Mad Money w/ Jim Cramer 12/2/24
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When November's up big and you turn the calendar to December, you almost always get some animal spirits going. Animal spirits being the catch-all for feel-good expression often stands behind a bull market, including this one. Buy, buy, buy! Sure, the average is mostly marked time today. Dow dipping 129 points, S&P advancing 0.24%, but the Nasdaq gained 0.97%, representing a nice rebound from some recent shakiness.

Today's session was dominated by Intel's decision to oust its underperforming CEO. Now, we're going to talk about the denouement of Pat Gelsinger's tenure later in the show. But I bet Intel's feckless days are now behind it, along with its grand ambitions to challenge NVIDIA and even AMD, which has been crushing Intel on both servers and PCs. Those are markets Intel used to dominate.

I'd buy the heck out of AMD, hand over fist. This is what we're doing for the Chappell Trust, as you know, if you're a member of the CNBC Investing Club. Gelsinger doesn't get ousted if he's winning business from AMD. He gets ousted if he's losing that business. Quite an opportunity. It was also a catch-up date for the MAG-7, the Super Bowl-backed division 7 of big, you know, the Titans. They've been lagging lately.

And when they lag, you know what you got to do? You got to buy because they inevitably play catch up. That's my thesis on mad money. Remember, there's always something good to say here, whether it's an upgrade from a long term bear on Tesla we got this morning or aggregate online sales being up double digits, which put buyers in Amazon or even stories about Apple's phone orders that weren't disastrous.

I know, low bar. Wait, you get a new month and everyone sees how well the previous month did. Well, there's a ton of money that comes in over the transom, so to speak, and that money ratifies the moves of the biggest of the big cap stocks. Money in means money put to work immediately, which leads to Magnificent Seven magic. Remember, people like to make contributions to the retirement accounts when the year's a good one, and we're seeing that happen almost by rote, and that's almost by rote is the transom money. Why does a great November generally translate into a great December?

Well, that's all about the mechanics of money management. Before I started my travel trust more than two decades ago, I ran a hedge fund. I was always looking for an edge. And one of the most reliable patterns I found is that when December rolls around, you mimic the biggest winners of November. Specifically, I would buy deep in the money call options on those now anointed stocks, and then I'd let them run through December. I wanted to participate in a well-established pattern that started with a bank that I'm going to put as much as little capital in to get the biggest back.

I know a lot of our younger viewers play options, so I thought I should mention that. So if you're putting money to work in November's winters, which is what I'm advising, let's take a look at what you're buying.

Why don't we start with Palantir, which reported one of the best quarters of the year. Fantastic growth, fantastic growth partners. That's right. Growth and growth partners together. That is fabulous. And they are killing it with federal contracts, including some important work for the Pentagon. Palantir's people rip-snorting smart, and they tend to win almost everything that they tender for. They also have a great commercial group. But I like their defense work. It's what I used to call a total up.

Second is Axon, A-X-O-N. That's the company formerly known as Taser a long time ago. I don't call it that because it obscures all the unbelievable work they're doing to rationalize police stations, make things easier for law enforcement and the justice system. Axon had three things happen in November. They reported much better than expected, or I mean much. They rolled out a new edition of their software, including valuable AI that saves a huge amount of time and, of course, money. And

This is a definitive Trump stock because there's widespread belief that local law enforcement will get more money from Washington with the GOP trifecta. All right, how about Tesla? What can I say that hasn't already been said, right? I mean, right now, Elon Musk may be the second most important man in America. He may be the most important man in America, as long as he stays tight with Trump.

Sure, Tesla issued a new software update today, and some people actually talked about that, but everyone knew it was coming. People have been buying this one because they've realized that Musk has the president's elect's ear, and his loyalty will likely be returned with good news for Tesla, especially the self-driving business. To me, it seems very transactional.

Fourth, not long ago we covered Texas Pacific Land Corp, a new addition to the S.P. 500 that owns more than 800,000 acres of land in the oil-rich Permian Basin. Now this one's a holdover from a 19th century railroad bankruptcy. All aboard!

All it does is take your money. Even though they don't own the mineral rights, they own the land, which means you need to pay them if you want to drill. I want that business. Landmen, what is that thing? Ben Stoto is our chief scientist and oil man, also research director, is watching lands, but I don't know about that.

that. Nothing like an oil stock after Trump gets elected, though. But be careful. The oil's underperformed during the last Trump administration because there was too much drilling. It could happen again. Although when I profiled Texas Pacific not that long ago, I told you it was worth waiting for. A pullback. The pullback never came.

