Mad Money w/ Jim Cramer 1/8/25
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My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Friends, I'm just trying to make you a little money. My job is not just to entertain, but to explain. So call me at 1-800-743-CBC. Tweet me at Jim Kramer.

We focus on the 10-year Treasury. We focus on the Fed. We dwell on Friday's employment report and a bunch of important surveys and inflation reports.

These are indeed all important, all impactful to stock prices, including today, where they'll gain 107 points, S&P advance 0.16%, NASDAQ dip 0.06%. Hey, by the way, these prices rolled nice recovery for some very ugly moments in the middle of the day. Mostly driven, yes, by the vicissitudes of the bond market, which ended up where it started and for some pretty wild gyrations. But what we don't focus on enough here or anywhere else, frankly,

is fraud. Yes, fraud. Specifically, the negative correlation between the love for the red hot stocks of flavor of the month companies that aren't doing all that well. When these firecrackers get severely overheated, you've got to be very careful because it means buyers are getting carried away with concepts, not earnings, not sales. And when that happens, the market's driving us through the danger zone. Yet we are in Kenny Loggins territory.

I started telling you to worry about froth at the end of November, just before Thanksgiving. Many of the redhots peaked right then, but some others just kept running, much to my own chagrin. Back then, I highlighted a whole bunch of overextended groups with my own monikers, like companies with AI in the name and ambiguous enterprise software and real company crazy rally, but also some traditional sectors like alternative energy, consumer fintech, enterprise software, space, and Trump winners.

Those were the results of a screen we had run searching for stocks that had a total return of 50% for the month of November. That is a red flag if I have ever heard of one. Since then, though, there's been a real downturn in most of these stocks, which is a very good sign, actually. But there were some that just wouldn't quit, which is a very bad sign. Until yesterday. Until yesterday, when the worst of the exodus is the real helium in the balloon. Quantum computing stocks. Fuck!

Finally got skewered.

and done by none other than Jason Wiley, the man behind NVIDIA. Now, you know my position. I'm an apostle of this company. I think it's the vanguard of the new industrial revolution, one that's going to touch every aspect of your and my lives in a very short time. I expect robots will dominate many workplaces, including some surprising sectors. Autonomous vehicles, digital factory twins, healthcare costs, these are all coming, and they're all good. We're looking at the era of agentics, where machines augment humans and often do a better job.

especially when we're dealing with humdrum but labor-intensive tasks. NVIDIA stock often gets a lot of heat for being too high, but none of what happens there is froth. The AI revolution is real, and more important, the company's sales and earnings are real, and they are spectacular, which is why I always tell you to own this one. Please don't trade it.

This positive productivity story can play out over multiple years. I think it will benefit numerous companies, but it can also spawn froth as speculators seize on businesses that could potentially do even better than the accelerated computing and artificial intelligence that are the hallmarks of NVIDIA and that I love so much. The worst, and I mean by that, I'm talking about the worst, the most chimerical, the most dangerous, least profitable, most hyped, quantum computing stocks.

Some amorphous method or in reality some wizardry mixed in with a dash of alchemy to represent the worst of all worlds. Yesterday an unlikely source flattened the froth of quantum computing and I for one actually breathed a sigh of relief. Yesterday Jensen Wong told us the truth about this group and I want you to listen. We're probably somewhere between in terms of the number of qubits, you know,

Five orders of magnitude or six orders of magnitude away. And so if you kind of said 15 years for very useful quantum computers, that would probably be on the early side. If you said 30 is probably on the late side. But if you picked 20, I think a whole bunch of us would believe it. But what we're interested in is we want to help the industry get there as fast as possible.

and to create the computer of the future and will be a very significant part of it. 20 years? I mean, holy cow. The quantum computing stocks got crushed in those words. I mean, annihilated. Many people thought the future was now when it came to quantum computing. They thought it could be a valid competitor to NVIDIA's accelerated computing. This year, next year, you got it. The panic sellers...

Well, they got quantum wrong, at least according to the most important person in the business. And I bet these stocks have got more downside, maybe a lot more downside, similar to the Icarus-like dot-coms of a different era. You can still escape them before the insiders take advantage of the windfall that many of you have given them by bidding these silly stocks off. I don't want you to get hurt. You're getting your chance to get out, and you need to take it.

Jensen not only pushed out the timeline for this technology, you know what? He even questioned the use case of quantum computing altogether. He said it's good at small data, but it's not good at crunching large data. And the new industrial revolution runs on large data. And then he said wants to solve problems that normal computers can't. Quantum computing needs normal computers to work. And that gating factor, because they're so slow, could make quantum computing less important, less germane than the promoters think. Ouch. All right.

