← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 8/27/25
00:43:38
Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money. Mad Money Disclaimer
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- [00:01]
Narrator/Commercial Announcer
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Jim Cramer
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?
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Narrator/Commercial Announcer
Don't miss a second of Mad Money. Follow imKramer on X. Have a question? Tweet Kramer MadMentions. Send Jim an email to madmoneynbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.
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Jim Cramer
On Fox 1.
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Scott Boatwright
You can stream your favorite news, sports.
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Jim Cramer
And entertainment live all in one app. It's raw and unfiltered. This is the best thing ever. Watch breaking news as it breaks.
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Scott Boatwright
Breaking. Tonight, we're following two major stories. Catch history in the making.
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Jim Cramer
Debates, drama, touchdown. It's all here, baby. Fox 1. We live for live streaming now.
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Jim Cramer
We got to talk Chipotle. Simply, why can't Chipotle stock get some distance from the new low list given how good it is for the better part of two decades? This is one of the greatest growth stories out there. Tremendous stock too. But for over a year now, the stock struggle and that includes last month when the Mexican chain reported disappointing quarter worse. They lowered their full year same store sales forecast, which is why the stock plunged 13% in response. Now at this point, a lot of investors are worried that even though Chipotle sells high quality food, I had a delicious burrito bot just today. It's just not offering consumers maybe what they want, the kind of bargains maybe that they need. I don't know. Maybe that's one of the reasons why the Stock's now down 29% for the year, which we know is not acceptable. So is this a buying opportunity? I know the company's in there buying or do we need to be worried about it? Let's take a closer look with Scott Boatwright is the CEO, CEO of Chipotle Mexican Grill. To find out, Mr. Borat, welcome back to Man Money.
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Scott Boatwright
Hi Jim. Good afternoon and thanks for having us on today.
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Jim Cramer
Of course, Scott. First, I want to talk about something that you're doing I think is going to combat a lot of what people may perceive to be an issue. A terrific new whole weight, whole new way to order for small group build your own Chipotle, which we came down to a meal basically that costs about eight and a half dollars if you get if you do take advantage of this.
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Scott Boatwright
That's right, Jim. It's something we're really excited about. We've been in this is something we've had in the hopper now for probably over 12 months trying to figure out how do we bring it to life in the most meaningful way where we can deliver on the experience and operationally we have it in the right spot and it's really addressing a consumer need around, you know, build your own Chipotle for family meal occasions as well as meal prep. We're really excited about it. It's off to a great start. And you're right. I think it's an extraordinary value. And if you order between now and October 21st with with the code TRY BYOC, you can get $10 off your first order.
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Jim Cramer
Well, look, I think that's a terrific bargain. I think up against that. For instance, look, I had a fabulous boldly I live down look, I'm in downtown New York. But that all in total, including yes, the delivery was 28 bucks. That's unacceptable. It's kind of like it breaks the. I don't know this. Let's just say it's kind of like there's a social convention of how much you can charge. It kind of exceeded that. Now, we all know food's gotten incredibly expensive. We also know that we love Chipotle. How do we solve this problem of trying to get that price down?
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Scott Boatwright
Yeah, Jim, it's a great question. And I'll start with, you know, the Chipotle. Average Chipotle burrito across America today in restaurant is still under $10. And I think it's still an extraordinary value. And I think about value. You've heard me talk about this in the past as benefit over price. And what I want to do is continue to hold price constant and lean into the benefit of the offering. And I know there's more we can do around the occasion and make sure we're delivering or exceeding guest expectations, both in restaurant and in digital to ensure we're delivering on the core equities of the brand, which are centered around high quality ingredients crafted with classic culinary techniques, prepared in restaurant in abundance with the value and speed you can't get anywhere else.
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Jim Cramer
Well, okay, so let's talk about the difference between what we just described and what you and I know is just great food like I have for lunch and what the stock's doing. I mean, it is down 17% since you came in, versus 19% up for the S and P. The restaurant group itself is up 8%. You're again down 17. I don't need to repeat how you are, but I do know maybe either you came in with the stock at a spike, it was at $60, or it's just that like right now at this very moment, the market says we want to be in pure value. Something that you actually question on your composable when asked by Mr. Tarantino Baird. Maybe that's kind of the zeitgeist. What do we do here?
