Mad Money w/ Jim Cramer 3/21/25
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Hey, I'm Kramer. Welcome to a special Las Vegas edition of Mad Money. Welcome to Kramerica. I've been with my friends. I'm just trying to make a little money. My job is not just to teach, but to also entertain. So call me at 1-800-743-CBC. Tweet me at Jim Kramer. After an okay day where President Trump indicated that he might be willing to be flexible in the tariffs, David Vidal ultimately gained 32 points, S&P advanced 0.08%, and the Nasdaq rose 0.52%.

After a hideous opening that made little sense, how do we handle this crazy environment? One way is to get out of the office as we did this week and talk to real business people like we did at yesterday's Home Depot manager meeting or today's reporting in Las Vegas. Hence why we're at the Wynn Resorts Delilah restaurant to talk to the top brass at this deluxe hotel.

Looking forward to next week for our game plan, I'm focused on the unrelenting negativity and how it's bringing about real but ignored values. Ignored because it's very hard to buy stocks ahead of the tariffs and a Fed that's no longer willing to help by cutting interest rates, at least for the moment. Look, the bargains are out there, but no one dares to take them because the analyst hedge fund journal complex has created endless fear.

By emphasizing we are in a stagflation moment, even as I'm not buying it, not one bit. The glass is half full here or maybe more. And the tariffs will soon come to pass. And then they'll be behind us. You can see that stocks want to go higher. If we get just a little bit of a reason to be more positive about the looming April 2nd wave of tariffs, stocks get bounced. It doesn't even have to be much. I mean, today during the midday press appearance from the Oval Office, President Trump signaled some flexibility on tariffs, saying, quote, the

The word flexibility is an important word, right? He used it. Sometimes it's flexibility. So there'll be flexibility. But basically, it's reciprocal. Boom. That honestly didn't provide all that much more clarity, but markets seem to like the word flexibility. I like it, too. After all of the major averages were decidedly negative this morning, all of them finished in positive territory, proving once again that there is too much glue.

This morning, investors were obsessing over the negative earnings updates that we got from the likes of Nike and FedEx, thinking that the former was yet another argument that the consumer is rolling over, while the guidance cut from the latter showed that, well, commerce in general is slowing down.

The negativity even extended companies with reports that I thought were very positive, such as chipmaker Micron. When Micron reported last night after the close, its shares initially climbed nearly 7% after hours trading. But overnight, investors decided that, well, in fact, they hated the quarter, and the stock was well into the red before the opening bell. Thankfully, though, we got no additional reasons to be negative during the trading session, and that word flexibility gave us a glimmer of hope. Encouragingly, we didn't even see the late Friday selling has become an unwelcome staple of the second Trump era trend.

Investors have been booking profits due to the fear of weekend true social posts that could roil the market. But today's stocks actually rallied into the close to preserve the modest gains of the day. So now let's look at next week's game plan with an eye toward what's bad. So we're ready.

Take KB Homes, who reports on Monday after the close. The homebuilder has inflation issues, has mortgage issues, right? Rates are too high. The stock's down from just under 90 to around 60. So you could say those are now baked into the stock price. But some investors thought the same way about Lenar, another national homebuilder. They reported an upside surprise in earnings, but talked about how housing prices are going down, albeit slowly. That was certainly enough to kill that stock.

So I don't see a bottom in KB Home, especially when it's trading at 42 in the fall of 2023. The stock's had a relentless run. Time to bide your time. Wait for a better moment. For the record, if you insist on owning a home, but do you mind if you just go with Toll Brothers? I think that's best to read. Lenore did shake off more than half its losses by day, saying closing at 115. That's only down five. I saw it at one point down 12. Lurking behind all the negativity here is the likelihood, yes, of a recession.

recession aided by statclation. Now, if you think that's in the cards, if you think we have recession, you should really consider buying McCormick, which reports Tuesday. This spice company has been putting up big numbers, but even better, you buy their seasons when the economy rolls over because during recession, people do less dining out, more cooking at home. Very positive for McCormick, which dominates the spice and seasoning aisles.

After the close game from GameStop. Now, this stock has been a propensity to go up both before and during the earnings report. And then it just starts to lag because nothing ever really happens. Maybe they'll announce some plan to lever up and buy some Bitcoin. In the end, you can't gain GameStop.

Wall Street used to love the dollar stores because unlike most retailers, they kept putting up stores, generating good growth. They went in the neighborhoods other retailers steer clear of, carrying what looked like inexpensive merchandise. Well, that changed during the pandemic. They raised their prices and raised them and raised them in order to pass on the value proposition. And it's never been the same.