It just kept going straight up. And you know you have some of those stocks, too, I hope. Fifth, Tapestry is a rebounding apparel company, and its stock is on fire thanks to Lita Khan, FTC. Yes, something you almost never hear, something positive. See, she blocked, or the FTC blocked Tapestry from acquiring Capri Holdings, which owns Michael Kors, Jimmy Choo, and

Versace. The market hated that deal. So when Wall Street cheered, when Landon Kahn shot it down and that's allowed, well, it's allowed tapestry to prosper. It's become an upstock. Next is EPAM Systems, which is an enterprise software company for platform engineering development. Now, the stocks come roaring back, leading part of the return of the enterprise software primacy over hardware. EPAM Strength is a green light to buy Salesforce and ServiceNow.

The two biggest enterprise software places I like. Seven. Oh, here's a wild one. Warner Brothers Discovery. Now, this is bouncing for several reasons. First, its balance sheet is actually improving, and it was the biggest worry. Shooting that down. Second, its assets are worth so much more than the stocks actually sell it for. Third, this new administration will be a bonanza. Ratings bonanza for CNN. Finally, once Biden's gone, media companies can merge again. That optionality is worth more to Warner Brothers than ever.

Everything else combined. Number eight, Fistra. Oh, lay up. Data centers are electricity hogs. We need more power. Ideally, we have the clean variety. That's Fistra, merchant of cleaner electricity with a nuclear kicker. Although I still do prefer Constellation Energy for nukes. Ninth is McKesson, a traditional middleman between the drug companies and the drug stores.

Now, it's a Trump stock, not because Trump loves the drug distributors, but because I think it was only a matter of time before the Biden-Harris regulars went after these guys. There's a widespread belief that the McKessons of the world got a big reprieve, rightly or wrongly. Finally, number 10, my favorite is EQT. That's the largest natural gas company in the country. Talk about a Trump stock. Perhaps the single most thriving industry in our country is the liquefied natural gas complex, the Apex Oil.

All of the LNG export terminals in Louisiana and Texas, both in existence and those being built or planned. Given that we have absurd amounts of natural gas in this country, we're the largest exporter in the world. The export market is a bonanza. Almost everyone needs our cheap natural gas.

At the beginning of the year, Biden put a pause on the approval of these LNG terminals. The move caught everybody by surprise, including companies that have spent billions upon billions of dollars doing these things. And it crushed any stock involved in the process. Now, we do expect that the pause is probably maybe eliminated. Go right back to work the first day of Trump's administration. No wonder EQT stock caught fire. It may be the single biggest beneficiary of LNG.

Trump's election. Now, there are other underneath this list, ones that involve traveling. To me, that means you can buy anything connected to travel, including the airlines. United's number 11 list. Cruise ships work. So does booking holdings. But the bottom line, if you want to know what I think could do best in the month of December, well, it's simply what worked best in the month of November. So now you've got your marching orders, and I say, bye-bye. Go to work. Let's go to Nicholas in Georgia. Nicholas. Hey, how are you? How's it going? Not bad, Nicholas. How about you?

I'm good. I'm good. Just trying to adjust to this cold weather. Go Bulldogs. Hey, my question is, and I love your show, by the way, I got a position with Bank of America, kind of bullish, and I want to know what is your short-term and your long-term sentiment on Bank of America?

You know, I can't own stocks, but it's very funny. My wife was asking me, how's Bank of America doing yesterday? I said, they're killing it. They're crushing it. She says, how's the stock doing? I said, doesn't reflect how well they're doing. And that happens to be my take right there. Doesn't reflect how well they're doing. Can I please go to Julie in Connecticut? Julie.

Hi, it's Julia from New Canaan. How are you, Jim? I'm from New Canaan. Pretty fancy. Good ice cream place up there that I went to at my door. What's going on with you? Awesome. Well, my question's about Uber. We're heavily invested for the long term, but I was wondering what your thoughts are about Elon Musk and RoboTaxi and how it'll affect Uber in the future. Do you think it makes sense for them to be partners? Julie, I'm going to tell you.

There's room for everybody. I think there's a lot of one-dimensional thinking when it comes to Uber. Most of the stocks of this period that came public have all soared. They've been leaving Uber in the dust. That's a mistake. I think Uber is a winner. Particularly because I've been in a Waymo, not them. But I can tell you, when you're in a Waymo, it's dynamite. It is. And you don't have to talk to anybody. You just kind of ride anywhere.

Sit anywhere. All right. Want to know what you should do in December? Just remember, the month of November. On Mad Money Tonight, after Shopify's...