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Scott Boatwright
Yeah, I think the investment community at large, Jim, is trying to understand, are we a growth company or are we a mature company? I will tell you, I still believe us as the best growth story in the industry, full stop. We're navigating a really challenging consumer environment. The industry has been in negative transactions now for a couple of years. In the last recession, global recession, we were the last to go in and the first to come out, Jim.
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Jim Cramer
Right.
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Scott Boatwright
I think we enjoyed a really strong year last year. And if you look at our two year comp Numbers, they're still outpacing the industry and the, and the segment of fast casual. So we feel like we're navigating an uncertain environment and we need to do better to meet the consumer where they are. And so I talk about this consumer flywheel, the three legged stool around ops, operations, digital and marketing. And there are things that we are doing in our strategic plan to address the concerns that I still have in those three areas to ensure we're exceeding the consumers expectations in this crazy environment.
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Jim Cramer
So once again I do want to be sure you think that it's possibility you can return to some higher same store sales numbers and it's not that we are right now in a situation where let's say Chipotle's great growth period is behind it.
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Scott Boatwright
No Jim, not even close. I have a lot of confidence in our strategic plan. I have a lot of confidence in our leadership team. We'll get back on our front foot here. We've got a few levers we're going to pull. I can get to some of the things that we have in the innovation hopper here in a moment but I have confidence we can get back to mid single digit growth. We're going to continue to grow restaurants at 8 to 10% annually. We will build another 315 to 345 new Chipotle restaurants this year. So we're excited about the growth ahead. We know we're navigating a cyclical environment that will change in turn as I think things become more steady in the macro and in relationship to whether what's happening with immigration tariffs and or taxes. I think once the consumer has more confidence to come back into the marketplace, spending will resume. And I think you know that the consumer today is still in a really good place. If you think about wages are still outpacing cpi job markets are seemingly holding seemingly well. And so where consumers are cutting back based on the information we have is on restaurants specifically and then leisure and hospitality. So we know the consumer is going to come back into the space. We have to ensure that we're delivering on value as I described it earlier to you Jim and I think the brand will be back when it's final.
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Jim Cramer
We just got to go over because it's I got to be sure because I like, I like the company very much. I always have been a supporter. Darden during this period since you come in is up 47%. Papa John's up 10. Yum up 8. McDonald's up 18. These, these are all faced with the same situation that you are Texas Roadhouse is up. Cheesecake is up 70. They're all faced with the same environment you are. So what we have to figure out is, are you doing something that must be changed because these other guys are doing their stock is doing better than Chipotle. Doesn't mean that they're better than Chipotle, but their stock is doing better than Chipotle.
- [20:59]
Scott Boatwright
I understand, Jim, and I understand your exact point. I think what we have to do is continue to lean into the consumer experience, Jim, in a more meaningful way and then really talk about our value proposition through our media channels in a more robust way. So I think our media program or our media strategy has to evolve a bit to ensure that the consumer understands the value proposition at Chipotle more fully. I think we need to do better in restaurant to deliver on that value proposition, both in restaurant and in digital to ensure that the customer feels the value or sees the value when they get their order at home or in restaurant. So I know there's more that we can do today, Jim, but I'm confident we're navigating just a challenging environment, and then we'll come back out of this on our foot in no time.
- [21:41]
Jim Cramer
Is that why the company bought back $430 million with stock? Although admittedly at a $50 basis? You did. You're in there buying.
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Scott Boatwright
We are. We're buying more aggressively this year than we have in past years, Jim, because we have confidence again in the strategy. We have confidence in the plan. We know we have an extraordinary product that has high demand for the product. We just have to deliver on the experience.
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Jim Cramer
Well, look, I've got to tell you, I'm glad that you came forward. I am very excited about this. The whole new way to order for small group. And look, what can I tell you? We love the food as much as ever. So the stock is what I'm going to call a quandary. And I think that you are addressing the quandary, and that is what the shareholders want. Scott Boatwright is the CEO of Chipotle Mexican Grill. Scott, it's so great that you came on.
