← Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 9/26/25
00:44:24
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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Jim Cramer
On Fox one now, you can stream your favorite live sports so you can be there live for the biggest moments. Touchdown and catch. History in the making. Fox One we live for live streaming now.
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Jim Cramer
Hey, I'm Kramer. Welcome to Mad Money. Welcome to Crame America. I'll be my friends. I'm just trying to make you a little money. My job is not just to entertain, but I'm trying to teach you every day. So call me at 1743 CNBC or tweet me at Jim Cramer. At this point we've heard from so many billionaire critics saying the artificial intelligence data center build out is an outrageous bubble that it really has become terrifying, hasn't it? This promotional pessimism as I'm calling it is the kind of thing that scares scares people away from owning stocks. Scares you. And now I think it has become a beastly overhang on the entire market. Although that bearish a shroud was not enough to frighten us today as The Dow gained 300 points. S&P climb.5%. The Nasdaq advanced.44%. Now I've heard this gloomy chorus in the background during some of the most dazzling stock performances I've ever seen in my life. I've never advocated that the negative position, the bubble recklessness. So the so called foolish spending partially out of respect to the leaders of the so called hyperscalers, the trillion dollar companies that are spending fortunes building out their data center networks because they think that that's where the opportunity is. I will not call it a bubble because I trust the judgment of Jensen Huang. He's the CEO of Nvidia, who's arguably the father of both accelerated Computing, which does matter tremendously. It's not talked about and generative AI Jensen has been met with skepticism every step of the way and the skeptics never seem to learn even as he constantly proves them wrong. And I think he's doing so again. Even though the data center spend is admittedly humongous, you got to keep in mind that it's coming for the most part from the vast cash flow of the richest companies on earth that are borrowing money. Lately though, some build out plans announced by Sam Altman's OpenAI and Oracle, founded by Larry Ellison, now with two CEOs have caused some trepidation because they're spending well in excess of what they can afford. Now I've got to say I actually am uncomfortable that but again, when I hear Sam Altman talk at our network in a great interview with John Ford about the demand that he has, when I know his roadmap for reasoning semiconductor platform reasoning, one that can comprehend and actually help your advanced thinking okay, and maybe be ahead of you with complex problems. I have to suspend a guilty verdict or at least I intend for mad money to stay open minded. So don't call me a cheerleader, but I believe that AI is getting better and better and better and will be worth every penny when things shake out because Jensen Wong has assured me and I have no reason not to trust him. Plus, unlike the dot com era Internet build out which was often financed by vendors called vendor financing or lightly financed by shaky institutions, the datacenter build out is largely funded by the smartest people on earth who are running the richest companies on Earth. The CEOs of these companies believe I will be the next industrial Revolution and they know I for one am not smart enough to doubt them. I own that. I don't have that. They've made us too much money though to think that they've all lost their minds. Of course not everybody's going to win. Could there be more than one winner? It's something I was working on all this week when I Talked to the CEOs when the.comcon imploded. We still did get Amazon and Google though. Google came public years after the bubble burst. Maybe we can get three or four winners this time around. That wouldn't shock me. But they all want to win the race for the best because they're terrified they'll be left behind and they'll never be able to catch up. And you know what? They won't. So when you hear these critics warn of a disastrous bubble, keep in mind that even Though many of these bearish money managers who come on TV and talk their negative book are smart. They don't know jack about tech versus Mark Zuckerberg, Satya Nadella, Andy Jassy, Elon Musk. And they can't hold a candle to Jensen Wang. There, I said it. I had. To not acknowledge the critics is to say, you know what I agree with. But that doesn't mean I should necessarily obey them. Hook, line and see. And I don't. As I say in how to Make Money in Any Market, which goes on sale next week, Both signing by me at Barnes and Noble, 555 Fifth Ave. Noon Tuesday. Get your reservation, hope to see you. The billionaires, they're not working for you. They're not. Even if they genuinely believe that you may really think that they're trying to help you. But you've got to understand, once you're that rich, you become incredibly risk averse because there's no need to take risks. A responsible billionaire will almost always pretty much default to bearishness when they come on air. Once you are that rich, it seems you can only see the worries and not the opportunities. So stop being swayed by their negativity and think this. Why didn't you become a millionaire like so many in videos? I know. I know the answer. The people, these people, the billionaires, the analysts, they all came on and they scared you. They scared you and they got you to trade out of a phenomenal stock that you should have just owned and not traded. Did they apologize? Maybe I missed it. Okay, enough soapbox. But I had to do this because it's all I hear anymore. No matter where I go, it's all I hear. Now we got a game plan. Let's get to it. On Monday, we've got reports from two oddly important