Mad Money w/ Jim Cramer 3/10/25
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Not an Empower client paid or sponsored. My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bone working 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 make friends. Jeez, I'm just trying to save you money. My job is to put everything in context, and I'm going to do it today, and I'm going to do it for you.

Call me at 1-800-743-CNBC. Tweet me at Jim Cramer. They wipe out these games pretty easily, don't they?

Just like that, the sellers take away months, if not years of profits because they want to get ahead of a potential recession. And then they swap into the safety stocks that thrive in a slowdown. Welcome to the world of recession preparation, where it doesn't matter what prices you get on the sales or the buys, as long as they get done, which explains today's terrific action. Dow tumbling 8 or 9 points, S&P plunging 2.69%, and the Nasdaq plummeting 4.0%.

Not only was this the worst day for the United States in two and a half years, the Magnificent Seven shed an astounding 5%. We're getting rid of the name Magnificent Seven tonight. It doesn't make any sense at all. OK, none. Some of the money taken from these longstanding winners went into the healthcares and oils, especially the ones with higher yields. Buying healthcare stocks makes sense. They're slow down plays. Oils don't make a lot of sense. Even the ones with high dividends. Few percent are going to protect you in this one. Believe me.

And there is justification for the buy safety, sell discretionary stocks. Tonight, Delta stock was just absolutely obliterated when the company announced a hideous shortfall, citing weakness in both business and consumer. What a dog. So what the heck is going on here? We don't want to be historical, though. We want to be historical and we want to be together. First, the whole market has changed because the president's changed.

Trump, one, favored the stock market and hated to see the Dow Jones Industrial Average down. Trump, two, favors rebuilding a market at the hands of our greedy trading partners by slapping their exports with big tariffs. By the way, remember, I agree with the greedy trade. I'm not against what he's doing. I'm against the way he's doing it. We know that President Trump claims to admire President McKinley. He restored the name of our highest peak from its native name, Denali, to Mount McKinley in honor of the 25th president. Quite a significant switch from when President Obama in 2015 scrapped McKinley and restored it to Denali.

Like most everything else that we thought President Trump stood for, McKinley represented the banks and the business interests of the time. That's turning out to be first President Trump, though, not the second. It was William Jennings Bryan, the loser in the 1896 race, who was the populist. And he sounds a lot more like Trump.

Trump, too, sees William Jennings Bryan and McKinley. Bryan ran on the Democrat Populist Party ticket. He stood for helping working people against a big moneyed interest. His followers wanted easy money, which at the time meant using silver coins as well as gold. But here's the thing. Trump, one, was very much in the vein of McKinley.

And there's Wall Street like that. Trump, too, is much more William Jennings Bryan and Wall Street done like that. You can almost hear from borrowing lines. He's like borrowing lines from Bryan's famous cross of gold speech, the most emotional speech about monetary policy in human history. Trump, too, frankly, is killing the market, simply by saying that he's not paying attention to it. He said this weekend it's not a focus.

After all, like Biden, Trump seems to accept that stockholders usually are wealthy people and that they've done well enough. It's time for the other 99% to do better? I don't know. That's what it feels like, amazingly, that he and Biden finally agree on something. Stock market doesn't matter. Now, let's get serious.

I've been saying for weeks that we have a Walmart White House where the president favors everyday lower prices for stocks. Weeks. I've said that he's giving nothing, literally nothing to stockholders. Today, everyone seemed to discover what I've been saying every night here. The everyday lower price tagline is totally true. It's not meant to be funny. The thing is, we like it at the supermarket. We like the lower prices. We're not so fond of it here.

All right. I mean, we like this part and we don't like this part. Pretty simple. This good, this bad. How long can this stuff go on? I don't know. William Jennings Bryan stayed that way until he died. Then again, he never won the presidency. I don't think that Trump will start going easier on our trading partners just because the Dow has been eviscerated. He's not sacrificing our trade policy on a cross of gold, meaning, of course, higher stock prices.

Of course, not many investors saw this coming, and that's incredible to me. And the shock from Trump's change in attitude has terrified the money men, the big money men, the ones that William Jennings Bryan attacked. Virtually overnight, they've decided that we're headed for a recession and it's going to happen fast. The thesis, we're a consumer country. They think the consumer's finished because of turmoil created by the Walmart White House.

At the same time, the big themes of tech, the data center build out, and AI seem suddenly cursed. Victims of that Chinese alpha deep sea that has figured out a way to get more computing power from less hardware. Buyers of NVIDIA expensive chips. By the way, NVIDIA now trades like a meme stock. Can we just tell it?

It's a meme. That's why it's getting crushed. Let's not fool around. It's a meme stock. Hey, maybe the strong orders we saw from Oracle tonight can turn things around. Then again, the Delta shortfall should have upset that. Will we really have a recession? The economy does seem to be in a sudden precipitous decline. We know that the president who loves tariffs now threatening to put tariffs on our trading adversaries that are as high or higher than the fabled Smoot-Hawley Tariff Act of 1930.

