Mad Money w/ Jim Cramer 2/24/25
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Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson report.

Sometimes you have to break from tradition to make something better, or in this case, a smoother spirit. Martel Blue Swift is made of French cognac, but because it's finished in bourbon barrels from America, they're not allowed to call it cognac. The shockingly smooth taste is rich and aromatic with distinctive hints of toasted oak from the bourbon casks, making it perfect for cocktails. Martel Blue Swift. Defy expectations. Enjoy our quality responsibly.

My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other than that, friends, I'm just trying to save a little money. My job is not just to entertain, but to put this all in context, to educate. So call me at 1-800-743-CMC. Tweet me, Jim Kramer.

The fad stocks, they need to go down before non-fad stocks can triumph. That's what's happening. It's just a fact of life in this business. After last week's meltdown and all things faddish, it's a rare positive in a sea of negativity that this thing is running its course. And that's what I'm thinking when the Dow inched up 33 points, S&P shed 0.5%, but the Nasdaq tumbled 1.21%, turning negative for the year. Now, I want to make clear, by the way, the decline came at the end of the day.

I don't know what caused it, but it was pronounced, it was nasty. Now nobody wants anybody to lose money, including me. But there's a thing called froth and we gotta talk about it as froth is the enemy of prudence. Smart investing requires a degree of prudence, something that's highly incompatible with froth.

We've had froth galore and not a lot of prunes running this hideous market that we got last Thursday and Friday and the end of the day. Now, the froth has fallen flat. I mean, if we were ordering a cappuccino at Starbucks after waiting for four minutes, that bad, we'd return it. No froth. The answer, it's been tamped down by people who want something else with a little more staying power. That's why the drug stocks have been going up. But let's speak to the frothiest of froth, quantum computing.

Yeah, it is pretty funny when you think about it. We know that before Microsoft started talking about quantum computing and being all jazzed and bulled up about it, there was this fringe quality to the entire theme. Then Microsoft went all in about quantum computing based on an all-new source of matter. Made it sound like quantum's around the corner. Nothing could be more authoritative than Microsoft telling a hot story about quantum.

until Friday evening when we saw a piece in the Wall Street Journal entitled, quote, physicists question Microsoft's quantum claim, end quote. Whoa, scary. It was a total takedown of Microsoft's quantum computing pitch. It was a vicious beating. Here's the snippet, quote, this is where you cross over from the realm of science to advertising, end quote, said J. Sal.

a theoretical condensed matter physicist at the University of Maryland. This professor with a terrific title, I mean, come on, theoretical condensed matter? I mean, like, I know condensed milk. I don't know condensed matter. Talked about a guy who knows his stuff. He even worked for Microsoft on some odd jobs, maybe. Gotta like an expert who's willing to cross a pretty darn big employer with some truth that sent down all the quantum computing stocks. Rigor one, froth nothing. Can we please stick a knife in quantum already?

Or how about the walloping of the nuclear power utilities like Vistra and Constellation Energy? These stocks are on a roller coaster. Right now, they're on the downside. They trade like they weren't even wearing their seatbelts when you were going down, which is what, you know what happens? You fly up and then you land on your head. Microsoft had a hand in the fourth year, too, except this time at least it was negative. See, these momentum utility stocks, all data center plays, won't be as important if Microsoft's actually cutting capital expenditures from data centers, which is also what we heard on Friday.

But why the heck do we need to bid up the stocks of tangential utilities when maybe we don't even need to worry about the regular utilities? Maybe they got enough power. Of course, we don't need Constellation or Vistra. We really don't need that. If we don't want them, you know, we'll tell you what we really don't need. We don't need the nuclear fission through Oklo, a total fan favorite. That's one of the most speculative stocks out there. Hence why it's been such a it's frightening when you own.

A stock because of quantum computing prospects. And then those hopes are dashed by an authoritative expert. It's terrifying when you own nuclear power derivative and a big nuclear believer says it might not need that much all that much energy. Either that or it isn't going to order a lot of chips from NVIDIA, which reports Wednesday. I'm trying to prep you.

Of course, this whole alleged slowdown in the data center occurs right in front of NVIDIA's earnings. Here's a terrific company with a stock that's just absolutely wilted. I mean, unbelievable. Now, has NVIDIA been a part of the froth? Let's just say that it won't be if it keeps delivering the way it used to, but it will be if it gets up to ghost. This one's starting to feel like the Kansas City Chiefs. Hey, listen, three weeks ago, we thought they were great going into the big game. We know that the Chiefs weren't for gazies.

They've won a lot of games. It's just that maybe they're up against such a staggeringly powerful team of players like the Eagles that it doesn't even matter what they do or say. Less frothy than usual, but still frothy nonetheless. That's how Nvidia feels to me, like the Chiefs. I still say own it, don't trade it, but don't have any expectations of this particular quarter.