$5 billion Black Friday. I'm checking in with this president on the state of e-commerce and just regular commerce this holiday season. Then on the heels of reports from three PC players, I'm giving you my latest on the PC refresh thesis. Somewhat tepid. And later, shares of CrowdStrike slid after its beaten race quarter, so is now a good time to buy the cyber stock that we own a lot of for the Chappell Trust? You know what? I got the CEO, so I suggest that you stay with Kramer. 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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With just a few hours left of Cyber Monday, the clock is winding down on the most important extended shopping weekend of the year. Now, we don't have the final numbers yet, but one thing became clear over the weekend. Online shopping remains ascendant versus brick and mortar retail. Take Shopify, the iconic e-commerce enabler. This weekend, we learned that merchants using their platform had racked up $5 billion.

billion in total sales on Black Friday alone, setting a new record. Now, if you add up all of Shopify's U.S. merchants and aggregate their online sales, do you think this would be the second largest online retailer in America behind only Amazon? So you know these numbers are representative. Plus, the company reported a great quarter last month that propelled the stock into the stratosphere. It's now up 45 percent for the year, trading at its highest levels since early 2022.

So what can we learn from this heavy hitter in the online shopping space? Well, today we got a chance to catch up with Harley Finkelstein. He's the president of Shopify. Take a look. It's very exciting. Mr. Finkelstein, welcome back to Mad Money. Great to be here, Jim. Thanks for having me on. Let's start with the big number, $5 billion in aggregate sales. Tell me where that stacks up versus last year, where it stacked up versus your expectations, and where it stacks up versus Amazon.

Yeah, I mean, look, Shopify merchants drove, as you said, a record-breaking $5 billion on Black Friday. That was unprecedented. But as you know, Jim, I always like to save the big numbers for you. So fresh off the press, I just checked our notes, and we won't have our final number until tomorrow. But I can tell you that Shopify merchants have already surpassed last year's record of 9.3 billion sales globally for the weekend.

So we're really excited about how it's shaping up. It seems that consumers are absolutely voting with their wallets to buy from incredible independent brands and their favorite brands are on Shopify. So give me a sense of what whether they're looking for value, newness. What is it? Is there are there some themes that we can seize about what's happening?

I mean, look, we have some of the most interesting brands on the planet that use Shopify, you know, the On Runnings, Aloe Yoga, Viore, even Barnes & Noble and Mattel. But if you look right now at trending shops and trending products, you see Cozy Earth, you see Stanley, the Stanley Tumbler, you see Our Place, you see Skims.

Bass, Brooklinen, even Hailey Bieber's Road Line. So you're seeing a lot of variety, but these are all independent brands that the consumers are looking for. What you're also seeing is that consumers are buying completely differently now. I mean, when you think about omni-channel, usually that insinuates online and offline, but we're seeing so many other channels that Shopify is powering.

For example, social selling on social media. Fifty seven percent of 18 to 24 year olds tell us that they're going to buy an Instagram. Fifty six percent on TikTok, which is what Shopify powers. So not only are they buying from independent brands, they're buying across every channel possible. Well, this is extraordinary. You're telling me that TikTok and meta, so to speak, are places that will, if this is the trajectory, be the primary places people buy from?

I don't think primary, but I think it's these new channels. And part of what we're trying to build at Shopify, historically, we were the e-commerce company. We're really trying to build this retail operating system so that when you come to Shopify, we have millions of stores already, big and small stores. You can sell across every surface area where customers actually spend their time. And even some of the more traditional e-commerce companies, like Gymshark, for example, a famously online company, they set up a physical store for the holidays in New York City.

So you're seeing traditional online companies also moving offline and vice versa. And it's all powered by Shopify. Well, what's exciting for me to go back to the TikTok is that if you have a young person, I know older people, too, but young people who know how to make a good TikTok video, who know how to have a good you have a good Instagram page, even using, say, Adobe, they may be able to realize their dreams just from their social media pages.

It's unbelievable. Entrepreneurship very much is on the rise. And I think the barriers to starting that business have never been lower. You and I love talking about this, but this does feel like the era of entrepreneurship. And now we have data to back it up. One thing we do every year, which one of my favorite things is we actually show a live globe in real time that all of your viewers can see, shopify.com slash Black Friday. And right now, as we speak, we're seeing about $2.6 million every minute go through the platform and about almost 21,000

orders per minute go through the platform. So very much you are seeing that this holiday season belongs to the entrepreneurs and the independent brands. All right. So I'm close to someone who's working with you. And apparently I need to point this out. You have actual customer service for young entrepreneurs, for people who have no sales. And it's rather remarkable. People can't believe you get to speak to a person. How are you able to make so much money because the stock's been a rocket ship and still provide service to people who really don't know how to run a business yet?

Yeah, what we're trying to do is take all the friction points that someone has in starting a business and scaling a business and bring them down, remove them. So whether it's getting shipping labels, we negotiate shipping pricing on behalf of our merchants, or things like payments or capital, or even helping them with advertising. We're trying to take all the friction out. One of the things that I often remind people of is that if you were to pretend that Shopify was a single retailer, we would be the second largest online retailer in America.

The reason I say it is because when we go negotiate rates and build products, we're doing so with incredible scale, but we're able to distribute them to all these small businesses. And that's creating companies that five years ago didn't exist that today are becoming the incumbents. Are you bigger than Walmart?