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Scott Boatwright
Jim, I thank you very much for the opportunity to share our story. Look forward to seeing you on future earnings calls where we talk about better results for our organization.
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Jim Cramer
All right. Sounds good to me. Thank you so much. And mad money's back after the break.
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Narrator/Commercial Announcer
Coming up, Kramer's hitting the rails and catching up with the CEO of csx, seeing if it's full steam ahead for this rail transportation company next.
- [22:49]
Jim Cramer
On Fox 1. Now you can stream your favorite live sports so you can be there live for the biggest news moments and catch.
- [22:57]
Scott Boatwright
History in the making.
- [23:01]
Jim Cramer
We live for live streaming now.
- [23:04]
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- [23:42]
Jim Cramer
What the heck is happening at CSX, the Big east coast railroad that's under a ton of pressure from an activist firm, Ancora Holdings. Earlier this month, Ancora sent a scathing letter to the board of Directors on the argument that the company should merge with another large railroad as soon as possible or part with the CEO who happens to be here tonight. Problem is, there just aren't that many freight railroads in this country. Neither Canadian Pacific nor BNSF seems interested in a deal and the two other major railroads, Norfolk Southern, Union Pacific, they're already merging with each other. So let's hear the other side of the story from Joe hendricks. He's the CEO of CSX to get his responses to these criticisms. Mr. Hendricks, welcome back to Mad Money.
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Joe Hendricks
Thank you for having me, Jim.
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Jim Cramer
First, I'm talking just so people know. The Railway Age is the most important publication in this industry and you are the railroad man of the year. So I want to ask the railroad man of the year who has been completely slagged and trashed by some fund that I don't know jack about? Well, how's the railroad man that you're doing? And the fact that your stock is up more than everybody else other than the one that's in a takeover talk, does that mean anything? I mean, maybe I'm wrong.
- [24:39]
Joe Hendricks
Well, we are proud of our results, Jim. Let's start there. I mean, in the last two years, in 2023 and 2024, we had the highest margins in the industry for our rail business in 23 and we were the second best in 24. But we had the best customer service in the industry, which led to some of the accolades that you talked about. And so we're proud of the operating results we have, proud of the team we have, and we're excited about the future because what we have right now is an opportunity we have never had before. Forget how we got here. But the railroads now want to work together to solve some of the problems that have been here for decades to improve service and grow the business.
- [25:12]
Jim Cramer
But don't they have to merge with each other in order to be able to make that happen?
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Joe Hendricks
That's been the theory that's been put out there. But in real biggest problem that needs to be solved is in the interchanges around Chicago, St. Louis, you know, Memphis, New Orleans, etc. It takes 18 to 24, perhaps even longer than ours for us to interchange. And there's lots of cost and waste in that. Customers are saying, hey, we don't need this anymore. We want a seamless experience. You don't need to merge to do that. It's an option. And if somebody were to talk to want to talk to us about that, we would obviously.
- [25:38]
Jim Cramer
So I mean, of course you think you're supposed to call these boys, supposed to talk them into buying it. What is supposed to happen? You have a banker and says, listen, I may have been the best performer, but I give up.
- [25:48]
Joe Hendricks
Well, Jim, let's listen. We have the strongest railroad network in the east, the best margins, best customer service. We think the best employee engagement. So we like our position and there has. It has value. Obviously Norfolk Southern, Union Pacific are pursuing one path, but we're in a situation now where we get to get talk to all the other railroads. They come to us that you're the only other railroad in the East. Not perfectly, but first we talk with bnsf. Great opportunities there.
- [26:11]
Jim Cramer
That's Berkshire for great opportunities to work together.
- [26:15]
Joe Hendricks
We had made some announcements last Friday about growing our business. Who's the office We.
- [26:19]
Jim Cramer
Sorry, you've been talking to Warren Buffett.
- [26:22]
Joe Hendricks
Well, I think he announced this week that we did have a meeting in his office. But I'll let Brooks Rathway talk about.
