Mad Money w/ Jim Cramer 2/21/25
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I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now.

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people might be friends. I'm just trying to save you the money. My job is not just to entertain, but to put things in context. So call me at 1-800-743-CBC or tweet me at Jim Kramer. All right, we've got two markets right now. One is all about momentum. The other is all about old-fashioned growth. Momentum is nasty right now.

Classic growth. Well, it is cruising. House of pleasure. Regardless of the fundamentals, these cross-currents are not readily apparent when you look at the average. Dow tumbling 749 points. S&P plunging 1.71%. NASDAQ, jeez, plummeting 2.2%.

Now, if you own too much momentum, you are gasping for air. The oxygen has been turned off for you. If you own the old tried and true secular growth plays and are diversified, I'm talking about the Johnsons and Johnsons, the Coca-Cola's, your portfolio is actually doing pretty well. First time those stocks have worked in ages. So we've got to figure out, will this chasm heal?

Or will it grow ever wider? And for that, you know what we have to do? We have to turn to our game plan for next week, which has an important mixture of corporate earnings and economic news. Now, Monday starts with Domino's Pizza, DPC, which could give us real insight into the possible weakening of the consumer. By the way, that's the proximate cause of today's hideous market. Right after the election, consumers experienced a surprising level of euphoria.

but that seems to disappoint dissipated now i gotta ask you something is it happening all over economic levels is just rich is it the poor is it the middle is it temporary why don't we listen to russell wiener he's the ceo of domino's he's a straight shooter he's going to give us some real insight after the close we get results from cotera energy that's one of the best oil and gas companies which is why we own it for the travel trust with natural gas back up to four dollars more on that later when we interview the ceo of eqt the big natural gas company i think the future looks bright for this group

We also hear from one of my favorite real estate investment trusts I know boring. You know what? I like making money. It's never boring. Realty Income, letter O. I'm partial to this one because it pays a monthly dividend, which just got boosted earlier this week. I also care about Cleveland Cliffs, so when it reports, it says this steel company has been beaten up by cheap exports from China via Mexico. Trans-shipment, they call it. I worry about how it's doing and whether the U.S. can actually stop these darn subsidized trans-ship imports.

Finally, I have to tell you there's one stock that's become a true battleground here, and I don't mean Palantir. I'm talking about a stock called HIMSS and HERS Health. That's an online healthcare company that currently offers a less expensive alternative to the GLP-1 weight loss drugs as long as they're relatively unavailable. Now, today the FDA said that Novo Nordisk GLP-1 formulation is no longer in short supply.

which could mean that the compound and pharmacies that are making similar versions of the drug have to stop. Now, hims and hers have said it can still make the cheaper version some way, but the market seems skeptical. Hence, the stock's astounding 26% collapse today. But then again, it's still up more than 100% year-to-date. So profit-taking, I don't know, makes sense to me. Tuesday morning's big, all right.

We own Home Depot for the Chappell Trust, and we want to build a large position ahead of eventual rate cuts. And as I said yesterday on our monthly conference call, we expect a soft quarter because of weak housing. But the company will benefit from the need to rebuild after major storms both in the southeast and the fires in Los Angeles.

Now, next, there's Planet Fitness. This is one. It's a puzzle. It's a puzzle. Many stocks are puzzles. I think young people are more health conscious these days. They're trying to stay in shape, avoid unhealthy foods and, of course, beverages like liquor. Will Planet Fitness verify that thesis? I bet they do. How about a sleeper stock? One that's withstood the selling. Sempra. Sempra's a growth utility with a decent yield and a lot of opportunity. CEO Jeff Martin. Yeah.

Yes, many times. Can show you that this stock offered a better return than most of the traditional growth names. Now, when this might be worth buying on weakness, I'm debating to put it in the Chappell Trust. After the close we hear from Workday, that's an enterprise software company that got downgraded this week because of the possibility of softer sales. The enterprise software group is really at the heart of this market's weakness. If the sales are soft, I expect much more downside. Now, have you seen the action in Kava of late? This once beloved restaurant stock, although a still beloved chain, has plummeted.

And it's not because of the last quarter, which was stellar. I bet they reported another set of great numbers. But when Wall Street has turned against momentum stocks, it doesn't matter how well your business is doing. Falcavo way, if the quarter's great, we're circling back at lower levels. Wednesday?

New home sales. Oh, boy. This group has really just taken a licking. You know, it's basically a jailbreak of selling caused by a combination of bad weather and more important, high mortgage rates. It's crushing the home builders. We need a pickup to verify that housing isn't just falling off a cliff at this point. I'm actually not hopeful. The incredibly reliable toll brother is called the spring selling season mix. That's all we want to hear. We also hear from local.

which is always a horse race with Home Depot, but it's been a standout performer for years. Its stock never soars. It just quietly goes higher. I love that. After the close, we get some fireworks. There's Salesforce. Oh, boy, which is thought to be doing very well, but don't tell that to the shareholders who have been shellacked in a battle wave of selling.

