Mad Money w/ Jim Cramer 3/26/25
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Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people want to make friends. I'm just trying to save you some money. My job is not just to entertain, but to educate you. So call me at 1-800-743-CNBC or tweet me, Jim Kramer.

It's time to praise the winners, the ones that don't need to wait until April 2nd to find out whether their business will be slammed by tariffs when President Trump announces whose earnings will be cut and who stay the same in a host of industries. Because tariffs are like taxes, and they can cut deep into profits. Today it all came together, even as the averages got hit, Dow slipping 133 points, as it's been losing 1.12%, but the Nasdaq tumbling 2.04%.

Wall Street basically decided to rally around the domestics, especially on the service side, and really put the wood to companies with big international businesses. You know what? It all makes sense. Because after the close, President Trump announced a 25% tariff on all cars made outside the U.S. And that is a lot tougher than many thought we'd see, although it's something that I suggested could happen this morning. All the better to own service company stocks. So fair warning, when I said that this could happen,

Well, I couldn't find a soul to believe me. Yet now there will be huge tariffs on 7.38 million cars coming here. And I think it's going to upset the world. When? How about tonight? But that doesn't mean there can't be winners here when the smoke clears. All you got to do is look at the S&P leaderboard. The stocks have shown brightly today. At the top of the even is an old Kramer favorite, Cintas. It's the uniform rental play. It aids more than a million companies, mostly small and medium-sized businesses with profit.

much more than their clothes, used to be just uniforms. Now they've got natural accessories, mats, mops, first aid equipment, all sorts of restroom supplies. Centos crushed the numbers today with much better than expected revenue growth, the highest gross margins the company's ever had. CEO Todd Schneider reached out to me to tell me, quote, there is some uncertainty in the marketplace, which we are carefully monitoring, but our value proposition continues to resonate, end quote. See, service business small cap not worried about

tariffs. Now, I was bummed to hear that they're no longer pursuing a merger with Uniforce, but the target didn't want to play ball. Too bad. Could have been an unassailable giant that we'd all be talking about. But after looking at this quarter's book of business, I know that Syntox can live without them and is not impacted by tariffs. And now there's paychecks, which we have on tonight. Paychecks work with small

and medium-sized business, U.S. businesses manage payrolls. And they offer all sorts of services, services being precisely the kind of thing that won't be hit by tariffs. Remember, you may think that's a low bar, but think again. So many of our major companies have expanded overseas that the sea of the S&P 500 is pretty much blanketed with mines. And we have very pure public service companies. There's also Dollar Tree. That's the all-American dollar store that imported very good numbers today, but mercifully dumped family dollar. No, no, no! Ah!

Now, that was an ailing business. It never should have been bought in the first place. More on that later. Now, I know a very significant portion of Dollar Tree's merchandise comes from China. But on their conference call, they said they'd be able to mitigate a lot of the costs. Now, that is great news. No wonder the stock valued more than 3%.

Probably look at a little alpha-chromaline health care. Again, I'm looking at the leaderboard, the domestic health insurer that works with state governments to give people health care while trying to keep costs down. These guys have no exposure to tariffs whatsoever. One reason why the stock could rally more than 4% today. That's an ideal service business when you're talking about 25% tariffs on foreign cars.

Now let's consider the other side of the trade, the biggest losers, all of which were somehow connected to the data center, except Moderna, which plunged 7% because of Financial Times story. It says they might be targeted by RFK Jr. in Health and Human Services, and it's certainly possible.

Now, what happened in the service side here that was actually difficult was Supermicro. They provide hardware, but they also provide services. They, along with Arista Networks and Broadcom, they were all part of the data center story that people seem to have cooled on. And then what is really the one at the blast center, right where you most felt it today? NVIDIA.

Hence, it's nearly 6% decline. We spent a lot of time in NVIDIA last week. Right now, people don't like the stock of NVIDIA. Now, we can go over all of these, and I can tell you that many people believe the data center story is done after rumored canceling of some data center builds by Microsoft.

But given how intertwined Microsoft is with an alpha called OpenAI that we talked to last week, that's the alpha behind ChatGPT, I think it's possible Microsoft's cancellation may simply mean that they're making OpenAI pay for its own computing power. I bet the data center build-out continues to pace, but very few people believe right now in my view. We're at a curious moment here where any reassurances that the industrial revolution of AI is still on just won't cut it. Every single stock in the sector is being mauled by the bears. NVIDIA is being torn to pieces.

So let's go to the epicenter of the playoff soon, because that's what I like to do. I want you to put your containment suit on first, though. Make sure you have a Geiger counter with you, because NVIDIA is being subject to nothing less than a nuclear bear attack, and the radiation burns are scaring shareholders as they question what the heck they're in this one for.

