Mad Money w/ Jim Cramer 1/16/25
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Mom, can you tell me a story? Sure. Uh, this is the story of Redfin. You mean Red Riding Hood? No, I mean Redfin. Once upon a time, there was born a real estate brokerage that was also a magical app. They called it Redfin.

Redfin is on a mission to get people the fairest deal of them all. Like in Snow White. Mm-hmm. With listing fees as low as 1%, Redfin agents charge half of what others often charge. So you have more money to put towards your dream home. And the Redfin app has a clever way of helping you find it. A trail of breadcrumbs? No. They update their listings every two minutes and give personalized recommendations so you see homes that are right for you. And then you live happily ever after? Yep. Time for bed.

My mission is simple. To make you money.

I'm here to level the playing field for all investors. There's always a homework in somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. I'm going to make friends. I'm just trying to make you a little money. My job is not just to entertain, but to put things in context and explain them. So call me, 1-800-743-CBC. Tweet me, Action Kramer.

Has the economy blossomed because of the Biden administration or in spite of it? This is the question so many execs are debating, and their answer is a resounding in spite of. As the average is diptated, without declining 68 points, it has to be shedding 0.21%. It has that losing 0.89%. We need to parse the in spite of or the because of phrase, because it could be very important to what's happening next on Wall Street and to your portfolio.

Regular viewers know that I'm not a politics guy, but I'm also not deaf, although I've been accused of both. Usually when there's something controversial, like the current administration's approach to big business, I expect the CEOs of this country to avoid talking about it like the bubonic plague. But with the Biden administration almost over, they can't, I gotta tell you, they can talk as much as they want, and they are. What a frustrated bunch. They really want to have my ear.

When I was in California, where I met or talked to a dozen CEOs from a host of gigantic, big industries, everyone brought it up. No one thought that business and the stock market did well the last four years because of the Biden team. Now, I pushed back a minute. I said, you can't have this kind of unemployment backdrop. You know, it's been very, very strong and an amazing stock market. If the White House is totally antagonistic to business, give me a break.

Wrong, they said. Some of them called me delusional. Their discouragement was palpable. The tough tone for the White House toward business and the endless parade of new regulations, stifling, impudent, they said almost in unison. The agencies were cited over and over again for their overzealous attitudes.

Let me describe what I heard. First, the Biden administration pushed through the Inflation Reduction Act, known as the IRA, which gave Medicare the right to negotiate prices for some expensive drugs, as well as other limits that should hurt profits for big pharma. It's absolutely true. This is not good for the drug companies. Now, this is when I have to tell you that I see both sides of the equation. I know drug prices are often too high. I know many other countries do similar to what the Biden administration did. But this is mad money, not mad health care policy.

From the perspective of your portfolio, you want a government with a thoughtful approach to business. You want to give and take discussions between business and the president. Maybe Biden did, and I just couldn't find the right CEOs. But then again, I spoke to almost every big drug company CEO, and the ones I didn't, you wouldn't recognize their names. Worse, at least if you're a shareholder, you would have hoped that pharma and biotech CEOs actually sat down with the president for something, anything, just to explain why the drug companies don't see themselves as the villains in our particularly expensive health care system.

but they didn't talk to each other. Some of the CEOs believe the president just didn't like the optics. I wonder if Biden was meeting with anybody outside the administration because his team seemed committed to hiding the fact that he's not as sharp as he used to be.

Either way, if you're a shareholder, it's easy to see why the drug stocks trade so cheaply. You never knew what was going to happen from potentially hostile White House. We know the inconsistency of the Biden administration toward the semiconductors, too. More on this later. For now, let me just say that the Chips and Science Act did a huge amount for the semiconductor industry. I think it's great it did, but the subsidies weren't spread out and they gave a ridiculous amount of money to Intel, a company that to me is deeply troubled.

We know oil prospered in spite of Biden because he's not a fan of fossil fuels. I push back on this one, too, arguing that they couldn't have fared that poorly. Their stocks have been pretty good. Again, though, I heard that in spite of Biden,

And a new one, his naivete, in part because, again, the president would not meet with industry leaders. There was no dialogue between fossil fuel execs and this president. He is the anti-fossil fuel pro-renewables president. Renewable projects proved to be expensive, though, and they're not just one part of the— they're only a part of the energy mosaic. They can't take it over.

The oil company CEOs that I know wanted to plead their case, play ball, but they never got a chance. Instead, they got a kick in the teeth, though, almost one year ago when the president crushed the most viable portion of the complex, the liquefied natural gas market, by putting a pause on new export decisions pending an environmental review. Again, no dialogue. Again, naivete, because if you want to win the war in Ukraine, you need to give Europe a new non-Russian source of gas.