Yeah, the one that helped cause the Great Depression. The sellers are not oblivious to history, even if the White House is. As they see it, Trump's mimicking legendary President Herbert Hoover, who, despite endless diatribes by economists saying Smoot-Hawley could destroy the economy, championed and signed the bill in the name of, yes, the working man, especially the farmers. Exports dropped 60 percent, and we went into the worst depression in our nation's history. Hoover regretted it, said that they should be repealed in 1932, way too late. I think the comparison is excessive, but you never want to be in the same sentence as Herbert Hoover.

Should you join the sellers? I think today's sellers are getting late, but not too late, to the party. First, they got terrible prices as they sold frantically to get out before the others, although the others may not appear to be bad because things are already pretty ugly. Second, they totally got ripped off on their buys, which could have been done at a much lower levels if they didn't demand that brokers buy their recession-proof stocks.

Lickety split. Our markets are deep, but they're not so deep that they can handle such concentrated buying and selling. Perhaps tomorrow we'll get another day like today or worse, which is what these sellers must be thinking or they wouldn't be dumping so vociferously. Maybe they know that the president's going to slap tariffs on Western Europe, Japan, and Korean oil makers. I'm waiting for that, aren't you? The trade barriers from those guys are awful.

Maybe he attacks the new Canadian leader, Mark Carney. Great guy, smart guy, but right now on the wrong side of the trade. Or maybe, just maybe, they know that Trump will defend the farmers against the Chinese. I can hear him say the words already. President Trump, here, just write this down. Burn down your cities and leave our farms and your cities will spring up again as if by magic. But destroy our farms and the grass will grow in the streets of every city in the country. Oops, that's the William Daniels, Brian Kossum, cold speech, sorry.

I think people are forgetting two things. One is that interest rates are going lower, which is good news. Two is that we have a Federal Reserve Chairman who's a student of history. He knows both William Jennings Bryan and Herbert Hoover. But he knows the cost of gold speech by heart. I used to have it memorized. He knows Smoot-Hawley, and he knows that we could be in trouble. Can J-PAL trump Trump?

I've been waiting to use that line for years. I say it'll be the other way around. Get ready for Trump to attack Powell for doing something, anything. I don't know. It does not be accurate. Powell can lower rates anyway. So the answer is that after Delta News is digested tomorrow and all the travel and leisure numbers are cut, it might be too late to sell. You can buy some low multiple tax and industrials and banks here. We did that for the travel trust today right into the teeth of the sell off. I'm going to talk about it on Thursday noon club call. I think you want to be in. I would not jump back into the Magnificent Seven because as of tonight,

There is no Mag 7. Came up with that name, scrapping it right now. No moniker fits the two or three that remain viable. And I'm not going to put, and there's nothing magnificent about Tesla or NVIDIA.

I don't know if the recessionistas can keep buying Smucker and Colgate. They're not even doing well. Can they keep selling Marvell Tech? I don't know. It's a nightmare. OK, but the bottom line, remember, this whole situation is manufactured by the Walmart White House because almost every other market around the globe is crushing ours. They're all doing better than we are.

I don't know who's advising the president. I know what he is doing is important work, and I am no free trader. I am not even a fair trader. I'm a tariff guy. But I think you can kill more flies with honey right now, certainly more than nuclear weapons. Now, the president can roll him back if he wants to, but he generally believes his tariffs are the right thing to do, which is why they'll probably keep coming with no finesse whatsoever, just brute force, which I have to tell you, including you, Mr. President, there are other ways and better ways to get things done. Let's go to Lorne in Wisconsin. Lorne.

Hi, Jim. Thanks for taking my call, and thanks for all your help along the way. My question is on Honeywell. I'm trying to bring this together. This is a very tough time. Yeah, go ahead. I'm sorry. I didn't mean that. Go ahead. Oh, sure. With automation, just in passing, Honeywell is considering being divided up into three companies, and I'm interested in the growth process.

of it. And I wondered what your insight was on which part of that company would best be suited for growth. Okay, Mike Chalmers owns it. We have a lot of it. Honeywell, the growth part is aerospace. Nobody wants Boeing. They'll be buying Honeywell, just like they bought GE Aerospace. I will say this. I like the chemicals business. It's not a growth business, but it's better than the typical chemical company, so that's going to make people like it. The automation business?

Work in progress. Okay, let's go to Sue in North Carolina. Sue. Hey, Mr. Kramer. Yeah, Sue, what's up? I work at your store every day in 20 years. Oh, thank you. I appreciate that. Thank you. What's going on with the stock Reddit?

Okay, so there was a big short squeeze. Let me explain this. First of all, I think the company is doing incredibly well, okay? It didn't do as well as what people felt because the stock had gone up so much, people were expecting something perfect. Second, there was a gigantic short squeeze. People were betting against it, betting it wouldn't be a good quarter, and it didn't come out a perfect quarter. Third, I think that Steve Huffman's doing a great job, and I would start right here.