- [26:26]
Jim Cramer
Well, what I care about is did they make you an offer?
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Joe Hendricks
No.
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Jim Cramer
Okay.
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Joe Hendricks
But they made it clear they want to work together to solve these problems and create growth opportunities for all of us. And that's the important part point.
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Jim Cramer
Would you be able to take share from trucks which the US Public bears the burden of because they own roads, to be able to take less pollution and run your own rails. Would you be able to make it so that you'd be more competitive?
- [26:50]
Joe Hendricks
Yes, because we get to work with the railroads like being a staff to solve these problems. We don't need to wait two years for regulatory approval process like the SDB is going to go through with upns we can do it now and we can do with Canadian railroads as well. We can start in the fourth quarter. We can show you examples how we can provide seamless service to go after that truck model conversion now, not wait two years. And we don't have the risk of that regulatory process. And importantly, we get to do as a partnership and we learn and grow together. We're going to have all kinds of opportunity to talk about things that we're doing together with BNSF and others to create value. And we're the strongest railroad in the east if you want to work with us now.
- [27:25]
Jim Cramer
Joe, there are criticism that says that I don't know how good it is that you're a cargo guy. You're not a railroad guy. You came from Ford and you know, the incur basically says like you came hat in hand. I actually remember you as someone who was kind of retired and done. You got brought back in. But maybe I, maybe I just read the articles and know the truth. Maybe that's.
- [27:44]
Joe Hendricks
Well, you do know the truth, Jim. But the fact of the matter is I was retired. You know, 31 years in the auto industry is a long way retired as president of Ford. But we came back out of retirement to do this because it's worth doing. We said for the last three years we need the railroads to work together to create value for shareholders and to create better service opportunities for our customers. We can't create value. The railroads have created all kinds of margin expansion over the last eight years by cost reductions, getting a lot more efficient. Investors now are saying, where's the growth?
- [28:12]
Jim Cramer
Exactly right.
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Joe Hendricks
You have these great margins. How can you grow and you haven't grown? We haven't grown because they haven't prioritized service. We have. We grew. We're the only railroad last year in 2024 that grew volume versus pre pandemic 2019 with those margins that I talked to you about before. But now we have an opportunity to say, okay, let's solve these problems for the first time. You need two partners to do that, by the way, an east west railroad to do that. And we have that with bnsf and we're going to create value now quickly and show you how we can do it together.
- [28:40]
Jim Cramer
Okay, so one of the reasons why you are you got railroad man the year is you took a fractious labor force and really somehow turned them into partners with you. And not just partners in nature, actual partners, which you needed, by the way, because you had a horrendous hurricane that took down your network.
- [28:54]
Joe Hendricks
We did we lost. We have four north south routes and we lost one of them due to Hurricane Helene. We're rebuilding it. Hundreds of millions of dollars are going to be back up early fourth quarter. We also took down the Howard Street Tunnel in Baltimore to be able to double stack containers to that and redo the tunnel because it's been 1890s, it was built. Those two things are affecting our network. But we still had a 550 basis point improvement first quarter, second quarter. With all that going on, all that's going to go away in the fourth quarter and we're going to be free to run our network, the Betas. But even so, we have some of the best operating metrics in the entire rail industry right now. Even with those situations going on because.
- [29:29]
Jim Cramer
Of our people now, there are a lot of people who'd be sitting right there and they would follow up by saying, and that's why we're not willing to talk to anybody and we're doing it on our own. What you have told me is, look, if someone comes in with a really good bid, you're going to do what's right for shareholders.
- [29:43]
Joe Hendricks
Well, our board is well advised. We're very active in all this and of course we'll do what's right for shareholders. But we said on our earnings call we will open all possibilities to create value for shareholders, properly grow the business and serve our customers better. The and is important. We can do all of those by working with other railroads. There's a different construct. You can do that and we're open to those constructs. But right now the opportunity exists to work with three railroads to provide better service, especially with BNSF across transcontinental railroad across the U.S. okay, so talk to.