I focused on three quantum computing stocks for you in November. IONQ, Quantum Computing, and D-Wave Quantum. They were on earlier today. I listened. I haven't changed my mind. And subsequently, I also mentioned Rigetti Computing. All these companies share a couple of traits. They're losing tons and tons of money, and they almost have no revenues. One's got okay revenues, but really, this Rigetti, that represented the worst excess. Its stock was below $1 back in October. When it got to $2 by late November, the company issued fifth

million shares to raise $100 million in a market offering. And that made it $21. That's the definition of froth. That's what you never want to see if you're a true believer in a bull market. Today, Rigetti's stock got crushed by Jensen's comments, falling from 18 to 10. And again, it's not too late to sell. It was at a buck a couple of months ago. Give me a break.

Same with the three we highlighted back in November. IONQ plummeted 39%. D-Wave Quantum dropped 36%. Quantum Computing nearly got cut in half, down 43%. When you do this kind of speculation, you have to know that you're playing a dangerous game of musical chairs. I think all these wealthy stocks remain vulnerable. You own a stock with AI

of the name, you could be in trouble. You own a hyped up alternative energy company, especially one connected to nuclear power. You need to ring the register tomorrow. They've come too far too fast for technology that can take over a decade to deploy. Now, I wrote a piece this weekend for the CBC Investing Club talking about how much I wanted to buy the stock of Palantir. The enterprise software companies are growing incredibly fast, can revolutionize everything from military procurement to health care.

The stock just wouldn't quit. And I had a huge case of FOMO, fear of missing out. I said it's the quit essentially wrong move for the trust to buy a stock that's run from 16 to 82 in one year's time. But I felt it. I wanted it. And of course, that was the top. Palantir stock, which fell again today, is at 68 now. Can't seem to stabilize. Ultimately, it will. And that's how much I respect them. But it has to churn and burn base before that happens. Shaking out all the hot money.

I see that happening in every one of these speculative categories. And while I hate to watch anyone lose money, all I can say is, told you so.

I can't be part of this froth. I've seen so many investors in my time get caught up in electric vehicles, charging station stocks, alternative fuels, small caps, Chinese stocks, internet infrastructure stocks, the early generation enterprise software stocks. I always want you to stay in this game. But I couldn't save the people who refused to sell their red hots. They were too greedy and then they were too poor. Look, I take this stuff personally. I don't play for dinner anymore, but I used to. So I know what you're going through. The D waves, the new scales, the rigettis, you

can make money in them, but these are not stocks you buy and hold or invest in. You've got to buy them to sell them. Bottom line, if you haven't sold, sell. If you actually think these moves are sustainable, you need to take a breath, limit your risk, and above all, take profits so that you don't have to play for dinner either. Robert, New York, Robert.

Hello, Jim. It's great to talk to you tonight. I have to tell you... Oh, I'm glad you're on the show. Glad you're on the show. Thanks for inviting me. This company that I want to talk about is the biggest U.S. egg producer. They just beat profit and sales estimates on higher prices, holiday season demand, not to mention their acquisition to obtain the production assets...

of ISC America. Okay? The impact of the bird flu outbreak in the U.S. has skyrocketed. It's skyrocketed the egg prices, Jimbo. And this company has benefited huge. The share price has nearly doubled in the past year. Now, Jim, listen to this. On April 3rd, let's go to the videotape. You said positive things on this company, and you got me to buy this stock, and I paid in the same

And you did it for me because now the stock's at 105. And it's not done, Robert. It's not done because the secret sauce behind CalMain is not the egg shortage. It's the fact that that's the kind of protein that people who take GOP-1 drugs need. Eggs are the best source of protein for GOP-1. And that's why that stock's really moving. They didn't even mention it in the release. I was shocked.

because that's the secret sauce behind CalMain's growth, and it's why you're going to continue to make money in it. All right, look, you can't take part in these frothy names for long. You can make money in them, but they're not investments. They're just trades. You have to buy, and then you have to sell, sell, sell, sell, sell, sell. Oh, man, tonight, a marathon of deals hit the tape this week. I'm seeing if you should get in on some of the market's latest mergers.

I'm scrolling through what we know about a potential TikTok ban and giving you a rundown of what to watch for in the weeks ahead. Plus, before I head to the West Coast for next week's JPMorgan Healthcare Conference, I'm getting to hear a little bit more about what to expect from the conferences with its own Lisa Gill. 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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Manage and grow your business all in one place. Intuit QuickBooks, your way to money. Money Movement Services are provided by Intuit Payments, Inc., licensed as a money transmitter by the New York State Department of Financial Services. Even before time expires in the Biden administration, we're starting to see the flood of mergers and acquisitions that I've been telling you to expect under a Trump antitrust regime. For the past four years, the Federal Trade Commission and the Justice Department's Antitrust Division have taken a real hard line on M&A. We