Oh, then there's Palantir. This stock is more or less managed by Alex Karp, the CEO. He makes sure there's excitement and pizzazz around what the company does. He'd walk a mile for a camera, this guy. He tells you to ignore the slowdown in Europe or blame it on the pathetic continent. He's on the most high-level book tour in history. I hope he's like Elon Musk and do business while he's on the road. I'm sure if I ask him, he'll say he's working harder in the time between book interviews and that anyone who's worried about him is, therefore, a big, fat idiot.

But Palantir stock is getting clobbered because it has had a parabolic move. And right now, this data analytics company needs a huge, noisy client win. Carp needs fellow promoter Elon Musk to hire Palantir to reform the Pentagon. This stock rallied to 125 at its highest last week. It's now at 90 and changed. Is this in all the king's horses stock? No, not at all. It's just that something needs to happen good at Palantir. Some big contracts, some big win, not just a book tour.

Anything that can reset the narrative because the potty mouth CEO is saying that he's all about lethality and ontology.

Hey, my name, I'm the Lethality King. I know that many young people are pro-froth. They bid up these momentum stocks in the morning, gunning them to get them noticed. When you see them running at, say, 7.30, 8 a.m., you look them up, and they always sound so great. You know what? You can literally make them up, so let's do that. Can you imagine, like, there's, how about this one? I'll create this one. EVA, that's an electric engine company that's designed to coordinate with NVIDIA's Blackwell platform to be able to navigate the streets of San Francisco and Los Angeles.

Oh, there's Space Y, which launches satellites in order to send fire, hospital, and cop shows to you if you cut the cord. And then there's Palantory, a company that makes artificially intelligent Pilates that can find waste in the Pentagon once the Pilates are brought into the Pentagon by curly-haired, foul-mouthed Pilatos people. And finally, there's my favorite...

Clot Dog, which is a company that has found a way to combine fusion with fission to create brand new state of matter while combating electric fission. If you are looking up the symbols of any of these, then I think you may be what I think Palantir calls people that don't know what they're doing. Now, I know there are real people who work at Rigetti or D-Wave or Quantum Corp. They probably

They probably go to work. They talk about quibbets and developing quantum materials that have never been ever seen before. I'm sure that if you hire Palantir, it's like hiring the Spartans and your company's opponents are going to die in hell. Very compelling stuff. But it doesn't tell you much about the earnings power, which is what I care about. Now, froth is hard to kill. If you talk about quantum, you're actually trying to hurt NVIDIA. And who doesn't want to try that these days? But the fact is, until the froth is slain,

it hasn't been, as people are still abusing these, until it's slain and its ingredients, including everything that's still bathing in the glow of the now-curtailed data center business, we can't find terra firma. So here's the bottom line. Once these frothy momentum stocks come in enough, then we will finally be in a much more straightforward world, a world where what tends to rally is not the sizzle, but the steak. Barry in Florida. Barry. Hey, Jim. Barry here.

First of all, let me say I spend more time with you than most other people, an hour in the morning, then 10 minutes, an hour later, 10 minutes with you. Let's keep that between us. Barry, let's keep that between us. We will not put that over. Regina, can we cut that out? Because Barry and I are spending too much time together. Go ahead, Barry. Yeah, edit that one. Yeah. So I have a question. Many of us are confused about a lot of stocks. FedEx is the one I'd like to ask you about this evening.

Okay, so FedEx, there were a lot of rumors that Amazon's going to do more in kind of the trucking business that FedEx does. Now, let me just tell you something. FedEx doesn't do anything with Amazon, all right? FedEx stock is down very big. It's at 253. I'm calling it an opportunity. I think Raj Subramanian is doing a terrific job. And I think that, you know, what is the downside here? I mean...

at the absolute low, it was at 239, it's at 253. Why not start? Barrett, Barrett, listen to me. I'm going for a beer with Barrett after, okay? Not a Modelo. I'm done with that. I think that this is where you start a position. Right now, maybe you wait for the alleged shortfall in NVIDIA. I mean, is there any... Like, you walk outside right now, it's like, hey, Jim, how about that shortfall in NVIDIA? I said, it hasn't even happened yet! Okay, anyway.

For off, it's hard to kill. But until we do, the rally is going to be all sizzle and no steak. Well, man, money, sorry. Celsius got a big boost on earnings and its billion-dollar acquisition announcement. I've got the CEO to see if the stock can stay energized for the long term. Then I'm digging into some of the last week's biggest pullbacks and telling you what I'm watching fresh off the latest sell-off. And later, can AICO plow ahead after this month's mixed report? I'm getting a closer look with its top brass. So stay with Kramer.

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Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson Report.

Sometimes you have to break from tradition to make something better, or in this case, a smoother spirit. Martel Blue Swift is made of French cognac, but because it's finished in bourbon barrels from America, they're not allowed to call it cognac. The shockingly smooth taste is rich and aromatic with distinctive hints of toasted oak from the bourbon casks, making it perfect for cocktails. Martel Blue Swift. Defy expectations. Enjoy our quality responsibly.