Right here. Let's say you want to buy 100 shares, buy 25. That's what we're doing, by the way, guys. We're not buying 100 shares all at once. We're buying 25, 25, 20. OK, we're buying down. That's what you do. Leave room. OK, leave room. Look, the White House can roll back these tariffs if they wanted to. But right now, they're more intent on rolling back the prices of stocks. I'm kicking off a series dedicated to finding opportunities to sell. First, after Costco's strong quarter, I'm shopping for the reasons behind the wholesale chains pullback.

And can OnHoly and Decker stay on track despite these market headwinds? I'm running through the pair's latest numbers. And later on, I'm checking in on CrowdStrike to get a better sense of the cyber stocks road ahead now that it's been absolutely crushed, spindled, and mutilated. So stay with Cramer.

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After another hideous day in the wake of last week's shellacking, it's official. We've got a real sell-off on our hands. Thanks to softer economic data, the chaotic rollout of President Trump's trade agenda, stocks are coming down across the board. So what are we supposed to do about it? First, I don't know exactly when this pullback will end. Looking at the S&P short-range oscillator, which I follow religiously, the market's finally getting ever so. But believe it or not, it isn't super ever so yet. And the backdrop's really ugly. Here's what I can tell you.

For much of the past few years, as the market turned higher, it often felt like you never got a chance to buy the best stocks on weakness. Now you're getting that opportunity because the sell-off has been indiscriminate, really incredibly indiscriminate, taking down the good with the bad with the exception of Johnson & Johnson and a couple of hospital chains and utilities. And I don't dismiss the landlines. Just tonight we heard from Delta that both corporate and consumer customers are weak, and it can't come anywhere near the estimates the analysts were looking for. Real big negative for tomorrow.

That's why all this week, though, I want to highlight some of these terrific babies that have been thrown out with the bathwater, starting right now with one of my absolute favorites that I think you can buy on the way down. In other words, I didn't say it's bottom. Buy on the way down. And the stock is Costco. Now, here's a stock that fell 6% on Friday in response to what I thought was a real solid quarter. At these levels, it's down more than 13% from its all-time highs set a few weeks ago. You usually don't get it that low. My book is in Costco. It's real simple. This is a stock that regularly sells off in good quarters.

which happened, right? The quarter they reported last Thursday was just one. You have to buy it into weakness afterwards because historically it almost always bounces back. Almost. I know that may not be enough for you. It's enough for me to start. Sure, Costco reported a revenue beat paired with an earnings miss, but when you drill down, there was a lot to like here. They had 6.8% same-store sales growth for the reported quarter. Wall Street was only looking for 6.4%. Like many other retailers, February was worse than January, but only by a percentage point. That's much better.

Now about those pesky mislines. Costco's operating margin came in a tad light. Earnings of $4.02 came in nine cents short of what the analysts were expecting, but there were so many extenuating circumstances. I mean, it's crazy to regard it as a miss. First, Costco said adverse currency fluctuations caused a 13 cent hit to the earnings. They've done a lot of work opening stores overseas. That accounts for the entirety of the shortfall. Second, looking at the year-over-year comparisons, last year the company got a 21 cent one-time tax benefit related to a special dividend. When you back out

that, the earnings would have been up 8.4% year over year. So I completely dismiss the so-called miss. So hopefully you feel a bit more comfortable with the seemingly mixed headline numbers if you're hearing the full context. But I always tell you that the best information comes from the conference call. And that was certainly true for this time. Costco, really, with people about to listen to management, I guess they really haven't. Rather than selling the stock immediately because of a single headline number in a very nervous market, here's what they would have heard. They would have heard incredibly positive.

things. Remember, one of the big market wide worries right now is that consumer confidence is plummeting. That's why the consumer discretionary sector has been leading the way lower these past few weeks. That's what Delta cited this to. And the consumer discretionary select sector spider fund, the XLY, is now up almost 18 percent from its mid-December highs. And many previously hot groups like travel and the retailers are really getting hit hard.

But when Costco management talked about the behavior of their shoppers last Thursday, they pretty much all positive things to say. CFO Gary Millerchamp saying we're not really seeing any change in what we've seen around our numbers over the last really a few quarters. Not bad.

Millichap went on to explain that Costco shoppers are, quote, still showing that willingness to spend, but they're being very choiceful where they spend their spending their dollars. End quote. I don't like that word choiceful. That's something, by the way, that I don't think that former CFO Richard Galanti would ever say. But whatever. There's no accounting for taste. Management expects that to continue.

And Millichap even said that consumers might, quote, even become more choiceful as the impact of some return of inflation, the potential impact of tariffs could flow through as well, end quote. He also mentioned Costco members continue to spend, quote, a little more on food at home versus food away from home overall, end quote.

Now, that may not sound all that encouraging, but when the consumer gets picky about value, well, that benefits Costco because this company offers the best value in the industry. If people buy more of their cheap Kirkland Signature house brand, they make more money because the margins on private label products are huge. Same goes for food at home versus food away from home. Good for Costco. Plus, even in non-food categories, Costco is still generally doing very well.