Because Biden's regulators are reflexively hostile to any kind of corporate consolidation. It got to the point where companies figured it's just not worth the effort to fight these agencies in court. No guarantee of success. And that's why when Trump won in November, it became very obvious that we were looking at a deluge of M&A deals. And these companies couldn't even bring themselves to wait for Inauguration Day. Just in the past few days, we've already gotten a slew of...

merger activity. On Monday morning, Disney announced it will be combining its Hulu Plus live TV business with Fubo. And that's a small media company, but it offers a streaming service that's focused primarily on live sports content. Disney effectively is acquiring Fubo, a

Through this deal, I got to tell you, though, a 70 percent stake in the combined entity. Small, but could be important. They're snapping this thing up just to stave off some litigation from Fubo, which is trying to block a streaming joint venture between Disney, Fox and Warner Brothers Discovery. By the way, after the close and a very bullish announcement, Disney said they have about 157 million global users globally.

streaming content with ads. Now, we talked about buying more for the trust at the 1020 morning meeting. These are pretty impressive numbers. I'm now frozen, can't buy any, but boy, I like what I'm seeing. Now, look, the Hulu deal was just the appetizer because from Monday night through Tuesday, we got several multi-billion dollar M&A transactions. Buy, buy, buy!

Let's take them in chronological order, starting with Stryker. That's that medical device maker spending $4.9 billion in cash to buy Inari Medical, which is mainly focused on treating patients with venous thromboembolism, or VTE. It's a condition that impacts up to 900,000 people in the United States every year. Stryker says that its Inari product portfolio is highly complementary to the neurovascular business. I've checked it out. I agree. I like this deal. Next, early yesterday morning, we learned that Getty Images and Shutterstock

Two of the leading purveyors of stock photos and videos are joining forces in a merger of equals. Of course, in reality, there's no such thing. Getty's buying Shutterstock and their shareholders own 55 percent of the combined company. This one's pretty straightforward. You got two major players in the same industry combined to give themselves a lot more leverage versus their customers. Something they need in this age of AI generated content. Then a little later on Tuesday morning, Kramer faved paychecks.

The payroll processor and provider of outsourced human capital management solutions announced that it's acquiring rival software vendor Paycor HCM for $4.1 billion. I like this Paycor. Again, they're rolling up the human capital management software space, and Paycor gives them additional scale to broaden their offerings.

And listen, that's not even an exhaustive list of M&A activity this week. On Monday, Phillips 66 announced a deal to acquire certain privately held natural gas infrastructure assets for over $2 billion. Yesterday, a waste management company called GFL Environmental announced that it's selling the majority of its environmental services business to a pair of private equity firms for over $6 billion.

Also yesterday, we learned that another Kramer fave small business uniform rental provider, Cintas, although they do a lot of other stuff for small business, was launching a hostile $5 billion plus takeover attempt of Unifers, which also specializes in workplace uniforms and protective clothing. And today we got a report out of Bloomberg that Constellation Energy, the incredibly red hot independent power producer with big nuclear exposure, is nearing a huge $30 billion deal to buy Calpine.

That's another major power generator that was taken private back in 2017.

All right, so what do we make of this wave of deals? First, I got to say, it's just nice to see some mergers again. While this deluge was widely anticipated because of the change in administrations, it's still good to see some confirmation. Makes me feel confident in betting on more deal activity, which is one of the reasons why we recently bought the stock of Goldman Sachs for the Chappell Trust. They've got a huge M&A advisory business that's been in hibernation for years. I think the stock should be bought by everybody. But more generally, I'm just happy to see so many companies once again going for deals that should improve their business.

Looking at the transactions we've seen just this week, while some of them likely would have been challenged by Biden's ideologically driven regulators, most of them seem pretty justifiable. All of them make great business sense. Disney tying up with Hulu and live TV with Fubo. That clears the way for a streaming venture with Fox and Warner Brothers. I'm not sure that project will work, but now they can at least try it. Stryker doesn't currently do much in the very specialized Venus Thromboembolism space where Inari Medical operates huge for them.

Getty Images and Shutterstock. Now, they're fighting for the life in a world where generative AI systems can create images from simple text prompts. They'll certainly be stronger together, and they'll be in a better position to negotiate with the software developers who want to license their photos to train their AI models. By the way, they're also going to benefit from widespread adoption of the latest NVIDIA platform, Blackwell, which works wonderfully with video.

Paychex is also gaining scale in an industry with the PayCore HCM deal. I suspect the Biden administrators in this one could draw some antitrust attention. They're going to take a good hard look at this deal. But I can't see why this kind of takeover should be blocked. The human capital management space has quietly gotten very crowded. Paychex has plenty of stiff competition all across its businesses. In payroll processing, they fight bitterly with longtime rival ADP. And I'll list for human capital management businesses, there are lots of competitors. Workday, we're going to upgrade. I guess the stock's flying.

