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all in one place. Holmes.com. We've done your homework. My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a homework in somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica.
I'll be with my friends. I was trying to make a little money. My job is to entertain, educate, and teach. So call me at 1-800-743-CBC. Tweet me, Jim Cramer. Now, you may think of the NFL's big game as a contest among great teams in the gridiron. Test of wills was only one winner for the Lombardi Trophy. You know how I feel about that. Yet, I'm always struck by how the event draws CEOs like flies to honey. It's impossible not to notice. Even when the Eagles come home with a resounding victory, go Birds, the CEOs are all there, especially when the game's in New Orleans.
which is why on a day when it took a shocking late-day rally to finish a positive chart track, Dow rising 10 points, S&P gaining 0.24%, NASDAQ advancing 0.07%, I want to talk about what I heard at the big game, what people are worried about.
and how those concerns are coloring your decisions and your stocks. I'm not overlooking what happened in the bizarrely positive close today by any means. I am saying that there did seem to be a gigantic program, money switching out of momentum and into classic growth, and it gained speed in the last few minutes of trading, taking the S&P to a record high. But it seems suspicious, and I didn't like the way it happened. Now, back to what matters. These CEOs I talked to, most of them are not political.
They tend to be somewhat old-fashioned. Call them Mitt Romney Republicans, Bill Clinton Democrats. They can remember a time when there was a lot less vitriol in Washington and a lot more teamwork, and they loved that. They didn't really fit into the current environment, so they dismissed Washington as much as possible, focusing on their knitting. So what are our views on the current situation? Well, let me give you a distilled version called sanitized. I'm going to limit it to business because while I, too, am sticking to my knitting, this is, after all, a business show.
First, nobody, I mean, nobody can figure out Donald Trump. These CEOs are baffled. They're confused. They mostly like that he's attacking the federal bureaucracy, not the deep state. They don't call it that, the bureaucracy. And they like that Elon Musk is doing it for him. While almost everyone caveated that they had personal views, actually at odds with Musk, a universally respected business person, Musk fascinates them as much as he's fascinated, the media is fascinated by him. They are adamant that if anyone can succeed in cutting the fat, it's Musk.
They all want him to take on the entitlements, Medicare, Medicaid, Social Security. And they want him to cut out budget, the waste in the defense budget. Let's call it that because they think there's a lot of waste there. And that's because of a lack of competition among the defense contractors.
They don't know why Musk is wasting his time on the small stuff. It makes no sense to them. Two, they all hate Trump's tariff plans. They do. These CEOs think that they're disorganized, make no real sense, won't raise any money and are real bad for business. Now, given my acknowledged and outspoken support for some of these tariffs, especially the ones that keep Chinese steel, say, out of the country by shutting down the Mexican border, I thought they might tone down their criticisms. But nope, they're free traders at heart and are totally befuddled by Trump's tariff agenda.
I said we should be putting tariffs even on South Korean and Japanese cars that are imported here. And that just provoked more skepticism. Look, I'm not a globalist. They're globalists. Three, there are admitted, there's been a shocking amount of new business going on in this country. They all admit that.
And to them, it's just sort of a wicked, which is dead mentality because business people no longer feel that the government is out to get them. There was a palpable dislike of the last administration's policies, even among the Democrats. They still can't believe how disrespected they were by the Biden White House. And that includes many big Democratic donors I spoke to. They all thought that the previous administration viewed them as rapacious capitalists, even when they had ideas that might work to slow inflation. It was
It was so grim, so gratuitous on the part of Biden, although many now question whether Biden himself even knows what was happening. It's real bad news for the Democratic candidates of the future. I was struck by that. Four, even though today the head of the FTC and the Justice Department said they would stand by the doctrine of the previous administration when it comes to antitrust, something that sounds as ominous as it gets, right? These CEOs aren't really worried.
Why? Because they know the new regulators won't be as dismissive as the old ones. They won't be hit by lawsuits out of left field. They'll be able to talk, to defend themselves before going. Everything goes fluid. They believe there will be some respect between them and the regulators. They look forward to constructive dialogue, even if the regulators end up siding against them. They despise the needlessly adversarial nature of both justice and the FTC under Biden. They've got me convinced that they're right. Absolutely. Five, they all want to know about Biden.