- [30:12]
Jim Cramer
Me about the business in general. I mean, there are a lot of people who feel like there's a bit of a slowdown in the country. I look at your numbers actually in the industry that you're on, I don't see a lot of slowdown. I think you're doing pretty well.
- [30:23]
Joe Hendricks
Well, volumes up year over year for the first, you know, for the first six months of the year, seven months of the year even. But there are different stories to be told. The rate sensitive parts of the economy are still slower than you'd like them to be. Look at auto, look at housing, but also look at even chemicals. We've seen some softening in chemicals business, but the aggregates like construction up coal up the grain harvest was strong. That ag business has been strong and the intermodal business been up and down because of the tariffs and because of ports and whatnot. But we need the industrial economy to get going. Since the pandemic, the industrial economy is not taken off. And if we, if we can get that part of the economy going, man, we've got a great opportunity.
- [31:03]
Jim Cramer
The Fed cut a couple of times.
- [31:04]
Joe Hendricks
With that certainly help for sure.
- [31:05]
Jim Cramer
That would definitely help. And then the last thing I do want to do and I don't want to leave on like a kind of, a really kind of. This note was nasty. Joe, I got to tell you, one point in my life, I know I'm on air. I was a nasty guy. I was not a diplomat. People didn't really think I was a gentleman. I never would ever write a letter like this. This is scathing. You don't deserve this, okay? You don't deserve it because you're a good man. But I also bet that these guys would love to have you do talks with BNSF because then it's more likely it's a surface transportation board would improve the, would improve the deal that they want.
- [31:36]
Joe Hendricks
Well, there are a lot of different motives going on right now.
- [31:38]
Jim Cramer
Yes.
- [31:38]
Joe Hendricks
Our focus is on creating value for shareholders and serving customers better so we can profitably grow.
- [31:43]
Jim Cramer
Well, you come with some sort of old fashioned stuff to me.
- [31:45]
Joe Hendricks
Yes. Well, because that's all it goes.
- [31:48]
Jim Cramer
That's really all that it really is.
- [31:49]
Joe Hendricks
And it involves people and working together. And we have, I'm telling you, for decades we have not had this opportunity. The railroads now want to work together to solve these problems. It's a great opportunity to. We had a great investor day. We talked about great opportunity for three years. This is in addition to that. Wait, do you see what we do over the next couple of years?
- [32:07]
Jim Cramer
Well, look, you know, I think that you've done a terrific job, but I thought it was really important that you had a chance to, to say yourself railroad man of the year. Done a lot of great things for this railroad. I think you deserve better than what's happened from some of these guys. But I think the people in the industry know well and by the way, so the stocks, because it was best stock other than Norfolk Southern, which was up on takeover chatter.
- [32:27]
Joe Hendricks
Yeah. If you look at our TSR performance since I've been here, it was the best in the industry until the merger stuff started happening. Now it's still second best in the industry even through today. And we got a lot to prove over the next couple years.
- [32:38]
Jim Cramer
Joe here should come in.
- [32:39]
Narrator/Commercial Announcer
Coming up, fresh off its earnings report, Kramer's one on one With Snowflake seeing if the AI boom can push this.
- [32:46]
Jim Cramer
Stock higher Next after the close today we got still one more blowout quarter from Snowflake, the cloud based data management analytics platform that I like so much. Now this comes on top of the last blowout quarter they reported three months ago. Tonight they posted a solid top and bottom line beat. Strong guidance for current quarter. Hence why the stock screaming after hours trading. Not only does Snowflake have fantastic sales momentum, but the business is also becoming ever more profitable. It was the star of tonight's earnings break. So let's take a deeper look with Sridhar Ramaswamy. He's the CEO of Snowflake. Learn more about the quarter when he has the story here. Mr. Ramasami, welcome back to Money.
- [33:31]
Sridhar Ramaswamy
Hi Jim, happy to be here.
- [33:32]
Jim Cramer
All right, so congratulations because not only did you post much better expected results, solid revenues, but this accelerating product revenue and these terrific operating margins. I didn't think this could happen so quickly. How is this coming together.