Right. There is no value proposition. These days, the reduced sizes often give you the appearance of value. But people know when they're getting had. That's why I'd stay away from Dollar Tree. This thing does not represent the kind of value that we want or that I used to get when we used to go there all the time. By the way, even Walmart's struggling. So when Dollar Tree reports Wednesday, I'm not thinking it's going to be great.

We got a pair of small business oriented companies that will support Wednesday. Cintas and Paychex. Cintas rents uniforms, provides many other services to small, medium sized businesses. Last time I reported, the market didn't like it and the stock got drilled. I'm worried about small business formation right now. And therefore, I have to worry about a company like Cintas that sells uniforms and then takes care of them.

As for Paychex, this payroll processor has a lot of bearish analysts covering it. And I got to tell you something, they got smoked in that last quarter. Just smoked by the great numbers. Paychex, I think it's going to continue to do well. Be sure to pay attention to Chewy Winter Reports on Wednesday morning. This online pet food store has been going strong now for the last two quarters. Ever since they called the bottom on mad money, they're crushing it. Thursday, we're going to hear from Lululemon. And, oh, man, this is a battleground. I mean, just incredible.

Thank you.

We get pending home sales on Thursday, and we're trying to assess whether there really is a huge slowdown in housing. Instead of just some anecdotal negatives about one company or another, numbers can help spell it out.

Desperate for something good that the Fed cares about? We also get the personal consumption expenditure numbers on Thursday, and this is their favorite inflation indicator. Unfortunately, it hasn't been a good one. Sentiment seems to be turning south. I don't know how I feel. I don't know about you. Because of these geopolitical worries. But we lack hard and fast data that confirms this new worldview. And that's why I'm grateful for the University of Michigan Consumer Sentiment Index on Friday.

If it's real negative, it will confirm the action we've seen in the last couple of weeks. So here's the bottom line. There's a lot going on next week. But until we get some resolution on the trade front, you need to expect more uncertainty, more volatility like we saw today. There's just too much negativity. And for the moment, it seems impossible to fight it. Although when it gets extreme for no reason, as it did this morning, you still have to pounce if only for a trade. Jonathan in California. Jonathan.

Hey, Jim, a big booyah from Studio City, California. Thanks for taking my call. Fantastic. I try to watch your show as much as possible with my father, Saul, who's a major fan and club member. I appreciate that. You can be a member of the club. Go ahead. You and I met back in 2012 when you came to do a talk at USD. I pulled you aside and we talked about the Colbert Report.

I'm calling to ask about a company that's not very exciting. It's an old one. It trades at a good multiple. It's the least controversial, and it's vertical, which is crazy considering who its founder was. I think it should trade like a fixed income, and if the Fed lowers rates, that thing could definitely go up. That company is Ford Motor. What do you think?

I think Ford's got some warranty problems to make it so that earnings always seem to be a black hole. I am not going to bless that. If you feel that way, what you just said, I know GM doesn't have that big a dividend, but I would prefer GM. Let's go to Tom in California. Tom. Hi, Jim. Longtime viewer and club member. My question today is. Oh, fantastic. Thank you, buddy.

You bet. I appreciate all your input. My question today is about Costco and its massive decline in the last 30 days after announcing they don't agree with or stand with Trump's ideas on the DEI. I love this company. They pay much higher than minimum wage to all their employees. I just...

I can't believe that they don't have the wherewithal to— Don't worry about the GI stuff with Costco. Don't worry about it. Here's what you think about. You think about profitability. I care about profitability. I care about growth. Costco's got them. Costco is a buy. Stock is way too low. I know people are thinking it's rolling over. I think that'll prove to be wrong. Buy some here. Buy some next week. Let's go to David in Georgia, please. David. Hey, Jim. Thanks for your time. Of course.

I'm calling about Discover Financial Services, DFS. I've owned it since 2011, so the stock owes me nothing. But I've been taking a little bit of a beating here the last few weeks, like a lot of stocks. And I'm just not sure with the Capital One potential merger and...

Everything that's going on. I'm betting that Capital One merger is going to work. I know that there are a lot of people who this week said bad things about the merger. They thought the Just Farm was going to be able to block it. I'm sticking with Capital One, which means I'm sticking with DFS. I think the deal is going to occur. I could be wrong, but I'm good. But I believe that the likelihood is that it does pass. All right. There's a lot that could move the market next week. But until we get more clarity on the tariff front.

Expect more of this crazy volatility, please. On Man Money Tonight, they say what happens in Vegas stays in Vegas, but not tonight. I'm boots on the ground, bringing you my exclusive of the CEO of Wynn Resorts. Then I'm bringing you the rest of my conversation with OpenAI CFO. We look at the private player's work with some of the biggest names in tech. And later, I'm rounding out my week out west by applying some of my key takeaways to this turbulent tape. So stay with Craver.