companies, Carnival and Jefferies. Carnival, along with the rest of the cruise industry, has been in super bull market mode ever since the end of COVID Can it continue? I actually think so. Led by Royal, by the way, because consumers know that cruises are relative bargains when it comes to leisure travel. Jefferies is a boutique investment bank that does a ton of financing. The investment houses have been among the best performers in this market. There's so many. Hey. So it may be taken so private. There are just huge banking deals everywhere. Jefferies will help us figure out if these moves are justified. Tuesday morning, we hear from a company. I think that that tells you more about the state of the economy than almost any other. And that is paychecks, which you're quite familiar with. If you watch Joe payroll processor and human resources company for millions of small medium sized businesses for real backbone of America. Now it's not as important as the non farm payroll numbers Friday but I think paychex tells you it tells you it's straight. I devour the report every quarter quarter during midday I'm going to leave my post here and go to 555 Fifth Avenue to sign books you have to reserve to do it. I hope to see you there. The books mean the book is meant for you to make you a better investor. Tuesday night we hear from the most important company of the week and that's Nike. This company is being reinvented by new CEO and old Nike hand Elliot Hill. My met and I respect I don't know if this will be the breakout quarter but there will be a breakout for Nike and you have to buy it ahead of that. And as I've told members of the CNBC Investing Club, our club bulletin from today. Jeff Marks, great job. Gives you all you need to know about the current Nike state of play. Next I am concerned when I see outsized dividends versus the rest of the market. UPS for example, sports a 7.84% yield which seems darn high, way too high versus the rest of the rest of the S and P to make me comfortable. Something's awry. You know what? I'm beginning to feel the same way about Conagra with its 7.7% yield. It reports Wednesday Congrega makes money. It has a lot of solid brands, but the Street's looking for down earnings and that would be untenable. It is time for a statement. Upside surprise, plain and simple from ConAgra. That's the only thing that reversed that hideous slide of their stock. Thursday we get a raft of data. Aggregate car sales, weekly jobless claims, durable goods, all important. But everything pales in comparison to Friday's nonfarm payroll report. As I've told you from day one of this show more than 20 years ago, I don't pay much attention to any of these numbers because it's the Fed scrutinizing this. If there's too much wage growth, the Federal Reserve has to say it needs to pause the rate cuts to see if the inflationary infection can go away on its own. So a hot number will put Jay Powell back in the box. He's got a president who won't stop criticizing him. He has a budding slowdown, but he also has a boom because perhaps that's the one that's connected to the yes, the data center build out. It's not built on borrowed money. Amazon and Alphabet and Metta don't need no stinking interest rates. But the bottom line, the employment number lords over all other entries here. Call me concern because I know that some parts of the economy and connected to this data center are overheating. But another part, autos, homes, retailers. Dreadful. Can Jay Powell save the rest of the economy without taking the data center economy to a boiling point? Well, you know me. I think he's done a pretty good job so far. Let's hope he can keep it up. And I am an optimist. Let's go to Jeff in New Jersey, please. Jeff. Hi, Jim. Happy New Year. Jeff from Central New Jersey, also known as Dr. Ece, fourth to the ring, shout out to the ace and the casino Combat Metaverse. I can't thank you enough for dramatically increasing my net worth and and creating intergenerational wealth. Let's see. I mean it's like what I want to talk about in how to make money in market. People have made a lot of money, individual stocks, but no one wants to believe them. I thank you for saying it. I see people 10, 12, 15 a day who make money in individual stocks and we're listening to one right now. He's not making it up. Jeff, how can I help you? I'm taking a haircut on this club stock. I'm now seeing ads for its promising new drug. A psychiatrist friend called Cobenafi. A game changer. Should I add to my position of Bristol Myers? Well, we're going to hear from JJ later in the show. They have a competitor. I have said, and I've been abject about it that I think I might be wrong in Bristol. That's why I've not added to it. JJ is doing a better job than Bristol and it's rankling me. Let's listen to jj. We're not afraid to take a loss if we have to, but we're not giving up yet. Thank you for those kind words. And again, again, evidence that individual stocks have made with homework a lot of money for a lot of people. The non farm payroll report next week lords over all the other data and they will. And you know what? We're going to see if Powell can continue doing what I think has done a pretty good job on my money tonight. Looking for a data center play that isn't all that obvious. I'm taking a look at one new to me stock and give you my take on the company. Then with all the plays out there. It can be hard to separate the wheat from the AI chaff. I'm looking at one newcomer to the space. It's worth your time. And President Trump just announced new tariffs for farmers suhu companies that don't have plants in the U.S. i'm sitting down with the CEO J&J, as I just mentioned, to get a closer look at the company's plans to invest in American innovation. So stay with Kramer. 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 on Fox 1. You can stream your favorite news, sports and entertainment live all in one app. It's raw and unfiltered.