The only proposed deal that I think might deserve some real antitrust scrutiny is the Cintas-Universe tie-up, which, remember, isn't even an official deal yet. It's hostile, and Universe doesn't have to do it. Universe is family-controlled. And even this one only raises eyebrows because Cintas and Universe mostly serve the same small business space. I don't love the idea of squeezing any small business, okay? They get squeezed enough by the governments, especially if you're talking about ingrained services like uniformed rentals, where there don't seem to be that many options. So I went to Todd Schneider, straight-shooting CEO of Cintas,

About that idea, he gave us a very thoughtful response. He pointed out that they have all kinds of competition. Businesses can source their uniforms and safety equipment from Amazon, Grainger, Fastenal, or they can go to Walmart or Costco even. Schneider argued that by joining forces, Cintas and Universe would be able to provide better service to their clients. And even if they're allowed to merge, they'd only be serving 2 million businesses out of 16 million total businesses in the U.S. and Canada.

I hadn't thought about the idea that Cintas is also competing with Amazon and Costco and Walmart to sell everyday supplies to the small, medium sized business customers makes a ton of sense. And those market share numbers, they speak for themselves.

So the bottom line, I've got to tell you, I'm just glad we're back to a place where reasonable arguments like this will be considered fairly by the antitrust regulators. Rather than the situation we had under Biden where every takeover is considered anti-competitive until proven otherwise. That's very good news for the whole market as lots of stocks will be going away. Given that we have so few IPOs, there won't be a lot of new stock to replace it. And a supply shortage, well, that is always

always good news for investors they have money's back in the brain coming up is it time's up for tick tock kramer's digging into what the future holds for the social media platform next

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Is TikTok really about to be banned in the United States? Do you know that without intervention from the Supreme Court in the next several days, it appears the Chinese-owned social media platform might really get shut down? That's a huge deal.

Back on April 24th, President Biden signed the Protecting Americans from Foreign Adversary Controlled Applications Act into law. Now, this was crammed into a larger piece of legislation that provided military aid for Ukraine, Israel and Taiwan, something that passed with broad bipartisan support. In terms of TikTok, the bill stipulated that it would be banned within 270 days unless its Chinese owner, ByteDance, sold the business to an American firm.

But finding a deal to sell TikTok was always a long shot. TikTok's likely worth hundreds of billions of dollars. ByteDance raised money at a $300 billion valuation just in November, even with the U.S. ban on the horizon. So there are very few companies that could afford it. Even if both sides were willing to make a deal, the Chinese regulators would probably block it. Either way, we didn't get a deal. And that 270-day deadline from the original legislation, that works out to January 19, 2025, 11 days from today. And

and the day before President Trump's inauguration. Now, the TikTok ban was challenged in court with the company arguing that the legislation violates its free speech rights, those that are under the First Amendment. But after the case worked its way through the lower courts, a federal appeals court upheld the law just over a month ago. And a few days later, the Supreme Court agreed to hear the case on an expedited basis. They're hearing oral arguments starting on Friday.

Given the timing of all this, it's worth noting that President-elect Trump, who tried to arrange something similar for TikTok via executive order when he was last in office, has changed his stance here, coming out against the ban and pledging to save the platform on the campaign trail. Last month, his lawyers filed an amicus brief with the Supreme Court, basically asking them to extend the deadline so that he can directly address the ban once he's sworn in. Although, who knows if the Supreme Court will play ball? So, with the market closed tomorrow in honor of late President Jimmy Carter,

I think it's worth taking a closer look at this issue before the court starts hearing oral arguments on Friday. The final briefs filed by both TikTok and the U.S. Solicitor General, who's arguing on behalf of the law, give us really a great indication of how each party will argue the case. Like I said before, TikTok's arguing that the law violates its free speech rights and the rights of the users.

Their lawyers emphasize that the First Amendment protects Americans' access to the speech of foreign adversaries, even if it's propaganda. They also offer an alternative to an outright ban. Disclosure of the source of any material in TikTok saying, quote, disclosure is the time-tested least restrictive alternative to address a concern the public is being misled about the source or nature of speech received, including in the foreign affairs and national security context, end quote.

Now, by the way, a group of TikTok creators has separately petitioned against the ban, and their case was folded into this border case before the Supreme Court. In one of the creators' last briefs, their lawyers argued that the lawyers, quote, an anathema to the First Amendment because it aims to shield Americans from nothing more than a potentially disagreeable mix of ideas, end quote.

But the Justice Department claims that this is not a free speech issue at all. They say the law targets the national security risk stemming from China's control of bytas. Here's how they put it in one of their briefs. Quote, the First Amendment would not have required our nation to tolerate Soviet ownership and control of American radio stations or other channels of communication and critical infrastructure during the Cold War. And it likewise does not require us to tolerate ownership and control of TikTok by a foreign adversary today. End quote.