While most of the market was getting pulverized late last week, Celsius Holdings, the formerly high-flying energy drink baker, saw its stock make a miraculous comeback. Yep, when Celsius reported last Thursday, the company delivered a solid top and bottom line beat. And just as important, they announced the acquisition of Alani New. This is another sugar-free drink play. The market loved this deal so much that the stock shot up more than 27% the very next day. And boy, that day was a lousy day.

So can it keep on? Let's take a closer look, which I'm Phyllis, the chairman, president, CEO of Celsius. I haven't seen in a long time. Mr. Phyllis, welcome back to Mad Money. Glad to be here, Jim. It's exciting times. All right. Well, let's talk about that, John. The buzz around this is greater than anything I've heard in a very long time. Tell me why these two constituencies are so excited about each other.

I mean, it's amazing. These two brands together will make us have the largest sugar-free portfolio in the energy category. And it's the driving force behind functional beverages and the energy category. Puts us as a number three, solid number three at a 16 share. And sugar-free is jumping over the other kinds. It is. It is. For the first time in 2024, sugar-free is the largest segment of the energy drink category. And you're looking at one of the best portfolios to compete head to head.

All right, so what is this company going to look like next year at this time? Oh, next year. Well, if you look at 2023 and 2024, Celsius drove over 30% of the category growth. These two brands together drove over 50% of the category growth last year. So sky's the limit.

Flavor trends are on. Innovation's on point. We have great things in the works, and it's going to be exciting times where these brands go. The bears tell me, you know, Kramer, did you look at the numbers about how this category dried up? We look at the revenues. Something did go wrong. Maybe you can explain it to us.

Well, we saw for the first time ever in over the last 10 years, the energy category actually went negative on growth for the first time. This was Q3 last year. Right. Mintel, globally, the category is $90 billion category, is expected to grow to 10% CAGR through 2029. So-

The category is expected to continue to grow. It's back into growth mode. By the back half, we hit summer. A lot of great things in the works. Everyone wants better for you. Zero sugar, great refreshing flavors. Celsius has it. Alani News bringing new consumers in. This female-focused brand is on fire. Okay, so this female-focused brand is not necessarily in all the channels that this is in. So how can you get people who take Celsius right now to buy this?

Well, this is incremental. We're not sharing one consumer to the other. Celsius, 50-50 male-female. It's really going after that health and wellness. It's Celsius Live Fit, the most refreshing energy drink in the world. Alani is great, great flavors, great packaging, health and wellness focus, but female focus, and it's truly incremental to who we're speaking with. Now, you have a particular spokesperson that I think is going to be the greatest speaker

One of the greatest pro football quarterbacks ever. What's he doing for it? We're rocking and rolling. And also, Juan Soto is massive for us in the playing for the Mets. We got so many great people. But Jaden, we love Jaden. Jaden's amazing. We have so many good people that support our brands. We're all about living fit, health and wellness. I mean, it's for everyone.

Now, I know that one of the good housekeeping seal approvals you have is Lifetime Fitness, which is something you run by trainers, really something they would not put anything in if it weren't good for you. But they're not in this. No, they're not. And there's a lot of opportunities. They're also not in the convenience channel, which we are just getting started. Which is incredible. That's where it's a great channel. Huge opportunities. You look at our infrastructure that we're going to leverage with this acquisition. I have over 500 dedicated sales team members that are dedicated.

We have key accounts team members and all channels of trade, huge opportunities that are happening in large format and grocery and mass.

It's exciting times to be in the energy category. I should be drinking pre-workout drinks? We have. That brings another great opportunity for us, adjacent categories with sports nutrition. The Alani Neo brings us into pre-workouts. They also have bars, protein shakes as well. So opportunities are endless. How's the PepsiCo relationship? Pepsi's going great. Really working well on the Celsius portfolio. We have innovation tied in with them. We're doing suggested orders. We're using AI to better route our customers.

our sales reps, and it's going well. Now, what about the, where are you guys just in terms of what's happening? This is what I wanted to ask, is GOP-1, you're the only one I see that I have that actually may be a beneficiary of what I think is going to be a 40 million person drug in this country. You're on the right side of the page, not the wrong side.

Absolutely. That's a major trend, and that's going to disrupt their seeing in grocery. You believe it. You believe it. Because we've got all these food companies coming on, and they said, Jim, forget about it. They're selling the sugar this and sugar that. They're telling me not to worry about it. There's no issue. That's just not true. We're talking every major retailer in the country, especially in grocery, and everyone's seeing these trends. And they're saying it's just going to continue to get stronger. And Celsius and Alani, zero sugar, better for you. We'll all need more energy. It's perfect for the consumer. Are they all in?

They're all in. Because you did a big deal, but I wasn't sure whether they kept their – they're going to take a lot of stock. Well, the one concern is tying in, right, on the acquisition, post-acquisition. We had the founders tied in. They did take stock. They have about 8.6% stock ownership. Right. They're locked in for the next 12, 16, 18, and 24 months. They're collaborating with us over the next two years to make sure this is success.