This is a richly valued momentum stock. Although a stock, by the way, like ServiceNow, is much more expensive. Then there's Snowflake. The rent-to-cloud play that's become far more than that. Really, it's a real advisor to those who want to learn more about how to use artificial intelligence in their business. And then there's the most important company report this week, if not this year. Okay?

We had many reports offering forecasts of how the $3 trillion AI and accelerated computing company might be doing. They all came out today. They were all positive. All I can tell you is that we had a huge sell-off in the semis today, with the chief index off 3%. That's not a good sign for NVIDIA, which got decked, and it fell to 16.4%.

I say own it, don't trade it. But our strength may be tested by the possibility of a slow ramp in its Blackwell platform launch. New iterations of NVIDIA's chips have always been questioned for their worth. I bet CEO Jensen Wang offers a clear path for those who want to join the new industrial revolution that he's helped create. Oh, I hope it matters.

Thursday starts with the gross domestic product read, and I think it will be strong. As part of a business euphoria we got after the election, when the consensus quickly built that President Trump would be much better for business than his Democratic predecessor. Today, we saw interest rates fall. That's a pattern we had all week, which suggests that this GDP reading might be the last strong one. Again, that's not what I say. It's just what I'm looking at. That's what the market's telling me. In this tougher environment, the cruise stocks, well, they've held up relatively well.

Can Norwegian produce keep its winning streak going? Not clear. We got a couple of key momentum stocks reporting. Vistra, that's a power producer with nuclear exposure, making it a favorite stock among people who want to bet on the data center-driven electricity shortage. I saw Giofernova get trashed as part of the anti-momentum trade today. Maybe a positive reaction to Vistra could signal that the selling's over?

I don't hold my breath. After the closed Dell Technologies reports, this one's crucial. Its stock was clocked last time, and I think it could make a comeback given that it helps companies adopt NVIDIA's AI platform. Great company with a terrific CEO, Michael Dell. I don't believe it'll miss twice in a row that last quarter I didn't like. Finally, Friday, we get the personal consumption expenditure number. Now this is the Fed favorite inflation gauge. We saw real strength in bonds this week, which produces lower interest rates. Maybe it's because of the slackening of inflation.

That would be good. Or maybe it's because the economy is cooling. Not so hot and definitely bad for earnings. The PC reading, it could be dispositive here. So let me give you the bottom line. Out of nowhere, the momentum stocks had a hideous downturn today. It's hurt many aggressive growth investors. Can this pullback finally run its course? I hope so. If not, my prediction, more of... The House of A. Rose in Pennsylvania. Rose.

Yeah. Hi, Jim. I like your opinion, like to buy some of the trade desk after its recent pullback. But I would like your advice as to what's a good entry point price wise. And also, if you saw any reason why I should not do that. OK. Yeah, I did. Actually, I didn't like the quarter. Why didn't I like the quarter? Because Jeff told me.

that he was just that's I'm sorry, Jeff Green, the CEO in the conference call. He said, look, he's disappointed in himself. And it wasn't clear how much things have really changed and whether things are going to get better after one quarter. I think we now have to wait another quarter. I really do, Rose. I want to see the next quarter. I don't like to buy after the first big quarter. Maybe there's a second because it sure didn't seem like the quarter went out very well. And, you know, I like the company. Let's go to Chuck in North Carolina. Chuck.

We are Jim from Winter Wonderland, Durham, North Carolina. One of my favorite cities. I'm not kidding. Like it. I like Raleigh, too, just for the anger of those people. Sure. Thanks for taking my call tonight. I recently made an investment in a company we've talked about before. Heard you mentioned a lot today. A week later, it closed 50 percent above my purchase price a

I was thinking taking a little bit off the table. The stock is SMCI. I'd like to know what you think about Supermicrocomputer. I think you should absolutely take a little bit off the table. It's had incredible runs, a parabolic move. We know that we're going to hear from NVIDIA. That's going to knock down or take it up. Why don't you make a little, let's make some real money. You know what I really do? I'll tell you, if I were you, I would take out my cost basis and then I'd play with the house's money. Greg and Marilyn Gregg.

Big booyah from Maryland, Jim. Thank you for everything you do, and happy belated birthday. Oh, thank you. You're very kind. Let's go to work.

Let's go to work. I want to get your opinion on Devin Energy. Devin has run too much. I got to tell you, I've watched it go up. We saw the quarter. It's terrific. We got Kotaro Monday. That's great. And if EQT comes down, I like that two better than Devin. Devin is not my stock of choice at this time. Now, the downturn in momentum stocks has hurt a lot of aggressive growth shareholders.