According to public documents, though, President Biden never intended to lift the pause for the greatest blue-collar jobs program available in maybe, well, today. Could be in history. I don't know. It's huge. By the way, these are huge private, high-paid projects. Totally dashed.

Biden, they say, also made unreasonable rules about where you could drill, rules that might not easily be overturned by President-elect Trump. But the biggest despite of came from the banks. You know, they all reported in the last few days. I spoke to a whole host of bank CEOs, and this group can't wait to give the president his hat, ask him what's the hurry, and happily hold open the door. These financial CEOs couldn't resist taking some parting shots at the Biden team. Again, I talked about how much money they made under Biden. How big could it be?

The issues, though, have more to do with tone, with respect. These industries weren't exactly in love with the Obama administration, but I never heard anyone say any of these things about Obama when he was leaving office. In the end, Biden stocked key agencies with people who truly disliked big business and tried to block pretty much any merger. I came back and said I thought there were so many mergers in previous administrations, like the airlines, that now we have tons of non-competitive routes. But let

But let me give you the in spite of here, that the market, the banks went up in spite of. Rather than have a discussion between the parties, the agencies would simply sue. Again, no dialogue. They created an environment where few companies would want to go through the merger gauntlet. It had a very successful chilling effect on doing new deals, many of which would have made shareholders like you a great deal of money.

The regulators acted harshly and the pendulum, which was too loose at the time of the mini-bank crisis two years ago, became way too punitive. There's that word again, punitive. When the regulators would step in, one banker said that the regulators showed so little respect that he thought they just wanted to stifle his business. The bankers wanted some degree of transparency about the new regulations that intruded endlessly on what they were doing. They wanted some sense of the real capital levels that the government wanted to see. And they wanted to see it at the table when the president discussed business. Didn't happen.

Then again, who knows if the president was discussing any of this stuff with anybody. For all we know, it was sadly a weekend at Bernie's White House. Several CEOs said that. Look, maybe it didn't matter. Everything turned out to be just fine. Could have been better? Of course. Maybe it will even be better with President-elect Trump, but maybe it won't.

Ultimately, I think that a president should develop a good relationship with the business community. They should talk. There should be dialogue. Biden was indeed needlessly antagonistic. I have that feeling after speaking with these people, not to say that I'm all with them, but the antagonism was too powerful. The bottom line, if all that matters is who wins the next election, you could argue that this style didn't work, that business might have been able to help bring down inflation, which is what I think undid the Democratic Party in November. Business is not hated in this country. It doesn't need to be loved.

But something in between, maybe everyone would have done better. Maybe that's the put pay when it comes to business, the White House and the closing stock prices of this administration. Rizwan in Texas. Rizwan. Hello, Jim. Booyah from Sugar Land, Texas. Thank you and your team for help us out. They're good.

I bought some share below 90 last year. Stock went up to 118 and pulled back. Should I buy more, hold, or sell? And if you can invite CEO in your show, take our symbol, D-I-S.

Disney, I turned to Jeff Marks today. It was at 106. I said, when should we buy back that stock that we sold much higher? I think you got a great price today. I think Disney is a remarkable company, and people are selling it because of the fires in Los Angeles. I feel horrible at what's happening in Los Angeles, but I do not think the franchise of Disney is going to be down very much, for long, very much. Eric in Michigan. Eric. Jim, I love the show. Thank you.

Jim, you remember those commercials from 2009 when it says, when EF Hutton talks, people listen? Of course. So that's Jim Cramer. When Jim Cramer talks, I listen. Having said that, I bought Palantir, 8,000 shares of Palantir back in the summer at $30 a share. I took your advice, I listened, and I sold 3,000 shares at $80. Well played. So I got my cost out.

So now my question to you is, what do I do with these 5,000 shares? Do I sit on them? No, no, you hold it. You hold it. And when it drops back down, you buy back the stock that you sold because this company is a winner. They have really smart people and a lot of good contracts. It's the best data analysis company in the world. Palantir. Trey in Texas. Trey. Jim, I stopped shopping with my wife years ago after she told me it was, quote, tacky to ask the price of something.

I tell you what, I wish she'd be a bit more tacky herself sometimes. Today she came home with a pair of heinous Valentino sandals last worn by Brad Pitt in the movie Troy. Evidently, the commission sales associate told her she just had to get them. Jim, the consumer is strong, and in our household, the consumer's husband is barely hanging on. Should I put what little I have left behind shopping named VF Corp? I would.