- [33:48]
Sridhar Ramaswamy
Jim? Snowflake is right at the center of today's enterprise AI revolution. We delivered a strong, strong quarter over $1 billion in product revenue, growing 32% year on year with a 5% beat and is increasingly at the center of new customer acquisitions. And of our existing customers, 6,000 plus of them are using our AI products every week. This is why big logos, whether it's it's BlackRock or Thomson Reuters are using adopting our AI products I'm very happy about is we are also innovating at a tight pace while being operationally efficient, often by using AI ourselves. It's that combination that makes us feel very good. That's why we raised our guidance and that's why we see an enormous opportunity ahead for us as a company.
- [34:40]
Jim Cramer
Well, I'm so glad you mentioned blackrock because we adore Larry Franklin the show. It's a huge position for my Channel Trust. One of the reasons is because it's the most technologically savvy financial company in the world, largest depositor of assets in the world. How does BlackRock employ use Snowflake to make it so they continue to stay on top?
- [35:01]
Sridhar Ramaswamy
BlackRock has been a long standing customer and partner. They have pushed us to become the amazing data platform that we are today. But specifically they are using our AI products to create a customer360 so that when you call in, the agent on the other side has access to every piece of information that they have about you. And that's all using Cortex, which is our AI platform. And they're setting an Example, for what you can get done with AI on.
- [35:30]
Jim Cramer
Snowflake, I just want to help me a little bit because, you know, there's becoming growing skepticism that maybe I can't generate a return. But then when I look at what Snowflake's doing for their customers, I think the customers are generating a tremendous return. Can you explain this weird conundrum between people in our business who say, wait a second, it's really not generating return, and the people who are employing Snowflake to make billions of dollars?
- [35:57]
Sridhar Ramaswamy
Well, that's the magic of the data platform that Snowflake is. We are consumption based, which means that unless people are getting value from running things on Snowflake, we don't make any revenue and they don't spend any money. What we do at Snowflake is make AI super easy to use, but it's also enterprise grade. You don't have to worry about governance and who has, who is going to see that data. It is that combination that makes it really easy for our customers to experiment, to play with, to get a feel for AI. We wanted to make sure that we could demystify AI for clients like BlackRock or Cambria Health Solutions, which is adopted Snowflake Intelligence. But they can do this one step at a time on their own terms and make sure that they can get value. This is similar to how we use AI, which is we roll out a small product like a little chatbot, it gets usage, then we build something big on it. We are busy rolling out Snowflake Intelligence to the entirety of our sales team. Just right now I was looking at our relationship with a customer and learning so much more about it using our AI product. It's that ability to take customers on a journey step by step that I think distinguishes us. It's part of our overall ethos of making technology simple, making technology actually serve. That's why we've been so successful with AI.
- [37:16]
Jim Cramer
Okay, so help me how the process works. Someone contacts you, you are partner, for instance, with Azure, with Microsoft. Do you sit down with them and then you go to Azure and say, listen, our client wants to do this. Or do you go in with the client to Azure and say, look, I think you guys can help us on this.
- [37:35]
Sridhar Ramaswamy
Well, we work together with absolutely partners like the cloud service providers, aws, Azure. But the more typical conversation is between one of our folks and an executive within a customer that wants to know, how can Snowflake help with AI? And in fact, the standard offer that I make to every CEO, to every CEO that is a Customer of Snowflakes is for them are their teams to spend one afternoon with a set of experts with Snowflake. I tell them we can create a dozen prototypes on top of your data that will show you what's possible with AI. Let's demystify all of this and then figure out where we want to put meaningful amounts of time investments in. It's that process, it's the journey by which the ease of use of Snowflake plus the fact that it's an amazing data platform, that's the thing that makes us shine in front of these customers because they understand how they can go step by step and create value with.
- [38:29]
Jim Cramer
Okay, well, help me because, you know, there are a lot of people feel I cannot be relied upon. We got too ahead, we're over our skis. Turns out there's hallucinations. It may not really work for me. That's the opposite of what I'm hearing from you.
