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Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. I'll be with my friends. I'm just trying to make you a little money. My job is not just to entertain, but to explain, to educate. You call me at 1-800-743-CBC. Tweet me at Jim Kramer. Sometimes you forget why you ever liked something in the first place. Take the super stocks, the hyperscalers, the tech titans. I don't care. Whatever you want to call them.
These stocks all got lumped together because of their size, their gigantic market caps that dwarfed the rest of the market. And then they lost their juice.
But on a day where the Dow gained 84 points, the S&P jumped 0.63 percent and then as I pulled one of one point five two percent led by two of these caps that Microsoft and Meta platforms were reminded of how the mega caps got so big to begin with. It's their scale, their smarts, their moats, their balance sheets and their sensational products.
Microsoft stock finished up 30 points or 7.63% today after a monster quarter. Embedded platforms jumped $23, 4.23%. Spectacular gains. Tremendous outlooks. Tremendous. After the close, two more tech giants turned in strong first-core reports. Although their outlooks, let's call them more muddy. Apple gave us a classic top and bottom line beat with sales up 5% year-over-year and earnings per share up 8% despite strong FX headwinds in the period.
Everyone was worried about iPhone sales, but those came in nearly $1 billion ahead of expectations, with Apple CEO Tim Cook telling me tonight there was no evidence of a temporary sales boost from consumers buying ahead of the tariffs. China's sales a little lighter, but isn't that expected by now? Offset by much better-than-expected sales in the Americas and the rest of Asia, Apple continues to achieve record sales in many emerging markets.
The stock, by the way, get this, it's reduced its share count by over 40% since 2012. It announced a new $100 billion share purchase repurchase tonight. Only the very consistent service revenue line was light.
That was disappointing. Got a call like I see you. I expect that the company will give more color on the exposure to tariffs and the potential impact that they might have on the rest of the year during the earnings call, which is currently ongoing. And while the strength of the first quarter results themselves are a great reminder of why it never really pays to get too negative on the world's largest company, Apple says it will have $900 million in cost increases in tariffs next quarter. That is suboptimal. Not their fault. It will matter, but it's suboptimal.
Then there's Amazon, which is trading lower after hours because the company gave a conservative forecast for the second quarter, as they typically do. And who can blame them, given the impossible game tariff situation? But looking at the first quarter results themselves, Amazon also reminded us why it's one of the world's best companies, why you can't bet against it. Sales grew 9% year over year, topped expectations by over $600 million, led by double-digit growth from Amazon Web Services, and the company's increasingly important advertising.
Advertising business gross margins are insane. Earnings per share, meanwhile, is up an incredible 62 percent, beat the $1.36 assessment by 23 cents. Now, one of the more quizzical things from the Amazon quarter were the results from the Amazon Web Services cloud computing business, which is such a fabulous business. Sales were up 17 percent. Very good. But that was slight.
That was light of what we expected. The operating margins, on the other hand, were fantastic. They reached nearly 40 percent. Street was only looking for 35. And that's why Amazon Web Services' segment profit came in over $1 billion above expectations. Essentially, all of the total companies' bottom line beat in the quarter.
But, you know, again, people found a little bit of what we call hair on the story. So many people were worried, though, about Microsoft, much more than these others do, going into the quarter. Microsoft's a machine that's a conference call that's incredibly well orchestrated. CEO Satya Nadella starts with a mewifilous analysis of what's going great guns. He takes it from 30,000 feet, all perfect, every division, including most probably Adelaide.
That's the gigantic web services business that they have that competes with AWS. Then CFO Amy Hood, perhaps the most professional of the CFOs in the business, gives the breakdown of the far more prosaic numbers, how much each division gained over the previous year. Then she delivers the single most important bullet in the call, the part where she raises guidance, sometimes huge, sometimes just big. Everyone breathes a sigh of relief for Ponder's outstanding ovation.
But for the last three quarters, three in a row, Hood underwhelmed us with her guidance. It fell flat. The stock got eviscerated. The first time, not so good. The second time, what are you talking about? The third time, who are these knuckleheads that have inhabited the bodies of Sacha and Amy? It kind of felt like the invasion of the body snatchers.
Not this time. This time it was a glorious course of raised numbers. Azure, it had huge accelerated revenue growth and will continue to do so, certainly better than Amazon Web Services sales growth, although it's not as big as AWS. The regular commercial business up so big that I thought I heard it wrong until we got to Q&A and I knew otherwise. And then the growth will continue there too. Perhaps most important, the data center spending isn't going away either because there's just so much demand. It was perfect. This quarter was a thing of beauty. As good as Microsoft was, believe it or not, I thought Meta was better.