And it's going to be exciting times. They partnered because they want to disrupt the beverage category with the Celsius franchise of what we built in our infrastructure. Now, OK, the most important slide in the deck, page 19, the intersection consumer megatrends, $2 billion sales platform, differentiated platform in the attractive energy category, 16% category share. Yep.

Did you ever think that would happen? That's amazing. Totally differentiates it. Especially with a multiple brand portfolio, you're able to leverage and unlock pricing promotional strategies that you can't do as a single brand heading head to head with some of these large mega brands that are out there. So we're on our way. 16 share is...

amazing and are you still bringing out some new flavors everybody loves oh the pipeline of flavors is unreal give us a little mango lemonade for celsius this summer and we got a whole pipeline coming in for alani it is going to be the robust year for celh celsius holdings on both these brands okay well i'm going to make a prediction this stock had a very big decline because there was a flattening of revenues this combination is so powerful and i didn't know it when i first saw it i said alani knew but

Every person, every woman knew it. And I guess it really is the one that people want. I'm so glad you got it. It's going to be a big differentiator for you, John. Big. That's John Fieldley, chairman, president, CEO of Celsius Holdings. Now, remember, the energy drink category monsters the greatest performing stock. Not any of the other ones you hear in tech over over a 30 year period. And this was a great one. And it can reignite mad monies back into the break.

Coming up, still trying to make sense of last week's sell-off? Kramer's got you covered with the lessons he's learned from the market's recent rough patch. Next...

Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson Report.

Sometimes you have to break from tradition to make something better, or in this case, a smoother spirit. Martel Blue Swift is made of French cognac, but because it's finished in bourbon barrels from America, they're not allowed to call it cognac. The shockingly smooth taste is rich and aromatic with distinctive hints of toasted oak from the bourbon casks, making it perfect for cocktails. Martel Blue Swift. Defy expectations. Enjoy our quality responsibly.

Last Thursday and Friday were just brutal, with the S&P plunging a combined 2.1%. NASDAQ, Dow, both fell 2.7%. As we got some softer economic data paired with some signs that the Fed, they weren't that eager to make...

Cuts! Now Walmart, long a passion of strength in retail, issued what some people thought was a cautious forecast. That also crushed the entire group. Now while the average is rolling down 2-3% during the two-day sell-off squall, when you zoom in on the individual losers, like I said at the top, there was a lot of truly hideous action. Sell, sell, sell, sell, sell!

In fact, look, the turbocharged growth stocks, they started falling apart on Wednesday, which is why we took the weekend to look through the biggest pullbacks in the last three days of last week. This is from all the components of the S&P 1500 with market capitalizations above 10 billion. So it's pretty rigorous screening here.

Now, today I want to walk you through the 10 biggest decliners because they can really tell you a great deal about what's really going on in the market. Now, biggest losers, one of them that has just been quietly going up over time, is called Axon Enterprises, formerly Taser, which plunged nearly 28% over the course of three days. Now, Axon's been a fabulous winner for years. It pivoted to police, body cameras, evidence management, software. Those are good businesses. So why then did the stock just get completely obliterated?

Weirdly, there really wasn't any bad news from the company. Instead, it was a one-two punch of downgrades from analysts at boutique research firms that failed Axon. The first from North Coast caused the stock to sink more than 16% last Wednesday. For another downgrade from Craig Hallam caused it to fall over 8% on Thursday. The stock fell another 5% on Friday when the market-wide selling really got going.

Now, Axelrod reports tomorrow after the close. But clearly, people want to ring the register going into the quarter. And the bearish analysts gave them a real excuse to do so. Very different attitude from what we've seen in the past few months, huh? Where momentum stocks are, frankly, unstoppable. Second is one that kind of took your breath away, which is Akamai Technologies, because it fell. It's an experience. It's a longstanding company. It fell 22.7% from Wednesday through Friday. Now, this is a content delivery network that's, like,

I tell you, it's like the fast lane on the information highway. Akamai reported on Thursday evening, and while the results were fine, well, you know what matters more? The guidance, and the guidance was awful. Three analysts downgraded the stock on Friday, and with good reason. Growth is slowing. Marginals are coming down, and Akamai needs to spend a lot of money to maintain its network. No thank you.

There was EPAM, E-P-A-M Systems. That's an enterprise software company for platform engineering and development. I don't follow this company all that closely, but I do know that EPAM has a major presence in Ukraine. And the Trump administration seemingly wants to pull the plug on assistance to the Ukraine. I thought that was why the stock plunged 20 percent in the last three days of the week. But there's more to it, because EPAM reported on Thursday morning and the guidance was absolutely miserable. The House of P.