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Jim Cramer
Watch breaking news as it breaks. Breaking Tonight, we're following two major stories. Catch history in the making. Debates, Drama. Touchdown. It's all here baby. Fox 1 We live for live streaming now.
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Jim Cramer
You so you you can fast forward.
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Jim Cramer
You know the drill. Or stop me when a stock I don't know comes up, or maybe one that I haven't followed closely, I promise to do some homework. Circle back with the real answer. We don't cuff questions around here. Last Thursday, I got stuck by not one, but two stocks during the lightning round. Well, I got to clear both up first. Stephen Florida asked about Credo Technology Group. Now, this one came public in January of 2022, just as the IPO boom was ending and the stock didn't do much for the next two years. But at some point in 2024, Credo started gaining momentum and it just kept growing. It is now up 357% over the last 12 months. Wowza. So what the heck does this company do beyond having a stock that relentlessly goes higher? This is a semiconductor company, but what they really handle is connectivity solutions. For the data center, it's the intersection of chips and networking. Credo competes with Broadcom, Marvell Tech, Astero Labs, along with various cable suppliers. Wow, those are such tough competition. Basically, they're part of the data center food chain. Which is why the stocks become a juggernaut. The arrival of the air has forced data center operators to transition to the kind of higher speed interconnects that are creators. Bread and butter. Everyone in this industry wants higher bandwidth connectivity with lower power consumption, and that's what these guys have to offer. It's a holy grail. Kritos components exist between the Nvidia GPUs and the first switching layers in the data center. And there's no redundancy there. If that piece of equipment fails, the entire cluster fails. What makes this one so appealing is that according to management, their latest generation products are a thousand times more reliable than the optical equipment they're replacing. That's impressive. No wonder the numbers have been incredible. In Kritos last fiscal year, which ended in April, the revenue growth accelerated to 126%. The earnings per share shot up from $0.09 to $0.70. The last couple of quarters have been particularly strong. Including the most recent one, which came earlier this month. Revenue was up 274% year over year and up 31% just for the last the prior quarter. That's incredible. Credo's operating margin came in at 43% and their earnings per share was $0.52. Wall street was only looking for $0.36. Possible Magic gave excellent guidance for the current quarter, talking about much better than expected sales. After that report, it's looking like CREDO will be able to put up nearly three threefold earnings growth this year. Second, Mini in video is a rocket ship. Now, a lot of stocks that run like crazy this year don't have much to justify those moves. They're typically unprofitable companies, real spacs, little in the way of sales. CREDO is not like that. It's tremendously profitable with breathtaking earnings growth. Okay, there. All that said, I'm going to give you some caveats because it's up so much. For starters, this company's level of company concentration for their their customers is way too high. Something that does happen if you're in the data center business because only a few companies are rich enough to play in the space. Last year, CREDO got two thirds of its business from a single customer. While that's come down to 50% in the latest quarter, another 35% of sales come from their second biggest customer. In other words, these guys are indeed hostage to just two companies. How big of a problem is that? Well, it depends. Top customers are these hyperscalers Amazon supported to be their largest customer? It looks like Microsoft's probably number two. Makes sense. We know these companies are spending like crazy to build new data centers all over the world. I don't think that spending will slow anytime soon. It can if you just got to keep doing the build out because of the demand. Meet the demand. But at the end of the day, CREDO is not in control of its own destiny. If Amazon or Microsoft ever scale back, this stock's toast. I write for right now. They don't see that planned. But I've just got to give you a little. Give me some caveats. Second issue. Lately we've seen some insider selling. Basically the entire C suite has sold shares this month. Even if just to fracture their holdings. I can't believe any of these executives for reading the register. They just would be kind of irresponsible not to sell something right? But I got to keep an eye on it. Now, even though CREDO has had a phenomenal run, and this is called a phenomenal run, the stock's been getting hammered by the recent sell off of the High Flyers. It peaked at 176 and changed last Thursday and it's already pulled back to 143 as of today. Now about a 19% decline and barely more than a week. The High Flyers got crushed this week. Frankly, you know what, I'm happy to see it. The stock had been straight up for the past few months. Parabolic move, which, you know, I don't like including a 42% move in less than two weeks after its latest quarter. That's a parabola. So Credo was due for a breather. But for as long as the data center theme remains real hot. I'd be looking at a pullback like this as a buying opportunity, not as not a bail. Still, we need to pay attention to the levels here. I think the stocks become irresistible in the low 120. That's where I really want to buy, right about 20 points from where it's trading. And it's okay. It's okay to say, hey, I missed it if it didn't go down to your level. Why? Why 120? I'm thinking in terms of what's known as the price to earnings