From an e-commerce perspective, we do more GMV than they do on their online store. Okay, well, let me ask you, you do all that. How do you make any money if you offer that level of service? This is somewhat rhetorical, but it is rather amazing. I want people to know that you can have real people helping young people and it pays off in the end.

Yeah, our support team, we look at them almost as business coaches. We want them to help not just with the setup, but as they scale, what new channels to activate, what promotions to do. But I said this on the last earnings call, in our Q3 earnings call, we think Shopify can do two things. We can grow our top line, which we did about 25% year-on-year in last quarter, but we can

but we also have free cash flow margins that are in the high teens. The ability to grow and be profitable means we can keep investing. And we're about to celebrate in a couple months from now, our 10-year anniversary since the IPO. We went public in May 2015. And that idea of actually being

a company that can grow and be profitable, that can get into more countries, that can add more services, that can increase the amount of value we create for the millions of stores. That's where we think Shopify can be a very durable company long term. What's the average car price? What is the average customer spend?

I got some new numbers for you. Right now, average card price in the US is about $155.21. So that's quite a bit. But that's actually similar to last year. But the thing I think that's most remarkable is that when you look at things like how they're selling, we're seeing companies like BarkBox, for example, a pet food company, that rather than giving a discount, they're gamifying it. They're creating a quiz to have their customers first answer questions about their pet before offering them a discount.

offer them a discount. We're seeing these incredible new ways to transact, and it's all powered by Shopify. Well, this is important because this is just so different. There are people out there who are watching you who want so desperately to leave their company. They may like it or not, but they have an idea. And you're telling me that it's worth the leap is what I'm hearing.

I, I, the cost of failure has never been lower. The ability to start and to scale has never been higher. But one of the reasons that I think you and I are such fans of entrepreneurship is because it's the backbone of our economy. It's where jobs are created. And so the fact that we're able to help people create more, more businesses that grow faster than ever before, it,

puts us in a very enviable position. But also, we ourselves are very proud of that. We want to be the entrepreneurship company. And the fact that companies like Mattel or Barnes & Noble or, you know, Skims also use Shopify is an endorsement that as you grow and you get bigger, you never have to leave our platform. And I think that's the reason why we've had a really great, you know, couple of years at Shopify. Well, congratulations. And I just I love the stories because I know so many people who have never been able to think about the idea of doing something because they're so scared.

The cost of failure has never been lower. Listen to that, people. That's Harley Finkelstein. He's president of ShopLite. Harley, congratulations on a great, what are we calling it? We've got, I think I'm- BFCM. Yes. Black Friday, Saturday, Monday season. Black Friday, BFCM. I mean, little did I know. Have a great rest of BFCM. How about that? Great to see you. Thanks, Jim. Thank you so much. Great to see you. Harley Finkelstein, president of ShopLite. Everybody's back. It's the breeze.

Coming up, is AI fueling a wave of PC upgrades? Or are we in wait and see mode on this thesis? Kramer is giving you his take next.

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Now that we've heard from the major players in consumer technology, what's happening with the personal computer upgrade cycle? Now, all year we've been hearing about how we're due for a wave of PC replacements. Now that we're four years removed from the last big upgrade cycle at the beginning of the pandemic. At the same time, we heard all about these new PCs with artificial intelligence functionality, how they'd be used once they've released and, well, they've already started hitting the market.

But over the last six months, Dell Technologies, HP, and Best Buy, which we own for the Chapel Trust, have all come down dramatically from their highs in the spring and summer. Now, all three of those companies reported last Tuesday, and all three of their stocks, they got clumped. Best Buy was down 4.9%, HP and Dell falling 11% and 12% the next day, respectively. Still, the stock market's judgment is not absolute. We need to check under the hood to figure out what's really happening with this PC refresh cycle and whether it's as consequential as the stocks seem to be saying.

Let's take them one by one. Start with Best Buy. Before the quarter, we've been selling our stake in this one for the travel trust precisely because we were worried about the hype surrounding the AIPC thesis, which, by the way, candidly, we had put into ourselves, but a cool one of late. And also because Lowe's and Home Depot have bad things to say about demand for big ticket items. And those are Best Buy mainstays.

Turned out best by disappointed with top bottom line miss, not to mention weaker than expected same store sales. Management also cut their full year forecast for 2025. They gave a discouraging outlook for same store sales in the current quarter. CEO Corey Barry blamed general and I'm going to quote this macro uncertainty, purchase delays and anticipation of holiday season sales. And what she described as, quote, distraction during the run up to the election. End quote. What a downer.

Now, there was some good news. Barry disclosed the current quarter was off to a good start with Best Buy same store sales up roughly 5 percent through the first three weeks of November as the holiday promotions have kicked in. That news brought the stock off its lows last Tuesday morning, but it can only do so much. After all, Best Buy still guided for same store sales to be flat to down 3 percent in the current quarter. The analysts expect them to be down just 0.3 percent. Doesn't drive what we've seen so far in November, though.