Sure, some categories are just OK, like consumer electronics or apparel, which Millard and Chip described as flatter. But overall, Costco is winning here by focusing on a strategy of, quote, bringing in great items at great quality and great value, end quote, and by offering newness with things like gold. You can't even, it's so popular to buy the gold. We buy, everybody tries to buy it. It just goes in and out like that.

Large electronics like gigantic TVs and even quirky big ticket items like Stern pinball machines, all of which did really well this quarter. Overall, Costco's non-food category actually led the way this quarter. Management said non-food same-store sales growth was in the mid-teens.

Not bad for a tough discretionary spending environment. Of course, there's another big concern about all retailers here, the tariffs. But I was encouraged by what management had to say on that front, too. First, CEO Ron Vakris disclosed, quote, about a third of our sales in the U.S. are imported from other countries, and less than half of those are items coming from China, Mexico and Canada, end quote. That puts a fence around the company's exposure to tariffs. And it's not terrible. More importantly, Vakris explained that with Costco's, quote, treasure hunt,

end quote, shopping experience, the company can be flexible with its assortment and, if necessary, replace heavily tariffed items with something similar that is much less tariff exposure. Maginot also stressed its extremely close relationship with suppliers. To him, the Costco relationship matters a great deal, meaning that suppliers are more likely to eat the cost of their tariffs themselves in order to maintain the business with Costco.

In the end, I think Costco is starting. It's really getting hit simply because it's a high multiple stock and a suddenly very risk averse market that sells down the high multiple stocks. And then what had been a very tame drawdown accelerated last Friday after the company turned in a result that featured an earnings miss, even if the quarter was pretty strong when you check under the hood.

Honestly, I feel much better about the Costco story after what we heard last week, not worse, which is why I'd like to start looking at the more than 13% pullback as a buying opportunity, because cost is still a high multiple stock trading at north of 50 times this year's earnings estimates. The stock could keep trading poorly as long as the market's nervous and in sell-off mode. We don't want to come for this charitable trust. We have no interest in selling whatsoever. We're looking to buy. It's well above our basis.

There'll come a time. I'm going to talk about it at our Thursday meeting. It's a noon meeting. But the bottom line, with a strong quarter in our pocket and such positive commentary from management on some of the biggest risks at the moment, I'd be looking to buy more Costco shares into any additional weakness. This has always been one that bottoms very quickly, not run from a stock that's been such a huge long-term winner for the Chappell Trust. Mad Money's back after the break.

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With the market in steep sell-off mode these past couple weeks, I'm trying to be constructive about the current moment. That's the way I play it, okay? I am, as I said earlier, historical, not hysterical.

I'm calling a bottom. No. But because I do like to start buying while stocks are falling to get the best prices, then once we get a bottom, I've got my position in. I can't tell you when the selling will end. But I can say that when everything comes down, the good and the bad, well, you tend to get some buying opportunities. You might not want to join the sellers.

Being constructive has always done well for me. It's not going to change this time. That's why I'm spending all week highlighting the best bargains that have been created by this market wide meltdown. Earlier, I mentioned Costco, which reported a quarter that many people didn't like. But that's ridiculous. I know Costco better than the sellers, believe me. And even though there was a lot to like under the hood, people were worried about some number that frankly was not bad.

Now, I've got another one. Really, really like this one. Spent some time with the company just last week. I got to tell you, this is a solid one. It's the Swiss footwear company on hold. Now, this is one of my favorite IPOs for the past few years. It's disruptor in the footwear space in particular. That's displaced Nike as the top brand for many consumers. Stock's been a huge winner over the past few years or so, climbing from a low of 15 late 2022 to an all time high of 64 and change in January.

Oh, but on holding topped out if you're setting that high in late January. And it's now pulled back to $44 and change it today. Opportunity. Initially, there wasn't a clear catalyst for the selling other than the fact that it's a richly valued momentum stock at a time when the markets turned against that whole group. By the time the company was set to report earnings last Tuesday morning, the stock had already sunk to the high 40s. But the quarter was just it was excellent.

I went through it with the company. I really like it. One delivered a big top line and a bottom line beat, accelerating revenue growth. We call that ARG around here. And real strength outside of North America. Its gross margin expanded by 170 basis points to 62.1, beating a 61.7% number Wall Street was looking for. That translated into pretty substantial earnings beat.

On also issued solid guidance for the year ahead. Companies said to expect 27 percent constant currency sales growth this year, essentially in line with the consensus estimate. The margin guidance was also basically in line beyond the numbers. There was a lot to like to first while on sales through wholesale channels were more than solid up 29.1 percent. The direct to consumer business was truly excellent. Sales up 43.4 percent.

Direct-to-consumer represented just over 40% of total revenues last year, but was almost half of the company's revenue in the fourth quarter specifically. With a much higher growth rate, it's looking like direct-to-consumer will soon surpass wholesale as the primary channel for one's products. That's a very positive development because there are no middlemen taking a cut when you sell your products on your own website or in company-owned stores. Hey, by the way, Nike emphasized direct-to-consumer to the detriment of traditional retailers like Foot Locker, and it ended up being disastrous.