Mark Zuckerberg has cracked the code in terms of trying to make digital advertising work for anyone, any company. Just tell us the product, send us the money, and we'll get you more customers than any other method of advertising. He's so confident. When I heard that, I wanted to start a new business just to see if it worked.
Even better, I could see where any company that advertises on television would be best off just giving a huge chunk of those ad dollars to meta, not linear TV. Because it's true, the performance is clearly better. I mean, he said it. I can't dispute it, especially when it comes to reaching younger people.
If you've ever started a publishing business, you know that you need to reach young people, not the older people that television gives you, because spending patterns and brand loyalty start in the teens. A teen lead can be worth 10 times the lead of an older person. If you want to reach teens, you've got to go to Zuckerberg. You've got to go to Meta.
So if you're a big consumer packaged goods company, you can simply give all your money to Meta, fire most of your internal ad people, drop your expensive ad agency and save yourself a fortune. Any ad firm and any publisher, any CPG, a consumer packaged goods company that was on that call knows that that's what's going to happen. It was just incredible. Not only that, but Zuckerberg talked about monetizing the asset that's potentially the best thing Meta owns.
WhatsApp, when 3 billion people use it as a principal communications method, it costs nothing. That could change. And it could give the company a gigantic new revenue stream. This was an all systems go quarter. Now, we know we've heard already from Alphabet, which surprised people with how a chatbot Gemini didn't cannibalize Google, even though there are concerns that Google made less money per search click.
And it could spiral. I don't care for the stock anymore, but I do know it's done better than most stocks in this market since in the last few weeks. A couple weeks ago, the formerly magnificent seven felt impossible to own. But days like today remind you why you avoid these stocks at your own peril. You've got to have a couple of them.
These companies are endowed with tens of billions of dollars. They're like nation states. They don't flinch at spending tens of billions to compete in artificial intelligence. They have the flexibility to pivot to what's necessary. With the exception of Apple, they don't have much manufacturing risk under the new trade regime. Apple is very difficult to figure. They're run by seasoned hands who are uncorruptible and bold and can course correct if they miss the mark the previous quarter. They are Marvel's gems, which is why I take every chance to harangue public officials
and urged them to stand up for these companies, which, because of their size, have become honeypots for lawsuits by foreign governments who never stop hitting them up for money. But in the end, their optionality knows no bounds, save tariffs, something that they could not have seen coming and snuck up on them very fast. Snuck up on everyone. Snuck up on me. How about you?
This has been the roughest stretch for these amazing companies that I can recall. Right now, only Microsoft is in the black for the year. Isn't that amazing? Well, behind most stocks, it's what we call a prolonged period of underperformance. But the bottom line, if we're in for lean times, you know what? It's quarters like these that remind me that these mega caps were built to prosper, built to make money in any kind of market. And they're truly ready to excel when things turn south for everybody else, including Apple's
Even though it's the slowest growing and the most tariffed, it does still make the most beloved products in the world. Let's go to Jim in Georgia. Jim. Hey, Jim. This club member owes a fellow Harvard Law grad and your staff a congrats for 20 years. Oh, wow. Thank you, buddy. Thank you. I really appreciate that. Thank you. That's great.
and my daughter is still beating the booyah out of brain cancer. Oh, geez. I wish her the best of luck. Wow. Okay. Hey, we talked about this a little while back, and I appreciate what you said about what's important. Oh, yeah.
I'll come back to the secondary importance. And, you know, we've got a global focus on defense spending, especially in the EU. This U.S. defense company buys only 65 percent of its products from the USA. And they're projecting a million, I'm sorry, a billion dollars in tariff expenses. I believe countries will contract with this company to offset trade deficit. And it's going to help it offset its tariff losses. Firehold RTX.
you
Oh, my God. You know, you actually nailed the story. First of all, they were very forthcoming about the tariffs. That was right. Second, it is a way for people, for countries to be able to say, listen, I know we have a trade. We have a youth trade surplus with you. We are going to write a check to RTX and get what we need. You are spot on. But most importantly, I just want I want your daughter to do great. And I am glad she is beating brain cancer. We all know people who have struggled against these terrible diseases. And I wish wish her the best.
All right, quarters like these from Meta, Microsoft, and even Apple and Amazon remind me that mega caps are mega for a reason, and they're built to make money in any kind of market. Tariffs...