Nvidia. They're shocked at how this company came from nowhere and how Jensen Wong became king. I always say the same thing. He didn't come out of nowhere. He's been laboring for years and years and years and just now paying off. They were shocked at how the media portrayed the Chinese as being well ahead of Nvidia, even though Meta, Amazon, Tesla, and Alphabet keep ordering billions and billions of dollars worth of Nvidia technology. Do you think that these titans didn't know about DeepSeek and they bought anyway? Give me a break. That was their only conclusion. Now, they are
It's just funny the way things go. They talked about the video of the dog. My dog. That's because they're in awe of Jensen. They regard him as the classic American success story, and they're cheering for him. They all wish they bought the stock. Six, they think AI is real, but they really haven't figured out how to use it to save money and make the business more efficient. Almost every one of them has seen the Salesforce ads with Matthew McConaughey. They think they're really funny, but they're trying to see what Salesforce can do for them. Are they baffled by AI? You bet they are. Seven, they're all hoping there'll be some sort of rollback
of regulations, even as they said they can handle the regulations better than the little guys, which ultimately works in their favor. Doesn't matter. They just think that the civil servants in Washington never worked in private industry and don't know how onerous all the new rules are. If the regulators ever labored in real companies, these execs think it would be obvious that they're stifling creativity. Remember, this is them, not me. Although in my experience as a small business entrepreneur, I totally agree with them.
Eight, they're perplexed about Europe. Seem to think that it's just decided to not compete in anything except taxing tech and fining tech. They have total contempt for Europe and the way its institutions work. Nine, this is a wild one.
They're all rooting for Brian Nichols at Starbucks because they often find themselves with no choice but Starbucks. They tend to hate the licensed ones like the ones in the airport, wish Brian could fire the managers, bring in better people. They actually talk about this all the time. It's a high priority for the CEO demographic. They want a better Starbucks. Two of them are happy that they got their drinks in four minutes time from order to drinking. Yay, that was fantastic.
Ten, they almost all think the stock market's too high, but their stocks are too low. When I tell them that the market's too low and I like their stocks, they nod, but they think I'm a dreamer. When I say to them, I don't question you about how to make and sell your product. Why question me on how to value your stock? They almost always come back to it as a person. They say, yeah, you really did like Apple and NVIDIA.
Thank you. Which I say I still do. Bottom line, if you're talking to so many CEOs at the big game, I can give you a sense about what they cared about. And even though their views definitely aren't the same as, say, the average American, there's a lot more relevant to the way we do business in this country and to why the stock market just hit a new high again today. Let's go to Barbara in New York. Barbara.
Hi, James. I'm a new member of your club. Oh, fantastic. You'll be there Thursday, right? Thursday conference call, you know that. Yeah, your monthly meeting. Exactly, exactly. I am losing big time over 10% on Salesforce since I bought it. What should I do? Should I sell it? Let's get Benny off the phone right now. We're going to give him a little spanking.
Oh, shoot. He's texting me all day. Now, OK, look, Mark's done a great job. And look, absolutely. See, Mark, this is just the time. This happens. Now, we own Salesforce. We started buying it when it was at $8. It's had a big run. I don't blame you one bit for feeling like, ouch, that one's down a lot. And all I can do is say, and I'll say it on Thursday, is it's worth buying more and getting a better app.
average. Why? Because I think the company's going to have a blowout quarter. And I don't get it from Mark. That's what I think. Mark doesn't violate any rules. Although he did wish me a nice happy birthday and so did his mom, Joelle. It's really sweet. Hi, Joelle. Let's go. He loves the show. Let's go to Robert in New York, please. Robert.
Jim, I want to wish you a happy belated birthday. Your birthday was last week on February 10th, buddy. And I was thinking about you and I, and God bless you and have, I hope you had a great birthday. You're very kind. I had all the buddies down in the Atlantis and we had the Eagles game. It was really probably one of the greatest times of my life. Thank you. My wife is dynamite. She became, you know, she was real nice to me. Did she give you a nice cake? Did she give you a birthday cake? Uh,
No. All right, well, forget about that, Jimbo. I'll get you. Yeah, I know. She didn't get that.
All right. Forget about the birthday cake. I'll send it to you. Yeah, wait a minute. I said forget that shit. The channel wants to show, so this is just between you and me anyway. We're not going to, we're going to cut this part out of the show. Okay, we'll just cut it out. All right. All right, Jim. So anyway, Jim, on December 22nd, we spoke about this company that was trading at $72 a share. They offered the convertible note deal back then, and they also did a purchase of the stock back, which was brilliant because it stopped the shorts. Okay. And Jim, if
If everybody goes to the videotape, this is a fact. Go back to December 22nd and even before that last year when you were constantly telling me, Robert, this is a good one. You made me over 168% in the last six months. You have been flimsy. Listen.
Thank you. Thank you. You, you and left shin. You've interviewed this guy. You affirm baby. No, no. It's like, you know what? 10% of me yesterday in a big shot, you know, the Panthers guy, he goes, no, I like about you. You're smart enough to know you're stupid.
I know. I'm smart enough to know I'm stupid and Max Lefkin's real smart and a firm, which has had a remarkable run. It's not done. It hit a high today. Could back off a little. Lefkin's got it going. He's a great lender. Is he dynamite? I mean, is he something when he gets together with me?