- [38:43]
Sridhar Ramaswamy
Well, AI is a technology. It has to be used responsibly. We pioneered how rag based systems, the retrieval based systems, could be used to create chatbots that would hallucinate far less. We sweated the details when it came to how can you make an AI model query structured data. We are the best in the world when it comes to that. If you build a solid foundation like that, if you build broad adoption so tons of people are giving you feedback, then the value that you can get with the AI products on top dramatically goes up. It goes back to how do you make sure that a customer like BlackRock that is incredibly finicky about getting all the details right, Trust what they're getting from Snowflake. It is our ability to walk them through that journey. To also include things like observability when they create AI products that makes us stand out. It is what delivers trust. It is what makes our customers feel convinced that we are the partners that they should be working with when it comes to.
- [39:41]
Jim Cramer
Well, I think it's obvious that you can't just blunder in day. You need someone like Sweetheart and Snowflake to be able to make it work. Otherwise maybe it is a waste of money. But I got to tell you, from judging from your numbers, people are getting a terrific return on investment. That Sridhar Ramaswamy, CEO of Snowflake, once again, congratulations. This was a monster quarter, as was the last one. Great job. Good to see you.
- [40:02]
Sridhar Ramaswamy
Thank you, Jim. Great to see you.
- [40:04]
Jim Cramer
They might be back after break.
- [40:06]
Narrator/Commercial Announcer
Coming up, Kramer takes your calls. And the sky's the limit. It's a fast Fire, Lightning round.
- [40:13]
Jim Cramer
Next. It is time. It's time for the light rail. Grizzled merchant rapper Royce Hindu captain I stand first of grabs on the fly. We play the sound and then the lighting round is over. Are you ready, Skeet Dad? Down the road, let's go to Dave in Illinois. Dave, Dr. Kramer, my man, a GNC Croatian traveler. How are you man? I'm good. You must have put my pictures through rock. What can I say, Dave, Good to have you on the show. Jim. This 30 billion dollar company provides connectivity for semiconductors in AI and in cloud computing. 12 of 15 analysts rate Arista Labs as a buy or strong buy. And its three year performance is off the charts. Jim, your thoughts on a lab? Here's my thoughts, Dave. I feel like an idiot for telling people, not telling people to buy it. I look at it all the time. I turn to my buddy pal friend Jeff March and say what was I taking at Sterile Labs? So I'm upset that I missed it. Let's go to Luke in Arizona. Luke. Hey Jim, thanks for taking my call. You know, I used to watch this show with my dad. Now my sons are watching it with me. So they're excited. Hey kids, how you doing? Kids got a whole show. Enjoy watching your show. Thanks for doing it. Thank you. Nice kids you got. Hey, thanks. That's Clark and Brady. All right, Mr. Kramer, the stock I'm calling about is Open Door Technologies. I'm wondering if the real estate market, the shortage, you know, I've got to tell you, this is a meme stock. The person who was, who left the company, the CEO was a straight shooter and I don't really understand what happened. But I'll tell you this, I am not going to jump on a situation that I thought was, was heavily, that some would say was manipulated. Okay? Some would say I'm not going to jump on that train. Let's go to Brian in New Jersey. Brian, hey, booyah. Jim, four time caller over your 20 plus years, congrats for what you do. You're three for three. Batting a thousand for me. Well, you give a person a stock idea so that they can make money. You teach a person how to and they'll make money for the rest of their lives. Thank you. And that is what that is actually how to make. That's what my book's about, which is that I can teach you so that even though I intend to be here 47 years from now, it could be, I don't know, the odds gonna be tough. The odds are tough. But don't Count me out. I'll still be with you. I'll read your book. Thank you. All right. My question is RGTI Rigetti, Quantum Computing. Okay, here's my view on quantum computing. It is for real. Is Rigetti my favorite? No, but Rigetti's one that could have a headline tomorrow. It's like Okloklo, I said when it was in the third. Enough. I can't take it anymore. I think that this one's like that Rigetti could have something that could be a home run. I don't want to keep you out of it, but it is a speculation. Please remember that. And that, ladies and gentlemen, concludes of the Lightning Round.