Included. Well, may I tell you, our green acres ahead for Tractor Supply. I'm sitting down with the CEO to see if the stock can plow forward. Then, cosmetics player oddity soared after earnings this week. I'm going to take a close look at what prompted the stock's makeover and what's in the cards for Hasbro after its earnings beat. But some tariff issues there. I got the CEO. So stay with Kramer.
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You see what happens when some companies report what look like disappointing numbers. Consider the case of Tractor Supply. It's the largest rural lifestyle retailer in the United States. A couple thousand stores here. Last week, the company missed expectations across the board, declining same-store sales, revenue miss, earnings miss. You can cut their full-year forecast and issue downbeat guidance for the current quarter. And that's why the stock, which had already been under pressure for the past few months, fell over 3% last Thursday. But then...
Since then, the stock has stabilized, making back most of its losses. It's almost as if Wall Street appreciated management's candor. So can these guys turn things around? Let's check in with Hal Watton, the president and CEO of Tractor Supply, to get a better sense of the story. Mr. Watton, welcome back to Mad Money. Thanks, Jim. Appreciate you having me on the show today. Absolutely. You know, you've been incredibly candid, but I want to start not with tariffs, not with the quarter. I
I want to know how's Chick Day's performance? It's going to be our best year ever in Chick Day's. You know, it's a hallmark attraction. It's true retail. Tell people who don't know because it is very exciting. True retail theater in the stores. We'll sell 11, 12 million birds this year in our stores. But the birds are really just the beginning of it. It's really about fueling that passion and that hobby. One in five of our customers raises chickens now.
The average chicken eats 75 pounds of feed. This year, our best-selling coop is actually our most expensive chicken coop at $999 with all the bells and whistles. People are decorating their coops now, really getting into the hobby, and we're off to our best chick days ever this year so far. Now, people should know, when egg prices soar, this is more than just decoration. And yet, they're fun.
Absolutely. They're really the third pet now, cat, dog, and chickens in terms of ownership. People love their personalities. They raise them. To your point, they lay back an egg a day, or you can raise them for meat as well. But it is a great business for us and one that really is a core passion for our customers. And it's a tractor supply signature. It is.
You're in the business that unfortunately has a lot to do with the weather. When I see the numbers as a gardener and someone who cleans up a farm, I know there's been nothing to do. It's just too darn cold. So it has to be has to be impacting you guys. Yeah, absolutely. As you mentioned in your opening remarks, we had our we just had our earnings call last week for our first quarter.
The first six weeks were excellent weeks, right on forecast and trajectory. And then the last six weeks, normally you'd see a step up in the south for spring, and then eventually in March you'd see a little bit of a step up in the north. And that just didn't come. Spring's kind of three weeks delayed right now. But when the sun's out, the business is strong. The sun's been out the last handful of days, and we feel really good about our spring business. What I will call out
the health of a retailer is about comp transactions and we had plus 2% comp transactions in the quarter we had positive traffic in our business we had the highest retained customer count we've had in our company's history new customer positive and reacquired customer positive so our customers healthy and engaged just spring hadn't started yet so they weren't buying some of those bigger ticket items and that's what
depressed ticket but if they're in the stores they'll eventually shop and buy those but also maybe there are great things that you have blades for lawnmowers exactly you can't get them elsewhere uh the best lineup i think the best lineup of car that you can have yeah you know clothes better than anyone in your business there are uh you know great vendor for us we have all sorts of products that drive our customers in you know we're far and away our number one category is animal feed you know we have between a 20 and a 25 share in that market uh
That's what drives Footsteps in. It's a consumer staple. I mean, I would argue it's even more of a staple than grocery because there's not an alternative to restaurants for your animals, right? Pet food, you know, we're the fifth largest player in pet food in the country. Again, that drives Footsteps in. We continue to take significant share in those as we look forward in our business.
You know, we've got the demand driven needs based businesses just like a grocery store to keep driving those those footsteps in really regardless of economic cycle. And that's been the hallmark of track supply for 30 plus years. Now, at the same time, we've got some great decorative items, but this is kind of item that is not made in America. This is the kind of item that we made in Mexico. You have some China to these work of concern. But then you actually did the unusual step of gave us the quarter estimate.
which made me feel better about Mexico, made me feel better about China. Not that you guys are all that foreign-centric, but you do have some. To your point, Jim, we are dominantly a U.S. business. Over 60% of our business is manufactured and produced in the United States, and it's the key categories that drive the footsteps in. So they're really not exposed to the tariffs, the dog food and the animal feed. Those are the things that really, really drive our business.