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We're gradually making our way back from the West Coast after hitting up NVIDIA's GTC event earlier this week. Hey, now we're in Vegas. And while we're out here, I figured this would be the perfect time to check in on Wynn Resorts, the casino kingdom with operations in Vegas, Macau, Boston, plus a new project that we're going to talk about, UAE. When Wynn last reported mid-February, they delivered a shockingly good quarter, and the stock caught fire.

Since then, it's pulled back substantially, along with the rest of the market, based on the worries about the consumer. So is this a buying opportunity or does it really make sense to be concerned?

Boots on the ground. Let's figure this out. Let's check in with our host for the day, Craig Billings, the CEO of Wynn Resorts. Mr. Billings, thank you so much for having us. Welcome to Mad Money. Thank you, Jim. Great to be here. All right. Not all casinos are created equal. And unless you've been out to Vegas, I have, you might not realize that this is really the deluxe place in Vegas.

How does it distinguish itself? Why is it the destination for even the Eagles? I'm not talking about the Eagles that are in the sphere. I'm talking about the Eagles that are from Philadelphia. Right, the important Eagles. Yes. Well, I tell you what, if you look back over the course of the past five years, our EBITDA per room premium that we have relative to our two biggest competitors has grown 150%. We always ran at a premium, but it's grown at 150%. So how do we do that?

Of course, we have a very strong legacy of amazing design, which you can see in this room.

of amazing service, but we've also evolved the business a lot. We've evolved our food and beverage. We've evolved our retail. We've evolved our programming. Really, there isn't a component of the business that we haven't made tweaks to really in order to make sure that we are the place to see and be seen in Las Vegas, and that's paid dividends. Now, one thing that I don't understand, and we're going to work our way through this after we talk about the properties, is that your market cap's $8.7 billion.

You have $2.4 billion in cash. I know there's debt, but let's put that away. I think that this palace right here could easily be worth $8 billion if you had to build it again. Your other properties are even more expansive. Explain to me, if you can, the disparity between trying to build a new casino like this and what your stock price is. Well, I guess avoiding the vagaries of the market and where the money flows have been over the course of the past couple of years, which has been disproportionately into technology and AI, as you well know.

If you look back at our total shareholder return over the course of the past, against really our top five competitors, over the course of the past six months, one year, three year, five year, we're either first or second.

So I really think it's an industry issue. Certainly, we feel like we're undervalued, which is why we've been buying back a ton of stock, frankly. So as we look forward, what do we do? I think the most important thing we can do is continue to produce significant EBITDA out of these assets. We had a record EBITDA year in 2024.

We have to continue to delight the customer, and that shows up in our net promoter scores, which are higher than they've ever been, actually. And we have to execute and deliver on our significant, I believe, the best development project in the industry in the UAE. Okay, let's go there. You're talking about a project that's $3.9 billion. Now, at the time of your conference call, you had finished up to the 35th floor. Where are you now? 42nd. And how high are we going to make it? 70. Holy cow.

We do. Believe it or not, we do about a floor a week for the exterior. And when that's done, how big is the gaming market there and what do you think you're looking for? Yeah. Several analysts have come out with gaming market estimates ranging in the five to eight billion dollar range. So to put that in perspective, the Las Vegas Strip, a little over six billion. So that's a substantial market opportunity.

The project is about five million square feet, 1,500 rooms, 25 food and beverage restaurants. - 1,500? - 500 rooms.

OK, they're not a lot of places that are that big. No, it's it's substantial. An ample gaming floor and then a production show that actually we're creating from scratch. So we're really, really focused on the wealth and affluence and population in that market. Now, I know you bought a place in London and I thought that that was a small, a great gateway because that you need to have one. You need to have UK people.

know that that's now, I guess, the biggest, safest, most fun place to go. You're right. So you framed it well. So it was a small acquisition in dollar terms, but a big acquisition in strategic terms, because not only do we buy a database of customers that are from that region, many, many customers that we will interact with in the UAE spend time in London every year. And so that's a real opportunity to continue to delight them and build the relationship. Now, Mikhail, I've always felt that you own it.

You've got incredible properties from the days of Steve Wynn. But I also know that you're dealing with a captive audience, so to speak, with the government. What are they doing and how is and who's coming now? Do you have good mass and good regular, so to speak, or high end? Describe to me what's happening in the state of play in Macau. Sure. Two things on that.

First, the way we see Macau is here you have a market that's five times the size of the Las Vegas Strip. China's obviously the second largest economy in the world. Macau, for us, plays an important role, really, from two perspectives. The first is it drives free cash flow that we can deploy and use to continue to grow. And the second is it drives cross-property play.