Let's start with the White House. There have been a feeling among executives that the strictures put on by President Biden against NVIDIA when he did it right on the way out, ones that limited the countries that NVIDIA could sell its best chips to, they might be lifted by President Trump. Now, all day, I'm hearing that that's wrong, that Trump actually may even go harder against NVIDIA.

and that alone could be a reason to sell the stock. But there's more. This morning, the Financial Times penned a story saying that Nvidia's chip somehow ran afoul of Chinese pollution controls. Given that China puts up two coal plants a week, I was astonished to hear that they could care about the pollution at all from Nvidia. It sounded like the typical journalist hit job against Nvidia that keeps popping up. Nevertheless, along with the rumor White House shut the slap down, well, I

Well, you can expect the stock to get hit. I know some of you don't care about the technicals, but you know what? There are enough people who do that I'm going to bring it up. NVIDIA's death cross formation happened about a week ago. That's where the 50-day moving average plunges below the 200-day moving average, and it's widely seen as a terrifying development. Sell, sell, sell.

Why does this matter? Because this stock is the subject of a tremendous amount of technical pressure. There are multiple inverse NVIDIA ETFs. That's your bets against the stock. There are also huge bets being placed all day against NVIDIA in what's known as the zero-day options market. That's where traders can make a one-day bet against NVIDIA, and boy, are they ever doing that. How does it work? You buy a put option on the stock. The customer on the other side isn't interested in making a long bet, which is what they have to do. So what do they do? They have to go in and short the stock.

The people who do these trades aren't all that savvy about NVIDIA, but they're savvy about the death cost, which makes it a bit of a self-fulfilling fair raid. Sell, sell, sell. The house of pain. So what do you do if you own NVIDIA? Well, look, if I were back in my old hedge fund, I'd ask myself, why the heck did I buy this in the first place? The answer is that I believe in the new AI-powered industrial revolution where everything tech has to be remade with NVIDIA's GPUs. A

allowing autonomous vehicles and robots to eventually rule the world. I haven't changed my stance. However, I don't believe in self-flagellation. I see the stock coming down from here. I've been saying that. It's become a whipping boy. I've been saying that. It will only get worse with tonight's tariffs. Believe me, it's okay to believe in the stock, but understand that right now it's not right. Down here, less than 25 times this year's earnings estimates, though. I think NVIDIA is cheap, but I...

I don't think it's done going down because the bears can plant stories about it. And as long as it goes down after the bears plant stories, that means the stock is in the wrong hands. So how do I describe it? I think the stock trades like a wavy, inflatable tube man, also known as an air dancer. Not exactly a Statue of Liberty. My advice, if you think Nvidia is cheap, then you...

And the data center, the chief home of video chips is spent. Well, then what? You know, there's nothing wrong with owning a tube man, except when you see a move south like this, you have to give it some room. You have to let it come down.

OK, you know, there's two men, you know that it's like, you know, used car. That's what the NVIDIA feels like right now. All right. Now, one day we'll get certainly we're going to get some certainty on NVIDIA. And if we can get that certainty, we also know what's happening with a whole host of other stocks. They'll all stop going down. Marvell, TACO, Broadcom, GE, Renault, I.

But the bottom line, Nvidia is the linchpin of this group, and the pin is failing. I don't know whether the stock plunges from here, but if you like it enough to keep owning it, I say prepare for the tube man turbulence. Jeff in South Carolina. Jeff. Man, what's shaking with you, Mr. Non-Tariff Man, or else you wouldn't be so up. What's going on?

I'm watching that as well. The JP here from Okita, South Carolina, a long time, third time. Okay. So days like these, as you usually open up, we're just trying to save you some money today. Right, that's it. And tomorrow, too, and already I'm feeling it, believe me. Go ahead. We have a long-time club, best of breed name, just seems to be stuck in the mud.

So should I hold on consistently, continually, buy more, or dare say, sell and move on? Hey, I love your interactions with Regina and the crew, especially when we try to do those two-fers. How about the very first time on a three-fer? Regeneron, Elf, Chipotle. Chipotle. All right, so Chipotle...

I don't want to be a weasel here, but it sells at 38 times earnings. And that kind of stock is going to take a little bit of heat just because the market's going to be down off the tariff news. But it is the kind of stock you would buy after the tariff news is digested. And it's but it is going to feel like it's you're digesting something that's real bad tasting. Let's go to Tina in Florida. Tina.

Hey, Jim. Hi, Kim. Years ago, when you've told us how you came to the decision to buy a position in Apple, you've told us about your daughters and how they had iPods in every color, and everyone had iPods. Similarly, now, I'm thinking about starting a position in a company, and I travel a lot, and everywhere I go, in every airport, I see people wearing these shoes, and

And I'm wondering if on holdings would be a good investment. Okay, we have liked on holdings for some time. We actually started liking it in the 30s. We've had, we've borrowed on the company multiple times. It is a high multiple stock, same multiple around in this Chipotle. I want you to buy the stock, yes, but I want you to let it come in first because the market's going to be looking a little peaked off of these stocks.