But as all businesses almost, we have some exposure to China. Ours is around 20%. That's total. On the direct import side, it's around 7%, 8%. Via our manufacturer, it's another 12% or 13%. And we're navigating through that. Many folks, I think, think it's going to be a big step up in price. But it's really going to be a – because this thing goes on the inventory and the balance sheet, then makes its way through turns and a moving average cost and kind of works its way up, say like hand tools, power tools, whatever the case may be.
We're going to see a steady set of price increases through the back half of the year on those sorts of categories. Not a kind of one time step up, as many have said. So I think it's going to be interesting to watch that, how it plays into inflation. We'll have to follow that and change our forecast repeatedly. Now, Hal, I noticed that Amazon's committing $4 billion to rural. Maybe they see your margins and they want a piece of it or it doesn't matter. I mean, they can commit anything to anything and don't know whether that's going to be their laser focus.
You know, 87-year-old business, big market. We've competed against lots of companies. We continue to compete against lots of companies. Since I've been at TrackerSupply for five and a half years now, there's countless companies that have made rural initiative announcements. You know, we just continue to drive our strategy and compete in the market.
pick up share and hopefully deliver strong results for our shareholders and our team. And people should realize that the real competitor would be the local feed and grain. Look, we all love small business, but the fact is they're not all that competitive on price versus the scale that you have. That's right. I mean, we compete about 40% of our market is made up of small mom and pops, local regional chains, co-ops, and
uh... and uh... uh... you many of them are will less sophisticated they certainly don't have the supply chain that we do they don't have that the uh... the digital presence of capabilities that we do any of the technology in the store that we do i think it's a strong set of competitive advantages in the market in its
You know, the drivers of YB, we've been just gaining share kind of each and every year for, you know, really the last couple of decades. And you'll keep doing that. Look, you actually are a winner if they can't carry certain things because of tariffs. Right. You will be a scale winner. That's Hal Walton, president and CEO of Tractor Supply. Textbook on how you handle these situations. And check out the chicks. They really are pretty cool. Mad Money's back after the break. If your small business is booming, you might say, cha-ching!
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What the heck's gotten into Oddity Tech stock this week? For those of you who don't remember, Oddity is this direct-to-consumer cosmetics company. It's based in Israel, and I've liked it for a while now. But until this week, the stock hadn't really given us a reason to get excited. Since late 2023, it's basically been stuck in the 40s. Nothing much to write home about.
But on Tuesday night, Audity reported a fabulous beat and raise quarter, something we haven't seen that often this earnings season because everyone's so worried about tariffs. In response, the stock shot up 30% yesterday, surging to a new all-time high. If you didn't know any better, you would have thought that maybe it caught a takeover bid. Yeah, the quarter was just that good. Audity delivered 27% revenue growth with expanding gross margins, leading to a solid 6-cent earnings beat off a 63-cent basis. That's pretty good. But not rally 30% in one day good.
What got people excited here was the new full-year forecast. They're talking about 22% to 23% revenue growth. And Matt said their outlook incorporates their view of tariff and trade-related headwinds. And that's pretty darn bullish. As CFO Lindsey Druckerman, whom you have met on the show before,
Explain to the conference, quote, relative to other consumer companies, we're very well positioned. We have an attractive gross margin structure, limited exposure to China directly, a robust and flexible supply chain, and great relationships with global suppliers, end quote. Wow, that's what we want to hear. And that's why Audi expects its gross margin to only take 50 to 100 basis point hit from tariffs. So many others are so much higher.
In fact, they see this as an incredible opportunity to take market share from their competitors who have much more exposure to Chinese manufacturing. Here, I'm thinking health. As CEO Oren Holtzman puts it, quote, moments like these are when category leaders are built, and this is our intention, end quote, very encouraging.
I believe them because tariffs aside, this is a very strong business. As Adi explains it, they've been investing for years in anticipation of a big shift in beauty spending towards online channels. That's now playing out, and this company's a big winner. Normally, people prefer to buy the stuff in a store so they can see how it looks, but Adi's been able to recreate that experience online with generative AI technology that can show you how the makeup will look on your face, and it is such a huge hit. The other big trend that management pointed out to was, quote, the shift towards high effluency.
efficacy products, end quote. Now, it's something they've been investing in heavily. See, Aria is their own internal biotech lab that's tasked with discovering new molecules that can eventually become high-performance cosmetics. They're doing the equivalent of drug discovery for makeup. That's what I always thought that Estee Lauder should be doing all the time.