Still, I want to focus on what Best Buy had to say about PC sales because that was more encouraging than the overall quarter. Computing and tablets were called out as some of the stronger categories, offset by weakness in appliances, home theaters, and gaming. The domestic computing and tablet categories together grew 5.2% versus last year. And laptops specifically were up 7%.

Later on in the conference call, an analyst asked about what was specifically driving the good PC numbers, and management's answer was interesting. Jason Bonfink, Best Buy Senior EVP of Customer Offerings and Fulfillment, said that much of the PC demand was more, I'm going to quote, up

and replacement cycle, end quote, buying, rather than buying because of the new AI functionality. Banffy explained that while Best Buy was, quote, excited about what's going to happen in the future with AI, end quote, they think it's a, quote, phased approach, end quote. And that theme will play out over time.

Right now, the real drivers replacing PCs that have gotten too old, that does not interest me as much as the AI PC. In the end, as we told the CNBC Investing Club in a very long report, I am torn on Best Buy. The company could do better if long-term interest rates come down and the housing market improves. But I'm also wary of the current moment. I mean, especially with the threat of tariffs looming. In the end, after the quarter, Best Buy is too expensive for me to recommend up here. But at least they confirmed that the PC upgrade cycle is for real, even if it's not driven by machines with AI functionality, at least not yet.

All right, how about the actual PC makers? All right, when HP reported, it delivered a decent enough set of numbers with solid guidance for the 2025 fiscal year. But the company also offered much lighter than expected earnings guidance for the current quarter, and management suggested that their 2025 earnings will be loaded toward the back half of the year. That didn't sit well with investors. It's the reason why HP stocks sold off.

Let's take on the main issue with the quarter. Now, when we spoke to CEO Enrico Louris on Mad Money, he said that softer margins for the company's PC segment, the big negative, were caused by increased component costs, and those should continue into early next year. I won't tell you how to feel about that, but just know that the problem with HP is a cost issue. At the same time, HP's PC business is doing much better on the enterprise side.

up 5 percent then the consumer side down 14 percent now hp emphasized that it's taking market share all over the world in the pc business particularly in quote high value end quote categories like commercial and the premium portion of the consumer market lawyers noted that hp's aipc units were more than 15 percent of the company's shipments in the quarter and they're apparently the number one player in the space now when i spoke to lawyers i asked specifically about how we should square some of best buy's more positive forward looking commentary

about AIPCs with HP's more guarded guidance, especially in your term. He said basically that the benefit from sales of these products was more of a 2025 and 2026 story. Hence that.

Finally, let's talk about Dell, a company I very much admire, which reported the same night as HP, posting a 10 cent earning speed of 205 basis, even as the sales were weaker than expected. The guidance for the current quarter was not so hot, though, and they cut their full year forecast. That's why the stock got hit. But after reviewing the results, I really like how transparent Dell's management is being about its issues. In terms of the PC business, we saw a big disparity between commercial and consumer PC sales, just like with HP, except for Dell was much bigger. Their commercial business was up three.

Consumer business was down a whopping 18%. Magnum says the PC refresh cycle is playing out more slowly than expected, but looking forward, they still believe it's going to come, likely next year, thanks to an aging installed base of computers and an end of support for Windows 10 late next year. More important than that in the PC world, Dell is the best partner NVIDIA has for the installation and running of the highest-end NVIDIA chips, like Blackwell. Blackwell is just now really beginning to ship in volume, and

And though that's not PCs, I think it will benefit Dell later on next year. Putting it all together, it's clear that the PC upgrade cycle is going more slowly than any of these companies would like.

But is it a lost cause? No way. Once Microsoft pulls support for Windows 10, it's inevitable. Plus, we're already seeing pockets of strength. Their Best Buy is moving a lot of laptops. HP and Dell are starting to do better on the enterprise side, even if the consumer is yet to catch up, which I do find worrisome. Here's the bottom line. These are all high-quality companies, and I'm inclined to give them the benefit of the doubt, especially Dell, which also has huge exposure to the red-hot AI server space and is not expensive.

But the big AI driven PC refresh cycle, it seems to be on hold, even though they're confident it'll play out. It sounds more like a normal upgrade cycle than anything revolutionary, which I found to be a tad disheartening. Hence the sell in Best Buy. We have a small position still. Let's go and take some calls. Why don't we start with Doug in Michigan? Doug. Hi, Jim. Hey, thanks for taking my call. Oh, thank you for calling in. What's going on?

Hey, in April, I purchased 400 shares of Motorola, and I'm up about 43%. Do you think that it will keep up with this momentum throughout next year? Okay, I'm glad you used the term momentum because I know the barcode side. I know the communication side, and I think the stock is overvalued at 36 times earnings, forward number.