Frankly, off of the very high tariffs that many people weren't expecting. But if you watch our show, you know they were coming. I don't know whether NVIDIA keeps going down from here, but if you like it enough to keep owning it, I say prepare for additional tubular turbulence. Remember, all I'm doing is being that guy.

You know, the guy with the W on the tube, man? That's what NVIDIA feels like right now. I'm just trying to put it as it really is, all right? I may have money tonight. CoreWheels IPO is on deck for later this week, but is the stock ready to tackle the tape? I'm looking at the cloud's backstory, balance sheet, and more. Then, fresh off a top and bottom line beat from Paychex this morning, I've got to check in with the CEO to what he hears about the state of small business not subject to tariffs.

and mostly service. And later, I'm digging into the path forward for discount retailers after Dollar Tree announced it will divest its family dollar business. Tough day here, harder tomorrow. This is David Kramer.

Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. Hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.

Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans.

It's time to make America affordable again. It's time to support the President's plan. Feeling 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.

And now, a next-level moment from AT&T business. Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got AT&T 5G, so you're fully confident. But the vendor isn't responding, and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more at att.com slash 5G network.

The first major IPO of this year is coming later this week when CoreWeave takes itself public. This is a cloud infrastructure play built for the AI era, and they plan to raise roughly $2.5 billion. Regardless of how you feel about CoreWeave the company, I think CoreWeave the IPO is a very encouraging sign.

We came into the new year expecting a lot of deals, but these deals never came. This one suggests that the IPO market might be waking up, although the horrible action in the NASDAQ today might put a damper on any of the animal spirits that you need for real recovery. So what's the deal with this, Corey? This is arguably the single best pure play on the AI infrastructure theme, something that would have been loved just 10 days ago, but not so anymore. I know there's a lot of newfound skepticism about this story, but after visiting NVIDIA's GCC event last week,

I can't move with a feeling of confidence about the growth of AI, even if I'm not sure the AI infrastructure build-out can continue at the same rapid pace. Today's market certainly said that things are slowing, and some people think it's slowing dramatically. I don't see that.

That's why I want to walk you through this story, because what CoreWeave does is very intriguing, but it's also a little hard to understand. It's become very controversial. I got to tell you, this company's back story is pretty well. CoreWeave was founded by three former commodity traders almost eight years ago, originally as a cryptocurrency.

currency mining operation. It was called Atlantic Crypto. But after crypto crashed back in 2018, the company changed its name to CoreWeave and changed its strategy too, basically acquiring as many computing resources as possible. They buy and assemble large pods of computing power, specifically NVIDIA's high-end GPUs. Now, originally they used these chips for cryptocurrency mining. Then they realized this hardware could potentially do a lot more, things a lot more useful, like provide computing for those who need to run AI programs.

Compute. That's why they brought up the chips like crazy after the crypto crash in 2018. They knew that they would be used for computing.

By 2020, CoreWeave had arrived at a business, a new cloud computing service called the CloudWeave Cloud Platform. It's just like Amazon Web Services, Microsoft Azure, Google Cloud, our Oracle Cloud Infrastructure, where the basic business is running data centers and having customers effectively rent those computing resources via a software as a service platform. For most companies, that's more flexible and more cost effective than building and operating their own data centers.

But here's the crucial difference between CoreWeave and the hyperscalers. From its inception, CoreWeave was built from the ground up using NVIDIA's latest and greatest GPUs, whatever they were at the time. The H100, the H200, the GH200, now the NVIDIA Blackwell chip, maybe next year the Vera Rubin. Of course, the hyperscalers are basically the biggest buyers of NVIDIA's chips in the world. But they built their own platforms before they realized the greatness of Jensen Wong's company. CoreWeave, on the other hand, was purpose-built for NVIDIA.

Nvidia's chips. And that made the company a perfect fit for the arrival of the AI era, which kind of unofficially began in late 2022 with the launch of the original chat GPT by OpenAI. This is a very short period of time, people. Since then, Corby's business has indeed exploded, with its revenue growing from $15.8 million in 2022 to $228.9 million in 2023 to a staggering $1.915 billion last year.

Because this is what purpose built around NVIDIA's technology, CoreWeave's cloud offering can give customers a major leg up when they're trying to train on AI models.

Now, I like this basic business a lot. Besides studying IPO perspectives, we've done a good amount of additional work on CoreWeave in recent weeks, including conversations with the company's executives and with other tech industry leaders and multiple CoreWeave partners. We even took a field trip to a CoreWeave data center outside Las Vegas during our travels last week. After doing all this research, I've got to tell you, I've come away as a fan of CoreWeave, CoreWeave the business, and a fan of the people running it.