I would bet the House of VF Corp because the way that your marriage is going, it's the only thing you can save it. I think the stock goes higher. All right. Stocks performed well during the Biden administration's tenure, at least in the aggregate. But was it in spite of his policies? Business doesn't have to be loved, but maybe in the next administration, it won't be quite as hated. Well, man, money today. I'm back on the East Coast, but still have lots to unpack from this year's J.P. Morgan Health Care Conference.

I'm bringing you my sit down with Biohaven CEO as he breaks down the company's work with new technology. Plus, where do regional banks stand in this environment? I'm checking in with First Horizon's top brass fresh off the company's report. And later, Biden just issued an 11th hour executive order aimed at strengthening U.S. cybersecurity. I'm going to sit down with Octo CEO to find out what the heck that means. So stay with Kramer.

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

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Mom, can you tell me a story? Sure. Uh, this is the story of Redfin. You mean Red Riding Hood? No, I mean Redfin. Once upon a time, there was born a real estate brokerage that was also a magical app. They called it Redfin.

Yep. Time for bed.

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A little over two years ago, Biohaven sold its key migraine drug to Pfizer for $11.6 billion, along with everything else, the same class of drug. I used to talk about this one all the time, right? Because the migraine drug, Nertec ODT, was a game changer for me. Took one this morning. But Biohaven is not some one-hit wonder. The rest of the company stuck around, renaming itself Biohaven Limited. And while no longer has Nertec,

It's got some exciting stuff in the pipeline. Now, that includes drugs and late stage clinical trials for OCD, epilepsy and bipolar disorder, along with early stage treatments for obesity and oncology.

and oncology. In full disclosure, I have a deal with Biohaven to develop a drug that has not yet been announced. I don't know if it'll even pass muster, but I have to disclose it because I play with an open hand. So can lightning strike twice here? Earlier this week, we had a chance to catch up with Dr. Vlad Shour. She's the chairman and CEO of Biohaven at the J.P. Morgan Healthcare Conference. Take a look.

Vlad, you're going after the toughest. A lot of people go after the easiest, but you're also going after some big ones. This new portfolio of yours is very exciting. Why don't you go over some of the really exciting things you've got?

Thanks a lot, Jim. And you know, it's exciting to be here to kick off 2025 and to talk about these new advances. It's only been two years since our spinoff from the Pfizer deal. And we have 10 investigational drugs across six therapeutic areas. And we're going after some of the hardest to treat brain disorders. This year, we're going to have readouts on bipolar mania, depression, OCD, as well as a number of other problems. These have been tried before. Mania has been tried. OCD has been tried. Everybody

But he fails. Why do you think that you've got something special? Jim, we're looking at some innovative approaches, new mechanisms that no one's ever explored today. And we have to do that for patients. Because when you look at our older drugs, they're plagued with side effects and they're indirectly hitting these disease. And frankly, they're not good enough for patients.

The new mania medicine that we're looking at hits a novel ion channel called KV7. And we think if you target this, you lower the hyper excitability of neurons and you're able to treat mania without all the side effects of those older meds, the tardive dyskinesia, the brain bleeds, the metabolic syndrome. We have to move past this. Some people might think that mania is a good thing. You know the truth.

That's right. Mania is a very disabling thing. All of us in our life experience times where we're exhilarated and we're happy. But when you have mania that persists and it's hyperactive for every moment of your day, it's disabling and you have to bring forward better treatments. It is true that sometimes you get creativity and other things that go along with the mania. But we want to temper down the manic symptoms and the hyper excitability so people can be more functional.

Now, you're into precision immunology, and I think that could be gigantic, even though it sounds like, well, precision is one or two. No, these are very large markets you're tackling. These are big markets, and when you look at what's been going on in oncology, where precision oncology has changed the field, with a new technology that we have, we think we can actually usher in a true precision immunology.

This science comes to us from Yale University. We have a proprietary-- - Where you, sometimes it used to be a full time and now you've got a lot of things on your plate but you still teach. - Exactly, that's right. And we keep those good relationships 'cause you have to be close to the cutting edge science. And we license this cutting edge science from Yale which allows you to harness your own liver to remove proteins from your body that are causing disease.

We call these trap degraders. They're targeted removals of aberrant proteins. And we can go in and identify in your bloodstream the disease-causing pathogen and redirect it to your liver. And your own liver removes it without hitting any other aspect of

immune system is anyone else doing that we're the only ones who have this technology other people you know what they're doing in immunology they're trying to target b cells and when you target b cells you actually then degrade all the normal healthy immune functioning of antibodies like igg iga ige and then they're indirectly trying to lower that disease-causing pathogen we don't think that's the best way to go you need your healthy immune functioning so we use our trap degraders

to just pluck out the disease-causing pathogen. And at the J.P. Morgan Conference, we presented some new human data showing that in IgA nephropathy, which is a kidney disease, we can actually just remove-- - I was gonna ask you about renal. - Yes. - Renal's pretty amazing. It mystifies people. Tell us about it. - Sure, so in renal disease, there's something called IgA nephropathy. And what happens is you have this aberrant protein that causes complexes in your kidneys and stops your kidney from functioning.