The fourth largest loser is a company called SIA, which operates in the less than truckload, LTL is what they call it, freight market. This stock fell 19.5% in the final three days of the week. Hey, by the way, the ninth biggest loser, Old Dominion Freight Line, good company. And the 10th biggest loser, XPO, also good. All right.

in this same less-than-truckload business. All three of these freight companies reported earlier in February turning in okay results, but they all got hit last week in response to an ugly quarter from competitor TFI International. And by the way, also, FedEx was rumored to become more of a competitor to the industry.

I don't know about this group. When you throw in the softer macro data mentioned earlier, Wall Street just gave up on all these. The freight market's been awful for years now. We call it the freight recession. But if you're waiting for bottom, you might want to wait a little longer to get some confirmation things are improving. I don't see any improvement.

Fifth largest decline? Well, from the aforementioned Palantir Technologies, which fell 18.7% during the three-day period and then plunged another 10.5% today. While there was some relevant news here, headlines about budget cuts from the Pentagon, insider selling chatter, resignation of the chief accounting officer, I don't think that explains the weakness. Palantir got crushed because it was the hottest stock in the entire market.

Trade it up to extreme valuation via a parabolic move. Those don't last. Trust me. And then Wall Street gave up on momentum. So Palantir came right back down. I like the company's stock, but the company. But you know what? The stock's so expensive. And frankly, I got to tell you, I think it's gotten a lot of some real bearish adherence in the last few days.

The sixth biggest loser from Wednesday through Friday, one that we love, Sprouts Farmer's Market. It fell 16.4% during that period. Most of that coming after the company reported on Thursday night. Bizarrely, Sprouts reported really strong numbers. This was a great quarter, and all the analysts raised their estimates. Yet the stock rolled over anyway. Why?

I saw someone complain that October was the best month of the quarter. And for what it's worth, that means bad cadence, by the way, the company's full year same store sales forecast was much lower than its first quarter same store sales forecast, which suggests that growth will continue slowing throughout the year. But honestly, what really did it? I'll tell you what did it. Sprout stock was up 220 percent in the 12 months before this quarter. And I think this is another momentum stock that simply got too hot to handle at the last moment. And maybe he's going to stay that way.

Oh, next, but we're really getting into him. Hims and hers. Yeah, hims and hers health tumbled 15.8% from Wednesday through Friday. In fact, every penny of that loss was from Friday's 25% meltdown. Simple story here. This stock had been rallying up 184% year to date as of the middle of last week.

You know, this is basically an online pharmacy, and they've been offering cheaper versions of GOPGS1 drugs from compounding pharmacies. Those are pharmacies that actually make drugs, supposed to just buy them. They're allowed to ignore the patent because there's a shortage of these life-saving drugs. But last Friday morning, the FDA announced that the shortage of NovoNordicin Zempik is over, which means the HMIS gravy train might be over, too.

Stocks down big again after hours trading after the company reported mixed fourth quarter results after the close tonight. Finally, the eighth largest decline during the final three days of last week was Cadence Design Systems. Wow, good company. Software play that helps tech companies design semiconductors and electronics, including NVIDIA.

Cadence fell 14% during the three-day period we were looking at, mostly on Wednesday, after the current report a solid quarter with conservative guidance. But the stock kept falling at the end of the week, as more concerns about overbuilding for AI infrastructure emerged. Cadence is a

is fully a part of that theme. So it'll continue to get hit. With the stock not far from the 52-week low now, it might actually be worth thinking about buying on waitlist. Candidly, this weakness for Cadence could carry over to Nvidia when it reports on Wednesday. I'm just trying to keep you up on a stock that you may own. As for the 9 and 10, well, they're the freight players I mentioned. That's Old Dominion, Freightline, and XPO. Both freight plays with less than truckload exposure.

Now, and they both went down on negative pin action from the competitor and not necessarily from themselves. So those are the 10 larger stocks that got hit hardest last week.

And when you look at these names collectively, there's a lot to learn. First, for the hottest of the hot stocks without valuation support, they're always vulnerable to sharp pullbacks. Usually it's because of the bond market, not this time. When you buy momentum, gains are easy to come, easy to go. That's the story behind Axon, Palantir, Sprouts, and HIMSS. Second, lots of previously good companies are reporting good quarters with real bad guidance.

At the same time, the less-than-truckload freight plays are suddenly hated. Both signs of a deteriorating economy. Here's the bottom line. At least in the eyes of Wall Street, the U.S. economy is looking quite a bit worse than it did just a month ago. Fortunately, it's now a new week and even started off well with some decent gains for most stocks today, although there was a bit of collapse at the close. But we can always learn something from looking at the results of the tape. And last week, we got a real education from the momentum buyers trapped in the school of hard knock.

Let's speak to Carol in New York. Carol. Oh, hey, Jim. What a great club meeting last week. Oh, thank you. Thank you. Thank you. Trying to keep everybody up on, you know, on some stocks that I am concerned about short term, not necessarily long term, but short term. So let's go to work.