It may sound like they're just buying a bunch of chips from NVIDIA and bundle them together, but it turns out assembling these massive clusters of GPUs is really, really hard work, even for the smartest people in the industry. It's not as simple as acquiring chips and connecting them with some cables. You're going to hear a lot of people describe CoreWeave as basically a financing play. And they've been pretty creative about raising money, but that fundamentally misses the real story. It's actually a way to affiliate with the bear position.

Corby has become an industry leader because it can assemble these NVIDIA chips in a way that maximizes performance, meaning computing power per watt of energy while minimizing downtime.

And you can't have downtime in this stuff. It just it really shoots the whole the whole proposition of it is it never goes down. And because its advanced data centers are highly automated, it can remedy any issues that happen much more quickly than its peers. Stuff breaks down all the time in these data centers. And Corby fixes things much faster than anyone else, according to multiple sources.

That's the Moat people. Now, in part because of that last point about the company's expertise, Corweave has become a trusted partner of many players in the AI space, including NVIDIA itself, which, by the way, actually owns a stake in Corweave. If you hadn't heard by now, NVIDIA's GPUs are in high demand and the company's in a position to be choosy with who it allocates. That's why it's noteworthy that NVIDIA chooses to give meaningful allocations of its latest chips to Corweave.

In fact, when NVIDIA was fixing its production hiccups with Blackwell last year, guess what? They were trying to ramp a full launch. It was working with CoreWeave to see how a product would perform once deployed at scale in interconnected clusters. Even when nobody else could get these Blackwell chips, CoreWeave was testing large quantities of them. That shows you trust. No wonder they were the first cloud provider to make Blackwell-based instances generally available to customers.

But it's not just the company's close partnership with NVIDIA. CoreWeave's platform is trusted by leading AI enterprises like Cohere, IBM, Meta Platforms, Microsoft, Mistral AI, and OpenAI. In fact, just a couple weeks ago, CoreWeave announced this deal with OpenAI. It signed an annually $12 billion contract for the use of its AI infrastructure.

Aside from the eye-popping amount, that was a real surprise because OpenAI's got a deep relationship with Microsoft to the point where they're obligated to use Microsoft Azure to a certain extent. OpenAI is also planning on building tons of AI infrastructure on its own through the Stargate initiative, starting with a huge new AI data center being built in Abilene, Texas. Yet they, yes, they agreed to this $12 billion contract to CoreWeave. They still did.

They've made a huge commitment here and even got $350 million worth of Corby's stock as part of the deal. Beyond all these public indications of trust in Corby, I've spoken to probably the top industry leaders about the company and almost universally they have positive things to say about these guys. By the way, very different from what you've been reading in Financial Time. If you've been reading their incredible parade of horribles about this company. So here's the bottom line.

You now know why I'm a big fan of CoreWeave, the story, and CoreWeave, the company. But what about CoreWeave, the stock? Stick around after the break, and I'll tell you what I think this one should be worth once it comes public later this week. Remember, you can be a fan of a company, but not necessarily want to buy the stock if the price isn't right. I'm trying to get this one right for you. Mad Money is back after the break.

Coming up, is now the time to go all in on AI? Kramer is continuing his look into AI cloud provider CoreWeave ahead of its IPO. Next.

Under Biden, Americans' cost of living skyrocketed. Food, housing, auto insurance. Lawsuit abuse is a big reason everything's more expensive today. Frivolous lawsuits cost working Americans over $4,000 a year in hidden taxes. President Trump understands the problem. That's why he supports loser pays legislation to stop lawsuit abuse and put thousands back in the pockets of hardworking Americans. It

It's time to make America affordable again. It's time to support the President's plan.

And now, a next-level moment from AT&T business. Say you've sent out a gigantic shipment of pillows, and they need to be there in time for International Sleep Day. You've got AT&T 5G, so you're fully confident. But the vendor isn't responding, and International Sleep Day is tomorrow. Luckily, AT&T 5G lets you deal with any issues with ease, so the pillows will get delivered and everyone can sleep soundly, especially you. AT&T 5G requires a compatible plan and device. Coverage not available everywhere. Learn more at att.com slash 5G network.

For the break, I told you about CoreWeave, which is coming public later this week. These guys basically buy chips from NVIDIA, assemble them into clusters, and then rent out that computing power to their customers. And man, are they in demand. As a business, I'm a big fan. Like I said earlier, these guys have a real expertise, and it's an incredibly close relationship with NVIDIA, which owns a stake in the company. But what about CoreWeave, the stock? We haven't talked about that.

Well, I like the story very much. I only like the stock at the right price. So let me walk you through the way to figure that out. First, in recent years, this company's been putting up staggering revenue growth. Last year, it grew at a 737% clip. And that was actually a deceleration from 2023 in its perspective.

Corweave emphasizes that it has, quote, significant revenue visibility with $15.1 billion in remaining performance obligations. They also note that 96% of the revenues come from committed contracts that on average last about four years. Very sticky revenue stream. While Corweave is not yet profitable, when you look at some of the less stringent metrics, they're certainly moving in the right direction.