Our market really is the premium end of the market there. So if you look at gaming revenue per table, we do more than anybody else there because we really service the premium end of the market. And that market has been relatively healthy over the course of the past couple of years. And then you have Boston, which I don't really understand why. Maybe you can tell me. I mean, I know the guys from Vichy tell me about the property, but why Boston?

Boston, we'll look at any gateway city that has a substantial population, substantial airlift. So Boston was very unique. It was a unique time and place, and it's a unique market. And so Boston, which is primarily a gaming business, less on the non-gaming side, it's great. It chugs along. It produces cash. Again, we can redeploy that cash, and it's a stable place. Now, when I think about the buyback, and I think about the fact that you've got a great land bank here,

What you can do with Dubai. I don't know. I don't know whether I want to buy back stock or build still one more place. But the stock is maybe the best buy of all of them, because otherwise you don't think your place is as inexpensive as it really is. Right. Right. Right now, I think you're right. So we like we can look out to the free cash flow profile in 2027. We can look out to the step change in EBITDA.

from the UAE and we like the returns we get from stock. By the way, our land bank is in the UAE too. Right, right. So you can do more there. I think there'll be people who say, well, who goes to the UAE? I know that when you're in our business, people are the, I'm going to say it, the rich people in business go there. All right. But tell, describe to people the UAE and why people say, well, why would I ever go there? Because it is kind of like a vacation paradise. Yeah. Three things that are great about the UAE. First,

Investors are lauded. Foreign direct investment is appreciated. It's incredibly stable. The governance is strong. Second, there's 10 million people. Okay, compare that to a U.S. MSA. There's 10 million people. 80% of them are expats. They're not Emiratis. I don't know that. 80 million, over 80 million of airlifts in Dubai, at the airport in Dubai, that's 45 to 50 minutes from our property. That's substantial. It's very significant airlift.

And third, we will be the only operator there for a significant amount of time. Oh, my God. Well, I love it. The problem with here is there's so much competition. No competition is fantastic. We're going to take a break. More to come with Craig Dilley, CEO of Wynn Resorts, after the break. Feelings stressed? The American Heart Association says even a brisk walk can reduce stress and improve your mood. Join us on April 2nd for National Walking Day and find tips and resources at heart.org slash movemore.

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Before the break, we checked in with Craig Billings to see a wind resource. But we had a lot more ground to cover in the casino space. So let's get right back at it. I've got 30,000 people when we start. Now I want to go right here. We are at Delilah. This was one of the most special places I've been. Just explain where we are right now. Sure. You're in Delilah, which is honestly our most popular restaurant, probably the most popular restaurant on the West Coast.

Right now, it's an incredibly beautiful... On the West Coast. Yes. It is renowned, and it's very, very difficult to get a reservation. Incidentally, we normally have a no cameras policy in here, Jim. Oh, well, thank you. We broke that rule for you. That's very kind of you. But yeah, it's incredibly popular, Delilah.

And it's an amazing room designed by our wind design and development team, many of whom have been with the company, actually going all the way back to the predecessor companies, Mirage and even Golden Nuggets. So I'm glad you like it. And just give me a sense of, for instance...

betting here. It's March Madness right now. You can't just go and take a seat. The seats cost money. Yeah. Demand is greater than supply. So we have to figure that out somehow. So there's minimum betting requirements that you would need to get a seat in the sports book. And as you can see, it's jam packed. Well, they said $350, but I just wanted to casually sit down and put some money. That doesn't work like that. So where do you stand on actually gambling in terms of

trying to make more money. It's very crowded. I had Flutter on a couple weeks ago. We have DraftKings on quite a bit. It's a tough market. Is it worth participating in?

Yeah, it's an interesting one. Here in Las Vegas, first of all, only a third of our revenue is gaming. And over the course of really the past four years, we've taken a significant amount of gaming market share by all the things that I talked to you about earlier, how we've really stayed true to who we are and evolved the business. Outside of Nevada, you know, for years, if you go back to 1990, gaming was in two states.

Right? And so for years and years, regional gaming was a greater than GDP growth business. Now it's much more about infill. It's about stealing share. And so you have to choose your investments very, very wisely.

But the competition makes it so the gross margins aren't what I kind of would like, right? I mean, you just can't make as much money. Or have you carved out such a high end that this is just really a pass? Yeah, our business is different, particularly in Las Vegas. Again, because so much of our revenue is non-gaming, driven by room rates, food and beverage, et cetera. It's a different business than a pure gaming business. Let's talk major events. Formula One, very popular with our viewers. Your relationship with it?