Not at all. But that doesn't matter. Anyway, the views of CEOs are so relevant to how we do business in this country. And after talking to them at the big game, it's more clear to me than ever how the current landscape is shaping up. And it ain't so bad. How could this deep sea shake up the semiconductor stocks? I'm going to check with KLA. I can't believe we have KLA on. Top brass to get a read on the AI landscape. Then does Disney stocks need some pixie dust after that post-quarter pullback? I'm going to eye the streets concern and tell you where I stand.
And later, I'm glad about this one. I got J-Mill to hear about the latest tariff headlines. Could it impact the contract manufacturing? And man, is their business spoken. 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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Okay, regular viewers know I'm a huge believer in the AI revolution. And aside from video, which made trends come back over the past few weeks, there are a bunch of winners here that tend to stay out of the headlines. I want to get them...
In the front of the headlines, take KLA. All right, you may know it as the old KLA 10-core. They dropped the 10-core, which is a semiconductor capital equipment player. You're going to understand that when we're finished. When semiconductor plants want to expand production, especially for high-end chips, they need KLA's process controls, their yield management equipment. This is a company that put in an impressive set of results at the end of January, up
The guidance for the current quarter has helped the stock recovery after it got hammered by this deep-seek scare. We're going to talk about that, too. Sent down anything connected to AI, probably wrong. Even now, however, still down more than $10 from its January highs, despite the fact that those deep-seek hardware numbers were incredibly misleading, I think. Could this be a great buying opportunity? Let's check in with Rick Wallace. He's the president and CEO of KLA Corp. We'll learn more about it. Mr. Wallace, welcome to Mad Money.
Jim, thanks for having me and really appreciate this opportunity. Oh, no, this is great because I think a lot of people, their eyes, they don't know KLA. What does KLA do? And I always tell people KLA is the brains behind a lot of what you hear when you talk about semiconductor companies. So I think that this is a good opportunity for you to just set the record straight about where you sit in the process, because you're a lot bigger than people realize in terms of the whole ecosystem, semiconductor.
Yeah. Well, a couple of things. One, the reason I want to join you and share a perspective, because I think there's part of the ecosystem that the public doesn't understand. That's the part that we play. And also the history that we've had with high performance computing and how that fits in day. OK, so you got the floor. So if you just back up a minute, we were founded almost 50 years ago as a computer vision company.
So kind of forever, we've been processing data. So we were into big data before people talked about big data. We were into machine learning. And in about 2012, you remember there were some breakthroughs in what was called AI, and it was being used in search engines to find cats online, right? Right.
We were at the same time in 2012 using it to find defects on advanced processing. So we started deploying AI back then. And if you fast forward till today, it's a big part of our competitive difference, the fact that we have AI in every one of our products.
But it's also enabling an industry which is transforming not just because of AI, but high performance computing as well. Now, I think that one of the things that's in this news is the deep secret. There's like this Sputnik component of it, like maybe the Chinese are catching up to us. But there's something that's also really important, is that your stuff is so important that our government has to be sure that the Chinese don't necessarily get what they might fully want. And it's cost your company a great deal of money. But all you're
doing is doing the right thing and you comply fully but it has nicked your earns right and so two things one on that moment with the deep seek i mean i think it's important to recognize
That was really just a more efficient model. There's going to be more efficient models. But if you notice, all the hyperscalers since that announcement upped their CapEx. Right. Right. All four of them. And the reason they did that is we're in this period, and I know you've talked to others, this is a transformational period for the data center, not just because of AI, but because of high-performance computing. We have our own examples of it, but we're also... So our...
Our story is we're a user of it.
and we're an enabler of it in the fabs. Right. Now, when it comes to advanced demand environment in the foreseeable future, you see no impact from deep sea. Is it possible that might actually turn out to be positive? That you have more companies be able to get through the first part and then go to the more complicated stuff because they get through the first part so easy. Yeah. And I think if you look at AI deployment and as you know, any technology as it comes down in cost has more applications. Right.
Right. And so one of the challenges I think we've had with AI is how is it going to perform on the edge? And this is just another iteration in those models. But from a semiconductor demand,
We're lights out. I mean, in terms of the forecast, this is kind of a perfect time for the industry and for KLA. Right. Because of all these drivers are hitting at once. Now, in December 2nd of 2024, the government put on export controls. 140 Chinese groups added to the entity list. It's a blacklist. Your stock went up that time.
day. Is it possible that maybe things aren't nearly as dire between the two countries? I mean, I'm kind of hoping for world trade, but I also don't want us to give away everything. Well, so not my area, but I can tell you that our attitude toward export controls is we just want a level playing field. Fair enough. And when we look at
Some of the actions that have been taken, they applied to U.S. companies, but they didn't apply to our allies. So what we're hoping out of this administration is level playing field. Right. And it's entirely possible. I mean, we don't know yet, but it's not because not everybody's been confirmed. Now, there's one other business that I think is important.