Speaking of new products, we got a bit more color this week on what the company product roadmap looks like. Right now, Oddity has two brands. Their first one, which is this ill maquillage and then spoiled child, which they introduced two years ago. Both of these are doing very well. Magma now says that they're still to be named. Brand three is on track to the soft launch.
in the third quarter with a formal launch coming in the fourth quarter. As CFO Mann told us during her last interview in February, brand three will be a telehealth platform with an initial focus on medical grade skin and body issues like acne, like eczema, like rosacea.
Rosacea. Audi has been investing heavily for three to four years to perfect the computer vision component here. See, things loaded with tech could be huge. And once brand three is out, well, guess what? Brand four is coming next year. One more point. Audi has a pristine balance sheet, $257 million in cash and cash equivalents, and investments at the end of the first quarter and zero debt. That also makes them the company's gold center in this business. Cody, market cap, similar, also has $3.2 billion in debt.
debt, that balance sheet's hideous compared to oddities. Because they don't need to worry about debt, oddity has a lot of flexibility. In fact, while their stock was stuck in the 40s for the past couple of years, they spent a lot of money buying back shares as management thought they were simply too cheap. When we spoke to Lindsay Drucker-Mann in February, she said that oddity repurchased 10% of its float last year, which is not something you typically see from a company that's recently come public. You tend to see stock offerings, although those can happen here too, as they did one March 24th of last year.
Now, after the stock spectacular run yesterday, it's obviously gotten a lot more expensive. It now sells for just over 33 times the new consensus earnings estimate for 2025. Just take the obvious. You're chasing a bid if you're buying it up here. Ideally, if you want to get into this one, at least in the way that we think about it, it may have money. I think you should wait for a market-wide pullback that knocks the stock down a bit from these elevated levels. But the bottom line, obviously,
Modesty stock caught fire yesterday because it reported a strong quarter raises forecast and then gave you a total all clear on the tariff situation. That means the stock's safe to own in this environment. Well, again, if you don't own already, maybe you wait for a bit of a sell off, a pullback to pull the trigger. It's such a volatile market. I bet you get a better chance. Let's take questions. Let's go to Matthew in Florida. Matthew. Hey, Jim. How are you doing? I am doing well, Matthew. How about you?
I'm great. Listen, I had a question on Snap. They're trading pretty low right now, $7.83. Even with all the concerns with ad revenue and stuff, do you think it's a good time to buy at such a low price?
No, it's a low price because it's doing quite poorly. I'm not stating the obvious. I'm just saying that I normally if there was something that was doing really well and it was down here, I would say absolutely yes. But I've not seen any sign that these guys really have a sense of urgency. So therefore, I'm going to say no, I don't think it represents value. Thank you for calling.
Auditing caught fire yesterday after putting itself as a stock safe to own in this turbulent market. I like it versus Elf. I like it versus Estee Lauder. I think it's a buy. But let it come down a bit first, please. Much more money ahead, including my exclusive with toy maker Hasbro. After the stock soared on earnings last week. Then I'm cutting through the noise and seeing what the latest tech reports are really saying about AI data center spend. And, of course, all your calls rapid fire tonight's edition of The Lightning Round.
Stay with Kramer. But first, as we continue our anniversary celebrations, we're taking a look back at all the places Mad Money has been over the last 20 years. One of our favorites, the college tours that have taken us all across the country. Why don't you take a look? What's the latest craze to hit college campuses? It may not be what you expect. Would you believe it's Wall Street? Wall Street.
And the latest campus cult icon, a 52-year-old suburban father of two. That's right, it seems CNBC's Mad Money and its host Jim Cramer have the new audience. Let's get pumped, baby. 30 seconds. Got it, got it, got it. These are little behind-the-scenes things that are going to make all the difference in the world of my show. I just appreciate it. Get that other stuff away. It is going to be the most important thing
Most useful class you'll ever take. Go, baby, go. Yeah! Jim Cramer on the third leg of his back-to-school tour. And there they are. It sounds like they're cheering on the Gladys. Perhaps they are. U.A. Michigan. There's a new chant in town now. Woo! Just for the record, there are really some fine-looking, great, handsome guys in Iowa.
Here's some of my buddies that I brought from the university. Here's BC's Tim. A big roadster state. I love you, I love your show, and I love the idea of making some magic.
So I'm very thankful to meet you and be here today.
And I am thankful. You know, you're why I do this show. It's just great to come out here and be with people and recognize that maybe there's like some life to it. So thank you. Thank you very much.