Everyone else is trying to indirectly get at this protein. We can tag it, send it to the liver, have it removed, and we think this could be a potential cure for this disease. Now, we've been speaking with David Ricks, you know, man of the hour, so for the GLP-1, I don't think people realize that muscle goes away.

So you may make someone weigh less, but without muscle they can fall. And that's pretty much, you know, we know that that's very disabling for elderly people in particular. You working on something for muscle? We are. And so what we've seen from the GOPs that David Ricks and Lily and others have kind of pioneered in this area is that if you decrease fat, you can have profound effects on your overall health. We know that. But however, we think that you should be decreasing fat.

without losing muscle. Because you know what happens when you lose muscle? You lose bone density. And when you lose bone density, you can have fractures and other things can occur. And as we all age, we actually lose muscle mass about 10% per year from age 30 onward. Our approach increases muscle, decreases fat, and it increases bone density. So we think that could be a potential game changer in this field. Fantastic. And one last one.

that no one's tackled at all. And of course, you go, epilepsy? Yes. Okay, so we all know epilepsy wrecks people's lives. They're afraid to admit it. They can't lead a normal life. If people find out, they lose their job. Worse, of course. And you're after this one, which no one has had any luck

This is another area that needs modernization, right? Because we do have some therapies that obviously will decrease the number of seizures, but they're plagued with these chronic side effects. People have cognitive impairment, sedation, difficulty operating machinery and other things, driving. So we're bringing that same KV7 ion channel activator that we're looking at mania, the same hyper excitability that we decreased there, we think could be a treatment for

epilepsy without that baggage and side effects. And patients, remember just like our migraine drug, where NeurTech ODT, the migraine went away and people didn't have other baggage and side effects. That's what we want to bring to epilepsy, where your seizures can be controlled without all the baggage.

of the side of the side you want to thank you of course you sold that drug the Pfizer for a huge amount when it looks like it's going to rain I know what I take as soon as I get up I used to have to wait for it to happen and then we got approval ticket ahead of time thank you from the American Migraine Foundation everything you do Vlad Chors is the chairman CEO of Biohaven wow great to have you on the show coming up will 2025 be a strong year for the regional banks Kramer is catching up with the CEO of First Horizon after their earnings next

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Mom, can you tell me a story? Once upon a time, there was born a real estate brokerage that was also a magical app. They called it Redfin, and they're on a mission to get people the fairest deal of them all. With listing fees as low as 1%, Redfin agents charge half of what others often charge, so you have more money to put towards your dream home. Could it be a gingerbread house? If the witch wants to sell. Download the Redfin app to get started.

We're a couple days into the bank portion of earnings season, and we're already hearing from some of our favorite regions, like First Horizon, which has grown from Tennessee to become a heavy hitter across the entire Southeast. With the company poor at this point, the numbers weren't much of a needle mover. Small revenue missed, paired with a 4-cent earnings beat. But please keep in mind that this stock rallied 42% in 2024. It's up another 5.8% year-to-date, so it was coming in high.

Plus, when you check under the hood, there was a lot to like here. Strong credit quality metrics, encouraging commentary about the state of the consumer. They're doing smart things with a bond portfolio and paying off expensive brokerage CDs that hurt earnings in the past year. But don't take it from me. Earlier today, we got a chance to speak with Brian Jordan. He's the chairman and CEO of First Horizon. Check it out. So, Brian, I read your excellent numbers and I want to know whether your area and your bank has kind of caught the optimism that others have caught since the election.

Yes, I'd say we certainly have. Our footprint is really brimming with optimism at this point. We've got a lot of borrowers that are starting to build loan pipeline, loan demand. The economy is doing well, and I think we're going to see an uplift here in the early part of 2025.

Well, I noticed that your charge-offs are way down and also commercial real estate, you say that people are ready. Now this is so opposite of what we thought could happen at this point. Yeah, our charge-offs have been very contained. We feel good about our credit performance and year over year, we're down about 10 basis points. So that really goes to the quality of underwriting.

We're seeing still very strong performance in Cree. And as I said on our conference call earlier today, we are seeing some commercial real estate developers who are starting to lean a little bit forward at this point. We haven't seen any projects started, but we're seeing signs that people are ready to move forward. And I think that's a reflection of the economy. It's a reflection that we might be adjusting to interest rates

as they are today. But all in all, I think it's a very good thing. You did say that using a prospect of a lot of rate cuts, but then at the same time, you recognize that when they cut the rates last time, long term rates went up and they were actually hurting growth. So what's going to happen in your view about rates?