If it doesn't run its course soon, well, guess where we're going to be? The House of May. May I invite you tonight with drops in temperature outside, could natural gas prices keep heading higher? I've got EQT's top brass to break down the recent natural gas rally. I like that one more than Devin. Then is the growth on the menu for Texas roadhouse after yesterday's earnings report? I actually liked it, but I'm going to talk about inflation and more with the CEO. And I'm helping you navigate this market's volatility as I answer some of our investing club members' burning questions. So stay with...

Cramer. Don't miss a second of Mad Money. Follow at Jim Cramer on X. Have a question? Tweet Cramer. 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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Over the past four months, the price of natural gas has basically doubled from just over $2 in late October to more than $4 today. Highest level, by the way, since the end of 2022. Now, sometimes because of the added lot of cold weather, some of it's more rampant liquefied natural gas exports. Plenty of it comes from utilities that desperately need to generate more electricity, but the data centers in particular.

That's translated some big gains for the natural gas producers, including EQT, one of the largest producers in America, with the stock that's climbed from the mid 30s in early November to 50 and changed as of today. Now, earlier this week, EQT reported stronger quarter. I mean, really better than expected production earnings, cash flow results and issued a solid year forecast. I got to tell you, I mean, these guys are really, really getting it right. And that's why the stock rallied a bit on Wednesday. All right. So I spent the last couple of sessions getting clobbered like everything else. But

A lot of people are starting to wonder what will happen to natural gas producers once we get past the winter and the Trump administration's pro-production policies start to push prices down, perhaps. So let's take a closer look with Toby Rice, the president and CEO of EQT Corp. Mr. Rice, welcome back to Mad Money. Hey, Jim, how you doing? So, Toby, I want to start first a little historical. You are a growth company that happens to be in the natural gas business. I want people to understand that because a lot of your compadres are running in place. That's not what you've been doing.

Yeah, there's a lot of momentum behind EQT. And Jim, you know, the tough part is we are a high growth business without growing production. We've been doing this in maintenance mode. And the key to the success has been an intense focus on increasing our margins. We've done that by lowering our cost curves.

And Jim, over the last five years, since we took over, we have seen our productivity capacity increase 50% through acquisitions. We've seen our cost structure come down by over 30%. And the most important metric of all, our free cash flow per share has doubled over that last five years.

We're just getting started. We're really excited about this setup and to continue the growth momentum in producing a high-quality business for our stakeholders. That's extraordinary, given the fact that most natural gas companies have been trying to keep their free cash flow even over the years. That's about the best they can do. Now, one of the reasons that is, and I think it's really interesting when you look back at people's conference calls, you were incredibly bullish about natural gas going in the year. Nobody else was. You get that stuff right. I know it's hard because you're predicting one of the toughest,

Toughest commodities in the world, but you sure nailed it.

Yeah, you know, natural gas is one of the more volatile commodities. And part of the reason why is because we've got we've crippled our ability to get infrastructure built in this country. What that means is market forces are pinched and are not allowed to flow freely. That causes volatility, our inability to get infrastructure built, lack of storage further exacerbates the problem. Then you throw in weather and that's a whole nother ballgame. You know, coming into this winter season,

I think it started off pretty mild, but very quickly we've seen much colder weather, and that has caused gas prices to go in November for 2025 from about $3 to now today over $4.20. Now, one thing people need to keep in mind when you step back and you look at this weather, this is only a 4% colder weather.

uh... winter than normal so this is not a major move and for people to look at these prices of four dollars twenty five cents for twenty five jim keep in mind this is still the most affordable energy source on the planet or on a twenty five cent natural gas is the equivalent of a twenty five dollar barrel of oil so on this is one of the great the challenges about after gas in the great things about natural gas is the affordability of the product we sell with the affordability stems from people like you understood there's a ton of

a ton of natural gas in the Marcellus, an area that a lot of people had written off even 10 years ago. But you had the foresight to be able to grow and grow and grow in that area. It has paid off big for you.

Yeah, but it's important to know we are in a new era of energy development here in this country. Thank goodness for the shale revolution that took place that transformed America from being energy dependent to being an energy powerhouse on the world stage. And Jim, we have never produced more energy than we're doing right now in this country. If you added up the oil and gas production

In America, thanks to the shale revolution, thanks to the wildcats and the roughnecks, we are producing over 30 million barrels a day of energy equivalent. Now here's the challenging part, Jim. People are scratching their heads because despite this record production, energy bills for American consumers are up over 35%. How does that happen? It's because political forces have overwhelmed market forces

And the simple solution is getting back to letting market forces work. And that means getting pipelines and energy infrastructure built, something we think is going to take place and allow us to connect to what is a really amazing demand setup for natural gas, whether you're talking about the continued momentum of evolving the energy sources we use, replacing coal with natural gas, or you talk about LNG providing security to our allies and lowering global emissions in the process, or

We could talk about the AI boom that's taking place. We've got major catalysts that are going to show between a 20 to 40 percent demand growth for natural gas in this country. It's a really exciting story. EQT is America's natural gas champion. Is it the center? Right now, it's being the center of it. There's a fantastic deck that you did. Page 18 data center demand becoming the cornerstone to natural gas because I thought they wanted to do it all with solar and wind here. What's the matter, Toby?