that I want to just talk about is that everyone's mystified by Taiwan Semi. It is a big customer of yours. How do you interact? They buy your equipment. And the reason I mention this is because everyone thinks that we don't make anything in this country. Right. But we make the most sophisticated equipment in the world. We do. And we as a KLA is a net exporter. We export 88% of our product. But when we look at Taiwan or any customer, we have a model we've used for years.
we collaborate very closely with them. We have to work on problems five years in advance. And then the key to our success is collaboration, understanding their requirements, maybe sometimes better than they do from our standpoint, but then we have to innovate. And what drives our differentiation and our margins is our innovation. And if you look at the money, the percent of our revenue we spend on R&D, it's kind of unparalleled. And then the last part of this
is you have to execute. So nothing frustrates customers more than a great idea that you can execute. So we go around that wheel with all our customers, but as you've noted, TSMC has made tremendous progress and they are clearly well known to be in the lead. But I also, I'm not going to disagree with you, but you have treated shareholders really well. I know you spend R&D, but you also have been consistently doing the right thing for your shareholders.
Thank you. I guess when I got in this job, we met with shareholders and I was an engineer, right? So I didn't understand this part of it. But I realized we had to have a strategy that we could execute on
Right. And consistently, it's their money. It's not our money. It's their money. And you're clear over and over again in your documents. Right. And so we have to deliver for shareholders. And our view is they want predictability and they want us to do what we say we're going to do. Part of why you haven't seen us, we want to be the stock you put away in the drawer. Right. No drama. And I want you to be that. Yes. I don't want drama. I love your industry. I always have. If people put these stocks away, they'll become, I say it,
They'll do a lot better than a lot of other investments. And that's why I want to leave that. This is Rick Wallace, president and CEO of KLA Corporation. You know I like this industry because I've talked about it over and over again. This is where the real intellectual property resides. This is what we do best in America. Mad money's back in the room.
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including important safety information about risk for thyroid C-cell tumors at www.vitaminshop.com slash GLP-1 weight loss. At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace. A different future is closer than you think with Capella University. Learn more at capella.edu. I was fishing last week. They told me they only had steak for bait. I didn't know fish liked steak.
I got a little sidetracked because I couldn't stop thinking about something that happened earlier this month when Walt Disney reported what I thought was a pretty fantastic quarter on February 5th, yet the stock sold off down nearly 2.5% the same day.
At the time, I figured investors would quickly snap up this one. Oh, come on. By the debt. In fact, I don't think it even should have been down. But it's now been two weeks later and the stock of Disney still hasn't recovered. So I'm going to break this one down for you. Full disclosure, we've owned Disney for the Chapel Trust since 2018. And during that time, the stock's gone from a huge winner to being a frustrating hold.
But I've been willing to stick with it, especially since Bob Iger came back as CEO near the end of 2022. Sure, I threw my support behind Nelson Peltz, the famous activist investor, when he made a run at Disney last spring to get a board seat. I still think the company could have benefited from his advice. Long story short, though, I like Disney's entertainment portfolio and its underappreciated parks business, which is why we've stuck with the stock for years of underperformance. I think we are going to win big on this one, and I am patient.
Now, after the proxy fight, this thing started showing signs of life, climbing from 83 and change in August to 118 at the highs last year, largely thanks to a strong quarter in November. By the time we got the next earnings report a couple of weeks ago, the stock had pulled back to 113, but it was still looking pretty good. And then the company reported the stock sold off. I think it's crazy. This reported a modest revenue beat paired with a major 31 cent earnings trouncing of $1.45 basis. That's thanks to very successful cost cuts. Hey!
Those matter. They still count. The key theme of the quarter was impressive profitability. As all three of Disney's segments beat operating margin expectations, entertainment, the most important division, had a slight revenue miss, easily explained, and the cost cuts translated into much better than expected operating income. Or just look at the turnaround in their direct-to-consumer business, DTC, which is mostly the Disney Plus streaming platform. This used to be a money pit, constantly burning cash.
In the latest quarter, though, it generated $293 million in operating income. That's way ahead of what the analysts were looking for. Why did nobody care? Substantial improvement for the previous quarter. Streaming businesses now turn a profit in three of the past four quarters. I'll take it. The next biggest division is experiences. All right. Now, this includes the parks business, the criminally underrated Disney Cruises. You know, we had a good special on that. Excellent quarter.
A lot of investors were worried the business would be damaged by the hurricane, especially since one of them forced Disney World to close for a couple of days. But no, the Experiences Division did great with a terrific top and bottom line beat. I love this business. Hey, by the way, show me Netflix's Experiences Division.
They don't have it. Meanwhile, there's the smallest segment, sports, which is mostly ESPN. It also had a top and bottom line beat, for heaven's sake. Right now, Disney Sports Division is focused on the upcoming launch of a new flagship ESPN app. It should offer meaningful improvement from the current ESPN Plus streaming platform, although it's probably not coming until next fall. Still, it's nice to see the sports business delivering on profitability expectations ahead of time. Why didn't people focus on that?