That said, I'm not going to call it momentum. And Doug needs to know there are so many companies that look just like this. They've had this incredible run. I can't call the top on them. I have no reason to call the top. I am saying I would be prudent and do what we did with Microsoft today. If you're a member of the CBC Investing Club, let's go to Karen in Georgia. Karen.

Dr. Kramer, I want to know if you think the stock is hot to go now pre-earnings and where you see it going in the long term. IOT, Samsara? I think this company is about to have a big earnings breakout and I like it very much. When we had them on, I was incredibly impressed and thought, wow, I wish I had known about this company earlier. You've got a winner. How about we go to Bernie in Arizona, please. Bernie.

Hey, Jim. Hey, how do we get Saquon back in New York? Do you know how to do that? How do we get back back in New York? I think that after what I saw in that that TV show, I good luck. Not going to happen. Yeah. Hey, I got a question. Never let him go to Philadelphia. That was really the mistake, because now we all have to listen to MVP when he plays up there. What's going on?

That's true. Hey, question for you. So I bought ARM a long time ago. Okay. I think as it came out, overall, my returns are probably 150%. So I'm really happy with that. Thank you for that. So the question I have is, how does ARM...

progress look like here over the course of the next few years? Do I hold it? Is it still a potential buy with everything going around AI right now? I think that you're going to get a break here. I think that ARM, wherever it competes with Intel and is going to be competing with Intel, I think that's going to be a win for you, a W, as we would say. I think that, look, ARM is not Saquon. It's more like after last night, King Henry.

Tonight's number two. The AI-driven PC refresh cycle seems to be going a little more slowly than everyone expected, including yours truly. Not a lost cause, but it does look more like just a normal upgrade cycle rather than anything revolutionary. You need to know that. All right, much more May Moneyhead, including my exclusive CrowdStrike, made a volatile environment for cybersecurity. Plus, fresh off the news of Intel CEO Shakeoff, I'm going to give you my take on Pat Gelsinger's legacy and what the chip company faces going forward.

And you don't want to miss that. And all your calls rapid fire in tonight's edition of the Lightning Round. So stay with us. What do we make of CrowdStrike? The cybersecurity play that's rallied over 73% from its August lows, set not long after a bot software update caused widespread tech issues around the globe. Now, this has been a huge winner, even through when CrowdStrike reported last week. The stock pulled back more than, even though it pulled back more than 4%. Yeah.

You know what? It didn't matter. I'll tell you why. They delivered an excellent beat and raised quarter. Wall Street only seemed to care that management made some comments about limited visibility in the fourth quarter. I did not think it was all that important. Given how much the stock had run into the quarter, I think that's what spooked people. That's why we have a big position for the travel trust. But considering how much CrowdStrike rallied in November, I bet it just keeps running into December. Don't take it from me. Let's check in with George Kurtz, the co-founder and CEO of CrowdStrike, to get a better read of the situation. Mr. Kurtz, welcome back to Mad Money.

Jim, great to be here. You know, George, I kind of be a little bit philosophical for a second. Wall Street saw the stock had run a lot and decided to sell. When you and I first talked after that fateful day, I know I felt that the stock might be finished for some time. It was a pretty much remarkable comeback. How did you do it?

Well, Jim, I think it was, and it was a great quarter for us coming out of a really challenging time. So we're proud of what we were able to post. And a big part of our success has been, A, taking care of the customers and really wrapping our arms around them. We've built so much goodwill over the last decade, so many deposits of trust with our customers.

that we had a blip here, we worked through it with them, and we stood behind our product and our company. And I think that really serves us well. And we've had a lot of positive comments on our response versus many others in the industry. Uh,

would have been unheard of. So I'm happy the way we handled it. I'm proud of the company. And we have remarkable customers and we're delighted to continue to protect them. Well, I think that when the time has come that this will be the case study that everybody reads from now on. We've read others about failure and trying to come back. They've never been done this fast. And one of the things I think that you did, I know you lack sleep because you won the Le Mans, but

It does seem that you must have visited, I don't know, what was a hundred day onslaught? Did you literally see everybody who matters and then some? I mean, it was literally thousands of customers interaction, whether it was Zoom, whether it was on the plane. I hit, I think, seven customers.

countries, 10 cities in 10 days. I mean, I was all over the place, not only me, but the rest of the CrowdStrikers and the sales team and our partners, because you had to reach out, you had to touch a customer, you had to hug a customer, and you had to work through it. You know, these are challenging times. And I've had many of our customers tell us, you know, these are the times where partnerships are really, really forged. Now, it's important for people to have some numbers around this. So why don't you tell us the retention rate that you found?