Man, Jim, I don't know what happened over the last couple months, but there's certainly been a renewed interest in the intensity for the appetite for this power to meet this demand.

We think one of this stems for the fact that people have been looking across all options and they're looking for the best energy possible. That means the most affordable, the most reliable, and the cleanest form of energy. And it took some time, but we firmly believe that natural gas is going to take the lion's share of power demand to meet this growing AI demand need. And people need to understand, this is not just a luxury item. This is not just going to make our apps better. This is absolutely critical that

America wins the AI race. And thanks to companies like EQT, we're going to make sure that our tech companies get all the energy they need to meet their demand. Well, I think everyone knows I've been pro-oil and gas for 20 years, in part because the industry itself is far more responsible. People don't realize that. You have been a remarkable steward. There are pages where you indicate that you were the first to net zero. But I

I want to go back to the government anyway. It is very clear to me that the first thing President Trump did was to get rid of that ridiculous pause that put so many projects on hold. Big projects that employed tens of thousands of people. The largest construction projects in America were all put on hold by one quick pause button in January 24. That's all gone now, right? I mean, you're free to trade, so to speak.

Yes, I think this administration is making it very clear that we are going to get back to letting market forces work, let market forces move the cheapest, most reliable, cleanest energy to the customers. We've seen the lift on the LNG pause. We've seen the push for more pipelines to get built to New England, which would be great. And Jim, it's about time because it's never been more. We've never produced more, but it's never been harder to do what we do in this country. And

People have heard energy executives say how difficult it is to get energy projects built. I get it. You guys have been hearing us say that for the last 15, 20 years. And we sort of get labeled as the boy who cries wolf. Well, Jim, what people need to understand is this pipeline cancellation movement that's taken place in this country is the first time that environmentalists have actually effectively shut down our ability to get energy to the places where they're sourced, to where they're needed. And that means after eight years of this, Jim,

the wolf is here. Our pipelines are maxed out. We need to get back to getting energy infrastructure built. We need to unleash American energy, build, baby, build. And thank goodness this administration will let this happen. And it could not happen at a more critical time in the face of this AI boom that's taking place. You know, our grid is very fragile, as people have talked about. And some people are saying that this AI demand surge

is going to be the straw that breaks the camel's back. If you ask me, this is going to be the log that breaks the camel's back. So we have got to get back to getting things built in this country and take our energy security and the affordability of this energy incredibly seriously. Well, you're a great spokesperson for the industry. And again, I want to just make sure people understand. Page 23, first traditional energy company of scale to reach net zero. He did say pipe, baby, pipe, so to speak. But you have never, ever, ever,

ever going against the wishes of the environmentalists. You've done everything you can to be as clean as you can, and I'm proud of you for doing that. It matters.

Absolutely. And we are going to be the operator of choice for all stakeholders. And that means we're going to produce the cleanest energy possible. And Jim, our commitment to environmental excellence is unwavering. We're going to continue to produce the cleanest energy on the planet. We're going to continue to find ways to lower the carbon footprint of our energy ecosystems. And addressing methane emissions was a big tool for us to do that. But Jim, why we did that is because we cannot let the carbon footprint associated with making our product

overshadow the emission reduction benefits when people use our product. And just to give your listeners an example here, our carbon footprint at EQT, it's about 400,000 tons per year. That's what it takes for us to run our rigs, run our frack crews, take care of the wells. And some people are saying we should stop natural gas development because of that 400,000 ton carbon footprint. But step back and understand this.

Those operations and that carbon footprint is going to produce an amount of natural gas when put on the world stage to replace coal, for example. It will have a decarbonizing impact of over 150 million tons. So a few hundred thousand ton cost for 150 million ton benefit.

This is the greatest deal in climate, and it's time that our industry starts stepping up and showing the world that these type of solutions exist, and we want to bring them to the world. Amen. Thank you for coming on and saying it, because that's probably the most important thing you've said about all the different things, because everybody wins with natural gas. Everybody. That's Toby Rice, president and CEO of EQT. What a company. Thank you, Toby. Great to see you. Thanks, Jim. May I have my respect here for a break?

Coming up, is everything bigger in Texas? Kramer's catching up with the CEO of Texas Roadhouse after the company's earnings report. Next.