Their adjusted operating income, which reflects the profitability of the actual business, excluding financing activity, went positive in 2023 and reached nearly $356 million last year. Good for a 19% operating margin. That's excellent. Excellent. Even their adjusted net income almost turned positive last year, and it's definitely headed in that direction this year. Okay, how about the balance sheet?

Corey, we've certainly got more debt than you'd expect from a high-growth tech company. Usually, these firms are backed by venture capitalists who take equity, not debt. But at the end of last year, Corey, we've had nearly $8 billion in debt, roughly $2.5 billion of which was current, meaning due in a year. That's offset by a little over $2 billion in cash and equivalents, which translates into $5.86 billion in net debt. This company has a leverage ratio that is high, 4.8%.

Actually, it's really high. Although when you factor in the expected IPO proceeds of $2.5 billion, they can do a great deal to clean up that balance sheet. That said, I expect Coreweb to continue borrowing money in order to buy computing resources going forward because that's the business model. Actually, they're proud of it. They recently raised $7.6 billion by borrowing against their NVIDIA chips as collateral. That should be good collateral.

I get where they're coming from. But just know that Corby's extensive use of leverage makes the story more risky and produce a lot of red flags, particularly because people feel that these are going to lose value with the collateral, the chips. And there are reasons to be concerned about that risk. Just this morning, the Financial Times published a piece about how Corby had technically defaulted on its big debt facility with Blackstone, big customer, after it made what the paper called a slew of administrative errors.

As the article put it, one investor believes the incident cast a horrific light on Coral Weave's internal controls, given how obvious the restrictions were. While another investor just said, hey, you know, this is considering the investing. It just doesn't really matter that much. It was the term that they use, dumb oversight at worst.

And for doing some research on this one, I am more in the dumb oversight camp. But when you've got a debt-laden balance sheet, you really can't make some stupid mistakes. This was wrong.

Now there are other concerns with this one, too. For example, I think Corby might suffer simply because there's really nothing like it out there. Sure, the hyperscalers are in the same business, but they aren't pure plays on AI infrastructure. Instead, they're more mature businesses that are pretty profitable at this point. So it's tough to find what we call good benchmarks or comparables, comps, to value this stock. There's another small quirky question that matters a great deal here. What are the previous generation NVIDIA GPUs worth? For example, once NVIDIA releases Blackwell, NVIDIA,

What are Coreweave's vast holdings of H100s, H200s, GH200s? What are they worth? If they're essentially worthless once a new model comes out, well, that's not so good. It means Coreweave will have to depreciate its GPUs much faster. That means they'll have smaller earnings on paper, and they won't be able to raise as much money by borrowing against these other older chips.

I tend to believe that these GPUs still have a decent amount of value even after a new model comes out. That's been the trend so far. After all, computing power is computing power. I also could argue that the software stack on top of the GPUs holds a lot of value, too. Next up, there's the revenue concentration issue. This is not good. Corey, you've got 62% of its revenue from Microsoft last year, at least up from 35% this year. But it's going to come down.

That type of concentration would already be a yellow flag, at least. And this specific issue became even more noteworthy a couple of weeks ago when it was reported that Microsoft was looking into looking to cancel some of its contracted business with CoreWeave, reportedly over delivery issues and missed deadlines. Problematic. I could not confirm that story.

I'm less worried about the concentration issue than the myriad bear bears are here, because much of what that was Microsoft buying computing power for open AI. So these numbers will look better now that Corweave has a direct long term contract with open AI itself.

We're also looking into the report about Microsoft canceling contracts with CoreWeave, and it doesn't seem to be that much to it. After visiting Silicon Valley last week and asking all about this, I got the sense that CoreWeave's actually the leader in this space, technical leader, too. More importantly, whatever was going on there wasn't about demand for computing power, which remains enormous despite what you saw on your screens today.

But that level of demand for computing power is really the key question for CoreWeave. Will the heavy hitters keep spending fortunes to fuel the development of AI? Or could this year be the high watermark when it comes to compute demand? After coming back from GTC last week, I believe that demand for AI infrastructure will stay very strong for a long time, which is why I'm interested in CoreWeave. Of course, if you think it's a bubble, it's about to burst, as many of the sellers indicated today, you've got to stay away from this one. It'll be awful for you.

So I like Corweave, the company, but I only want Corweave, the stock, at the right price. The IPO is being marketed with a price range of $47 to $55 at the $51 to midpoint.

Corbyn would have a market capitalization of roughly $24.5 billion. If you add back the net debt of around $6 billion, we'll get you an enterprise value of just over $30 billion. Given Corbyn's lack of profitability, I think the best way to value the stock here is with what's known as an enterprise value, a revenue multiple. Though you have to make some assumptions about the growth rate to put that together.