to growth ratio. That's also known as the PEG rate. You can always justify paying more for a stock with tremendous earnings. But once the price earnings multiple reaches levels that are more than double the growth rate, that's generally too high. Of course, Credo is expected to grow earnings at an almost 200% clip this year. So in theory, you could pay 400 times earnings for this one. But that's not right. It's an exceptional year for credo. If you look out the next fiscal year, Wall Street's only looking for 24% earnings growth. I suspect those estimates will turn out to be too low. But I like to play a little cautious. With a stock is up this much, a company with a 24% earnings growth might deserve a P E multiple of say 48. You know what that would put the stock 123. That's my goal. I really like that as a price Target. Because when Credo reported last quarter September 3rd, stock was trading at 124. Okay. In other words, if the stock pulls Back to the lows one in the 120 area, I think you're getting that magnificent quarter for free. I care now I get. I think that the price targets realistic because these high flyers have been pulling back hard lately. But let me give you the bottom line. Is Steve in Florida? First of all, I have to admit that I didn't know. This is the kind of thing that shows you that there's just so many companies around this data center. I'm not embarrassed by it, But Steve was right to bring it to my attention. I feel bad that I didn't know. CREDO Technology Group deserves to be talked about along with all the other data center semiconductor network winners. Like I talk about Marvell, I talk about Broadcom, but this got great products and even better financials. I don't love the customer concentration, but the velocity of credence growth is undeniable and the stock only gets more attractive as it gets dragged down by the sell off and all things before momentum. Unlike the specular plays that are getting hit real hard, this one's got real earnings, which means it genuinely does get cheaper as it goes lower. You could put on a small position here. That's fine. Do you really like it? But I suggest waiting for it to come down to the 120s before you really load up. It's a special company, but you know what? Price still matters. They have money back into the Coming up, Kramer's going for extra credit with his second homework assignment of the day. Stick around for his deep dive on Resolve AI next.
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Jim Cramer
Tonight we're running a homework doubleheader after I got stumped with a couple of names in the lightning round last Thursday just before the breakout covered Credo Technology Group, which makes connectivity equipment for the data center. It's a red hot stock that's been pulling back and I think it's buy on weakness. Next up, Brian in Rhode island asked about Resolve AI and that's with a Z, but this is a very different kind of artificial intelligence play. Brian told us that Resolve had partnerships with Google, Microsoft and the stablecoin issuer Tether. Sounded intriguing, but alas, I didn't know the company at all. The stock has been straight up recently, so I told Brian that we get back to I didn't know Resolve because the company essentially came out of nowhere over the past year or so. Resolve actually announced a deal to come public via a SPAC merger way back in December of 2021, but that deal didn't close for over two and a half years. Finally in August of last year it did. But after the stock spiked to 12 bucks in the days after the deal closed, the thing then dropped like a rock, falling all the way down to $2 and change late this year before finally bottoming at $1.07 this April. At that point, Resolve AI was too small for me to even mention on air. By late August though, it had rebounded to around $3. And over the past month or so the stock continues stock has more than double is now sitting at nearly six bucks and that's after pulling back hard from its highs a little over a week ago. So what exactly does this company do and is the stock worth buying now that it's cooled off, including a savage 10.8% decline today? Okay, Resolve makes a software for E commerce, including chat bots that act as personalized shopping assistants, listening to what the customer is looking for and steering them in the direction of what they like, as well as a one click checkout solution that makes people more likely to complete their transactions. I could go into more detail, but I'm going to stop right there because, well, I don't like Resolve. Not one bit. Why? For starters, this is one of the most promotional companies I've ever seen, as promotional as I think you can get without, let's say getting too close to the wall. Those so called partnerships with Microsoft and Google, they seem flimsy. I went back and looked at the announcements, both of which came in the fourth quarter of last year and basically Microsoft and Google are reselling Resolve software tools through their cloud stores, while thousands of products are available there. If that's a partnership, then anyone who sells things via the App store has a partnership with Apple. Resolve also puts out tons and tons of press releases, often for trivial reasons. A few weeks ago, they published a press release just to point out that a couple other stocks are valued much more richly than theirs. Who the heck puts out a press release to announce that their stock is too cheap? That's a red flag to me, as is the fact that results pursuing a Bitcoin treasury strategy where they buy bitcoin or some other cryptocurrency as an investment. Although the details on that effort are very vague, it's not even clear if they've started. If you've got a business that's worth investing in, why divert your money to crypto speculation? Here's what makes this even worse. Not only is Resolve Hyper Promotional Company is also a serial seller of its own shares. Just this