So if everything was so darn great, why the heck did the stock pull back in response to the quarter? All right. There generally was not much hair on this one. I saw a couple of things cited. I mean, first, despite the generally strong results for the reported quarter, Disney didn't raise its full year forecast for the 2025 fiscal year, reiterating its call for high single digit adjusted earnings per share growth for the year, approximately $15 billion in cash provided by operations. Would I have liked a guidance hike? Sure. But
But I'm fine with management being cautious on the conference call. CFO Hugh Johnson, one of the all-time great finance guys out there, explained that the company felt it would be premature to raise its outlook so early in the year given the, quote, rapidly evolving, end quote, economic environment. Okay, he's a pro. That's what he should do. By the way, he did a great job for years as CFO of PepsiCo. He's handled this stuff. He knows how to handle it. He knows how to do these calls right. The other source of potential disappointment,
Disney Plus subscribers fell from 125.3 million to 124.6 million during the quarter. I didn't like this. That slip in the subscriber count came after Disney put through a $2 price hike in mid-October for most of its subscription plans. So a lot of hammering about it, the fact that hundreds of thousands of people chose to cancel. Now, Disney also had the misfortune of being compared to the aforementioned Netflix, which had just reported that it added a record 19 million subscribers in the same period. That hurt.
Again, though, I still feel pretty sanguine about Disney+. As we used to say in law school, Netflix is sui generis. It's in a class of its own. Disney+, will probably never be that good, but it's delivering profitable growth right now, and that's enough for me. It should be for you, too. On the conference call, CEO Bob Iger offered some more encouraging commentary on streaming subscribers, saying that the churn in the quarter was not as bad as management expected, given the price hikes.
He noted the total streaming subscribers still grew in the quarter. Thanks to one point six million game from Hulu. Disney expects overall subscriber growing growth for the streaming business this year. That's thanks to a great slate of movie titles, along with their password sharing crackdown and improved algorithm to recommend content.
Finally, on the weekend after the quarter, there was this really tough piece in the Wall Street Journal. It was called a high cost of Disney vacation. It mentioned that even Disney is worried about the issue. We think that spooks some investors, too, even if it's not exactly breaking news. So you don't want to be reading that your tickets cost too much. I come back, though, and I say, if prices are so high, why is the place always packed?
Overall, however, I found a lot to like on the conference call. And at that moment, it certainly seemed that Wall Street agreed with me, at least initially. On the day of the report, I was watching closely. Disney opened up more than $2. At one point in early trading, the stock hit a high of $118 and change. That's up nearly 5% from the previous day's close. Then the stock reversed hideously, finishing down that day almost 2.5%. And it has not recovered since.
However, after looking into the reasons why people sold Disney after the quarter, I got to tell you, I think the bear case. Then I'm sticking with my gut that this was an excellent quarter for Disney and the weakness in the stock since the quarter is indeed a clear buying opportunity, especially if you don't already have position this one. We bought some more last week for the trust. And on Thursday's noon club meeting, I will certainly be pounding the table on this one, too. Buy, buy, buy.
Right here the kicker at this latest pullback Disney trades is just under 20 times this year's earnings. This was premier growth stock It's cheapest it's been in ages So here's the bottom line did you reported an excellent quarter a couple of weeks ago, but didn't get any credit for it? Mostly because management didn't want to aggressively raise their full-year forecast so early in the year But the dip here has created terrific buying opportunity for you with the stock now trading at bargain levels Relative to the kind of valuation it used to get so you know what time to take a page from Jalen hurts because we're going to Disney World Let's take some questions
Let's go to Bill in Massachusetts. Bill! Jimbo, it's your friend Boston Bill. Happy belated birthday, my friend. You're terrific for mentioning that with my historic birthday. Thank you very much.
Listen, everything's been doing great. I've been with the club. This is going into our fourth year with the club, and I'm loving it. Thank you, Bill. I hope you're on the call Thursday. I hope you're on the call Thursday at 12. We'll give you a shout-out. All right, thank you. Absolutely. Your staff's incredible, and I just wanted your opinion on Netflix. It never seems to come down enough to really buy it, but today it came down a little. I wanted to know your opinion. Thank you.
momentum. First of all, Bill, thank you for being so loyal. Thank you for being a member of the club. I look forward to Thursday's call because I know people who like it. Let me give you the Netflix story. It's skinny very quickly. Every momentum stock came down today. This was an attack on momentum and back into other classic growth stocks. And what an opportunity to buy the stock at Netflix. I do like that company very much. You know from the club that Disney's cheap, but Netflix is sui generis and unlike it. Anyway, look, Disney did report an excellent quarter, and the stock shouldn't be down. It's trading at one of the cheapest valuations. I
I rarely pound the table like this. I think it's probably time for you to start a position. Hey, much more mad money, including my student with J-Bill. Oh, my God, what a stock that is. It hit a new all-time high last month. Then what should you make of the valuation of some of these decade-standout IPOs? I'm breaking down the perspective of the retail investor. And order calls rapid-fire in tonight's edition of The Lightning Round. So stay with Kramer.