Well, we were really pleased. Ninety seven percent plus retention, net retention rates, one hundred and fifteen percent. Sorry. One hundred and fifteen percent net retention rates and ninety seven gross retention rates. So when we look at these numbers, this is still best in class. And given the challenge that we had to work through, we're super proud of the results. All right. So tell me what would happen. New customer.

new one you want to see yourself. Was the first question, how the heck did that happen? Or what did you do? You probably put it right up front. How do you go forward and make a sale based on what it just happened? Well, Jim, this is one of the things that we talked about many times. We believe, and I think it's recognized by many of the analysts, that we have the best security platform in the market today. And when we look at what we've been able to do for customers and protecting them from ransomware attacks and many of the most

heinous attacks out there, nation state and otherwise, they take that to heart. And customers know that if you want the best technology, it's CrowdStrike from a security perspective to stop the breach. So we have that going for us and look, we are open and honest.

there's some things that we had to change. We changed them and we basically showed the customers what we did. We told the world, we put everything out there for everyone to see. We're super transparent about it. And customers recognize that. And in many cases, customers have said, uh,

you know, broken bones heal stronger. And this is not a mistake that's going to reoccur. So we feel happy with what we've done. We continue to do more with our resilient by design and we continue to drive innovation in the product. Now, I know that you, from my own work, have a huge number of banks. Almost every major bank, frankly, is CrowdStrike. Did any of those banks say, you know what, we got to move on from you?

Not that we've seen, Jim. And I think this is one of the great stories coming out of this. Lots of challenges, but working with them. And again, we had one bank who basically said, look, we've got 10 years of trust deposits by CrowdStrike and one withdrawal on the 19th.

And they went to the board, they talked about it, and everyone is all in on CrowdStrike. So that's our focus, is to do right by the customers, continue to build innovative technology, continue to stop breaches, and continue to move forward. And that's what we're doing. And I think this last showed us moving forward. Well, just in terms of moving back for a second, Delta is currently suing you for $500 million. Now, when I looked into the lawsuit, candidly, there are so many ways that you do not have to pay

500 million, that it was almost misleading to use that number. But when Ed Bastian was on CNBC, he did indicate after this lawsuit that they're still heavy with CrowdStrike. Have they left you at all? There's still a customer, Jim. And again, we want to be respectful of customers. We'd love to try to get this resolved. You know, it's in the lawyers' hands at the moment, but we continue to serve them like we do all the other customers out in the marketplace. In the meantime, we got a new president in January.

I know that he seems to court controversy. I also know that there are so-called enemies or maybe our actual enemies may have not seen the likes of this, of Trump number two. What are you what are you preparing for? What are you seeing?

Well, when we think about cybersecurity and government, this is one of the areas where governments have to be protected. We worked with the last administration. We're delighted to work with the new administration. And it's really about the betterment for the country, keeping the country secure and leveraging the rich technology that we've built recently.

over the many years to be able to do that. So, you know, we're excited and we look forward to continuing the hard work that we've put in over the years. And protecting governments is one of the top priorities for CrowdStrike. All right, George, we do have to cut it off, but I do next time want to spend more time on the AI generated parser, which I thought was good.

And Gen Tech AI, as usual, your conference call is a fountain of information that is kind of what I can say about no BS about how things work. George Kurtz is co-founder and CEO of CrowdStrike. I love having you on. Thank you, George. Thank you, Jim. We'll be right 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! It's time for the lightning round. And then the lightning round is over. Are you ready? Let's get it done. It's time for the lightning round. I'm going to start with Hugo in Ohio. Hugo. Greetings, Jim, and thank you for having me on.

Jim, among the many great... Yeah, oh, yeah, can you hear me? You bet. Go ahead. You go ahead. Among the many great pearls of wisdom you've provided over the years was about buying on a pullback. Last August, I bought Plantare and NVIDIA, and in less than three months, Plantare doubled in price.

My question tonight is about LMT, given Elon Musk's comments about unmanned aerial vehicles versus having a human pilot.

I think he's right. I got to tell you, Hugo, I think that this stock, I love Jim Taklett. I think he's terrific. But I don't like, in terms of Ukraine, it would not be, it's not good for, look, war is unfortunately better for Lockheed Martin than not. And I think the stock's going down correctly. I would not touch this thing until it broke 500. But it's run by Jim Taklett. He's really fabulous. But it just doesn't matter at this point. Let's go to Chuck in North Carolina. Chuck. Booyah, Jim. Booyah.

Thanks for taking my call. My stock is UPS. I'd like to know your buy. Oh, Chuck, I'm telling you, you're going right into the holiday season, and UPS has screwed up a lot of holiday seasons. If you want to take a shot, then I say take a shot with FedEx. I'm not kidding, because they have it better. They're all set. Let's go to Paul in California. Paul. Yeah, Jim. Thanks for taking my call. It's Penn State, Paul. Whoa. I mean, it's Oregon Kramer.

