies. A huge number went bust. Why didn't, what didn't go bust? Okay, Amazon, Cisco, Google, fortunately hadn't come public yet, so it didn't get to go bust. They joined the previous winners of the PC revolution, Intel, Microsoft and Apple. The others never saw the field. The losses were staggering. But those winners, they were amazing. They were run by the smartest people who took advantage of everything you could ever take advantage of. And they made their shareholders fortunes as they grew. We heard at every turn that they were just parts of the bubble. And then when the bubble burst, it would just be a matter of time before they would burst to a matter of time. A matter of time. A matter of time. Well, the time matter, nothing happened. Sure, intel and Cisco didn't soar like the others. Cisco still very much alive. A mismanaged intel needed President Trump to get the money to be able to stay a survivor. Right now I'm hearing that what we call the hyperscalers, the company spending on fortunes on. Right, the checks in video are part of the AI bubble. That was just like 2000. Okay. Microsoft's like 2000, Amazon's like 2000. Google's like Oracle which missed the Internet well, but it's all in a data center meta and even Tesla which wasn't route to birth the Internet, they are all writing these checks and it's wrong that they do so. And that's what tonight's quarter showed. I don't know. They all go wrong Buying accelerated computing and generative AI chips. It's the equivalent of all the companies that participated in the making of the building blocks of the Internet. Tonight people are wondering whether the money being spent on Nvidia is finally peaking and petering out. Now I want to stipulate some things. First, the companies I just mentioned, the hyperscalers are run by the smartest people on earth. Second, they have the better balance sheets than any country in the world. They have incredible revenue growth. Apple is the only one of these heavy hitters, that isn't right. Use checks in video because they don't have any strategy. Apple stock, by the way, is the poorest performer. The big tech stocks. Will that change after tonight's numbers? Well, Apple turn out that the last laugh while all the others fall flat on their faces. Is Nvidia fooling everyone? Is Jensen Wong fooling everyone? Are the valuations all way too big there? Listen, we heard the same thing about the dotcom survivors at the turn of the millennium. We who liked those stocks were called clowns. I was considered, yes, a genuine legendary Wall street funny man for supporting them. Then I came up with this ridiculous thing called Fang and people really laughed me out of the building. Thank you Bob Lang for helping me on that one. He's from the stream. You know what's ironic? I often hear from people far younger than I am that we've heard this before and all these companies are delusional and so are their CEOs and the buyers of the stocks. These young skeptics tell me that we're looking at the biggest bubble in history with Nvidia, the backbone of general being as overvalued as Cisco was in 2000 when it was worth $550 billion. It's true, Cisco is overvalued the time it's now worth a little less than half of that. But here's what I have to say to them. I don't care about the seemingly sky high market capitalization that these stocks have. I'm simply trying to put a valuation on a company that makes what you need to become one of the serious players in AI. I learned not to question Amazon or Microsoft or Google or Meta or even Tesla. The big customers a long time ago, they know more than I do. They're run by people much smarter than I am. Much, much smarter. I'm just grateful they let me along for the ride. So feel free to dismiss AI as a bubble. But the bottom line, during the three or four years of the dot com bubble, people did make fortunes. Who had faith as long and some, yes, you had to ring the register for. But even when the dot com bubble burst, there were a handful of fairly obvious winners that eventually came roaring back. You did have to be courageous to buy them. If you gave up on Amazon in 2001, you missed the $2 trillion boat. If you give up on Nvidia now, I think you could miss a boat that's not sinking, just resting before it reasserts itself. So I say own it, don't trade. Let's speak to Ian in Florida, please. Ian. Hi Jim, how you doing? I'm doing well Ian, how about you? Doing excellent, Jim, thank you. All right, fill me in. What do you got man? You know I'm a five time caller and investing club member. Thank you. Absolutely. Thank you. For Jeff Marks to Jeff right now is working on, he's doing a little work on the, on the crowd strike there with the George Kurtz, how can I help you? Well Jim, I want to get your opinion on something. It's been looking at a stock. It's, it's almost 50% down for the year from the 52 week high. Nvidia has a pretty big stake in it too. They're highly affiliated with Nvidia. What do you think about getting into at this point? Core weave? Okay look, I like core weave. The problem is I like intrader allies, the CEO. Here's the problem with it. You know, people kind of like are saying, you know what, it's moved up so much, it's going down. Here's what you do with a stock like Corvette. I learned a long time ago sometimes stocks tell you what to do. This one is going to tell you what to do when it stops going down. And that has not happen and do not count today because today was a bounce back day. Let's see, this stock is going to tell us. I need to say that because it's losing money. When you have stock of a company that's losing money, you have to let the stock tell you. And I can read. What can I say? I'm a stock whisperer. That stock is not yet done coming down. But I like your concept. I just think there are other better stocks in this market. Sure there are a lot of losers in the dot com bubble. I know 330 of them. But if you think we're in an AI bubble now, I think you got to go back in the history books. You got to do some work. Don't listen to the people who are in their Dr. Dentons. At the time maybe they were in Pampers. Oh maybe. Tonight the fast casual stocks have fallen out of favor from Wall Street. So I'm checking in with one of my old favorites, CEO Chuck Potlay. Get a better sense of what the company has their pipeline and CSX has caught the eye of the activists. Is it this or is it this? I don't know. Why don't we go straight to the source to figure it out. Get the company's response. You don't want to miss that. And then stowflight hey, how about the star that I've been on this show? Can you believe David Kramer?