Now, I'm not totally convinced. We didn't let the Soviets control American radio stations, but we did let them publish a newspaper. Justice also argues that TikTok does not have any First Amendment rights here because it's not in control of the algorithm that it uses to make recommendations to its users. They argue that First Amendment rights are not being violated by the law because TikTok would be allowed to continue if it only had a U.S. owner.

The issue, they stress, is the PRC's ability to influence TikTok and gain access to U.S. citizens' sensitive data. And the Justice Department says that TikTok's preferred disclosure remedy won't work, claiming, quote, such a generic standing disclosure would be patently ineffective, end quote. So what's going to happen? It's tough. I honestly don't know.

I think TikTok and its fellow creator petitioners can score some points with that First Amendment argument. But if the government can paint a clear picture of why TikTok is a national security threat, it probably could be able to win. Usually, given the Supreme Court's six to three advantage for conservatives, you can get a sense of which way most cases will break. But this is a tough case to game, given that most conservatives were strongly in favor of taking a tough line against TikTok until Trump changed his mind.

That said, we'll get indication of which way the Supremes are leaning during oral arguments on Friday because the questions tend to be pretty darn pointed. By the way, I'm also not sure if President-elect Trump's request for an extension of the ban deadline will even be considered, let alone granted. And if the court does uphold the law, it's unclear what Trump's options would be on TikTok once he takes office.

It's tricky because this is the result of a law passed by Congress. It's not an executive order that can be simply reversed with the stroke of a pen. It may require congressional action to change course. And while President-elect Trump has tremendous sway with the new GOP-controlled Congress, most of those legislators voted to ban TikTok last April.

We do know that if the TikTok ban is upheld, it will likely be enforced via app stores, primarily Apple and Google. Users will be unable to download TikTok or receive any updates via the app store, severely degrading the platform.

Of course, look, I have mad money to show about stocks. So what does the TikTok ban mean for your portfolio, for my charitable trust? Most obvious answer is that it's good news, if not great news, for the other publicly traded social media platforms if advertisers are forced to go elsewhere. And that's especially true for meta platforms, trust holding, which has its

own knockoff version of TikTok with Reels, which I think is pretty good. At the same time, we could see some service providers to TikTok take a hit. Oracle comes to mind. They're TikTok's main cloud technology provider here in the U.S. But no matter how this case plays out, it deserves more attention than it's getting. For the nearly nine months since TikTok ban was passed, it feels like people have just assumed something would be worked out to prevent the most draconian outcome. Investors also figured that Trump would step in after he won the election. But the bottom line?

We listen and we don't judge. But here we are almost nine months later, and it seems like the only real way to stop the TikTok ban is if they win this case before the Supreme Court. Given that this isn't really a straightforwardly partisan issue and we listen and we don't judge, I think, well, let's just call it anybody's ballgame. I'm taking questions, and I'm going to start with Susan in New Jersey. Susan. Susan.

hi jim thank you for taking my call love your show thank you to you and your crew

Oh, thank you, Susan. Thank you. Yeah, thank you. I'm a second generation listener. My dad always watched your show, my late father. And now I'm continuing the, you know, continuing to watch. Yeah, I'm so glad you did. And I, you know, I'm sure you're I'm glad your dad loved the show. That's a nice thing. Thank you. He did. And I remember him while watching. So thank you. And I took the dive and became a new member.

Oh, fantastic. We're working hard. Jeff and I are working all day today together trying to get this stuff right. How can I help you now?

Well, you're awesome, and here's how you can help. HPQ. I bought HPQ a while back thinking I would get a jump on the 3D printing, and it's really just sat flat. It's been really neutral, even a little in the negative. Friday, when everything popped, it popped a touch, but it really hasn't popped. Wondering, do I just keep holding? Do I sell? What's your take?

OK, Susan, I think there are better stocks to own. Frankly, I, too, expected that we would get a better that the AIPC would mean more. I don't think it's going to. I would take that one. And the fact that it sells low at nine and it's got a three point forcing shield. No, that's it's starting to look like that. Nothing's going to move the needle here. I want you to take that money out. We bought a little BlackRock today for the trust.

that's a great stock it's different area i know but stocks come down 100 points it's a really good one buy a small amount that's my favorite going into earnings season and thank you for those great words of confidence and i will pass it on to this to the staff anyway look it seems like the supreme court is the only thing standing in the way of a tick tock ban no one's talking about it and since this isn't a completely partisan issue it's really a toss-up might happen here but you gotta stay focused and boy if

Wow, if Meta wins. Meta would be the winner, of course. Much more made money out of including my preview of the J.P. Morgan Healthcare Conference with the top voice in the space, Lisa Gill. Now I'm breaking down the decline in food and beverage stocks. Don't miss my message to the packaged food C-suites on navigating the space and changing landscape. They won't like it. You will. And don't worry, your call is rapid fire. So stay with Kramer.