Disastrous for the brick and mortar and the DTC didn't do as well. On has none of those problems. I want to make that really clear. That's a big difference between Nike and On. I also thought On's management had some really thoughtful things to say about the company's brand strategy and the conference call. They explained that they manage the On brand in three distinct ways. This was so smart. Sometimes you just get blown away by how smart management is.

First, through premium product brands with some of their top products like the CloudMonster, CloudSurfer, and CloudRutter, now becoming stronger brands in their own right. Second, through strategic partnerships, whether that's the long-term relationship with tennis great Roger Federer or more recently with Zendaya, which management said has done very, very well through what they call high-impact presence in global markets, end quote. I should have said quote. Meaning big swings in marketing and major global moments. And here I'm thinking about the Paris Olympics. We're using the Super Bowl ad, pitching Roger Federer with Alphard.

from Sesame Street. I thought it was a little goofy, frankly. But on holding, he seems very pleased with the results, so who am I to say that

Probably right. And they did say that, quote, literally put the name of our brand into everyone's mouth and on America's most watched morning show, end quote. It's tough to argue with that, right? On boasted significant growth in brand awareness last year, calling out the fact that amongst Gen Z consumers in particular, brand awareness in the U.S. more than doubled a single year. Brand awareness is what you have to look at when you don't have a lot of sales yet. Listen, unlike with Costco, I don't feel much of a need to convince you.

the on-quarter was a good one. I was blown away by it. That's because at least initially the market really liked it. Last Tuesday, the stock jumped 5.8% and then tacked on another 3.7% on Wednesday. But the gains were short-lived as the market-wide sell-off picked up steam into the end of last week, to the point where Ron Holdings has now given up all of the post-quarter gains and then some. The stock's now down to its lowest level since mid to late August. Now, that strikes me as an excellent candidate for buying into weakness.

especially if you haven't had a chance to pick some up during the two-year-plus rally. Now, you're finally getting a sale on Holies. I have to tell you, what are you waiting for?

By the way, while we're on the subject of footwear, I think you're getting an incredible bargain in Decker's brands. That's the parent company of Uggs and the white-hot Hoka athletic shoes. I covered Decker's shortly after it reported in early February. Wall Street didn't like that one at all. It stopped about 20% in a single day for the quarter. Even though Decker's delivered a huge top-and-bottom-light beat, management issued pretty weak guidance for the current quarter, in part because of some quirky inventory issues. Hey, but

Basically, they sold too many UGGs during the holidays and didn't have enough product for some top styles entering into the new year. High-quality problem, I say. HOKA was also merely in line with expectations in the fourth quarter after surprising the upside so many times in previous quarters. That was a bummer.

these seem like silly reasons to sell a stock down 20 in a single session though which is what i told you uh a month ago back then i said you were getting a good buying opportunity but you might get an even better one if you waited for the stock to keep coming down full disclosure decker's has been awful since then falling lower and lower to the point where it's now down over a hundred points or more than 45 since this last earnings report the price earnings multiple has fallen from 30 to 20 times earnings

That seems really excessive to me. So let's consider Decker's another high quality company that may be worth buying, although I deeply prefer on. OK, deeply.

Here's the bottom line. All throughout the week, I'm highlighting stocks that I think have been hit really hard in the south that you can buy into gradually, not calling the bottom. I think on holding will be a terrific stock to own, given that they just reported a great quarter. As for Decker's, they issued terrible guidance a month ago. The stock was destroyed. Now it's come down to levels where maybe it's too simply just to seem too, I'd say, annihilated to ignore. Uh,

But I also, again, I like Costco first, and then I like On, and then maybe, maybe Decker's. Let's go to Carmen in Connecticut. Carmen.

Hi, Jim. Thank you so much for taking my call. Of course. I bought some tapestry stock last week. I knew that in 2017 it was the Coach brand and it had changed to tapestry, so I bought some. Since I bought it, it's really taken a hit and it's had quite a drop. And I'm not sure whether I should hold on to it or not.

Just sell it. I really don't know what to do. OK, Carmen, I'm going to be tough on this one. My favorite retailer is Ralph Lauren and that stock collapsed today. Collapse. So I don't think tapestry or PVH, for that matter, can possibly be better than Ralph Lauren. So all I can tell you is that in this market or in this tape, as we say, tapestry is going lower.

Hate to always tell people that I don't like people to sell, but I got to, you know, look, this is not buy and hold here. It's buy and homework. Craig in California. Booyah, Ski Daddy, Jimmy Chill. Really able and willing to do some chilling. You bet I am. I like that. I'm seeing some green on the wall, too. I'm just looking at the green. You'll see me tomorrow. No, no, no. It's not so bad. It's not so bad. I got Pepsi up 0.69% here.