week, in fact, the company announced it had raised $200 million in a private placement involving a number of existing investors. For that private placement, by the way, management priced the offering at $5.40, which was well below the stock spot price of $7 and change at that time. So they hyped their stock, hype their own stock to attract home gamers, maybe like you. Then they sell tons of shares on the cheap to big institutional investors. And this is just the latest example. For perspective, in an SEC filing from August of last year, Resolve said it had 172 million shares outstanding. In that same filing from this August, it was 245,4 million shares. And at last count and its filing earlier this month, the share kind of grown to 284 million shares, which doesn't include the 37 million shares just sold in last week's private placement. This is head scratcher. Then there's the financials, or should I say the lack thereof. Resolve essentially had no revenue last year. Specifically, they had roughly 188,000 revenue. Not 108 million people, 188,000. As for earnings, they reported an operating loss of 138 million. And that's the last actual result we have from Resolve, because this is a British company only needs to report earnings twice a year. Now Mattress says that they weren't trying to have revenue in 2024 and that this is the year where it should all come together for them. Resolve has said repeatedly that they expect to reach $100 million in annual recurring revenue by the end the of of this year. They've Been saying that since late last year, and to their credit, they haven't backed away from that target. Over the summer, the company disclosed that it reached 70 million in annual recurring revenue, and they've repeated that a few times. We'll know more when again they report October one. I'm assuming they'll have decent revenue results, but I suspect that those will be paired with rather large losses. Still, the company might say that the end of the year, our target is now $125 billion or something like that, and the stock could soar. Wouldn't shock me. Of course, given that the stocks more than doubled in a month, expectations should now also be pretty high. So if the results don't live up to Management's recent bluster, then look out below. Honestly, I wouldn't try to game the quarter either way. But overall, when it comes to Resolve, I just can't find much reason to chase the stock's recent rally. The Resolve story has a lot of sizzle with a yet to be determined amount of stake given that the stock's up more than 4 50% from its April lows. I can't count this recommending this one, especially with all the red flags we've seen from management. Look, I love to be proven wrong with this one. Maybe they'll report something incredible next week. But I got to go with my gut. And my gut says the risks outweigh the potential rewards. Here's the bottom line. If you want to play on artificial intelligence, I'm begging you to find one with actual earnings like the Credo Technology Group that I just talked about and not a money loser like Resolve AI that seems best at promoting itself and then selling its own shares. Usually those aren't great qualities in an investment. Let's go to Kenny in New York, please. Kenny. Hey Jim, thanks for taking my call. I'm in this at. I met. I'm in this at $23. I don't know if I should buy more at this point. It's Mountain. What's your opinion? I've looked at Mountain mntn. It did not have the last quarters and good. But you know what? The product is really good. Good. And the opportunities for them to be able to attract very good small, medium sized advertisers make me inclined to like the stock here. And when I saw it all the way down here, I said maybe I should gear up. It may be a good story here. It's a good company. Let's go to Hutch in New Jersey. Hutch, Jim, it's hot from Stockton, New Jersey. Hey, man. Right around the corner. How you doing? I'm well. How are you? I am doing well. I lived in Stockton for a long time. Salesforce had an awesome quarter. What's going on with the stock? Okay. Salesforce has got an issue. We're going to find out when we go out to Dreamforce. The problem with Salesforce is there are a lot of people, not me because we own it for the travel trust, but there are a lot of people feel that they're so successful that they're actually making it so that their clients don't use as much product. And also the clients have developed some AI products that they make so they don't need Salesforce. I'm going to Mark Benioff's made a tremendous amount of money for people he is owed. More of a viewpoint on this than just that quick and dirty explanation of why the stock's going down. So even though it's down 27%, I'm going to reserve judgment until I do more work. When I am out there, it's not a cop out. I got to do more work now. If you want an AI play, find one with real earnings growth not resolved, which just seems best at promoting itself. Tough one. All right, now there's much more money, including my exclusive with the exact opposite result. Johnson and Johnson. I'm learning the latest in cancer treatment tap litigation, tariffs and more with the CEO. And boy, I wish we owned that for the trust instead of one that I own. But everybody who's in the club knows that. Then Costco dropped after earnings. But were the results really all that bad? I'm giving you my take on the quarter and order calls. Rapid fire. Tonight's edition of the lightning round. So stay with creeper. Even though it's been a terrible year for health care stocks, there are still a handful of real winners like Johnson and Johnson up more than 24% year to date. I think that's because of their incredible research work and the remarkable pipeline. It's differentiating itself from the pack. So can this pharma and medtech titan keep climbing? Let's take a closer look with Joaquin Duado. He's the chairman and CEO of Johnson Johnson. Welcome back to Bear, buddy.