Every year we make it a point to attend J.P. Morgan's annual health care conference out in San Francisco coming up next week because it offers unparalleled access to the top CEOs in the industry. It's the single most important health care event of the year. Some people feel it's the single most important conference of the year. So tonight we're taking a chance to get a preview of what we can expect here from Lisa Gill, managing director of J.P. Morgan and the head of their health care service research team who always comes to speak to us ahead of it. Lisa, welcome back to Mad Money. Thank you, Tim. I love coming every year ahead of our health care conference.

Well, thank you. I know you're going to start things off by talking to Jamie Dimon, your CEO. And can you give us a little preview about what you guys are going to discuss? Because we've got a new administration. We've got a lot of different changes in health care. And I think we've got a new M&A approach. And a lot of M&A deals start at the conference. That's absolutely right. So I think, you know, my discussion with Jamie obviously will be centered around health care. But one, deregulation. What does this mean? Right.

Two, financing. What do we think about rates going into next year? Because that is how you're going to finance deals. And three, you're absolutely right. I mean, most deals either get announced at our conference or they're meeting for the first time at our conference to put something together. Which parts of health care would be most likely to have deals? And I say that because we're doing a piece tonight about deals, and they seem to be almost in every single industry.

I think across the board. I mean, a lot of what you've seen more recently has been pharma biotech deals, right? So from a product perspective.

You could see deals in life sciences. You could see deals in services. I think from a service perspective in the areas that I cover, it's probably less likely that you'll see big deals near term. But, you know, there's been talk about one of the managed care companies maybe buying either a managed Medicaid name or a specific Medicare Advantage name. And I think there's a lot of question around this administration about what does Medicare Advantage mean in this administration? Well, look, you've got a lot of your group in particular, a lot of things in play.

A lot of people, for instance, you take a little contrary approach. You like the companies that are involved in drug distribution. Now, a lot of people are very suspicious of these companies, but you think that they represent some great value. I do. I mean, at the end of the day, the drug distributors provide a service of getting the product very safely from point A to point B and saving the U.S. health care system billions and billions of dollars each year.

And so if you think about what they're doing today and trying to replicate that, I would go back and look at 2003, 2004, right, when there were white papers written about, hey, if we change the system and we got rid of the drug distributors, what would it mean? Because there was concerns as we saw a change in the overall reimbursement model back then. So I'm going to look at them because I know some are priced for imperfection. That's where the real bargains are. Now, we have a president, a

Sometimes he, let's say he can say some things that we're shocked at. Our incoming president. Yeah, yes, our new president-elect. And he seems he wants to knock out the middleman. Now, isn't that exactly the people that you're saying might be cheap?

Well, what I would say on the middleman is that I would love to believe that any company would give you a good price without having to negotiate. The middleman, negotiate. I would think of Donald Trump, President-elect Trump, as the biggest negotiator, right? And so I think perhaps he doesn't really know exactly what these companies do. And the models are OPEC.

And so understanding what they bring to the system. You need to have someone in the middle to be able to negotiate between the manufacturer, between the retailer, be able to provide the level of service needed for the member. And all the clinical programs that go around that, I mean, I think people forget about

that. And I would just remind you that, you know, you're primarily really talking about PBMs, not drug distributors. Drug distributors are more logistics coordinators. A PBM or a physician, I'm sorry, a pharmacy benefit management company is going to be on the drug side. And if you look at that, those companies make about just over $2 per script. Right. I mean, it's not big dollars. But the drug companies like to blame them.

Well, it's always easier to blame someone else, right? So they don't set the price. At the end of the day, though, we need the big drug companies. We need innovation. We've seen innovation. We've seen innovation with GLP-1s, right? And companies trying to figure out how do we pay for those. But also, how do we sustain whatever weight loss people have longer term? If you want to say that you have a pill...

or a once-a-month shot or something that reduces fat without muscle loss, it's going to be done at your conference. Most likely. And do you think? Some news? Well, I don't know if we'll get some news at this conference, but I would bet over the next several years we'll continue to see it move in that direction. Let me ask you something.

I speak to a number of CEOs like you, obviously, and no pharma CEO I know was able to get in to see Biden because they always said the same thing. His people said bad optics to be in the room. They don't want you in the room. That's going to change, right? I

I would think so. I mean, I would hope that, you know, President Trump seems to be much more business friendly, wanting to make the right decisions. And I think, you know, if we go back to the last administration, he absolutely met with them. He had them at the business roundtables. He had the managed care companies at the business roundtables. Right. So I think that his practices most likely will look similar to the last administration. OK. Really?