I think rates are not likely to go down very much this year. I don't buy the forward curve. We used three cuts in 2025. I'm a little more cautious than that. I don't think that we'll get one, maybe two cuts over the course of the year. If the economy holds up,

You see job growth remain strong. You see inflation, which is still running a bit higher than the Fed would like. I think you'll see rates stay in this area. I don't think they're going to go up, but I don't think they're going to go down as much as the market might be optimistically hoping for. I'm with you on that. Now, I noticed some really terrific things you did. You reshuffled the bond portfolio. You got rid of the low rate. You've got a higher rate. I also seem to think that you got rid of the so-called hot.

money that goes all over the country, which is empty calories, doesn't help. So you're in a position with your balance sheet to really be very strong to do work. Yep, I agree with you. We did, I think, a very nice job of repositioning the bond portfolio during the quarter. We sold $1 billion, $1.2 billion in securities.

from a one nine yield and reinvested at a five plus percent yield. And we got a shorter duration. So I think that will serve us well. And as you suggested, we did a lot of work around deposits, deposit cost, and we reduced very significantly our wholesale fundings over the course of the quarter. So our wholesale deposit

base. So we should be very well positioned for a margin that is steady to maybe slightly improving this quarter. But it's, I think, a balance sheet that will perform very, very well, notwithstanding what direction the rate curve might take. Yeah, and that's exactly what we want from stocks that have been as strong as yours and continue, I think, be strong. Now, a couple of quarters ago, you talked about the idea of moving in some of these areas and there was a scrum. People were coming in. You had to spend a lot of money on marketing. I noticed that

It's marketing expenses related to new bank accounts shifted to other non-interest expense for customer incentives. It sounds like that that war is over. You said it would end and you said that your franchise would come out on top. Obviously, those numbers indicate that you have.

Yeah, I think we're seeing that marketing line come down because there has been a little bit of slowdown in the competitive environment. And I think our investments there have done a very good job of positioning us very well. We've done a great job retaining existing customers and growing new customer relationships. And we will continue to invest in the franchise, but I feel good about the way our footprint is performing today.

Now, you are in the strongest area of the country, and it seems like the expansion that you made only just made it stronger. What's your feel about that portion of the country that you kind of own, so to speak? Yeah, I think the southern footprint that we represent is going to show phenomenal outperformance vis-a-vis the U.S. economy over the next several years. I'm very encouraged by the demographic trends that we see in the footprint.

I think from a policy perspective, whether it's around taxation, right to work, and the ability to grow businesses, you will continue to see businesses relocating to the southern footprint. I think you will continue to see the economy growing at a faster rate. And I think that's good for our customers. It's good for our communities. And we'll see our shareholders benefit from that as well.

One last question. I've spoken to a lot of bankers in the last 24 hours. Actually, I've spoken to every banker in the last 24 hours. And something that stunned me was there had been very harsh regulatory tone, that the regulators really came in much more heavy-handed.

than a lot of banks thought. And if that changes and we get more transparency to different rules, then it really will free up a lot of capital to invest. Do you feel that that could happen?

Yeah, I think you'll see a shift maybe in supervision, but I think clearly in regulation. You will see that some of the more onerous aspects of the proposals out there will be rethought. I'll give you an example as it relates to us. The proposal today crossing $100 billion is

indicates that you would have to raise 6% of risk-weighted assets in total loss-absorbing capital, or TLAC.

Not that that's necessarily a bad thing, but it's very costly. And in our case, that's a significant amount of debt that we don't have a use today for. And so I think as we go through this, I'm hopeful that regulation will continue to be appropriately tailored for size and systemic risk of organizations.

And a first horizon is nowhere near as risky as a JP Morgan or a Bank of America. And I think the regulation is more likely to reflect that. Well, I think that that's what's necessary, especially in an area that is strong as yours. We want growth. Growth is good. And you give it to us, Brian Jordan, chairman, president, CEO of First Horizon with another great quarter. Hey, Brian, thank you always for coming on the show and explaining. Thank you for having me. All right. We'll be back after the break.

Coming up, a Biden executive order aims to strengthen U.S. cybersecurity. Kramer sits down with a leading player in the space to find out what it means for the industry. Maxed. All right, what's next for the cybersecurity space? I think the demand for the software isn't going away anytime soon because companies can't afford to let hackers tear apart their businesses. However, a lot of corporate customers are trying to find one-stop shop situations with larger players in the group. But what about the small to medium-sized players like Aqua,

one of the leading companies in this identity verification space. A little over a month ago, these guys reported a real strong quarter. Stocks were basically flat. What's it going to take to get this one running again? And can we get some information about what is going on with this administration and the things that they're saying these days? Let's check in with Topikin. He's the co-founder and CEO of Okta. To get a better read on the situation, welcome back to Mad Money.