What do we make of what's happening at Hasbro, the iconic maker of toys and games? Last week, the company reported an impressive top and bottom line beat, driven by strong momentum in their Magic the Gathering business. But Maxman also noted that the tariffs are tough for their business, even if there are some things they can do to mitigate the damage. In response, the stock jumped more than 14%, and it's just right a few more points. So can it keep running? Maybe investors should get cautious. Let's take a look at Chris Cox. He's the CEO of Hasbro. To learn more, I'm Chris Cox. Welcome back to Mad Money.
Jim, thanks for having me back. I don't want to bury the lead here. Everyone wants to talk about tariffs. I totally get that. But we talked about Wizards of the Coast last time and how it could be big. It wasn't big. It is just gigantic. So first, tell us that, because that's going to be lasting no matter what price the tariffs settle at.
Yeah, the wizard's business is cooking with gas, especially magic, as you said. You know, it's largely tariff resistant. We make almost everything in North Carolina and Texas. And what we don't make here domestically is imported from Kyoto, Japan.
And the business is just doing really, really well. It's had 13 out of the last 14 years. It's grown. It's on track to grow double digits this year on the back of, you know, a surging installed base and some really clever collaborations like we have upcoming with Spider-Man and Final Fantasy. Can you tell us about...
Who are the people who are so obsessed with it? It just seems like they can't get enough of it. People who are just trying to figure out about the stock need to know what's the demographic of a person who's really obsessed. You're looking at one. I've been playing since 1994. I think the average age of a Magic player is about 30.
The typical new player is about 11 or 12. It's about 60%, 65% men, 30, 35% women. Tends to be educated, higher income consumers.
who like really deep strategy games. And, you know, so far in the 35 years that the game's been in existence, there's probably about 75 million people who've played it and probably close to 15 million people who actively play it today. I wanted people to know that because they may think, well, is that number ephemeral? It's obviously building. It's not ephemeral. All right. So Trump toys and tariffs. We had the president make a bit of a joke about a competitor of yours. Well, maybe the children will have $2 instead of $30.
So maybe the two dollars will cost a couple bucks more than they would normally. You know, when I heard that, I thought of you immediately because I said, well, you know what? Not everybody can afford to pay 19, 19, 50 for something that is 950. So what is your first year? Let's let's say your 30,000 foot view of tariffs and what they might mean for the average person in America, for the goods that you make that you have to source in China right now.
Well, I think our general first principle has been don't overreact. You know, this is a pretty fluid situation. We certainly expect that there'll be movements on the tariff front as the administration cuts deals with more and more countries.
And Hasbro is in a relatively privileged situation. You know, close to 50% of our revenue that we generate in the United States is either domestically sourced or from things like experiences and digital games, which give us a lot of padding. And then we have sourcing from eight countries around the world. We source from the US, Turkey, China, Japan.
India, soon Indonesia and Vietnam. And so that allows us to kind of spread the impact of tariffs. So from our perspective, prices will go up. I don't think they're going to go up anywhere near that the impact of tariffs have. We're going to be able to keep them relatively subdued versus what the impact could be.
And then we're also being choiceful about where we're going to take pricing. You know, I'm with you. I think most families, you know, when they think about a toy, they think about $10 or $20. They're not thinking about $30 or $50 or $100. That's very few and far between. So we're trying to selectively keep core items, particularly giftable items, at those $10 and $20 magic price points. Is there a way to try to keep it?
I was just trying to figure out the haggling. Like, if you want to keep it at a certain price and Walmart's at a different price and Walmart is very, very powerful, do you guys say, look, that price we don't want to sell to you, we'll sell it to another guy?
Well, no, I think we have a more of a collaborative relationship with them. And like I said, since since we have a lot of sourcing flexibility and we make a lot of stuff domestically, I think, you know, from our perspective, we're able to keep prices maybe lower than a lot of other companies are. And so Walmart, Amazon targets of the world, small mom and pop toy shops, I think, appreciate that. OK, so there's some things that were surprising to me on the call. I
I didn't know that Play-Doh has to be made in a certain place. I didn't know that anything with electronics has to be made in China. Anything made out of foam but not darts, it's very idiosyncratic. How do you figure out what can't be made in Turkey, where obviously Turkey seems very exciting as a place to make? But I'm kind of struck by the oddities that you have to face.