Okay. So I was looking at names of companies that you spoke highly of in the past that I haven't heard about in a while. And I wanted to ask you about Abercrombie. I saw that they beat earnings the last four quarters and other

Although I'm still learning what to listen for on conference calls. The last one sounded overall like numbers grew, but many of them not as much as previously. They're also continuing to share buybacks and opening 40 new stores. They did talk about headwinds from currency. Well, Carol, you know, Carol, no, it's not really currency. They had promised a very big number and they failed to deliver. And it has been paying the price ever since.

This is a, I mean, I guess I could say, I'm going to say it, Fran Horowitz is a good manager. It's a disaster. And I don't know how they can turn it around, but they are going to report on the 5th of March. Let's hope they get it right. And if they do, they may have to get it right without me because that last quarter was so bad. I really appreciate you saying you like the call. We can always learn from looking at the results of the tape. And from last week, it sure seems like Wall Street is looking worse than it did a month ago.

Watch where my head, I'm hearing what the acres ahead look like for the agriculture space with Agco CEO. Then don't miss my breakdown of a pair of stocks that I'm keeping my faith in, even amid the tape's recent turbulence in that close today. And of course, all your calls rapid fire in tonight's edition of the lightning round. So stay with Kramer.

Lately, the agricultural business has been struggling thanks to low prices for some key crops, stubbornly high interest rates, and geopolitical concerns. That makes it hard to predict a near-term future for some of the top companies in the industry, including ADCO. It's one of the world's largest makers of farm equipment. Earlier this month, ADCO reported, I guess you call it a mixed quarter, with revenue miss alongside a solid 7-cent earnings beat. They're getting the costs in line. The company paired those results with a mixed full-year forecast. In response, the stock fell more than 5% in a single session. It hasn't really recovered.

So how do we figure this one out? Let's figure it out with Eric Ansodia. He is the chairman, president and CEO of Agco. We've got to get a better read of the situation. So I don't know if you understand it. Mr. Ansodia, welcome back to Mad Money.

Hi, Jim. OK, so tell me, because I am confused. I look at your stock and I say, what do you do? I mean, the ag cycle's bad. You got real countries that are in real trouble. I know that your predecessor, Martin Rieschenhagen, said this is the time you buy your stock aggressively because things are going to come back. But you're not buying back your stock. Is that because you're not sure that things are going to come back very fast?

We're absolutely sure. 2024 was the big correction year. That's what happens about 2024. We're also highly confident that 2025 is the trough. All of our models are predicting that. The barometer in Purdue for the U.S. industry and SEMA for the European industry are already strongly up. The U.S. wasn't in this position since 2021. So we're very confident in that.

We don't buy our stock back right now because we've got a shareholder concentration issue that really has caused us to, instead of buying stock back, we do a special variable dividend. But that has nothing to do with the confidence of where we see the strength of the company and the strength of our industry going forward. Explain to me why Deere could be hitting a high, a competitor. I'm obviously reacting to everything you just said, which is that we are at the trough, you've got to buy. And yours is hanging back as if the trough isn't here.

Well, we have to remember, we're a pure play ag machinery business. And so, we move essentially purely with the ag economy. Some of our competitors have a construction business and sometimes even another business.

And construction businesses are more buoyant right now. So you see a bit of two dynamics with some of our competitors, where a single dynamic is really what impacts our business. Well, should you be thinking about maybe a diversifying bit? Just because when I recommend a stock, I don't want to tell people that they're necessarily hostage to a cycle, even if the company's as great as yours.

Well, it depends. If we thought that we could add more value by diversifying into other sectors, we would. We don't believe that. We believe being very focused on being the most farmer-focused company in industry is exactly what we need to do. Investors can diversify on their own.

We happen to be at the very bottom of the trough right now. And even in 2024, we delivered 300 basis points more in margin than we did at this same time in the cycle last time. So all of our focus on technology, margin-rich businesses, growing our premium brand, Fent, growing our precision ag business, and then taking out costs, they're all hitting and providing a much stronger business this cycle than they were last. In fact,

Our performance at the trough this year is better than it was at the peak during our last cycle. Well, that is significant structural change to this business. That is a great point. Now, one of the things that...

is concerning me about our economy and other places is that food costs got too high. And yet I'm not seeing high grains. Maybe one grain is high. Can you explain to me why we have such horrible food inflation when I'm looking at farmers not making that much money, but maybe they could plant more with agco? I know they could plant more.

DAN TAPIERO: Most of the inflation is on the protein side of agriculture. Essentially, that means eggs and meat, as opposed to grain. Green prices are somewhat low right now, and that's a big part of our business. But during the high price of-- when prices of grain were quite high, the beef herd got called way back. Now you add to that the avian flu.

42 million birds have been culled over the last year or so just in North America. That's over 10 percent of the flock. That's a significant reason why egg prices are so high. Those are the drivers to food inflation right now, not so much the input cost of grain to those protein producers. Well, I hope the Federal Reserve is listening to you because that explains a great deal. Now, how about what's happening with Ukraine? Where are we there?