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What just happened to the stock of Texas Roadhouse, the steakhouse chain I've been recommending for ages because it offers the consumer tremendous value. For a long time, the stock kept chugging higher, one of the few restaurant names that work precisely because its menu is relatively affordable compared with the tremendous quality of food.

I'm a patron. Last night, Texas Roadhouse reported what I thought was a pretty good quarter. Clean top and bottom line beat higher than expected same-store sales. But the stock got hit today, dragged down by management's commentary about the choppy month of February, not to mention the broader market-wide sell-off, of course. I wonder if this sell-off isn't excruciating.

given that Texas Roadhouse has already pulled back pretty substantially from its high in November. Now, we've got a small position in the stock for my travel trust, and I am looking to build it up. But first, I want to hear what management has to say. So let's check in with Jerry Morgans, the CEO of Texas Roadhouse, to get a better read on the quarter. Mr. Morgans, welcome back to Mad Money.

Thanks, Jim, for having me. Appreciate it. All right. So, Jerry, we got to straighten some things out because I think the analysts were trying to do their models. And I'm more thinking about the top down. One, you had a great quarter. And two, there were some really difficult weather conditions. And you really explained all of them. And yet I still feel that it's business as usual, meaning it's great at Texas Roadhouse.

Absolutely. You know, we had a great quarter. We had a great year. We had a great January. And then February, obviously, we got hit with some Mother Nature and some challenges. But, I mean, we had a tremendous Valentine's Day week, which was 20,000 average unit volume over what we normally do. So it tells me there's still a huge demand.

for legendary food and legendary service. So, Jerry, you also said on the call, though, if it's really cold and nasty out, people, unlike what the analysts, what their lives are like, people don't go out as much. And that makes a lot of sense to me. Yeah, I think so. They're going to come get our food. If you've got quality food, they're going to find a way to have it, you know, picked up or if they're coming in and they're going to want to get that.

Now, once again, people have to understand the early dime, which I've been to, still $10.99. You have that $5 drink menu. You've been swearing by that. You still represent, I think, what everybody in the industry would say is the affordable quality option. Nothing's changed, correct? Absolutely. Nothing has changed at all.

How are you able to, even though you talk about commodity inflation and that a lot, that is having to do with the steer herd, actual the cows, that's going to be two to a little bit more inflation, 2%, 3% going to three to four. How are you still able to offer that price that is so affordable if the steer is going up in price?

Well, you know, there's a lot of factors that come with that. But, you know, the bottom line is we have several offerings. You have a six ounce sirloin, an eight, an 11, a 16. You know, you can spend some money or you can be very value oriented. All of our steaks are

come with two made-from-scratch side items. So, I mean, the value is built into the menu all across, but we don't give you just one option or one choice. You can eat a six-ounce or you can eat a 16-ounce, a pound of beef if you want it. All right. So, Jerry, one of the things that a lot of the analysts seem to want is for you to put up flood the country with stores. Now, those of us who have been to different stores, Pennsylvania, New Jersey, Texas, know that if you start putting up 100 at a time, that may interfere with the quality. But

But are you able to grow to Wall Street satisfaction even as everyone says, well, wait a second, you need more stores?

Well, I do understand that concern, but I want to do it right. And I believe that the numbers that we have been very consistently producing for the last 20 plus years is a sweet spot for us to open a restaurant and to get it right the first time. As they say, you only get one chance to make a first impression. And that is very important to me. And I'm in this thing for the long term. You know, I understand that there are regrets.

requirements or needs or whatever. But my job is to run an organization that can produce quality food service and profits. Now, I saw something interesting and I'm not sure whether it's good or bad. You have a big mocktail business. I say that because as someone who was a restaurateur, I used to make a lot of money on actual liquor. Can you make any money on a mocktail?

Absolutely. I think it's just a new flavor style and it's not a flavored lemonade. It's a it's a whole soda based offering that a whole group of our new consumer or our consumer really believes in. And it's got you know, they want to have, you know, I don't know, a buddy of mine said that the camera eats first and that they're taking pictures of it. It's got to look cool, Jim, in order for them to buy it. And and yet they love that style of it.

Well, I know that when you post them online, that is the best way to get more people in. Now, I think you're an old-fashioned company, and I like that. And one of the things that I like about old-fashioned companies is when they put through a big dividend boost, you better sit up and listen, sit up and watch. It means something, right? That dividend boost that you just announced?

Yes, absolutely. We believe that, you know, we are we have the ability to do that through our performance and we want to give back to that shareholder. Now, digital kitchen. This could actually something we're thinking could really help the quarter. I'm thinking about how that you need to be worried about labor at all times. Can it make it so that you don't have a labor shortage in the in the back?