Thanks, Jim. It's great to be here. You know, you must be up late at night looking at all the things that the Biden administration does at the last minute. One today, Biden administration launches cybersecurity executive order, imposing new security standards for companies to do business with the U.S. government. And the director requires software companies to demonstrate the security of their development process. Don't they need Okta to try to figure out what the security is?

Well, I think what you're seeing with the Biden administration is consistent over the last four years, which is they understand that identity and having great identity verification and great identity security is absolutely critical for the functioning of the government and the effectiveness of the government. And we've had big parts of the federal government from the Department of Defense to large civilian agencies invest in Okta. And I think we'll see that continue under the Trump administration. Everyone knows that the

The stakes are high and we have to defend all these resources and identity is a way to do that. So we're we're happy to to provide that service to the government. Is there a way to stop China? I mean, look, they got into the into the agency that actually talks about many on foreign investment. Siphius, which may be key in the tick tock decision and the tick tock decision, which probably comes down tomorrow from Justice Roberts, is at the heart of our relations with China.

Well, the stakes are high, as you mentioned in that specific example. And what we see in the industry is that of all the security breaches, 80% of them have to do with some kind of compromised identity. As you were talking about the recent breach at Treasury was an access token, an identity access token that was stolen and misused. And we're really trying to lead the fight against the

these identity-based attacks. And if we can help solve these identity-based attacks across the entire technology industry, we can get to the root cause of 80% of security breaches, which is a huge, huge progress to make when the stakes are so high. Information is so valuable. Everyone is trying to make sure they protect it and defend it. And one of the reasons we're positioned well in the market is because we have

the leading independent neutral identity platform that can help them do just that. Well, I thought of you yesterday. I wanted to get on my Wi-Fi because I'm flying back from San Francisco. And what do they want? The last four numbers of my Social Security number. Now, isn't that the way it's done? How can something that's been done for 100 years still stand up under any scrutiny?

Well, these systems, one of the core challenges is these systems need to be better integrated. If the system that was providing airplane Wi-Fi knew who you were and could tell by your biometrics or another kind of indication on your device, they wouldn't need to ask you this information. Since these systems aren't integrated...

the developers of these systems have to resort to really kind of bad options, like asking you for your frequent flyer number and asking you for the last four of your social or, God forbid, ask you for a password that's been reused.

This is the bad result of when things aren't integrated. And that's why in this business, integration is so important. Now, how many of the big companies are pulling the trigger? For instance, last time you said to us on the show when you reported that great quarter, organizations are still scrutinizing budgets and rationalizing the software spend. Maybe with a sense of new optimism. A lot of people talk about that after the election. Has some spending gotten a little more robust recently?

This is what I'm seeing, and this is in, I would say, dozens of conversations over the last couple months.

Companies are being prudent with their spending, but that's leading them to pick trusted partners and then consolidate categories of technology on those partners. I was in a meeting earlier this week where a customer of Okta's told me that they have 40 different identity vendors that now that they're working with us, they're going to consolidate down to one identity vendor. So people have this concept of consolidation and platformization, which is definitely a trend.

But what we're saying is that people are going to a one-stop shop for identity and they want to go to a one-stop shop for identity that is neutral and independent. So it's not like they want to

tie up their identity with their collaboration software or their cloud infrastructure. They want that consolidation on the identity layer so then they can choose and have the freedom and flexibility to choose the best technologies around that. Now, look, I think that the federal government is woefully behind, which is why I know when I hear this, I'm encouraged. But you said half the 10 biggest deals you did last quarter were with the U.S. vertical. Now, will that change, do you think, when a president like Trump comes in?

I think that it's kind of apolitical. I mean, we want to defend our systems. We want to protect our information. It makes... You know, one of the big things that the Trump administration has talked about is efficiency. So one of the ways you can be more efficient is have more modern technology systems that are easier to use and get the business results and the government results faster. And that means...

upgrading cyber, that means upgrading systems, and that means having the best information technology. And that's always good for the leading independent neutral identity company to play a role in that. Well, how can these big companies not realize that identity is often at the heart of being hacked and instead rely on a one-stop shop, say, of Microsoft? We know that Microsoft's a good company. We've had them on. But, I mean, their core competency is not cybersecurity.