It's great. Our relationship with Formula One in general is great. They do an amazing race here. We end up being kind of the home base for a number of the teams, many of the drivers,

Really anybody who is affluent and in attendance at the race. And it's really, really good for the town and really good for us. Now, let's talk about what you could do. You could build, what, another two, three, four casinos this size? Do you have that kind of land? If we utilized the—you may have seen the golf course out behind our building. If we utilized the golf course and the land that we own across the strip, we could probably do two to three casinos.

Our focus would be on the land directly across the Strip. We have really three things in motion right now. We have the UAE, where we also have a land bank, a great market where we will be the only operator for some time,

We're in exploratory stages in Thailand, which we think would be an interesting market as well. And then we have the land across the street. We're simultaneously thinking about all of those and how to deploy capital for the best return. Let's go into the consumer. One of the reasons I wanted to speak to you so badly is the level of gloom is palpable. I have to think, and I tell people that business is the greatest source of social change. Business is the source of jobs. It's the source of health care. It puts food on the table. And in many ways, it's not political.

I have to believe from what I've seen here, and admittedly it's anecdotal, not empirical, we're doing pretty well in the country. Agreed. And how are things holding up during this period where people tell me that the consumer is worried about tariffs, worried about all sorts of things they can't control? Our customer is healthy and fine right now.

Who knows what happens with the macro economy? Our customer tends to be more levered to the market and what's happening in the markets than they are in income or inflation per se. In our markets? In the financial markets. Well, then they're doing damn well. Agreed. So what we see here is fine. There's certainly a lot of noise out there at the moment, as you alluded to the other day. I saw you on CNBC yesterday.

But right now, things feel good. I'm constructive. Look, I walked down here. I walked up. I wanted to get a pair of pants in your area where the Brioni is, Brunella. Yeah, look, I'm not going to spend $1,000 because I want a nice pair of pants on the way back. But I do like the fact that it was Milan, that you have recreated Milan here. And I don't know a lot of places that are Milan. It works, doesn't it? Yeah, it works well, particularly for our customer. And you have a customer base that I...

I don't know whether anyone else really has it. I mean, that's so how did the word get out that you're the place to go? Well, there's a long tradition and legacy here of excellence. And what we've done over the course of the past several years is a lot of the evolutionary moves that I talked about. And we've also been incredibly deliberate about making sure the world knows about that. We've been more active from a social media perspective than we have ever been in the history of the company. What is it? TikTok? What do you use? Everything.

And how about that versus linear? Do you think that linear is sunset? We don't do billboards and TV commercials at all. Now, why? We do 100%, 100% social media-driven marketing. But you're trying to attract high-end. People would say that's a low-end. No, there's a lot of high-end folks on Instagram every day. And so if we can create that sense of CNBC and FOMO, if we can create that sense, we will drive business to the property. Ooh.

So we're kind of T-Rex and Stegosaurus on TV, but people still watch something. Now, how are you guys doing in terms of the whole thing? How are you guys doing in terms of the whole, just in terms, and explain how that works and how random it is. I mean, I know that for the DraftKings guys, if the favorites win, it's not so great. Yeah, I tell you, if you're in the day-to-day grind gaming business, hold is actually quite predictable. Yeah.

If you're in the high-end business, hold is not predictable at all because you can have one player that can move you in one direction or another, and you may hold extra high or extra low on any given day, and that's just part of the deal. We're fine with that kind of action because we know we can fade it. We know we have the business volumes to deal with it. But even just what TV game, what basketball game people bet on here, what's the most popular game to watch at that given moment? I mean, everything's in play in this place. Everything.

So do you worry every day? I mean, do you worry every day about how much you took in on the Super Bowl? I know that was a really tough compare. Very difficult to try to figure out. The analysts keep asking as if you didn't say it was a tough compare. You play with pretty much an open hand. You have to think about that stuff. When you're in this business, you have to think long term because hold will normalize over time. And so, no, I don't worry every day. Every morning I get an estimate of the EBITDA that we did the day before. And I judge the business on the back of that estimate.

But, no, I don't sweat the hold on any given day. I remain mystified, as people who belong to the CBC Investing Club know. I am mystified about the catalyst, but I think that you're absolutely right when you look at the cash, look at the properties. It's absurd, and eventually absurd changes into great wealth. Thank you. Thank you very much. Craig Billings, CEO of Wynn Resorts. We have money back after the break. Thanks. Appreciate it.

Earlier this week in San Francisco, we got a chance to speak with Sarah Fryer, the CFO of OpenAI, which was the original pioneer of the generative AI business with ChatGPT. Even though this is a privately held company, it's got a valuation that's larger than most publicly traded ones. And it's got its finger on the pulse of the most important trend in this market. That's why our interview went long. And we decided to broadcast the rest of that interview tonight with Sarah Fryer. Take a look.