Hey, look at this. Mondelēz is up a percent. I guess they like the Toblerone, huh, buddy? Toblerone. My wife hits me with the Toblerone when I get out of the way. When I get out of line, boom, boom, boom.

Hey, yeah, Jim, looking at it, even with the recent pullback, it seems like everything, there's a lot of stuff up there near 52-week or maybe all-time highs. It's really difficult to find anything viable. So I've been looking for some viable pullbacks. I might have found one here. All right. Yeah, this stock trades at a real cheap multiple, about six times, far below its 10-year average P.E., juicy dividend.

Great recurring year-over-year revenue growth. Margins are way up. Net income way up. Growing a three-year revenue CAGR around 30%. Despite this, the stock is down about close to 20% over a month. The intrinsic value is around 106. I think it's a buy right here, at least to 100. Maybe you can tell me what you think on this stock.

And will it give me grade A, extra large, exceptional gains? CalMain. CalMain. OK, CalMain. All right. So CalMain, the reason why it's going down is because people feel this shortage is going to end. When the shortage is going to end, the stock is going to go lower. I totally agree with you on everything. But I do. And when I see a stock with a four or five P.E., that means the numbers are going lower. And therefore, it's probably not as cheap as you think. And that's the way I look at CalMain. OK. OK.

Now, look, there's weakness all over the place right now, but I have to, it's my job to be constructive, not to be historical. And I'm seeing some things in the football space that I really like. And my favorite is on holding.

I think they've put together some phenomenal shoes, a great brand, and they're really coming after Nike. All right, much more ahead. Creating my deep dive on another one that's just given up the ghost. This is CrowdStrike. I know it's a rich stock. I don't care because this is cybersecurity, and this stock is just completely crushed. Then after daily today, how do you make sense of the road ahead? Don't miss my look in the market's rearview mirror. And of course, all your calls rapid-firing right now. And I got to tell you,

I'm going to try to be constructive in that too. Stay with me. When the market rolls over like this, especially the Nasdaq, sellers always end up throwing the proverbial baby out with the bathwater. That's why all week I'm trying to highlight my favorite stocks that you can now buy at a huge discount. Not all at once. I don't say that they're not done going down. No bottom calling here. Just trying to be constructive.

Let's talk about a stock like CrowdStrike. That's the heavy hitter in the cybersecurity space. We want it for the child trust. At the end of the day, all the worries about President Trump's chaotic trade policy or slowing economy or the possible weakness of the data center have almost nothing to do with cybersecurity. Hardly a day goes by without some new data breach that costs companies a fortune. Hence why they're willing to pay up for the best cybersecurity. The best cybersecurity is CrowdStrike.

Palo Alto is real good too. The threat environment isn't going to magically improve anytime soon. Last week, CrowdStrike released its annual threat report and as always it was a somber read. Average breakout time, meaning how long it takes

Bad actor to move across your network was down to an all-time low of 48 minutes, with the fastest time being just 51 seconds. Voice phishing scams saw an explosion, 442% growth between the first and second half of 2024. State-sponsored cyber operations kept ramping up their activity. CrowdStrike called out China Nexus activity as seeing 150% growth.

From the prior year, with the Chinese targeting some industries even more aggressively. Oh, and don't forget the Russians, the Iranians, the North Koreans. Put all together, you can understand why CrowdStrike roared to an all-time high of $4.55 and changed on February 19th, an impressive 127% run from its lows last summer. Since then, though, the stock's been eviscerated. Sell, sell, sell. Bing. Plunging from the low 300s, plunging from the 400s, 420, 430, 140, to the low 300s.

We have been a seller of the stock in the 400s for the Chapel Trust. Today, we bought back the stock we sold. Now, I wasn't too surprised to see some profit taking ahead of the quarter last week, despite CEO George Kirchner's stellar record of beating earnings estimates, given that so many growth stocks are selling off. After a crash record put on Tuesday night, the stock finished the next day down 6%. But since then, it's fallen an additional 15%. It's basically back to where it was trading last summer. At the close of the day, the company caused a huge network outage. I mean, that's ridiculous. Didn't even lose any clients.

So how much of this is CrowdStrike specific and how much is state of the market? Okay, some analysts quibble with CrowdStrike's earning guidance, but that only came in weaker than expected because Banford's forecasting a higher tax rate to provide consistency across reporting periods.

Without the change to expected taxes, the earnings guidance would have been perfectly in line with Wall Street's expectations. Some people have gotten worried about CrowdStrike's margins due to the company's AI investments. However, this company already seeing a huge payoff from AI. It helps them catch hack

and it's bringing in lots of business. When the last conference call, management called out strong AI adoption among our own employees, leading it, quote, to time savings per employee of over one full workday a month, equating to more than 24,000 workweeks saved if annualized across our entire workforce, end quote. So CrowdStrike's not wasting money on AI. These are smart investments. Plus, I think it's crazy to sell CrowdStrike on seemingly soft guidance when these guys have a perfect knock on wood.