I mean, you're dealing with a supply chain that's been optimized over three or four decades in the case of China. So, you know, and also toys tend to be very labor intensive and very specialized types of labor. So, for instance, when we look at China, but China is always going to be an important place for us to source product.
because there's the rest of the world in addition to the US. But super high-end action figures that require a lot of deco and specialized painting, China tends to be very, very good at that. As you mentioned, foam swords, for some reason, that industry is dominated inside of China.
But lower end electronics, they tend to be very, very good at that. And countries like Vietnam and India haven't quite caught up there. But I think over time, those other sources of supply will mature, will be able to diversify even those categories.
And, you know, I think we're making rapid changes. You know, our goal was to get to about 40 percent of global sourcing out of China by the end of 2026. I think we'll hit that much earlier. You know, in fact, for 2025,
we already have several hundred SKUs for the U.S. that we've moved from China to other locations like Turkey, like the U.S., like Vietnam, like India. Well, no one's standing still. I've imagined these countries will call you. The Turks will call you and say, listen, we've got some high-deco painting people working who are ready. Or perhaps Vietnam says, look, we can do foam. I mean, aren't they all trying to adjust and get your business?
Oh, for sure. And we're open for business. So we've been working with our partners in Vietnam for
gosh, 15 years. We've been working in India for 10 years. We've been working from Turkey for 10 years. So yeah, we're diversifying. And if we want- Often with companies that are multi-country. So it's not like we're taking a Chinese manufacturer and saying, hey, we're not working with you anymore. A lot of the big Vietnamese manufacturers, a lot of the big Indonesian manufacturers had home bases in China and have been diversifying with us over that time. Right, and if we want- Which also makes it easier.
And if we want board games, where do we make them?
We make most of our board games in the U.S. up in East Longmeadow, Massachusetts, where Milton Bradley started making his first board games in the 1860s. Well, I think that's terrific that you did that and you kept that going. And I got a feeling that you'll be able to you'll be more resourceful and you're a conservative guy. You got credit for being conservative. The companies that are being aggressive, they're the ones whose stocks are getting killed. I think you're doing this exactly right. I want to thank Chris Cox, CEO of Hasbro. Great work, sir. Just great.
Oh, thanks, Jim. Absolutely. Mad Money's back after the break. It is time. It's time for the Light Round. And then the Lighting Round is over. Are you ready? It's time for the Light Round. It's time for Ryan in Tennessee. Ryan. Hey, Jim. It's a pleasure speaking with you, and congrats to you and your team on 20 years of Mad Money. Oh, thank you, buddy. I appreciate that. Thank you very much. How can I help you?
Hey, I've been looking for companies that are a little beat up in this environment, despite putting up some good earnings. My question to you is on BlackRock. Is it a good place to be buying or adding? Yeah, I think so. Look, we own it for the Travel Trust. Candidly, we're down on it. And I don't like that when we're down on a stock. But we are. The stock has declined far more than I thought it would. Home office is a decent quarter. I agree with you. And I think it should be bought. That said, I've been wrong. But I think it should be bought. In the long term, I think it should be a great position. Let's go to Juan in Florida. Juan.
Good afternoon, sir. Thank you very much for having me today. Thank you for calling. What's up? Absolutely. Yes, I was calling about a stock in the healthcare AI sector, ticker symbol TEM or Tempest AI. Yeah, diagnostics with no money being made. We're not recommending stocks right now that are losing a lot of money because we think this could be a dicey environment, a turn on a dime. It's going fine right now, but I don't like companies that aren't making any money. Let's go to Will in Connecticut. Will.
Booyah and congrats on 20 years, Jim. Oh, thank you. What's going on? So with electricity rates surging across the country and more homeowners turning to solar to cut costs, how do you feel about the top residential installer, Sunrun?
No, I've been a couple quarters. I can't be there. And by the way, look, First Solar is a really good company. It got clubbed the other day. I think the group is very fraught right now. It's fraught. Let's go to Alex in Oregon. Alex. Hey, Jim. Thanks for taking my call. Also, shout out to your staff. They're always some of the nicest people I've ever dealt with. They are excellent.
Yeah, we've seen him on display this week. Okay, what's up? I'm just calling about a mid-cap company. They do analytics and data services. The ticker symbol on them is EXLS. They just reported a great quarter and raised guidance. Thinking about going long on them. I actually like it. I agree with you. It's one of the fintech stocks that's been proving to be very solid, and I like it. I should actually spend it. We should have them on the show. They're doing very well. Let's go to Allen in Virginia. Allen.