All right, what in the world has gotten into the stock of J. Bill? The outsourced manufacturing formerly known as J. Bill Circuit Company. Now, here's a company that does contract manufacturing for everything from electronics to autos to health care. And its stock has been on fire ever since the company reported a tremendous quarter back in December. It's now up more than 25% in the past two months, setting foot into fresh all-time high territory. I have always loved this company. Now, there's a wrinkle here. J. Bill's a global operator in a world where the president of the United States has gotten pretty aggressive with his tariffs.
Can Jabil keep thriving in this environment? I think they can. Let's get a closer look with Mike Daschler. He's the CEO of Jabil. To find out more, Mr. Daschler, welcome to Mad Money. Thank you for having me. I'm very excited to have you because I think that we finally get to explain to people that there are American companies that literally can make anything and make anything anywhere better than anyone else. I've always been proud to know what your company does. Explain to them how you are worldwide, but everybody seems to count on you.
- So one of the things we do, a lot of people think we're just a manufacturing company.
We're actually an engineering-led, supply chain-enabled manufacturing company. We have thousands of engineers, about 10,000 engineers, be it in design engineering or production engineering, mechanical engineering. We have supply chain teams that handle 38,000 vendors, 700,000 parts. So it's a huge organization that does supply chain for us as well. And then manufacturing in 30 countries, like you said, worldwide.
We're in almost every single manufacturing company there is. And if you look at the brands that we have, they're the top brands in the world today. So it's just a perfect layer. Now, you seem to be
I don't want to say experts at everything because that would be jack of all trades, but GLP, you've got the injectors. But then next thing you know, you're doing auto-assisted driving. But then you're doing data center. I think we should start with the latter just because they're so in the news. If I go to a data center, it may be a J-bill center. So one of the things, if you look at the whole ecosystem of that whole AI data center piece, it starts with a semiconductor company.
piece. We actually build wafer fab equipment for foundries. We actually build the testing equipment as well on the back end of foundries. And then we have OSAT, silicon photonics and servers and racks. We do thousands of servers and racks. We enable. Including for Amazon, which just did a deal with you that makes it cements the relationship, a hugely important warrant deal.
Absolutely. And then if you go further beyond that, we actually do the power from grid to the chip and cooling from chip to outdoors. So it's a complete ecosystem, a complete package solution that we provide. So who would call you to do that? Is it the Oracles of the world, the Dells, the HPEs?
Who brings you in? So today, our largest customer is the hyperscaler you mentioned. Obviously, we do different pieces for them. What we're looking at is customers coming individually for the different pieces. So equipment makers on the foundry side, somebody, a switch maker might want silicon photonics.
We can do OSAT packaging to sort of reduce the amount of ping pong that takes place between the Americas and Asia. The wafer has to get packaged, comes back. We can avoid all those by doing it all in the Americas.
I know you have huge American, you tell you, giant American footprint. Don't feel like that you're all overseas and therefore you have no place to go if there's a lot of tariffs. I am interested, I think our viewers are very interested in this. Do people have just drawings, like plans, that that's all they do and then they give them to you? Is that what happens? Specifically on the hyperscale? Yeah, like a contract manufacturer, anything for a data center. They have something in mind.
But then they give it to you to make. Correct. So I think it's not the construction per se. It's all the components that go within a data center. And I think the power requirements are so critical today that you have to get that power from the grid to the chip.
And the cooling, the liquid cooling, air cooling technologies are evolving rapidly there. We actually made an acquisition recently on liquid cooling. And that was to give us a heads up on this data center infrastructure. Which is sensational because everyone's worried about liquid cooling. You can't just have these data centers burn so hot. Correct. And if you look forward, so today retrofitted, most of the data centers are retrofitted. And that's liquid to air. Right, right.
The newer data centers, because of the power requirements, because of the thermal management requirements, will all have to be liquid to liquid. And that's the acquisition that we've made. It's the technology. It's the engineering. It's the design piece. I thought it was brilliant. Now.
I do a lot. I do. My family does business in Mexico. You're in Chihuahua, Guadalajara. You're in Monterey. You're in Tijuana. You're in Juarez. The president, we don't know what they're going to do. Peter Navarro, his old friend, my teacher by a college, just wants to really make a point that you can't move Chinese steel through Mexico. But then everybody gets hurt. But now you're a manufacturer. You kind of want to do what your customers do. What are you telling your customers that they should do?