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Joaquin Duato
Thank you, Jim, for having me here. I love your five reasons why you should Owen Johnson.
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Jim Cramer
Well, it's pretty easy. You make it very easy. But let's get started. First, we had an app. This is a good example announcement of the president talking about imposing 100% tariff on any branded or patented pharmaceutical product. Entering the country October 1st. But it doesn't apply to companies that are spending a lot of money here. You're spending the most here. So I presume that one of the reasons why your stock was up nice today is you don't have a problem.
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Joaquin Duato
We have announced that we are investing $55 billion in the US in the next four years, which is 25% more than we invested in the previous four. And this is all due to the Trump tax reforms that were enacted in 17 and not confirmed. That was so important and we aligned with the administration that we need to bring more manufacturing jobs into the US Advanced manufacturing. So, Jim, we have always been here. We are an iconic company. When I drive to work every day, the place that I drive to work every day is New Brunswick, New Jersey. We've been there for 140 years. So Johnson and Johnson never left. And we are now, as we speak, breaking ground in North Carolina in a major biologics plan, which ultimately, when we finalize our $55 billion plan, we are going to be able to manufacture here in the US Essentially all the advanced medicines that are done in the US So that's our plan to bring great manufacturing jobs into the country in robotics, in cell therapy, in biologics, to bring great middle class jobs.
- [34:03]
Jim Cramer
Okay, now you, I think that's true. You also give me hope because you've been talking about how you think that there'll be more advance in human health in the next decade than it has in the last century. How is that possible?
- [34:17]
Joaquin Duato
That's a vision that I think it's inspiring. And it's a combination of two things. One thing is the advances that we have in biology and in understanding the human body. And the other thing is how technology and artificial intelligence is amplified, amplifying that. So I believe we are entering into an era in which the combination of our advances in biology and chemistry amplified by artificial intelligence are going to give us cures for many diseases that we thought were incurable. One example of that is cancer. One area that we have been working for a long time in search of a cure is multiple myeloma. Multiple myeloma is a devastating disease. And we have now results with our cell therapy carvigdi, in which patients that were about to go into hospice are disease free five years after a single administration gym. So that's the type of things that give me hope that in this decade we're going to be able to address multiple problems like cancer, dementia that before were thought to be untractable.
- [35:20]
Jim Cramer
Well, one that I Thought and what you've done with both myeloma is just extraordinary. But another one that I thought thought was a death sentence. Bladder cancer, maybe not anymore.
- [35:30]
Joaquin Duato
Bladder cancer is a devastating disease too. It's something that if you know somebody with bladder cancer, you know what happens there in localized bladder cancer. If the initial therapy fails, then the next step is removing of the bladder. And that has consequences for the quality of life and the life of the individual. We are now having the FDA approval of of a groundbreaking therapy for bladder cancer which is called Inlexo. Inlexo is a revolutionary drug releasing system that releases delivers medicine a cancer treatment directly into the bladder. And we have obtained tremendous responses with that, durable responses. And what is going to make possible is that patients keep their bladder. And it's a great demonstration that we can combine our capabilities in medicines and medical devices and bring these solutions to patients with bladder cancer.
- [36:23]
Jim Cramer
Well, let's talk about medical devices. You've made a couple of acquisitions in the heart. It looks like they're all playing out better than expected. Maybe you can talk about how big Abioma turned out to be.
- [36:34]
Joaquin Duato
Abiomade is one of our acquisitions in medical devices in cardiovascular specifically together with Shockwave that we also acquire. And Abiomed is doing really great. Abiomed, what they do is heart pumps for your audience. What the heart pumps do is that they take cover the heart pumping blood when you have a heart attack. We have already presented data in a congress in Europe recently that was previously published in the New England Neurologine showing that in patients that we have followed during 10 years, Jim, after a heart attack with cardiogenic shock. So they were not able to pump blood into the organs they were living over a 10 year period. 600 days more. That is substantial. 600 days more by letting your heart rest and recover. That's what you can accomplish with our heart pumps with a biomed.
- [37:28]
Jim Cramer
Okay. How do we be sure that politicians don't get in the way of great research and development hero things that you do?
- [37:38]
Joaquin Duato
I think the US is the best country for innovation in life sciences. And I am of the school of Warren Buffett when he says never bet against America. So I think here in this country we have all the elements, Jim. We have the universities, we have the research institutions, we continue to attract great talent. We have the capital markets and we have companies like us that are able to develop those medicines.
- [38:02]
Jim Cramer
You don't think that the research part of our country. A lot of these people tell me they feel that they're under attack from the government. Do you think that. That things will come through fine?