Let's say that after growing by more than 700 percent last year, Corweave's revenues grew slower to 200 percent in 2025. At $51 per share, that would imply the stock got an enterprise value to revenue multiple of 5.3. Seems reasonable. If you look at the hyperscalers or some of the smaller companies like DigitalOcean, Nebius, they're trading at five to eight times those numbers. On the higher end of the range, Corweave could be worth 60 to 76 per share. That's very aggressive. I don't want you there.

Even the incredibly negative analysis of D.A. Davidson, which invoked, unbelievable, the specter of Enron when it decided to put their work to on paper. They still slapped the forty seven dollar price target on this thing. And they said it looked like Enron. My God. And they're projecting three hundred twenty three percent revenue growth this year. Putting it all together, I think you can buy Corweave anywhere in the 50s after it comes public. But once it reaches the 60s or higher, just say no.

But the bottom line, if this IPO goes well, we could get a lot more big deals this year and the ones that we've been waiting for since Trump won the election. If this is the flop, though, expect the gloom to continue. John in Texas. John.

Jim, I bought Hewlett Packard Enterprises, HPE, at the end of December for around $21. And I sold it last week for $16.

And I'm wondering, did I make a mistake doing that? No, you did not make a mistake. I did spend a lot of time with Antonio Neri when I was out at GTC. It was a nice time. Well, I shouldn't call it a lot of time. But what concerned me was that last quarter was bad. And they're in the penalty box with me. And I would have done the same thing once I saw that quarter. I would say, OK, I got to move on. There's not much here. Now, be aware that everything's headed down now to where HPE is. But.

that may afford you an opportunity to swap out of eight to put money into a new name that's better than HB. And here, what I'm thinking about is Dell. OK, let's go to Brian in Florida. Brian. What's up, Jim? How's it going? Oh, I don't know. You know, today was a bad day for a lot of tech stocks. So, like, how about you? How are you doing? I like bad days like today. OK, fair enough. That's good. APLD, Applied Digital. I'm curious. Do we have a contender in the long term frontier here?

Losing too much money. Not a good time. You can't lose a lot of money in this tape. It just doesn't work. I'm sorry. I know it's a nice $6 bet, but I'm not going to do it again. All right. Corweave's IPO will be the one to watch. If it goes well, we can get a lot more similar deals. If it goes badly and it flops, what can I say? Much more made money. Including my post earnings exclusive with one of the hottest companies out there right now,

payroll and HR company paychecks. Then after today's news, the Dollar Tree is selling family dollar. I'm telling you what I make of the change. Of course, all your calls rapid fire tonight's issue of The Lightning Round. So stay with Kramer.

Lately, we've been hearing so much negativity about the state of the economy. But then Paychex goes and reports a phenomenal quarter. This is a huge payroll processor for small, medium-sized businesses with a big outsourced human capital management business. So they have some real insight into the heart of the economy. And that's why when Paychex reports a modest top and bottom line beat, very encouraging. Congress will send the stock up 4% today. It means something, like I said at the top of the show. This is a good sign. Do not take it from me. Let's check in with John Gibson, the president and CEO of Paychex. Did you

The Getter Better Read on the Quarter. Mr. Gibson, welcome back to Mad Money. Hey, Jim, it's great to be back with you. All right. Well, I've got to tell you, there's so much gloom that it's been scary. And I know a lot of people are just saying to me over and over again, look, we're on the we're really watching it. Things could fall over. And then, John, I read your quarter and I read all the notes that you've come out with. I just don't feel like I can be as negative as everyone else is after reading your stuff.

Well, Jim, there's no question this is an interesting time. Small businesses are expressing optimism and uncertainty all at the same time. And my general view is any time emotion is leading us, I like to look at the data. And what I can tell you when I look at our data, I'm not seeing any signs of a recession in our data at all.

The underlying labor market remains fundamentally healthy. We continue to see moderate growth for small businesses. We see wages continuing to be moderate. Look, I think job growth has been relatively stable the last year in small businesses and been in line with historical averages. So right now,

we're not seeing anything. There's certainly a lot of concern and uncertainty. And hopefully as we get through April 2nd, that'll calm down. And I think the optimism that small businesses have will continue to propel us. I'm glad you brought up April 2nd because when I read through what you're saying, I say,

OK, the companies that are in small business, they themselves are doing well, but they have a lack of confidence that comes from Washington. I don't want to be political here, but there is an element which just says, wow, what the hell is going on there? And could it wreck my business? And I don't think that's such a bad view to be worried about.

Well, Jim, look, I would say this about small businesses. Regardless of what's going on in Washington on any day or any topic, I always go back to this. Small businesses are very resilient. We've been through hurricanes, floods, fires, global crises, a global pandemic.

and small businesses continue to lead the U.S. economy. And I think generally entrepreneurs are optimists. And I think that there's optimism there. There's things in Washington that they're hearing that they like, and there's other things that they don't like. So we have this weird state we're in right now in terms of optimism and uncertainty at the same time. And I think that we get through some of this uncertainty and there's more clarity on what's going forward. I think the optimism is going to win the day. Well,

Are you seeing anyone who's now saying, you know what, there's there we're getting some deregulation. We're getting some of the breaks that we expected if we voted out the Biden people. Vice President Harris and brought in Trump.