Well, I'll tell you, Jim, the biggest thing that it does is create a calmness. And it's more I mean, these are most of our employees are coming from concepts that have it. So the digital kitchen creates a calmer hour. I mean, it's a it's a monitor that tells them exactly what they need to do. If they need to fire 15 rice, then they know how to do that. So instead of them having to do the math and count individual checks,

The computer does that for them. So I think from that, it reduces the stress and creates a calmer environment. And I'll tell you, the operators love it. Our roadies and our back of the house employees absolutely love it. So, you know, we're full force in getting the whole concept rolled out. Makes a ton of sense. Which we should get done this year. One last thing. People need to know that if you're a manager and your managers are really pretty excited about working there. If you're a manager, you got a stake in the institution, don't you?

Oh, no doubt about it. No doubt about it. Execution is everything. And if you're a manager, any tool that you can use that would help you be more efficient, which is what we believe it can do. And as we get the whole concept rolled out, it'll be very beneficial. Am I wrong to focus too much on Texas Roadhouse? Should I be talking a little bit about Bubba's? It seemed to be come up a lot in the call.

Yeah, Bubba's is doing great for us. We're really excited. I mean, you know, a roadhouse of steaks and potatoes and country music and all of that side of it. Bubba's is more pizzas, burgers, and more of a rock and roll environment with sports on the TVs. It's just, it's got that same rowdy enthusiasm that we got. If you get there, you might get lit, Jim.

I haven't been lit in maybe 52 years. Anyway, Jerry Morgan, CEO of Texas Rotos. I'm so glad you came on on a really tough day in the market. We need to hear someone who recognizes, listen, it's just another day, but the institution lives on. Thank you, Jerry. Thanks for coming on.

Thank you, Jim. Appreciate you. All right. I've got to go get lit. It's the weekend. Man, money's back after the break. Coming up, missed out on yesterday's investing club monthly meeting. Kramer is tackling some of the leftover investing questions from club members. Next. Oh, man, what a nasty day. No, we're all feeling the pain, feeling it together.

On weeks like this one, where we see the S&P hit all-time highs one day and then the Dow lose 700 points the next, I like to return to the thing that makes our show unique, taking questions from you, our viewers. You're our bosses.

And in a miracle of good time, and we happened to hold our investing club monthly meeting yesterday. Once a month, Jeff Marks and I get together. We walk club members through our thought process of how we make decisions for portfolio. And then we take questions from club members. We thought it might be a perfect time to take a few questions that we weren't able to get to yesterday and maybe clear up some of these on yesterday.

really days that are very hard to understand. Remember, if you're not a member of the club, scan the code, go to cnbc.com slash investing club to sign up. If you don't scan the code, I'll get out of the way of the code. I don't know. All right.

All right, first up, we have a question from Andre, who says, "Congratulations on your Eagles winning the Super Bowl." Last time I was happy. "What do you see as the catalyst for Microsoft going above its current stagnant flattish levels?" All right, there's two catalysts. One is that I think they're going to have a monster good quarter because all they need to do is take a little lift in Azure, which is their cloud play. But the other is, I know, and this shouldn't, but they're talking a lot of quantum.

And there are a lot of people who feel that they may be the reserve for quantum, even like the Defense Department's quantum, let's say, offering. I don't buy that ladder. That's way too speculative. But I do think the numbers could be the estimates could be a little low and that would be the catalyst. That's why we hold on to it. Now, let's go to John in Illinois.

who asks, "I buy small positions of 10 to 20 shares of five to seven stocks. Is it best to take a little off the top if a position climbs greater than 56%? Try and understand when to take some profits." First of all, I want to dispel something. You are not small, okay? That is nonsense.

You're buying nice amounts of stock, and you need to start thinking that you are big, that the small stuff gets in people's head. You get these big titans on the oligarchs. You don't think you're important. You are important. When a stock goes up 40%, 50%, 60%, like we saw with CrowdStrike, we very quickly took some off. Why?

because it became too big. We don't want to swing. But also because we think parabolic moves are moves that go down more quickly than they go up. You're making the right move. You're taking little off. So if the stock drops big, you buy some back. That's your plan. Trading around a position we call it. It's something we specialize in. Now let's go to Mark in my home state of New Jersey, who asked, is Tesla a falling knife or SpaceX rocket ready to take off? It is neither. Tesla is a fantastic tech

company. We know there are people who are beginning to say, wait a second, I see Musk doing a lot of things. Maybe he's not focused on Tesla. Here's what he's focused on, making money in all his ventures and then saving money when it comes to the government. I have no problem with what he's doing. I would say this, though. EVs right now aren't selling well around the world. It is, in the end, short-term a car company, longer-term a tech company. Put a small position on it and then see if it comes down. No more than that. Next up,

Irvin, California, asked, PayPal has been in the doldrums since its huge runoff during COVID. In the last few months, it had a significant recovery, but it's now pulled back. Is PayPal on the right track to recover? This is very important. First, that quarter was not what I thought it would, and certainly was not up to snuff given how much the stock ran. But second, more important, they've got an analyst meeting, and they're going to give you a five-year plan.