So one thing with tariffs, first, before anything, tariffs to us are a pass-through cost. So we don't take on the tariff cost. It's a customer issue. Now, there might be a customer and demand issue if the costs go up quite a bit, but it's not on us. I think
the tariff situation, not just Mexico, the reciprocal tariffs, everything's going to create a little bit of volatility. And one good thing for J-Will is in these volatile times, it's actually an opportunity for us. Who would you go to
to move your manufacturing around. We are in 30 countries. We know the local jurisdictions. We know where to get labor from. We know what the rules are, the laws, taxes, etc. So we're in a really good position to move product around. Lift and shift. Lift and shift. And lift and shift is important because
Sometimes when you move products or manufacturing across, the labor is not available. In which case, you need automation and robotics to go with that lift and shift. Right. If somebody asks you, which is cheaper to make in Mexico? It's an unfair setup because obviously the two countries are very different. But if you can have robots, you can have manufacturing, then it doesn't matter. And that's one of the things that I think whatever is the best way for the customers, what you do. Correct. And I think if you look at what we have in the U.S., we have 30 sites in the U.S.,
So we're really well positioned whether people want to move from overseas here or they want to move from one jurisdiction to another. We have sites across. My wife says we should go to Croatia. Suddenly you've got to play in Croatia. Maybe we'll be a film crew. That's for injectables, right? Correct. So it shows how nimble we are because we actually started that facility for EVs.
Really? And then we quickly adopted to GLP-1s. And the GLP-1 automation, the scale, an interesting fact, we make $500 million
diabetes, insulin, and GLP-1 pens. What a business. We're the largest manufacturer of diabetes pens. Which is incredible. People always want to know whether it's a Lilly or Nova that makes it. They got a company that does make it. I want to thank Mike Daskor. He's the CEO of JBL. You've got to look at this company, JBL. As soon as I started reading, I said, this is one I should have for my travel trial. Spam Bunny's back in. It is time. It's time for the Lighting Up. Let's talk about myself. You're glad it's out.
And then the lightning round is over. Are you ready? I'm going to start with Dan in Washington. Dan. Hey, a big evergreen state booyah to you, Jim. I'm liking that. I'm liking that a lot. What do you got for me?
So Dutch Bros, B-R-O-S, been in it for about a year and a half. Had a solid run up, great earnings last week. Just wondering if I should take profits here or if this thing's going to be- Chief, there's never anything wrong with taking a little profit. Absolutely not. This stock has been a rocket. It was up 63% for the year. That said, you know how I feel a long time about the annihilator and all the other tricks. And I was on this Dutch Bros before anybody. That was because of my daughter, Cece, who just told me, listen, there's nothing like it. And she was right and they're right. And I do like the company very much.
How about we hit Lamont in Tennessee? Lamont. Hey, Jim. Lamont in Nashville. I've always got that standing music. Have you seen my Airbnb on Music Row and some hot chicken? Best hot chicken in the nation. Sunshine, you got me on the first words there.
Hey, my son Jackson and I are looking to build up his top portfolio. I'm thinking about Archer Aviation, probably a six-year play. Okay, here's the deal. Because you said it was for your son, I'm going to okay it. I'll tell you what.
Because the strangest thing happened. A lot of people think this thing's a little like, I don't know, a little out of, you know, a lot of kind of, I don't know, lost in space. But Archer received its FAA certification to have a public training academy. So maybe this thing is for real. Then if it's your boys, it's fine. He's got his whole life ahead of him. Don't put your money in, put his. Okay, now we're going to Bob in New York. Hi, Jim.
Mm-hmm.
Am I wrong? No, you're totally right. Amazon is what I call money side up. And I think you ought to understand this about this thing. This thing can go down. And when it goes down, what do you do? You buy it. That's what we tell club members. I regard this stock going down as a gift. Well, you wouldn't be able to get it otherwise. This thing is amazing. And, you know, it's like people who are like ordering from Amazon are selling the stock. I mean, think about that. That makes no sense to me. Let's go to Foster in Kentucky. Foster.
Booyah, Jim! Oh my God. I'm such a longtime fan. So happy to talk to you. Fantastic.
Man, my question's about Alphabet. $75 billion in CapEx expenditures seems a little desperate to me when you consider all the new competitors in the AI space. Do you still think they're a good buy at this point? Not as much. I mean, people know, members of my club, they know I've been selling it down and selling it down and selling it down. Would it be the first one that I leave of the mag? Yeah, except for it does sell only for 20 times earnings, but...
I think they really got to rethink what their game plan is here. Because I feel like Gemini competes with the Google search. And the thing is, like, the ads is, like, endless. And they don't know how to monitor the YouTube. And the next thing I know, it's like, will you please put me in charge? I will clean up that son of a bitch. It'll be at 250. I was there. I'm not kidding. I'll run that thing. I'll get it to 250. And then it's, see you later. Let's go to Jeff. Oh, he's a short-term guy. Let's go to Jeff in Michigan right now. Jeff.