Well, I would say this, Jim. Look, there was a spike in optimism in small businesses. And when you and I last talked in that December timeframe, what I told you is there's a lot of optimism, but I'm not seeing action. I wasn't seeing the acceleration in hiring. I wasn't seeing the acceleration in business formations. And then uncertainty came, and I also haven't seen action. So we're not seeing whether that's our HR generalists engaging our clients, engaging

in trying to prepare for any type of downsizing. We're not seeing it. And in fact, what we're seeing is a very stable small business macro environment at this time. I'm sure a lot of small businesses are waiting to see that the tax situation gets resolved. They're waiting to see the deregulation start to come through. And they're probably waiting to see some of these things and some of this talk on tariffs. But when you look at the data, I'm not seeing anything to be concerned about in the short term. I really like that.

I mean, that's just terrific because I like empirical. I don't like emotional. Now, speaking of waiting, you've got a very big deal that's about to close. Is it your expectation that there could be tremendous synergies, perhaps, and there'll be a lot of cross-selling?

Yes, Jim, I'm very excited. We made a lot of great progress in the third quarter, not only just in the fundamentals of driving revenue growth and adjusted earnings per share up 8%, but we also made good progress on completing the acquisition of Paycor, which we announced in January. We now expect at the close in the coming week

based upon what we know now in the planning. We now expect to exceed the $80 million cost of energies targets that we set back at the start of the deal. And I've been very, very happy with how things are going, both in terms of putting the teams together, in terms of looking at our product set. And when we get this deal announced in the next several weeks,

We're really going to have the most comprehensive, flexible and innovative set of HCM solutions in the industry, really built for organizations of all sizes. And so this is an exciting time for paychecks. I think it's an exciting time to be in our industry. I definitely agree with you. I think that's one of the reasons why the stock popped was you had a very good overview of what's going on with PayCore. Now,

If there's anyone who has something that's intelligent that can add to the AI debate, it would be you. Because small, medium-sized businesses would be the people I'm most concerned that maybe they're worried about AI. But perhaps they're just optimists when it comes to AI, too.

Jim, you're absolutely right. We've been introducing AI into our products, as you know, for probably the last three years. Matter of fact, we won an AI award before ChatGBT was launched. No one knew what AI was. And now what we see, we just did a survey on this, small businesses are

already using AI to drive productivity and drive their business. They're using it today. And what we're finding with our clients is when we package the AI technology with our proprietary data set,

we can bring powerful insights to them that enable them to really punch above their weight. They can now compete against bigger companies and they can be more effective in competing in their local markets. And so I think the power of AI for small business is just going to be really fantastic. Do you find that it's good for them to be able to find people who want to work for them? Because I know that there's a certain level, there's still dearth of talent and other levels, there's starting to be a lot of talent. But when you try to do a search, it's a

It's almost impossible. But with AI, it seems very easy to do.

It is. And in fact, we introduced the Paychex recruiting co-pilot. And that actually is a product that has over 20 million workers in it. You can tell them what you're looking for and it will give you a curated list of both active people that are active in the job market, but also the inactive. So people you may want to reach out to. We've seen a lot of success for that upmarket. Now, Jim, one of the things we're looking at is how can we package that better for the small entrepreneurial owner who's

who maybe doesn't want to use the AI tool. They want us to use the AI tool for them and then have us reach out on their behalf and actually help them find the candidate and place that candidate forward. That's where our HR outsourcing really comes in, and that's been one of our fastest-growing businesses, as you know. God, that makes so much sense.

It just makes so much sense. Well, congratulations. You led the market today. The analysts are finally getting on board. They understand the juggernaut that you have. John Gibson is the president and CEO of Paychex. It's great to have you on the show. Jim, it's always great to be with you. Excellent. Man, money's back in for the break. Coming up, Kramer takes your calls. And the sky's the limit. It's a fast-fire lightning round. Next. Next.

And then the lightning round is over. Are you ready? Let's get that. Time for the lightning round. I'm with Tony in Florida. Tony.

Hey, Jim, I just want to thank you. I'm a club member since day one, and I love it. Every single 1020 meeting, I never miss it. Thank you. We're doing our best to be able to give us 10 minutes. We will tell you everything you need to know, including tomorrow. How can I help you?

Oh, I like NextCharm. I think it's a good move, particularly in this environment. Thank you for remembering the club. That is exactly the kind of stock that I am looking for. Let's go to Billy in Connecticut. Billy.

Hey, Jim, happy New Year again. Oh, wow. All right, what's going on? Jim, real quick, real quick. Break it down for me, Jim.