When I have a company that has a five-year plan, I can measure it. I don't care about a quarter plan. That means nothing to me. I think the new CEO runs PayPal as a transparent, open guy who's doing a good job. Let's see what the five-year says, and then we'll make a decision. I've talked to Jeff Marks about the idea that maybe PayPal should be the fintech we own. I also like the Capital One Discover merger. That seems to be good, too. And don't forget, we are buying BlackRock right here.

Let's take a question from Nevin, who asks, given that many mega cap tech companies plan on spending 300 billion plus on AI in 2025, why do you think Nvidia's stock price hasn't set new highs? The stock has yet to recover the losses from DeepSeek news a few weeks back. And these mega techs confirmed that AI spending after this. I mean, what am I missing? Here's what you're missing. The fact is the stock is up huge still.

Now, we say own it, don't trade it, but we had to take a little bit off the top because we didn't want to be the NVIDIA fund. But you need to know this. When a stock is at this big a move, no matter what they say when they report next week, it may not be enough. So there are people who are taking profits now ahead of when it reports so they can buy stock back if they want to. Or they just say, you know what, we've made so much money in this company that we're not going to make any more. I personally feel that it's a great long-term investment, and we've owned it for a long time. We're going to continue to own it.

Next up, Robert in Connecticut wants to know, when you have an investment that rockets over 100% in six months and is trading at an extremely high P.E. ratio, what determines if you trim as per discipline versus selling it? I like to say to myself, wait a second, here we are. We are the NVIDIA fund.

I don't set out to be NVIDIA fund, but NVIDIA is going up so much. We are the NVIDIA fund. I don't like that. By the way, my friend David Tepper, who owns a huge amount of Alibaba and has had one of the greatest hits ever, I think he feels he has to trim it because he didn't want to be the Alibaba fund. All this, what's in your head is, oh my, every time NVIDIA goes down, I'm not doing well. We don't want any stock to dominate our brain. We don't want them renting our cranial.

Okay? They don't get that right. All right. Thanks again to all our club members. Mad Money's back after the break. Why don't you join the club? It's really pretty exciting. 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. It's time for the lightning round.

And then the lightning round is over. Are you ready? Let's keep that light round. Let's start with Jacob in Alaska. Jacob. Booyah, Jim. Thanks for taking my call. Of course, Jacob. Glad you're on the show. How can I help?

I started a position about six months ago, and after its recent earnings report, the stock pulled back a bit. And that said, I'm still sitting on about a solid 10% gain. But given the current setup, is it the buying opportunity to add more, or is it time to ring the register and take some profits and whirlpool? I didn't like that quarter at all. And that stock is very much in the penalty box. It's had a little bit of bounce. And what I say is, move on. I need to go to Charlie in California. Charlie.

Hey, Jim. I called a while back on FTAI. It was $80 a share back then. It got a little over $120. Is it too late to get in? No. No. As a matter of fact, I've got to tell you, anything Aero I'm going to be in favor of at this point, and you've got a good one, I think you just hold on to it, even though, I mean, it just got clocked today. I mean, but it was just part of the whole momentum trade. I think I like it damn good today. Let's go to Mary in Idaho, please. Mary.

Hi, Jim. Marion, Idaho, where it's only 45 degrees. How do you like that? It's snow on the ground. I got a guy. Why don't we do our show from Idaho? What the heck are we doing in New York? I mean, that's the heartland. Potato heartland. You're welcome to come out here anytime you want. I even have a spare bedroom. Bring your wife and your dog and we'll just... I got two dogs. Can you handle that?

Oh, anyway, we should do some work. We should do some work. One of them is just such a knucklehead, don't matter. Leave him outside. He's like a husky. Go ahead. Let's go to work.

I have an Irish setter, and he's a grand champion, and I'm very proud of him. I'm in a dilemma right now. I'm working on maybe expanding my portfolio, and while I've got some Broadcom stock, I was wondering if it would be a good idea maybe to get more Broadcom.

Right. I like Broadcom so much. I've got to tell you, I think it is just it is just terrific. And I like it to pull back to be able to buy more. That's my approach. And I like that Terrier because my executive producer's got one like Bandit or something. I don't know what the guy's name is, but I'd like to send you my knucklehead. I used to have a dog named NVIDIA. That dog had horse sense. Let's go to Don in South Dakota. Don.

Winter greetings, Jim. Long time listener. Your practical approach resonates out here on the tall grass prairie. Well, we love where you're from. We did some of our best shows ever there ever. Let's go to work.

Please advise us on the complexity of Bruce Flack's Rookfield Corporation. Man, that guy is so smart. I would wish he'd come on the show. They are real street operators. I wish I knew exactly what they own, but they seem to own everything that is just great. Now, that's the kind of stock that go down, and then I would be a buyer, not a seller. Let's offer that judgment. I'm not done. I'm going to go to Paul in Missouri. Paul, show me.