Well, I think that what's really changed in the last five years is that the debate about how important identity is, that debate's over. People know in the industry and people that are trying to have robust cyber defenses know that you have to have a great identity strategy. Now the thing we spend a lot of time talking to customers about and talking to prospects about is,

is this critical architectural decision they need to make to choose an independent and neutral leader and making sure they understand that if you choose identity as part of another platform, whether it's infrastructure or collaboration, you're going to be locked into that platform. And that's not good for your business. That's not good for your government agency. That lack of choice is going to lead to

the technology strategy of your organization in a certain way, which may not be flexible or may not be robust. Like everyone wants to do AI and everyone wants to have the most robust set of AI agents to make their organization more productive. If your identity is coupled into a certain stack, how are you going to choose the best AI agent stack? You're going to be kind of railroaded into a previous choice you made four or five years ago when the technology is changing so fast and who knows who's going to have the best

AI agent framework today. That's a critical technology. You need to have the choice to choose and secure it. By the way, if you're going to secure your AI agent stack, you need to have robust identity and robust security. So it's one of the reasons why the future is so bright for Okta. Doesn't the agent need it too? I mean, why can't you hack an agent? That's the secret about agents. It's very, very exciting technology. But Jim, no one's figured out how to secure them.

The frameworks that are out there now, basically, if you think about the agent as a person, it's the equivalent of the agent has a bunch of passwords written on sticky notes on the virtual monitor. That's how the security is done and that's not going to work. We need better systems and protocols to make sure that those agents only have access to the right things so they can work on your behalf only when they're trusted. And they do it in a way that it's not going to be hacked and it's not going to let your passwords get leaked all over the internet. And so that's what's at stake there.

So like many technology advances, you need the base technology, but you also need the supporting technology. And identity security is a critical, critical supporting technology for our agenda future. I hope that the Fortune 500 CEOs who watch the show call you because I don't like the fact that they don't seem to understand how high the stakes are and how old their technology stack might be. I want to thank Todd McKinney, chair and CEO of Okta. Always, Todd, good to have you on the show. Thanks for having me. We have money's back after the break.

Coming up, Kramer takes your calls. And the sky's the limit. It's a fast-fire lightning round. Next. It is time to start with the lightning round. We're going to start with Aaron in Rhode Island. Aaron.

Mr. Kramer, how are we doing? Booyah! Booyah to you, partner. What's happening?

All right, so I bought this stock at $100 a share. It's now sitting at around $220 a share. And I wanted your professional opinion on how much higher we could see it going. Company name, Amazon. Amazon, I'll tell you, this is a multi-year move. We're not going to look at it on a quarter-to-quarter basis. I think it'll be higher long-term. I've been behind it now for 20 years. I'm not changing my view. Let's go to Bruce in California. Bruce.

Hey, Jimmy Chill, this is Bruce, first-time caller from Newport Beach in Southern California. And while it was great having you on the show, it was a rough week with the fires, Jim. Yeah, I'm sorry for everybody that's out. Holy cow, I've lived out there, and it's just, anyway, just horrible. But go ahead, let's see if we can, let's do what we do.

Let's do what we do. And, you know, the best investment is prayer because it has unlimited returns and lots of people need our prayers. My question today, though, is about stock ALHC, Alignment Healthcare. I do not know Alignment Healthcare. I know it's a software company, but I'm not going to just say that, oh, therefore it's good or bad. I'm going to go do the work. I don't know Alignment Healthcare, but thank you for the call. Let's go to Ty in Arizona. Ty.

Professor Kramer, how goes it? It goes fine. How about you? I'm good, thanks. My girlfriend and I are huge fans of the show. We love watching you on TV and listening to you in the car on Spotify. Thank you. You always provide a bunch of great information along with a ton of laughs. So thank you for that. That's what we want. Thank you very much. Exactly. The company that we're calling about today is MicroStrategy. All right. Look, it's a super hyped up company.

version of Bitcoin. If you really love Bitcoin, be my guest. I happen to like Bitcoin. I'm not in love with it, so I don't need to kind of double down, which is what they offer. But look, by all means, if you love Bitcoin, you're going to really love that stuff. Let's go to John in Ohio. John.

Hey, Jim. How are you doing? Just want to say happy New Year. God bless. Thank you. Same to you. Same to you. My heart goes out to those out in California. No more serious note. It's a shame that you're in good hands with Allstate until your house burns down. But, Jim, what are your thoughts on Virtue Financial as a long-term growth stock? I think it's a very inexpensive fintech company. They do a lot of execution. They have a lot of data. They're a great market maker. They're right over there. And I think you should buy the stock.

It has always been a goodbye for as long as I can remember. Let's go to Wayne in Connecticut. Wayne. Professor Kramer, thank you for taking my call. Of course.