Will BlackRock ever become the Golden Rock? Well, BlackRock is going to be a long-term position at the Travel Trust. I am betting on Larry Fink and all the good things they can do. They're switching their model to a much more lucrative model. They have great technology. It is just a true buy-in homework stock. I do the homework, and I like what I hear. Let's go to Nick in Maryland. Nick. Hey, Jim Cranor. How are you doing? First, I just wanted to shout out my business teacher, Mr. Marks.

Hey, Mr. Marks, how you been? Yeah, right. Booyah. I was interested in the Stryker. That's why I came. Stryker is a good company. And I think that a medical device company in this environment will do well. Now, there's some people going to say, listen, there are going to be tariffs on that company. I'm not sure whether they'll really matter. I think Stryker works in an environment where we're putting 25% tariffs on all foreign cars. As I've been saying to you, Germany, Japan, and Korea have to pay. I've been saying it and saying it and saying it.

And it happened tonight. People say, who? Why do we know? I don't know what else I could do. Let's go to Fritz in Illinois. Fritz. Jim, it's my third time calling. Thank you for having me back, sir. And I'm glad you're on the show. How can I help?

Well, you're two for two. Let's try to go three for three. My friend always tells me about Fax Set. He thinks it's undervalued. What do you think? You know what? If you like Fax Set, I actually want you to suggest to buy ICE. I-C-E. I think it's got a lot more upside to it. Oh, no. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, is a dollar sold, a dollar earned? Kramer's giving you his take on Dollar Tree's decision to sell off its family dollar brand and whether this is good news for stockholders. Next. Addition by subtraction always sounds suspect, doesn't it?

Voodoo mathematics. But in the case of Dollar Tree, the voodoo works. This morning, Dollar Tree announced that it's selling its family dollar division for $1 billion. Now, this whole saga is pathetic because they bought family dollar for roughly $9 billion in cash stock a decade ago. They got 8,246 family dollar locations with that deal. And I covered it closely because I have a fascination for these stores. At the time, at the time of the acquisition by Dollar Tree, family dollar was renovating its stores and it looked like it might be working, but it wasn't.

Family Dollar's been a loser for many, many years. Dollar Tree CEO Michael Creeden said on a very upbeat conference call this morning they'd really got the stock going, but kicked Family Dollar under the curb. Quote, Dollar Tree and Family Dollar are two different businesses with limited synergies, end quote. And now, without the burden of Family Dollar, the strength of Dollar Tree can finally shine.

That sure isn't what a different management was saying way back when this deal was announced. When the deal closed, then-CEO Bob Sasser crowed that it was, quote, a transformational opportunity for our businesses to offer broader, more compelling merchandise assortments with greater values to a wider array of customers, end quote. Dollar trees meant for middle America, the release said, while family dollars meant for low- and lower-middle-income people.

In reality, those two chains had nothing to do with each other, and keeping them as separate brands under the same roof never made much sense to me. I recall going to a Family Dollar down in Asbury a few years ago, and, you know, they were saying it was being remade. It was part of the remake, but you know what? I couldn't tell the difference. Sometimes I wonder if they could either. Virtually no synergies came true. Nothing was truly complimentary.

I always found Dollar Tree a much more appealing place to go, and now it's free to go about its business, which includes the mitigation of tariffs on China. They've actually been handling this situation surprisingly well. It's a remarkably well-run chain and quite fun to go to as bright and cheery as family dollars stultifying and gloomy. I have to tell you, though, I am upset about this. I am steamed.

See, I told the previous management over and over again that the way this merger was conceived never made any sense to me. I've always been a huge fan of Dollar Tree, never liked Family Dollar, had several I considered my own, went there with my pop a lot. But every Family Dollar store was dowdy and really awful. I would never go with them. I complain every time the management of how they should just take make these stores into Dollar Trees where they didn't overlap.

and get out of the leases where they were in direct competition. But no, they always told me the deal was working out spectacularly. What was I complaining about? Even as the numbers showed otherwise. So the family dollar, same store sales struggling every quarter. Their denial was palpable. Of course, now we see the truth. The amount of capital destruction here, basically $8 billion in losses, is just shameful.

And we've not heard a thing about it until today. And that is shameful, too. So now that we know that they never had a plan, there was no integration, they were run as two separate outfits, even as family dollars seem like a doom chain on its own, descended from mediocrity to force to tragedy. What do we have to say here? Could we never be any accountability for this lame brain obliteration of capital? Something that could have easily been avoided had they just made all these nasty family dollar stores into clean, refreshed and yes, fun dollar trees. But hey, you know what?

At least we won't have family dollar to kick around anymore. I'd like to say there's always a bull market somewhere. I promise I'll be there just for you right here on MadMoney. I'm Jim Cramer. I will see you tomorrow. All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC, NBCUniversal, or their parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium.

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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