Kind of. OK. Track record of beating estimates. CEO Kurtz, George Kurtz, is all about UPOD, which is under-promised and over-delivered. So don't let all the concerns about the guidance and fear surrounding tariffs and general uncertainty distract you from the fact that CrowdStrike once again reported an outstanding quarter. They beat estimates for both revenue and earnings per share, delivered free cash flow over $1 billion for the year for the first time in company history, marking a record 27 percent of revenues.

Look, this is not to mention that CrowdStrike became the first independent software vendor to reach $1 billion in sales on the Amazon Web Services marketplace in a single year. Plus, when George Kurtz came on the show last week, he told us that he and his team remain confident about their long-term goal of $10 billion in annual recurring revenue, as there are still several tailwinds the company stands to benefit from.

Now, one of these consolidation as the companies realize the importance of cybersecurity, they're eager to right size with a single vendor that can help them to protect their operations. They want a one stop shop like CrowdStrike rather than putting together something piecemeal. As evidence that this this tailwind is gaining steam, company called out a seven figure contract win with a large state university was looking to consolidate their identity protection needs.

George spent a lot of time on the last conference call talking about the importance of his exposure management business, something that hadn't been discussed in the past. He explained how easy it was to add on his Falcon Flex offerings, called out big wins this business has had already, including with a large radio station, a multinational shipping line, and a large Asia-Pacific health care provider.

While government spending has been a tailwind for the cybersecurity business for quite some time, there's no doubt that the stock's been hurt by the Trump administration's big push for cost cutting. But I don't think you're going to cut cybersecurity spending. Do yourself a favor and read the last conference call. George Kurtz talked about, quote, an adversary stockpiling akin to the Cold War era, end quote. When it comes to the geopolitical AI arms race, as George puts it, quote, AI in the hands of more adversaries intensifies the market need for a crowd strike, end quote.

When you read his additional commentary on the democratization of destruction and how tools like DeepSeeker are making adversarial AI easier and cheaper to develop against you, you might be willing to volunteer more taxes if it means our country has what it needs to stay safe. Besides, Elon Musk and his guys at Doge perfectly understand why we need this stuff. They're tech guys. This is in their wheelhouse. Government's really looking to save money on cybersecurity? What a better way to do it than consolidating different vendors.

Besides, what President Trump wants to be responsible for losing, who wants to be, does he want to be responsible for losing an AI Cold War? I don't think Trump wants that. Talk about a buzzword salad. In short, I still like CrowdStrike very much, which is why we use today's weakness to buy more for the Chabot Trust. As I see it, the company's as strong as ever, and I look forward to hearing more from Kurtz as he continues to drive the strength in his business with the second half acceleration net new annual recurring revenue right ahead of us.

The bottom line, while I don't know what the next few weeks will bring for the market as a whole or a crowd strike in particular, I feel confident in giving this company's long-term strategy my good house, giving me a seal of approval. Given that the stock's now trading at prices not too much higher than the day that disastrous outage last summer, despite the continued strength in the business since then, I think right now you are getting a terrific entry point. Leave room. This is a real bad market. Midline is back in for me.

Coming up, Kramer takes your calls and the sky's the limit. It's a fast fire lightning round. Next. And then the lightning round is over. Are you ready to keep that? Let's start with Mike in New York. Mike.

booyah jimmy this is from garden city new york excellent what's happening i'm a long time viewer and a first-time caller and i want to thank you for all your hard work and help helping us thank you it's greatly appreciated thank you i really appreciate that how can i help you jimmy i'm in the house of pain like all of us right now with the recent downturn in the market

I bought a tech stock a month ago and I doubled up last week right before earnings. And I am really in the house of pain. What are your thoughts on Marvell Tech, Jimmy? Marvell Tech. That's Matt Murphy. I know it's a wild overreaction to that quarter. It's now below where it was when it didn't even have it with AI. It's getting a little crazy out there. I think that Matt is a good company. I would start buying here if I didn't own any. So all I can do is counsel state, of course. I'm sorry.

I wish I had more, but I would be a buyer, not a seller. How about that? Joey in Arizona. Joey. Hey, Jimbo. Joey from Arizona here. Got a question about Verona Pharmaceutical. They have $400 million in financing set up. They've gone up 300% since June in their Fafuta date. And they're going to get bought out by a big pharmaceutical company. Well, we don't know. And you know what? This is one where I don't want to tempt fate. There's no revenues.

to speak of. It's kind of a very dicey stock. It's been supported by a couple of firms, and I think that's terrific. I would sell half and let the other half run. I just cannot recommend a risky stock right here. Let's go to Sean in California. Sean. Hello, Mr. Kramer. Sean here from Northern California. Hey, man, what's going on? I'm just going to jump away from Amos Vineyards.

Also, a hop, skip, and a jump away from Keysight Technologies. Your thoughts, please. Keysight just hit anything that's electronic measurement. I love. I also love Agilent. I think this company is doing incredibly well, and its stock is getting hit, being thrown. The baby with the bathwater. Good stock. Let's go to Amelia in New York. Amelia. Hi. Hi, Amelia. Yeah, hi. Go ahead. You're up.