Now, I want to talk about what if you had an outfit that made it so it was much easier to get to where you could really use you, that the onboard is much cheaper, that it would be terrific. I would say that you're worth a lot more. But if the company that did that is from China—

instead of, say, Estonia or Lithuania, suddenly we're worried. So deep-seek, I think, is a problem because we're scared of China, not because we're encouraged by deep-seek, which is what we should be if we're you. So let me take a step back just where we are in our business. If I'd been here two years ago—

We would have been the model company. And that would have been what we've done. Our North Star is always to be on the frontier of intelligence. That's where we are today, even with a deep seek on the scene. But that's what all we would have been. But today we're now this much more multifaceted company that can really compete at many levels of the stack. I've already talked about infrastructure in Stargate.

But now think about where we're going. We're going up into the API layer that allows us to work with developers and enterprises to get our technology broadly used in the world, like with Grab or you said Estonia. Government of Estonia has deployed ChatGPT wall-to-wall to all secondary schools. And they're fabulous there. I wish Deep Sea had come from there, Danf.

But then go right up into that layer where you have a consumer or someone in a workplace. And there we're driving deep personalization. So it really knows you, Jim, me, Sarah. So not just our demographic. It knows all of your work, right? If you've done all of these research reports for all the CEOs who've ever visited you, you now have a stack of those. You're not going to switch platforms.

And then finally, you'll see us do more collaboratively. Like, let's say we're both working on a video together using Sora, our video generation model. We are going to be able to share that back and forth. So you're going to be on our platform to do that. And 400 million people are doing this every week already. So we're already showing that we are very, very much becoming a multidimensional company. So, I mean, look, you're from Wall Street, but you're from Main Street. You're from small business.

What we thought was at scale wasn't until DeepSeek, and yet somehow we thought that's bad for us. Is that a media-generated fear? Because when I heard about this, the first thing I thought was, like, wow, mass, unbelievable. I didn't think scale could be 8 billion people. I thought it could only be our country. Yeah, no, first of all, we want to make sure that AGI goes to everyone. Right. And I think a big part of scale is cost. Mm-hmm.

I like where you're going with that thought. Thank you. And so I think about the business model being more about driving access. So if I can make more revenue, I can offer more access. If I can lower costs, I can drive more access.

And so to me, the deep-seek moment as a CFO, it allows me to go internally and say, OK, we need to continue to stay really efficient. This is why building our own infrastructure is important, because the cheaper we make it—and remember, AI right now, costs are coming down 10—

10x every year. It's insane. Our GPT-4 API to GPT-4 mini, which is our workhorse model today, cost came down 99% in two years. I have never seen anything like that in any of my careers. Let me be sure, because the NVIDIA has not come down in cost.

What's happening is, first of all, the accelerators, so what NVIDIA sells, are becoming much, much more productive. So on a per GPU hour, you are getting much more compute back to your box. He says it's four to one. I don't know if that's... It's Vera Rubens. We are so excited to probably be one of the first users of the next accelerator. So that is getting less expensive overall in terms of the output.

But then the data centers themselves are becoming much more efficient. And particularly at these mass scales that we're building, it really helps with economies of scale. You've been able to intermediate everywhere. You've been able to make convert. You convert people. You're incredibly wise about everything. Can we get a tweet which just says, you know what? I listened to Sarah Fryer on Mad Money and I

I'm no longer going to get mad at them and they have the money and I got to focus on Doge. Can we get that after listening to you? I certainly hope so. I hope so. You certainly should. Now, where are you guys with, are you aware

Are you where Amy Hood is on Microsoft, where she says, listen, what's good for them is good for us? Or is it important to recognize that Mr. Nadella wants to kind of make it so he's got his own thing and you've got your own thing? Look, I think we'll be strong partners for a long time. Amy and I have been friends for— Well, that's right. Bring her up. It's 30 years. 20-plus years. Don't age me, Jim, but 20-plus years. Hey, my bad.

But look, first and foremost, we are going to be really strong partners because so much of their technology is built on top of our AI. So don't lose sight of something like Copilot, their APIs. Those are OpenAI's technology going into Microsoft's product to make them smarter. So that's important. Number two, they're going to be a large majority of our compute capacity for many years to come. Even though we're now broadening out to work with partners like Oracle and CoreWeave,

Microsoft's super important. So it's why Amy and I spend most weeks together at some point. And then finally, credit where credit is due, Satya, Sam got together when no one believed that AI was going to be the next era of computing. And I think they were first on the scene. So I feel they deserve credit and are going to continue to push the envelope here. And as you are the king queen of partnerships, I imagine that you're working with Tim Cook at Apple, not just because...