- [38:13]
Joaquin Duato
I'm an optimist. I think that will come through fine. We've been through ups and downs at Johnson and Johnson over our 140 years of history. I'm an optimist. I believe in the strength of the life science industry in this country. And I think that we will remain the leaders, as we are today, the undisputed leaders in. In health care innovation.
- [38:32]
Jim Cramer
Okay. Now, I think your company has been set back and remember this with Mr. Gorski, who is a friend of mine now that he's retired, friend of mine too. Okay. And we both felt that what happened with Talc, that there were obviously there were charges made. We didn't feel that the charges would hold up in court. And it turns out that you have taken a very firm stand ever since. You've taken a firm stand saying, listen, we'll fight you. The stock is really been taking off. Do you think that overhang is dissipating? Look, what I can tell you is.
- [39:01]
Joaquin Duato
That we are very focused in going into what is called the Daubert hearing. Yes. In which the court is going to reevaluate the junk science that the claimants attorneys are putting forward as the base of their claims. And we think that's going to be positive for us. I can also tell you that since we came back to the TORCHES system, Jim, we have not paid a single penny.
- [39:25]
Jim Cramer
People don't know that. And that's.
- [39:26]
Joaquin Duato
We have not paid that out. And you know, we're going to continue to litigate those cases in ovarian cancer because we have won 16 out of 17 cases in the last 11 years.
- [39:37]
Jim Cramer
Okay. Now, is it junk science that could derail a drug from a company that's separated from you? You are not involved with the company Tylenol. Is that junk science against Tylenol? Because Tylenol. I've always felt that Tylenol was the safest of the medicines in that area.
- [39:51]
Joaquin Duato
I think you have to listen to your physician. You also have to listen to the guidance of the fda, Cambu, who is the holder of Tylenol.
- [39:58]
Jim Cramer
And that has nothing to do with you now.
- [40:00]
Joaquin Duato
Nothing to do with us. It was separated two years ago. And I don't have more information there because they are an independent company and they make their own decisions. But I'm confident that they will be able to navigate this situation too.
- [40:10]
Jim Cramer
Okay. People think that I like JJ Too much, but I see that when the lawsuits dissipated, what do I have a yield with 3% the only triple A balance sheet that I think is worth it. It's worth a dividend. King. And so just tell me. It looks like this is the moment. The research department is great, the net Med tech is great and it's still not expensive which is really driving me great. It's an inexpensive stock.
- [40:36]
Joaquin Duato
Thank you. And look, we had a Q2 which was a stage stellar as you know.
- [40:40]
Jim Cramer
Yes. Which was fantastic.
- [40:42]
Joaquin Duato
We exceeded analysts expectations. We substantially increase our guidance and we believe that 26 is going to be better than 25 and 27 better than 26. Why is that? We have an incredible pipeline of innovation that we can discuss.
- [40:56]
Jim Cramer
Now I know that there are. There are American people who think that you charge too much. There are American people who say that it's the PBM's charge too much. There are politicians who say you charge much, a lot. Look, there's me who says this is. It's so fit, pristine and great. But I'm trying to figure out what do we say to people who say listen, drugs cost too much in this country.
- [41:15]
Joaquin Duato
We are saving lives with these medicines and we are trying to make it so that every American can afford its medicine. So every time we have, we have put that drug to the market we take care that there's appropriate access for every American. And that is our priority to.