Okay. It's Jim. I'm on now? Yeah, you're talking to Jim. How you doing? Hi. I appreciate your call. I listen to you in the morning. I listen to you at night. And I appreciate all your advice. I'm retired. Okay. I'm asking about Merck. Okay.

Okay, Merck is too cheap. I mean, it's got a 3.4% yield. Rob Davis is doing very well. It's really, he's made a couple acquisitions. I think they're going to work out. Everyone's just so scared of the key to a patent roll-off, and that's not anywhere near. I think you buy the stock of Merck. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, could today's sell-off mean a buying opportunity? Kramer is using his years of expertise to help you make sense of this market and how you should position for the road ahead. Next. Tomorrow, kick off the trading day with Squawk on the Street.

Live from Post 9 at the NYSE. I don't need an excuse to sell the Mag 7. They're everywhere. That's another Milius note today. Yeah. That P got to 15. And then what happened? Yeah. I mean, look, all I know is that this is a decline moment and a lot of panic. And no one ever made any money panicking. It all starts at 9 a.m. Eastern. Sure, you can get out, but can you get back in?

Selling everything right now feels great. We know that President Trump is now hanging with the Bears and he forced one of the Bulls.

As he himself said, you can't really watch the stock market. The stock market is the problems of the rich, and they don't matter as long as they can take a hit. And that's the zeitgeist from the Walmart White House, where Trump's giving us everyday lower prices for stocks. The Fed on hold, too much inflation. We used to talk about how Powell and Trump would be puts on the market, meaning they represent a floor. You weren't going to go through the floor. Nobody's talking about a put anymore. So, of course, you want to sell. It relieves the pain immediately. You're no longer burdened. You can go about your life again without worrying about your portfolio. Buy, buy, buy!

Today's a good read on what's happening. People are capitulating because they want to get rid of the pain and they don't want to lose the game. But you heard what I pressed.

See, there's just one problem. How do you get back in? Maybe you should be doing buying right now. I know that feels like a silly question on a day like today where the average is being killed. We need to worry about capital preservation, not capital appreciation. But I'm somewhat of a market historian, charting all along the way since 1979. I've spent years questioning why the market hasn't created more millionaires. The average has been stupendous since I got in the business. I'm talking 42,000 points in the Dow. But the individual stocks, they've been far more extraordinary. To get those gains, though, you have to stay the course.

As Ken Langone told us last week, the big gains occur only about eight days a year. And that's the problem. The whole day was obvious that only consumer products and health care stocks make good money. There haven't been many days like this. So people sell their losers out of fear. So out goes Apple or Microsoft and Netflix and Meta. Why not? You don't want to give up the gain. And there is no Magnificent Seven anymore. Scrap it right now. OK, I am banning the term from the show as of this evening.

But think of it like this. Days like today are what kept you out of the big gains of the same stocks. Most people never get back. They don't buy. They forget or they think they can't tend to fade or the market's too brutal. So they stay away and miss these huge gains that would have made them millionaires. It's why you should be thinking of buying the great companies. You're not selling them.

To not get good merchandise as it starts being really cheap is a failure of imagination. To not have held them all the way could be a failure of recognition. Recognition that these things do get better and that management should not static. They do things to make their companies better. So if you sell here instead of buy, you're getting out when maybe you should start thinking about getting in.

Sure, sometimes these sell-offs are really right. Back on October 6th, 2008, I went on the Today Show and said that if you needed any money in the next five years, you should take it out of the market. S&P was at just under 1,100. It was an excellent call. Next thing you know, it was at 666 a few months.

That's where it bottomed. Then the late Mark Haynes, a friend of mine, host of Squawk on the Street at the time, made a call exactly 16 years ago to buy the market. We call it the Haynes bottom around here because it was perfect. The anniversary is the bottom today. I spoke to Mark that day. He said that I'd been bearish and that I'd been correct, but it was time to go positive. I argued with him that my call had been so right, I can't walk away from the terrific call. He said it wasn't terrific until you close it out and that I was wrong to stay negative. I didn't like to argue with Mark. I folded and went positive.

I got a lot of people out before the market cratered, but I never heard a soul bought the stocks back with my mimicking the Hanes bottom. S&P is now at 5,600. They missed a huge number of points. They avoided the big loss and also avoided the colossal gain. It was about as perfect a call as you could possibly make. But when I look back, sometimes I wish I had said nothing because so few people got back in when the market was down 40%. Even then, it was right to stay the course. So in honor of the Hanes bottom, remember, even when it's terrible out there, and it is terrible,

Stocks do bottom, and you have to do a little buying. The lack of clairvoyance of Hayes, well, I plead guilty to that. But we know that you have to do some buying because, well, it's been right since 1979. So I have to ask you something. Are you willing to bet that this time it's wrong? Like I said, there's always a bull market somewhere. I promise you I'll find it just for you right here on Mad Money. I'm Jim Cramer. See you tomorrow.

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