It's almost, if I'm not mad at that, for four and a half years, buddy. Well, it finally seems to have its day. But this weekend, there's some big presentations at the thing called Ash, which is they're going to make presentations, a lot of other companies. And it better be good after that run. And I can't be assured that it is good. Maybe it's a little time, a little profit-taking time. I'm not done. I'm going to Griffin, North Carolina, 2nd North Carolina. Griffin.

Hey, Jim. Hope you're having a great day. With the recent bull run with ACHR, it might be time to ditch the intelligent investor. What are your thoughts? About which one?

ACHR. No, this stock, all of these came down today. Joby came down, too. I actually think these stocks have overheated, and I am worried about a strong unemployment number on Friday, meaning a lot of jobs after we saw this GDP number today, and that these more aggressive speculative stocks could get hurt. That's my fear. Let's go to John in Tennessee. John.

Booyah Jim from the Volunteer State. Thanks for taking my call. Of course. What's happening? Not much. Wishing you and yours a wonderful holiday season. Same. I recently opened a position in AstraZeneca. At the same time, I also hold Pfizer, mostly for that...

Oh, man, I got to tell you, AstraZeneca, I was so excited about that stock after the CEO came on. And then there's just been a series of disappointments. I don't know what to make of it. I'm going to have to say take a pass. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, is Intel making the right move with its latest C-Suite shakeup? Kramer sharing where he comes down on the troubled chipmaker. Next...

What can I say about Pat Gelsinger, the disastrous CEO of Intel, until he was ousted this weekend? I wanted him to succeed at turning around Intel, which had been wrecked by a series of well-intentioned CEOs before him who were in over their heads. As much as I criticized him, I was rooting for the guy because it's of national importance that Intel survives. I did hound Gelsinger many times. I said he should be fired when the stock was in the 50s and the 40s and the 30s. But when it got to low 20s, I said, enough already, it's too low.

What did Gelsinger do wrong? I can quibble over his serial overpromising and underdelivering, his endless vouchers of imminent success, his total cluelessness about how NVIDIA is running circles around his company. In truth, though, Intel had been left behind a long time ago, and while I admired Gelsinger's messianic desire to return the business to greatness, he just didn't have the horses.

So he stretched the balance sheet too far, made promises to the federal government in return for aid to build new factories, factories that he didn't really have any plan for or even need, and kept kicking the can down the road when it came to actually resuscitating the company. In the interim, he didn't see AMD coming for his PC and server business. While I admire Lisa Su, the CEO of AMD, for executing a masterful turnaround, she was helped by Intel's in-depth management. I think all the market share donations to AMD is a paramount reason why Intel's board finally woke up and did something.

I honestly never knew what to make of Intel under Gelsinger, what it would become, what heights could be scaled, what greatness could be restored. I heard that he was going to sell off all mobilized self-driving car business bought for $15.3 billion in 2017. He managed to spin off some of it in 2022, but the rest just sits there, unsold, unloved. I heard he was trying to sell Altera, a specialized semiconductor company that Intel acquired a decade ago for $16.7 billion. That failed as the business has fallen on hard times, ignored by, yes, Gelsinger.

Meanwhile, Gelsinger burned cash to the point where there was actual concern about a cash crunch developing. Remarkably, Intel is always known for a strong balance sheet. Not anymore. The whole time he insisted he was winning, he was beating NVIDIA with much faster chips. He was clobbering AMD with gigantic wins. He was in the thick of all the debates about semiconductors, and Intel's luster had already returned. Even as he kept retreating from his ambitions while scrambling to deliver on all sorts of promises as the clock ticked, promises that weren't met.

So the question is, was Gelsinger an honest promoter who didn't get a chance to fulfill his dreams of returning the firm to its proper place in the firmament? Or was he just a delusional CEO, ignominiously fired with no real plan to staunch the bleeding?

The stock did rally momentarily in the news, in part because I think that David Zinsser, the named co-CEO, well-respected CFO. I like the guy. And the other co-CEO, Michelle Johnson-Hultius, she's the general manager of client computing, might be able to resuscitate that business. That's very important. Then the stock fell as a dawn on investors that the task ahead could be unfathomable. Intel just got $7.8 billion of your money, federal government money, to expand its domestic semiconductor manufacturing. I hope the company can invest it wisely, something I was very worried about with Gelsinger.

I had to be worried. In the end, though, I appreciated Gelsinger's rah-rah approach. Intel's ranking file had been pretty beaten down. I do wish the company had said that it needed to go in a different direction. That's NFL speak for announcing a firing. The resignation thing didn't sit well with anyone, especially because it was done yesterday with no notice to anybody. No matter what.

As I said, not long after Gelsinger's tenure began, he just wasn't the right person for the job. The problem, after three years of Gelsinger's so-called leadership, maybe there's no one who can turn this one around. I like to say there's always a bull market somewhere. I promise I'll find it just for you right here on Mad Money. I'm Jim Cramer. See you tomorrow.

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