Auburn's number one, Duke's number two in the NCAA. But how's that relationship? Because I know that if I know that I have your stuff readily available, it's going to make my Apple proposition even greater. And I'm a total Apple house. So where are you guys? Yeah, so we are the partner to Apple.

on how do we create Apple intelligence on the phone. Now, is there more work to do? Definitely. And we don't know what the payment terms are yet. We are so early. We just rolled this out right ahead of the holidays. So we're about two and a bit months in.

I think we have a lot more work to do. We would like to see more intelligence at that end point. I think Apple needs to keep watching what Google is doing as well. And so competitively behooves them to keep working hard here. But I think we're bringing them literally the frontier models to do the maximum with new intelligence. And what are they giving back to you? So they give us mass distribution to start with.

And then it's just the beginning of this relationship. I like that you brought up Duke, too. Do you know that my son is going to Duke? I understood that. Yes, indeed. I do some homework, and now I'm raising it to $600 billion. That's how much. I don't accept my money, but that's what I think you should be worth. That is Sarah Fryer, CFO of OpenAI. And yes, I confess to being a huge fanboy of everything that Sarah Fryer's involved in Mad Money's package with.

It is time. It's time for the Light Round. Crazy Round, buddy. That's where I take your calls. Rapid fire. You say the name is Tucker Taylor. Bye, bye, bye. Just heard another course ahead of time. My staff prepares to grab a food while you're playing a sound. And then the Lightning Round is over. Are you ready? Let's go to Elaine and George Elaine. Hello. Elaine. Yeah, you're with Jim. What's up? Hi. Oh, yeah, Jim. Hi. Oh, yeah. What's up? I'm a love...

I'm a long-term viewer, and I just want to thank you for everything you do for us small investors. My company provides CPAP machines for people diagnosed with sleep apnea. It's made a big difference in my life. And I want to know what you think of ResMed.

Sure. Okay, so Mick Farrell came on the show and told me that my, let's say, my reservations about recommended stock, which is about GOP-1, were misplaced and the company's doing quite well. I'm with Mick. He's never steered me wrong. I like the stock. Let's go to Roger in Florida, please. Roger. Hi, Jim. Boop, boop, boop, boop, boop, boop, boop. Booyah from Sunshine in Jacksonville, Florida. Oh, man. I love Jacksonville. Okay, go Jags. What's happening?

My question is about this customer engagement AI company that missed the last quarter by a penny or two. It's Twilio, T-W-L-O. Yeah, they did miss the quarter. And I think the hype's too great on Twilio. I know everyone got all excited about it, but that's a very crowded field. I'm going to have to say no, I don't want to buy Twilio here. Can we go to Dave in Illinois? Dave.

Dr. Kramer, holy cow, interviews with Chuck Robbins, Sarah Fryer, Ed Decker, and of course, otherworldly Jensen Wong. Jim, you're a national treasure, my good man. Wow, Dave, you're way too kind. I wish I were. I wish I were. I wish I were half of what you said about me, but I thank you very much.

Jim, this $18 billion company operates entirely in the U.S. as a regulated natural gas and electric utility. It's also beating the market up 6% on the year. Of course, I'm talking about low-beta NISORs. So, Jim...

Dave, I've liked Nice Horse forever. I've got to tell you, I recommended it when I was at Goldman Sachs, and that was like 140 years ago. I think you've got a good one there. I like consistency. It's got it, as always, Dave, delivers. Let's go to Ian in Florida. Ian. Oh, yeah, Jim. How are you doing? I am doing well, Ian. Thank you for asking. How about you? I'm doing great, Jim. Third-time caller and investing club member as well. Fantastic. Fantastic. Thank you for being a member.

Jim, I wanted to pick your brain about stock. The 52-week high was $2.30, and it's really been beaten up. It's around $1.15 now. You had a lot of insiders selling lately, which kind of worries me, but I really like the company. Do you think it's a good time to get into Reddit?

All right. Steve Huffman did a really good job. The people were really big. They got that stock ahead of the quarter. There was no way he could ever meet the expectations. It's now come down tremendously. And I think this is a good time to start a position. Stock was up six today. I don't want to buy up six. If it comes in on Monday or Tuesday, buy a little. Let's go to Henry in New York, please. Henry. Hey, Jim. Big thank you for sharing your encyclopedic knowledge of the stock market with us home gamers. Thank you. Thank you for saying that. Well,

With all the tariff talks on steel and aluminum, steel seems to be getting all the love. I'm wondering about the aluminum side of it. I'm worried about aluminum. Aluminum's been down for three straight weeks. That does not go well for Alcoa. I want to stay away. Let's go to Eric in New Jersey. Eric. Go ahead, Eric.