Back in August, during the great broadening in the boom in small-cap equities, you thought this stock may be poised for growth. But when home sales didn't pop after the Fed cut interest rates, and when Trump became president-elect, making China tariffs more of a potential reality, you suggested that the stock may not be a good purchase at that price point, stating that you may consider buying if the share went below $80. What are your thoughts on Best Buy?

Well, you know what? We have a meeting next week for the club. And I feel very, very strongly that Best Buy is too cheap down here. It has been a one-way ticket to Hades from 103 all the way down here. Yields 4.5%. I don't want to give up on Best Buy. Unfortunately, the Southland is going to have to have a major redo. I don't know why this stock can't even lift for a single day, though. Let's go to Charlie in California. Charlie.

Hey, Jim, long-time listener. Recently, I bought into a stock, FTAI. I caught a little bit of a bounce from the 99 at drop suit. Should I hold it or just take my profit? Aircraft leasing is a terrific business. I would hold on to that. It's the opposite of, say, the tanker business, which everybody wants to be in. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, let the chips fall. Kramer dissects the current state of the semiconductor space. Next. Jim Kramer, the diehard of the dollar. Hey, Jimmy, love the show. My five-year-old grandson loves to watch your show. I have to thank you for making us money when it's there to be made. Our world is a better place with you in it. ♪♪

Right now, the whole semiconductor industry feels like it's really in flux. That's how I feel after the blowout quarter from Taiwan's Semi last night and the decision by China also last night to investigate low-end U.S. chip makers in America for dumping chips in China. It's hard to keep up with all the news flow from the semiconductor industry in the last few days here. First, the Biden White House made a midnight weekend decision to pick which countries are allowed to buy unlimited amounts of NVIDIA's highest-end chips and which ones will be restricted.

The White House designated 18 countries as key allies that can get unlimited high-end chips from NVIDIA, the kind used for artificial intelligence. CEO Jensen Huang has traveled around the world urging countries to develop their own sovereign AI. But the administration restricted whole countries to much smaller numbers of high-end chips than they would need to pull that off. The list seemed totally arbitrary and capricious to me. Many of the countries that Jensen would have liked to see have sovereign AI, well,

Well, I mean, friends like Israel, Mexico, Portugal, Switzerland, they were not on the friends list. I get that the U.S. wants to curtail China from getting high-end chips, but the idea that Israel might ship chips to China seems a little fanciful. Sure, the Swiss are canny, but come on. Mexico does transship Chinese steel to our country, but they're a gigantic trading partner. You can't arbitrarily restrict them. That's exactly what the White House did. The whole new regime seems unnecessarily restrictive to me.

Even as Nvidia has supported every restriction from the Biden administration on selling chips to China, this dictum flies in the face of positive, unified initiative to get the rest of the world up to speed in AI without damaging American interests.

Remember, Jensen doesn't want American hegemony when it comes to generative AI. At the very least, I think it would have been nice if the White House had given NVIDIA a heads up here. Then again, who knows if these rules will stick when Trump takes office next week. Then on a much more positive note, there was last night's Taiwan semi call a tour de force from the giant foundry company in Taiwan, where they played their hand, saying they needed a huge amount of semiconductor capital equipment, which sent the stocks of Lammersearch and KLA and Applied Materials into the stratosphere today.

I thought people would hear this as a clarion call to buy NVIDIA. Despite the government's punitive restrictions, after all, Taiwan sent me this new equipment precisely so it could meet demand for NVIDIA. But nope, the stock is still in the doghouse. Still hard today, declining almost 2%. Look, I don't know if traders will feel safe buying this one until Biden's out of the White House. Who knows what they'll do next? They got a couple of days. Then today we got Chinese dumping news. But for once, it's not the Chinese dumping goods here. It's the Chinese charging us.

with dumping lower-end chips there.

The kind is made by Texas Instruments, which sent that stock plummeting more than 5%. The Chinese also accused our government of unfairly supporting its own semiconductor industry through the U.S. Chips and Science Act. No kidding. China says that that act, quote, violates the fundamental principle of a market economy, end quote. Now they care about dumping. Didn't seem to bother the Chinese Communist Party when they spent decades dumping cheap manufactured goods here and devastated vast swaths of the U.S. economy, as we all know.

Everything else?

I think it's all case by case for the moment. All that's going to work are the semiconductor equipment makers, at least until President-elect Trump comes in and sorts out these export restrictions. What a shame. I thought we really had something going here. Maybe we can salvage it, but maybe we can't. I like to say, as always, bull market somewhere. I promise I'll find it just for you right here on MadMoney. I'm Drew Kramer. See you tomorrow.

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