Well, that could be. Could be. You know, sometimes he's fiery. Now, I did think that I brought this lawsuit. This is the CBS lawsuit. This is about how they say that the pharmacists were really encouraged to do the wrong thing for opiates. And we also have Walgreens all the way down. And these stocks are both at their 52-week low. Now, I know there's a lot of bad baked in. Anything good that could be interesting, because I'm more interested in finding out new things that could create violence.

bargains than I am about saying why they went down. Yeah, let's talk about CBS because I think that there are some good opportunities in CBS. So the biggest driver of what drove down earnings last year was Medicare Advantage. So they had very strong growth in membership for 24, but that came at a cost.

They've lost about $3.3 billion in Medicare Advantage in 2024. And 2025, based on their plan design, they will shed a number of those members. Number two, they will regain their stars. Remember stars? Right. No, I'm involved, unfortunately. Well,

I can't believe that. No, I am. I was checking the stars the other day. So you look at the stars. And so their stars will come back for CVS this year, which will create a tailwind in that side of the business. When you look at their pharmacy business, it actually was pretty good last year. Yes, it was. They beat expectations last year. They continue to gain market share. Closing stores. We have too many pharmacies in the U.S. But apparently, remember, I

But my understanding is they've closed all the losing stores and management now has a good hand. Is that possible? That is possible. And one of the things that everybody cares about in health care is transparency. And one of the knocks on retail pharmacy and PBMs has been transparency.

CBS has a transparent model that they've offered to the marketplace, and they put out a press release earlier this week saying the majority of their scripts will now be at that cost plus. Well, that would be an interesting opportunity. A lot of people know the brand. They know the stock's very low. You're not that worried about this lawsuit, right?

I'm not worried about that lawsuit. I mean, listen, at the end of the day, we saw it with the drug distributors, right? The drug distributors at an all-time low settled around the opioid settlement, and then that's where the stocks really started to work. And so, again, this here, when you think about CVS, it's a small piece of their business. They've got really good cash flow. And so I think at the end of the day, you know,

it's something they're going to have to work through. But I feel good about CBS going into next year. Well, I like a contrarian approach. There's certainly a lot of value there. I can't wait to see you at the conference. Me too. I think there'll be even more news than you do just because I think that there's some companies that have to do things because they're down so much. Maybe. That's the opportunity.

All right. Well, that's Lisa Gill, J.P. Morgan's head of health care services at Equity Research. And I've got to tell you, this is as good a preview as you're going to get. But next week is going to be so exciting. I can't wait to go to your conference. Thank you for having me. Can't wait to see you there. Thanks so much, Jim. Mad money's back in for the win. Coming up, Kramer takes your calls and the sky's the limit. It's a fast fire lightning round. Next. Next.

It is time! It's time for the Light Round. And then the Light Round is over. Are you ready? It's getting dark. Time for the Light Round. I'm going to start with James in Florida. James. Hi, Jim. Good evening. I hope you have a great day. Oh, yeah. How about you? I've been using the data for over 40 years. And my focus question for you tonight is in Pfizer Pharmaceuticals, PFE.

It's too low to sell. That's all I can say. I can't recommend it. I just don't want you to sell it if you have it. Let the dividend do its job, and then maybe we get some good news on the C-Gen acquisition. How about we go to Pranav in Texas? Pranav. Hey, Jim. How are you? I'm good. How about you, sir? I'm good. Thank you for doing all the great things for the society. You're doing a marvelous job. Thank you. I just want to ask a question on the ticker symbol, sir.

Yeah. OK, now this is one of these. We are going to revert to what if you want robotics, here's what you're going to get from me. You're going to get NVIDIA because they're the king of robots. That's it. Nobody else. Let's go to Ed in Illinois. Ed.

Booyah, Jimmy Chill. What an honor to meet you, a true legend. You're the maestro of Wall Street. You're very kind. I'll play it. What's up? Jim, Vertex has been behaving badly recently after some disappointing news on their new wonder drug, Suzetra Deez.

Is the long-term positive outlook for Vertex still intact? Or should I replace it? You know, I've got to tell you, Ed, I was sorely disappointed on that. I was praying that they would have something that wouldn't be addictive. And it looks like it's not working. I would not. Now it reflects the other great drugs they have and nothing good on that drug. But I don't see a lot of upside because that was the drug of the future for Vertex. Thanks for the call. Lisa in North Carolina. Lisa!

Booyah, Ski Daddy. Thanks for taking my call. Oh, thanks for calling. What's up? I'm calling about QS, Quantum Scape. Yeah, you know, look, I don't want to be too negative, but I've kind of had a Quantum Scape. I don't think they've got the, I don't think they have the horses. I would be a seller of Quantum Scape even right at this level. I have to say it. Let's go to Randy in Ohio. Randy. Randy.