- [43:22]
Narrator/Commercial Announcer
The Lightning Round is sponsored by Charles Schwab. Coming up, is this the Market of Matt Kramer is digging into the major uptick in company mergers and deals and what the trend says about the strength of the market.
- [43:37]
Jim Cramer
Next, more buyers than sellers. Kid, that's a wise guy term. Something is said to clueless newbies on the trading desk who can't figure out why a stock's going higher. But even though more buyers than sellers doesn't tell you very much, it's a reminder that the stock market, like any other market, is at the mercy of supply and demand right now. This market staying buoyant in part because there are far fewer shares floating around. So when a big account goes to buy a stock, they're more likely than not moving it. In other words, we've got the makings of potential stock shortage. And where's it coming from? Takeovers. Today, Bloomberg News published a terrific piece headline dream dealmakers top $1 trillion in M&A with busiest August since 2021. Yep, we've had over $1 trillion in M& A activity since just the beginning of June. That's up 30% year over year, the biggest amount since the record breaking summer of 2021. Remember, the Biden White House took a very forceful stance on antitrust enforcement. I've never seen an administration that was more anti takeover in my lifetime. His FTC was a horror show for dealmakers because they repeatedly sought to to block even the most benign of deals. Of course, like I told you last night, Washington is not all that important the market. So stocks rallied nicely under Biden as profits stayed strong. But for four years, the vast majority of potential takeovers were put on hold and takeovers are the easiest way for stocks to go higher. Now we've got a much more takeover friendly administration deals are coming fast and furious. For example, I'm used to a very slow August with almost no deals. Do you know that this year we've had $300 billion in deals, including this Keurig Dr. Pepper purchase of J.D. pete's for about $18 billion. 80's attempt spectrum licenses from Echo Store for $23 billion. And of course, as you heard earlier, Union Pacific, all aboard seeking to acquire Norfolk Southern, a huge $85 billion railroad deal. And yes, Palo Alto Networks, a charitable trust position, snapping UP Cyber for 25 billion in cash and stock to boost its identity based cybersecurity exposure. Of course, there are plenty of other ways for the market to go higher. Profits can increase, the Fed can cut rates, new cash can come in. But at its most basic, we're talking about a stock market market, a market of stocks. And if there's less stock, the remaining merchandise will most likely go higher. Plus, when there's more M and A activity, that generates a lot more fees for the banks. And when the banks go higher, they tend to take the rest of the market with them. Why? Because they provide fabulous leadership that gives us confidence. I think that this is just the beginning of a wave of mergers that can drag this whole market higher. As long as we don't get a similar wave of IPOs that flood the market with new supply, we still haven't seen many deals. And when we have them, I got to tell you, not a lot of shares are actually being offered. We've had very few mergers in pharma because the Biden FTC was so effective in trying to quash deals in that industry. As a result, there are now way too many drug companies. We need far fewer banks. Retailers should be merging like crazy. So should the industrials. And it is ridiculous how many tech companies are out there. Which is why Palo Alto's takeover cyborg made so much sense to me. Probably never could have happened under Lina Khan, the FTC nemesis of all business. I think mergers are essential to capitalism. They can rationalize industries and create new competitors that rival the head heavyweights. But at the end of the day, what matters to me is that takeovers take out stock. And when you take out stock, you drive up the prices of all the other stocks simply because of a lack of supply. That more than anything else, is why I like this market. Sure, we can get sidetracked. We can question whether we have an independent Fed. We can wonder about the distortion of tariffs. We may be perturbed by inflation. But I think the coming wave of takeovers could be more powerful than all those in terms of the direction of the market. Regardless of how you feel about antitrust policy or the current president. The fact is, the Trump administration's merger friendly attitude is just simply great news for your portfolio. Alexa, as always, just for you right here made money. I'm Drew Kramer. I'm going to see you tomorrow.
- [47:30]
Narrator/Commercial Announcer
All opinions expressed by Jim Cramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBCUniversal or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, Internet or another medium. You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. 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 it's not rocket science. Grayscale has been educating investors on crypto for over a decade. Grayscale Invest in your share of the future. Investing involves risk and possible loss of principle. Visit grayscale.com for more information.