Well, this is, it looks more like, you know, a settlement is in play here than has been for the last three years. But, you know, until it's done, it's not done. We certainly, you know, have been supporting Ukraine. We've added this thing called Project Sunflower. We put Ukraine at the very top of the list where we give those farmers priority because of all the challenges they're under.

Even with that, that whole market has been hit quite hard. It was the breadbasket of the area for a number of times. 13% of the global calories came out of there. You and I talked about that before. We'd love to help those farmers get back to that kind of productivity. It'll take some time, and it'll take peacetime to really have it happen fast. Okay, then Brazil. I mean, any company I know that has business in Brazil is telling me, what the hell are we doing in Brazil? What's happening there?

Hey, Brazil is a great market. I was just down there for a week last week and met with some of the farmers and a lot of our team there. And Brazil is absolutely a growth market globally. They have more opportunity to put more acres into production, but also they can crop two to two and a half crops per year because of their tropical climate. So I was there, the combines were going through harvesting the grain, and right behind it comes the planter, planting the next crop on the heels of the combine as opposed to having a fallow season.

So they've got tremendous growth opportunities to feed the world's population as it grows from 8 billion to 10 billion people. We're big on Brazil, very large fields, very productive farmers, very sophisticated. They measure every little thing. And so we've been investing heavily. We just opened up a remand center, a training center. We're continuing to invest in our facilities. So we're bullish on Brazil. Well, OK, so let's just understand it.

I think you're telling positive stories, but there's no doubt about it. There are huge headwinds here. There's weather. It's not so great. We have politics that are not so great. So what is, I know that you're sure that we're at a trough, but are those things resolvable? Weather, of course, is nothing you can control. And the politics seem to be not so hot.

Well, weather is one of these things that I think is with us from now on. And there's going to be more climate events and probably more severe climate events. So two things-- we help farmers with shortening windows. And the big thing is precision agriculture. They need more technology to have the machine do a better job for them in a shorter amount of time. So precision ag is the deal. We closed on our $2.3 billion tech investment, the biggest in the industry's history last year.

all about taking a leadership position in precision ag, especially for the mixed fleet. Essentially, that means serving any farmer regardless of their brand, not just our machinery brands. And so that's what it is about weather. Weather also in some ways helps because as one area gets hit by a weather event, that takes that amount of crop off the market. That helps prices everywhere else.

And so we're helping farmers wherever they can deal with the volatility. But weather actually helps with pricing for farmers. Well, I learned a lot during this interview. Politics will. Yeah, politics were in an uncertain environment. But we'll navigate that. Well, thank you for explaining all this to me. And again, I hope that people listen to what causes food inflation and how it's not the farmers, maybe the herds. But we don't know if they grow them again. It sure will change. Eric?

Hans Sodia is the CEO of Agco and really understands the business. Hey, Eric, thanks for coming back on the show. Thanks so much, Jim. Always good to talk to you. Bad money is back after the break. Coming up, Kramer takes your calls and the sky's the limit. It's a fast fire lightning round. Next. It is time to talk about the lightning round. We're going to talk about rapid-fire lightning. We're going to talk about the lightning round. We're going to talk about the lightning round.

And then the lightning round is over. Are you ready? It's getting dark. Time for the lightning round. Chris, I'm with Lou in Massachusetts. Lou. Jim, my financial idol. Huge fan. So glad to be on the show. Thank you. Glad to have you. Hey, listen, investment club members, since you kicked it off, and I'm dedicated to listening almost every night, and my family is going to be cracking up laughing if they hear this. So here goes.

I'm disillusioned right now by a recent purchase that seems to be dropping daily. And it might be just...

what's going on out there in the market. I'm talking about M.O.D., Modine Manufacturing. Yeah, I've got to tell you, Lou, people decide that that is part of the data center and the CFO sold a lot of stock. So people are itching to get out. It has come down so much. I don't know what they're itching about. Go get some sauna or something. That works. The cortisone, cortisone 10 is very good. Let's go to Patty in New York. Patty.

Hi, Jim. Booyah from Yonkers, New York. Yonkers, unbelievable vacation spot. Fantastic. What's up? Uh...

Jim, I'm in a house of pain with Elf Cosmetics. Should I hold or sell? Oh my, I gotta tell you, down 40%. Everyone's decided that it doesn't work anymore. It's got tariffs, blah, blah, blah. I am not going to sell Terangamine down 40%. That doesn't mean I'm going to buy, but I am not going to sell it. That's crazy. People hate it. Let's just wait. Wait. Don't bite. Not yet. Let's go to Jim in New York. Jim. Jim.

Hello. What's your thoughts on PGY, buy, sell, or trade? You know, it's up so much. FinTech, there's only a couple of FinTechs that have really stayed. I want you to take some profits. Let's just do that. I'm going to ask you to ring the register. Okay, let's go to Rich in Connecticut. Rich. Hey, Jim. Booyah. Hey, buddy. How you doing? Good, good. Thank you. You're doing a great job. Keep up the good work. I'm trying. Hi.