You're up. Hey, Jim. Booyah. Just want to give a quick shout-out to my roommate. He's an Eagles fan. I know you're a diehard, so just had to shout him out on here. Well, he is horse sense, that fella.

Okay. He does. He has good taste and good horse sense. I'm calling about a stock. It's down about 20% from its all-time highs, reaching, I think, early February, right before they reported. They seem to be really catching up in artificial intelligence here. And, you know, they just officially announced a huge acquisition in the cyberspace. Should have some synergies with their cloud computing. Of course, we're calling about Alphabet.

Yeah, you know, I got to tell you, the more I look at it, the more I am concerned that they bought the Wiz. They might as well go to Genos for $32 billion. And I'm concerned. Why am I concerned? Because I stopped going to Google. I can't be alone. There's just other places to go to. And that, ladies and gentlemen, is the conclusion of the Nightingale Hour.

We learned a lot this week, especially when it comes to our ability to spread fear simply by talking about the possible tariff disaster that could befall anyone who buys or sells imported goods. You saw it all morning, although fortunately, at least on our hour, we decried the negativity and suggested that perhaps we should take a glass half full approach.

I'm in the minority. The drumbeat of negativity is way too loud. It's very easy to create pessimism. You just keep talking about the potential damage from the tariffs and eventually it'll come true. You can scream inflation. Go ahead. We're in a real jam of a moment.

The market can't get to where it might have to go, which is conceivably lower, because there are many people who still believe that the tariffs will mean nothing. These buyers assume there'll be a pebble dropping in the sea. I think it will be worse than that, but I am not in the catastrophic camp. We just don't do enough importing in this country to make that much of a difference. Then there are other people, chiefly, I think, traders, who decide that the administration's slapdash approach to these tariffs has created so much confusion that we could be headed for a stagflation economy.

And nobody hates that place more than Wall Street. In that environment, only the short sellers win.

Right now, except for days like today, which start negative and go positive, the latter camp has the upper hand. Of course, I want to be empirical here. Some industries will be hurt badly because they have a huge concentration of product from overseas. We sold our best part for the Chapel Trust because of the tariffs. I have to imagine that Macy's or a Kohl's could get hung up on these things, too. You know what? Even Walmart could get it, although they carry a preponderance of U.S. goods, mostly in the grocery section. But if we're talking about the direct impact of tariffs, I actually think that the vast majority of us won't really know the difference.

It won't cause another wave of price increases like we had in the pandemic. Then again, it won't be transitory either because the president's really eager to slap on tariffs in order to raise revenue. He's a true believer. Still, to circle back to what we saw this week, it would be easy to say that we saw Home Depot doing great. We saw that OpenAI can't handle all the queries and it's starting to make good money on subscriptions so it can afford to buy more and more chips from NVIDIA. What else? I mean, I have never in my 40 years of knowing Michael Dell ever heard him be this bullshitter.

And that includes the 90s when things were going great guns. We saw that arm holdings is desperately trying to meet demand. Tariffs won't stop this kind of technology. Of course, these stocks are part of the S&P 500. Right now, they're considered heavy. There are so-called death crosses all over the place, a chartist term that means the stock's going to really roll over and hurt you. And yes, it is hard to stick your neck out.

Because the president's people haven't been able to quell fear. So the hunker down is going to hurt retail, even if you believe that the White House has very good reasons to get tough on our trading partners. And they really do. Although the administration is bad at articulating them. And if the president makes some exceptions and things are all part of one big no exclusions policy, well, that's pretty positive.

Me, I don't know, as Jensen Wong said, that we simply don't have enough people to do what's needed in this country. That matters. It's why we need physical artificial intelligence that he showed us to do the work. Otherwise, we need to keep outsourcing overseas. And that's about as long term bullish as you can get.

We need the robots. Bring them on. But I'm not going to get in the way of a freight train of grizzlies. No, I can't do that. Sell, sell, sell, sell, sell, sell, sell. I'd rather step aside of the tracks and let them pass. In the end, what I saw here is bigger than a head and shoulders pattern, a 50-day moving average costing over the 200. The charts can't stop it. The bears can't stop it. But the palpable sense of dread that analysts and some of my compadres in the media can keep you out of it, they can.

What can I say? Journalists fear-mongering has done more to keep you out of big long-term winners than any other force. That's a shame. You can't afford to let it get you, even when people are temporarily right to be concerned. I like to say that there's always a bull market somewhere. I promise you I'll find it just for you, right here on MadMoney. I'm Jim Cramer. See you Monday.

All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC, NBCUniversal, or their parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium.

You should not treat any opinion expressed by Jim Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit cnbc.com forward slash madmoneydisclaimer.

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