Hey, Jim, I got two quick questions. I want to know about Powell Industries, POWL. It's dropped $140 a year. It is unbelievable how badly that's – I mean, I'm talking about I did not see that coming. I think that I've got to do more work on Powell because it has been a big, big disappointment. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, how should snack food makers be preparing for the growing influence of GLP-1 drugs? Kramer is giving you his take next. Tomorrow, kick off the trading day with Squawk on the Street. Live from Post 9 at the NYSE. When's the last time your hair was that long? Yeah. He's got a guy for everything. I remember him. That's how long we've been friends. That's why he had that crazy hair. But to me, at the time, it was...

I can't speak about how it's beautiful. Advanced micro double. Beautiful curls you've had. Beautiful. Thank you. It all starts at 9 a.m. Eastern. Practically every day we see more research about why the food and beverage stocks just keep going down. One of the most hideous bear markets I can recall. We heard they're being hurt by the GOP-1 drugs. The foods are designed to be craved. But what if these drugs stole your craving? We used to hear ladies tell us, bet you can't eat just one. But with Ozempic, it's easy not to eat any at all.

We hear that a new generation believes their bodies are temples, so they won't eat anything processed or adulterated. We know that junk food isn't selling as well as it used to. Just look at the numbers from J.M. Smucker, which acquired Hostess Pranis, maker of Twinkies, right as the GOP-1 drugs began to gain momentum.

But we also know three other things. First, no food or beverage company is willing to say that their earnings are being hurt or compromised by GOP-1. Second, no company is willing to accept that there are permanent changes in the way young people consume food and drink, especially alcohol, which they seem to have turned on with a vengeance. Third, their dividends, along a terrific trampoline, are now marginal in an era where the 30-year Treasury yields more than 4.9%, the highest it's been since 2007. That's devastating for the dividend-paying packaged food stocks.

In the end, denial is a river that runs through the grocery store aisles. What has to happen with this group? First, the CEOs have got to get more realistic. They have to assume that the GOP-1s will only become more popular, given that the diabetes and weight loss shots from Eli Lilly and Novo Nordisk work for far more than these two categories: heavy drinking, hypertension, sleep apnea, cardiovascular disease, high cholesterol, and perhaps even cancer and Alzheimer's prevention. You think people will stop because they don't want to give themselves a shot?

How about if you only have to give yourself a shot once a month instead of once a week? How about if pill form gets approved? People losing too much muscle with fat, the industry is going to come up with a pill that only attacks fat, not muscle, or they'll pump places full of protein powder. In other words, the food and beverage business has got to get more realistic about what's coming on down the pike.

Specifically, they've got to recognize they'll be selling less food because of this. That's why under this new administration, they need to start merging to cut their distribution, advertising, and marketing costs. Finally, I think the food and beverage stocks have to do, they've got to do something radical here. They have to slash prices to the consumer. They have to stop

the revulsion that we all feel when we look at the prices in the supermarket. Liquor's going up too much. And when you look at those prices and you read about all the bad things liquor can do to your body, well, the purveyors can't hold price. They have to find a new way to tempt you with value, even if their profit margins take a hit. Value. Look, snacks, way too expensive. We need value. Processed food prices should be cut substantially to keep loyally. That's what the stocks are saying. Take a look at the stock of McDonald's. It's tough

going down when they rolled out that decent $5 value meal. Texas Roadhouse and Brinker International, they've got terrific filling meals for just over $10. They found a way to make money. Their stocks are in rally mode. The packaged food companies need to do the same thing. They have to accept that the house-end days are gone and start trying to make money for their shareholders again, even if it means selling themselves to each other. Honestly, the

The whole thing's gotten absurd. It's like Baghdad Bob levels of denial. How can the food CEOs believe what they're saying? Do they think their stocks are wrong? Do they watch the same things you and I do? Until I see a food exec say, we need to reset expectations in a new world and then cut prices to the consumer and estimates to the analysts, their stocks will keep experiencing this endless, sickening, slow-moving decline. How can I not see this?

There's nothing wrong with resetting expectations. It's painful. And yes, for day two, maybe three, your stocks will indeed get killed. It's true by the analysts. But unless you're holding the chart upside down, it's telling you that the food and beverage companies exactly what they have to do. Slash prices, slash estimates, merge the safe costs and then start all over again. I think it's the only way they can get out of this jam that they actually never saw coming and refuse to acknowledge when everyone else knows exactly what's happening.

I like to say, as always, bull market somewhere. I promise I'll find just for you right here on MidMoney. I'm Jim Cramer. See you next time. All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC, NBCUniversal, or their parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium.

You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit cnbc.com forward slash madmoneydisclaimer.

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