All right. I've held this stock for about two years. Done well with it. Nice dividend. And I know you've liked it recently, but it's backed off from about 21 to 19. Is it still smart, you think, to buy here? And I'm talking about energy transfer. Yes, E.T. is smart. I mean, look, this is the way you buy E.T., just so you know. This is a pipeline company.

You buy it by the percentage yield. So it's got a 7% yield now. You buy some, eight, you buy some, nine, you buy some. That's how you buy these stocks. And I'm going to continue to pound that that's the way to do it. How about we go to Brandon in California? Brandon. Can you hear me, Joe? Am I on? Better than ever.

You are on. I love you. You are on. I love you, man. I just want to let you know. Oh, thank you. Thanks for everything you do. No problem. And if no one's told you, you're cool like the water in the swimming pool. I do have a question. Two questions. First question, are you ever going to bring back the bat when you're smashing stuff? And question number two is about new Fortress Energy. All right.

I don't know if we're going to bring it back. I kind of like it. I would like to do that. But New Portrait Center is this company that we profiled as being not a great company. And we're going to continue to say it was not a great company. It's in the archives. Can't do anything about it. It's a bad one. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, Kramer's breaking down the recent action around Apple and Home Depot in the latest chapter of his investing guidebook, Max.

Last night, I referenced the George Michael song lyric, You Gotta Have Faith, in my Sunday think piece for the investing club. My daughter's a member, and somehow it resonated with her. It just seemed important, given how terrible last week was. That legendary song reminded her that gloom is not a strategy. I've always said that hope should not be a part of the investing equation. I say that because hope is something that belongs in the stadium, as in I hope the Eagles win the Super Bowl.

But my hope has nothing to do with the Eagles winning or losing, does it? So how can we have faith when we invest if hope is off the table? Simple. Faith is different from hope. To me, faith means that when Apple announces it will spend more than $500 billion in the U.S. over the next four years, that will be meaningful to shareholders because Apple cares about shareholders. It's not doing something just to appease the president of the United States. That means it's good for Apple.

when CEO Tim Cook says, quote, from doubling our advanced manufacturing fund to building advanced technology in Texas, we're thrilled to expand our support for American manufacturing, end quote. And he continued, quote, we'll keep working with people and companies across this country to help write extraordinary new chapter in the history of American innovation.

The vast majority of people I talk to say Cook made this announcement simply to get the president off his back and the stock went down two bucks at the open. I think that that shows zero faith in what Tim Cook's accomplished over the years. Given his track record, you should have faith in his plans for the future. It's not like Cook suddenly got stupid when he met Trump. He came up with an American manufacturing plan that makes sense. We don't know how Apple can avoid paying tariffs on their Taiwan-made semiconductors, but maybe have a little faith in that issue, too, now?

Or how about Home Depot? Right now, the stock's being left for dead. I mean, it's just hideous. Sell, sell, sell. Because why? The Fed has paused its rate cuts. It's been horrendous, a total nightmare. Now, Home Depot reports tomorrow morning. Housing turnover's been pathetic. The weather's been terrible. Appliance and tool sales have been just incredibly disappointing.

But Home Depot, the stock is down 57 points from its high set in November of last year. It's been pummeled and pummeled on each negative data point. When we see the numbers, they'll likely be below expectations because expectations, as defined by the analyst community, have not changed during this period. I don't know why. I have no idea why that is because it's obvious that things have gotten worse for their clients, if only because of the weather and the lack of housing turnover. But A,

But after the stock gets clobbered tomorrow morning, after, I want to go buy some more from my travel trust at that lower price. Why? Because I have faith that Home Depot will come out of this meager downturn much stronger than it came in. Why? I have faith because I remember 2007-2009 when many short sellers bet against this company during the worst housing collapse since the Great Depression.

What happened back then? Home Depot gained share. They became more indispensable to the industry than ever before. And they used the weakness to buy back a gigantic amount of stock, taking the share count from 2.1 billion to less than 1.7 billion. How can you not have faith in a company that did that during the Great Recession?

Do you think these guys have gotten dumber since 2009, that they've lost their institutional knowledge? I don't. That's why after all the estimates are finally cut and the price targets are trimmed, I think you're going to have an exquisite moment to buy the stock of Home Depot. Now, when I say you've got to have faith in this business, that doesn't mean faith should be easily dispensed. I only have faith in a handful of companies. I'll be a big handful. But if you don't have faith in anything, that means you don't know the history and you don't know how stocks work.

While people always say the past performance is not indicative of future results in this business, sometimes when you're dealing with well-run companies like Apple and Home Depot, past performance has been a great predictor. Maybe not tomorrow, but certainly for four decades before that and maybe decades into the future. I like to say there's always bull market somewhere. I promise I'll find just for you right here on MadMoney. I'm Jim Kramer. See you tomorrow.

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