Booyah, Mr. Kramer. Booyah. Hey, I know past performance does not guarantee future results, as we found out in the Super Bowl. I thought you might like that one. But I talked to you three months ago about panel data. I-N-O-D. Say it.

What a stock. I mean, yeah, you were right. You're right. It's a high multiple stock and it didn't get hit today. How about that? That is what I call a hero stock. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, is there trouble ahead? Kramer is giving you his take on what's behind today's market sell-off and how best to position your portfolio. Next.

Wow. After today's miserable market, we've got to point to reasons about how things got so fouled up so fast. A big one? It looks like the consumer's in play, as we haven't seen in a while. This week, we got a series of readings, key numbers for home sales, consumer sentiment that show true softness, and a sense that maybe things are starting to go off the rails in the economy. Well, that's incredible, given the surprising head of steam we had going into 2025.

But before you conclude that the long-awaited slowdown has finally arrived, let me play devil's advocate for a moment. Sure, the market was crushed today. Pretty much everything, except some old-fashioned blue chips, won't give you more than those in a second. But you know what? It could be a false flag situation. The weather's been miserable for weeks across the entire country. As we heard from Texas Roadhouse, a terrific company, that weather's played havoc with all sorts of businesses. I say that because I just don't see this economy rolling over,

Maybe it is the storms. Maybe it is the cold. Unemployment's way too low, and that's the key determinant of a shift in sentiment and a concomitant cutback in spending. Now, we know things can't be all that bad, as today's stock market would indicate, because Walmart, the world's largest retailer, reported just yesterday, and it put up some staggering numbers for its most recent quarter.

Sure, management offered a note of caution to chill people and set the stock down hard. But you know what? I did a lot of work on this. The actual results were tremendous, and I don't see any sign of a crash in sales these last few weeks, despite what you may have heard. But let's say it's not the weather. What else can cause the weakness? Perhaps there's a sense that the Trump bump is over. We know that when he was elected, the business world cheered with both their voices and their dollars. It was spontaneous. Some of their bullishness spilled over to the market, and prices of all sorts of stocks went higher.

But now we find ourselves entering the second month of Trump's presidency, and some business people are starting to question the turmoil from Washington. It's making people feel uncertain. Plus, there's been no promised tax cuts, just lots of tariff talk that's confusing everyone with its ad hoc, capricious nature.

No, that's not a personal judgment for heaven's sake. One of the indicators we got this week, the University of Michigan Consumer Sentiment Read was appreciably more negative than we expected. That's a read on what I'm talking about. We know this economy runs on the consumer. Any sign of a real slowdown based on consumer confidence could be a shocker. And I'm struggling to find any reason for that besides the weather.

But this is what's causing it. We saw the results in the stock market all day, didn't we? The companies with super high growth rates and super expensive stocks. I'm talking about the Palantirs, the Apple Ovens. They got completely obliterated. The industrials were pulverized. Total lack of faith in almost everything. A sign that stocks perhaps might be too high?

Meanwhile, the stocks that do well in a recession, they went bonkers. Get a load of these. PepsiCo saw its stock rally nearly 3%, no reason whatsoever, other than the endless buying from people who were worried about a slowdown. Soda and potato chip king, 3.5% yield, could be mighty attractive in a slower economy with lower interest rates. Apple, Coca-Cola, almost 3% yield, saw its stock jump 2%. And J&J, Johnson & Johnson, long a liar, is now a winner, up roughly 1.6% today, thanks to its 3% yield. But that's not much else. Nothing else much new there.

So now let me put on my old trader's hat from the previous century and offer an alternative thesis. The stock market is often controlled by unseen forces. Namely, buyers and sellers who are desperate, flailing, taking action without putting much thought into it. The buyers moving PepsiCo, J&J, Coca-Cola are paying what can only be described as exaggerated prices here. It's like some very large accounts, meaning mutual or hedge funds, showed a total lack of restraint. Or they acted within fear. They had a desire to get these trades done no matter what by the end of the day.

They got the money they needed by liquidating the once red-hot momentum stocks. That side of the trade also was executed with furious abandon. What were they fearful of? More turmoil in Washington? Some weak housing numbers? Hey, maybe even a new coronavirus out of China? A story that's swirled around all day? Sometimes it's as simple as a bunch of money managers panicking at the same exact time.

Of course, something could be lurking. Sure. We don't know. I will be writing about it for my Sunday night think piece for you investing club members. Or maybe just maybe there was nothing other than sloppy portfolio magic. And if that's the case, you might end up kicking yourself for missing a tremendous buying opportunity. I'm going to give you some buying ideas on Sunday night, too. 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 Monday.

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