That's very true.
Okay. All right. I'm going to get straight to it. I know you don't have much time. That's all right. Why did they flip it out to Williams? What was Williams thinking? That was like the dumbest play. I mean, I liked it. I know. But, like, are you kidding me? To Williams? You flip it to me, I'm going to do better than Williams did. And he was SSPD in the midseason. That's what that was all about. Now we got to work. Okay. Okay.
All right. I'm a longtime investor for myself and my kids, but I recently had a grandbaby and she's almost two years old. Her name is Layla Bear. We call her Layla Bear. So I've been looking at future stocks like low, like under $10. And I was going to get Palantir when it was like 27. And I wish I would have done it. I could kick myself for not doing it. But I started looking into some of the companies that they're partnering with. And Redcat is one of them. It's a
Yeah. Well, this just happens to be a personal favorite of our chief scientist, Ben Stoto. We talk about Red Cat a lot. Look, it's a data analytics company. You know what? I'm going to tell you, for spec, you can buy it. You really can. Red Cat. I mean, only because if it doubled, you'd feel like an idiot for not buying Red Cat. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.
You may not know it unless you're a member of the CBC Investing Club, but every Sunday I pour my heart out into a piece about what frustrates me, what I think is really going on. I was going to wait until my talk this Thursday's noon Investing Club meeting, but I don't want to wait. I want to give you a glimpse of what I bring to the weekend reading party. My premise...
While it's become a lot harder to launch a successful IPO in the last decade, every once in a while you have some spectacular offerings that make people just worthless. They tend to fall into two categories. Either they're highly accessible or they're so dominant in their industry that they're widely seen as unstoppable. Let me give you a sense of what I mean here.
Let's start with a company that almost nobody's heard of called Applovin, which one came public in 2021. Now this is $180 billion company helps mobile video game developers with in-game advertising, which is how most of these games make money. You might wonder how in the world Applovin got that kind of valuation. But when you look at last week's quarterly report, they earned $1.73 per share whilst it was looking for $1.26.
That's up from 49 cents to year four. That stock is up because they've got a level of stunning growth. Hard to believe. There's just one problem. The people who know Apple often took it to ridiculous levels, 380 to 510 in a two-day rally after the quarter. Today it came back $14 a year, and it still sells for over 75 times this year's earnings.
which brings me to the chief conundrum of this new class of companies. How do you pick your value? What do you pay for that kind of growth? Honestly, I have no idea. It's whatever the market will bear. And I can't invest like that. I just came back from the Bahamas where I stayed at the Atlantis, played a lot of blackjack. The rules of blackjack, when you hit, when you split, when you double down, they're much more clear than what you're supposed to do with something like hot blooded. This one feels like you have a nine and a face card and you hit and you pull a two.
Let me give you another example. Palantir. Yeah, this came public in 2022. I'm sorry, in 2020. Two. And it's now so beloved by home gamers that it doesn't even matter what the company has to say. Palantir now has a $292 billion market cap, something that seems downright preposterous, with the stock selling at 435 times earnings. Obscenely expensive. But then again, the numbers also are exceedingly great.
Every time the stock gets hit, this data analytics company that very few people understand goes bonkers. CEO Alex Karp was on Squawk Box this morning promoting his new book for the second time on our network, I should add. And anytime he speaks, the stock goes higher. He did it again today, up five bucks, another all-time high. Man, there's a lot of talk that Elon Musk may tap Palantir to help out fund costs to be cut in the defense department.
If the company gets that contract, the stock's recent rally will be entirely justified. Right now, though, people are valuing Palantir like they valued GameStop at the absolute high. Except, well, like GameStop, Palantir has a brain and a real growth story.
Problem is the Reddit. That's the one, the red hot recent IPO ran to 230 last week before being clobbered by a quarter that Wall Street didn't exactly love. Reddit had a little problem, unexpected miss in daily average users, but apparently it was caused by a change in the Google search algorithm. No company with a smoking hot stock can afford to have that happen. However, as someone who started a website journalism business in the street, I can tell you this stuff happens all the time. Google changes its algorithm every several times without my knowledge and we'd miss our quarter by a mile. I think
I think you should take advantage of this pullback and do some buying, because loving Redditors are confused about the worth of their institution now. This one had a $40 billion valuation in its highs, now under $34 billion, but it's the repository of so much content that can be gobbled up by the likes of the chat box of Grok or MetAI or ChatGPT. All three of these stocks have one thing in common. Their shares are controlled by what we call retail. The
The retail investors fall in love and stay in love. That means this trio will just keep going and going and going, maybe even to even more absurd levels. But we have to respect the return of the public and their ardor for super growth companies, because that ardor is what sends their stocks higher after every single dip. I like to say there's always a bull market somewhere. Problems I'd find just for you right here on MidMoney. I'm Jim Cramer. I'm going to see you tomorrow.
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.
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