- [41:31]
Jim Cramer
Well, that's Johnson Johnson the way I've known it for as long as I've been alive. I want to thank Joaquin Duado. He's the chairman CEO of Johnson Johnson and yes it is the best company in pharma right now in the country. Mad money's back. 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 over the lighting round recruitment where Ralph Garcello and Sam is not going to tell you. Bye bye bye. Steps on my step Planet sound and then the lighting round is over. Are you ready to eat that down? The light round crime trip. Let's start with Joelle in California. Joelle. Hi Jim. Thank you for having me. I'm here sending a big old sunny California boo yah to you. Right back at you. How can I help? I'm just curious what you think I should do with my D wave quantum. That's qbts. Okay. I want you to take out your cost basis so you can let the rest run. That's what you have to do with the stock that's up 200%. Take out cost basis less rest run and you will never Regret it, can't lose. Go to Scott in Ohio. Scott. Hey, Jim. Mr. Kramer, thank you very much for taking my call. My pleasure. How can I help? Well, your passion for, you know, recommending individual stocks to investors, not trading to me is huge. Thank you. No trade, just invest. You're a rare breed, Al. Thank you. Good. Yeah, yeah. Here in Ohio. I'll get to the point. You know, we have the intel plant, the Android plant coming up and maybe Microsoft building a data center, who knows? But common sense tells me the, the demand for energy is only going to go up. Absolutely. Whether it's from the plants themselves, the employees that work there. So getting the construction people that are going on now, I like those two. Okay, so what got stock do you think we should be talking about here? Okay, which one? I'm sorry, say that again? Which stock are we talking about? The old pie. Oh, American Electric Power. Oh, no, my electric powers. But you know, I've been recommending that one for multiple years and I'm not backing away. All. Well, I'm not done here. I'm going to go overtime. Let's go to Joe in Massachusetts. Joe. Hey, Jim. My stock is at a 52 week low. They made some new acquisitions and they're paying off debt aggressively. So it's a midstream company. 5.6% dividend. Can I buy more? One oak absolutely. Walter Hull, CFO there, is doing an amazing job. So is Pierce Norton. I think that's a buy. Can't believe it's this low. And that. Ladies and gentlemen, conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. I don't go to Costco because of the $50 hot dog and soda combo. Hot dogs upset my stomach, so you could charge 15 cents. I wouldn't eat it. Although I appreciate that they haven't raised the price in 40 years. I like Costco because it costs very little to be a member. But the prices are fabulous. And the perks, travel, rental car, auto insurance, they're amazing. Once a month my wife Lisa and I go with our carts and we get what we want. It's the only time we buy bulk. It's the only time we buy things away from Amazon because the prices are so much better. They've been that way forever. And if you don't like the prices of the name brands, then just buy the Kirkland Signature premium private label. I'm not alone. In the fiscal year that just headed Costco, sold 245 million hot dog combos, 157 million rotisserie chickens. And to quote CFO Gary Miller, chip the bloodship enough bath tissue to reach the moon and back over 200 times. I mentioned all this because Costco stock got crushed today. Down more than $27 for what I think is actually a pretty silly reason. Its membership increased the in the quarter, but not as much as the market anticipated. Membership renewal rates Worldwide in the US and Canada declined to 89.8 92.3 respectively, down from 90.2 and 92.7. People hated that that was the previous quarter. It didn't matter that the sales and earnings and same store sales were all better than expected. Something only a handful of chains have been able to pull off. Only TJX really exceeded these numbers. That stock soared. Yet with Costco, everyone's hung up on these lower renewal rates. The thing is, Costco's membership fees went up big with no real attrition. And we're beginning to see a lot of younger members, which is very important because my only real fear with Costco was an age out. Plus the company was able to mitigate prices on tariff goods. They're always the last to raise prices and they're changing the supply chains and moving production to hold down prices. All that mattered to the street though was the so called re up disappointment. And I think that was almost really explained away very well by management call. They said they have a lot of online subscribers and they don't re up at the same rate. Makes sense. It's new. That they have a lot of online subscribers is different from people who go into the store. The idea that this is the metric that caused people to sell the stock, I'm regarding it as absurd. Any time a stock gets hit, people look for an excuse. This is just an excuse. So what really happened here? I think the stock had simply gotten too high for a moment. Costco was selling for over 50 times earnings more than double the valuation the S&P 500 in the aggregate. If you want more. And analyzing on these kinds of price earnings multiples and what they mean. I spend a lot of time time and how to make money in any market telling you how to understand the multiple. Costco had the endorsement of the late Charlie Munger, Warren Buffett's right hand man who served on the board of the company. A total Costco addict by his own description. He owned more than 187,000 shares. The second largest individual shareholder after then CEO Craig Jelenick. He vowed never to sell a share. But he always said the same thing. Costco is never cheap meaning the stock's never cheap because no retailer on earth was as cheap as Costco when it comes to what it sells. Yet the stock is one of the best performers of all time by pretty much any measure. Past 20 years, Costco's delivered an annualized return of almost 19%, compared with 11% for the S&P 500. Given that, nothing's really changed in the company, even as the stocks now selling for under 46 times earnings after this pullback, I think. You know what? I think it's cheap for Costco at $915. Well, let's put this way, it's a heck a lot cheaper than it was at 1078 back in February. In retrospect, if you're going to sell, wasn't that the time to do it? But not us. We're not. We're not going to sell the stock. We're a little like Charlie Munger. Costco Always cheap to shop, never cheap to buy. If you can get the stock flat for the year and below its typical price earnings multiple, I think that's about as good a bargain as you'll find in any of their stores. If you don't own any Costco, it's time to start buying the best retailer on earth. I like to say there's always bull market summer problems. Find just for you right here man. Money. I'm Jim Grandman. See you Monday.
- [48:42]
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- [49:30]
How did I not know Rack has Adidas?
- [49:32]
Jim Cramer
There's always something new.
- [49:33]
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