Hi, Professor Kramer. I'd like your take on Union Pacific. Take the UNP. Okay, people feel that this stock is right in the crosshairs of the tariffs, that they're going to get hurt more than anybody else. I want to buy the stock right here. At 214, I would start buying. The next buy would be at 204. Then maybe get some at 194. Build a good basis. Start with small and build up in a pyramid. That's what I feel about Union Pacific. I'm looking at it myself. I like this level. Let's go to Cheryl, Louisiana. Cheryl. Yes.
Hi, Jim. I watch the program celebrating your 20 years of mad money. Oh, thank you. While you might think of those 20 years as a generation, you have educated and touched three generations of my family. Thank you very much. Thank you. I sure am trying. And that makes me feel terrific. We're out there trying every day. How can I help you?
Jim, I attended the Berken Road Investment Conference at Tulane Business School and was interested in the presentation by Vymed, VMD. What are your thoughts? Very interesting. You know, I'm a ResMed guy. I don't know Vymed well enough, but I'm glad you've done the work. I've not. It's from Lafayette, Louisiana. Interesting company. And that, ladies and gentlemen, is the conclusion of the lightning round.
Earnings season. It's pain in the neck. It's convoluted stuff coming at you from all different directions. Lost in sleep, just a total time suck. And I love it. I love it because it clears things up. The false narratives are exposed and you can go back to play on offense, not defense. And few false narratives have gone as far as this story about the end of data center spending. And that's the pack of lies started on Deep Seek Monday back on January 27th when a Chinese firm claimed to have created a generative AI model using far fewer computing resources than the leading players.
All the previously red hot AI infrastructure stocks were immediately crushed. You know what? They never really recovered. We started hearing that Microsoft was pulling back from the data center investments. AI kingpin NVIDIA didn't bother to defend itself. So the group crumbled.
I found it incredibly frustrating because we never had clear evidence that there was anything wrong with the AI infrastructure thesis to begin with. The idea that hundreds of billions of dollars are going to be spent on these new data centers is true. And that's why we stuck with the stocks for the tribal trust. We defied the data center bears aided by an interview with data center semi-director King Jensen Wong, CEO of NVIDIA, who told us that demand for his highest end chips is stronger than ever.
And we felt like idiots for doing so. Day after day, we heard about little chinks in the story that would add it together, meant you were long in the tooth if you stayed positive and you were going to lose a lot of money.
Until earnings season came along and the data center bears started getting gored by the bulls. That's when we realized we were right all along. It all started with Vertiv, which makes the fiscal guts of the data center the power control system. Vertiv reported a fantastic quarter April 23rd, said its business has accelerated from the fourth quarter. When they came on the show, they told us about their order book being brimming with demand.
Then April 28th, got an amazing set of numbers from Cadence Design Systems, which we knew had to be a big partner of NVIDIA. Then we got this misdirection play on April 29th when Supermicro, another partner of NVIDIA, preannounced weaker numbers, which again made people sell anything connected to the data center.
But last night, the bears were trampled to death when both Microsoft and Meta revealed they were totally on board with continuing to spend big on the data center. Microsoft's data center constrained. Mark Zuckerberg at Meta says he needs to keep spending because it's just so lucrative to do so.
It's simple. It's necessary. If big money is going to be made monetizing his Met AI site, which he's so crazy about, even though Wall Street didn't like the guidance we just got from Amazon tonight, it sure doesn't seem like they're backing away from AI infrastructure spending at all. Next thing you know, all the stocks I've been highlighting bust out and the torture we endured worth every penny. Now, most people would be content knowing that we've made it through the desert to the promised land. Not me. Actually, I want to look into this. I want to know what happened.
How did the media sow endless doubt here? Did they ask enough questions? Why didn't they believe Jensen Wong for a minute? They're constantly interviewing bears who wanted these stocks down. Some of them didn't reveal that their bias was rooted in the fact that they were shorting the entire AI complex. There was too much money on the line for the bears to allow the facts to get in the way of a good story. I know it may be hard to believe that huge companies with tens of billions of dollars to spend actually keep funneling that money to the data center suppliers.
especially NVIDIA, but that's exactly what's happening. And I think it's not too late to own a lot of the members of the complex, even as I expect that if we wait a few days, the bears will be out again, citing the Amazon Web Services light line. They just can't stop trying to make money at your expense. It's their job. I get that. I just wish they'd explain why they are so negative if the facts don't support their point of view.
I like to say there's always a bull market somewhere. I promise I'll find it just for you right here on MadMoney. I'm Jim Cramer. 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.
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