Mad Money w/ Jim Cramer 6/23/25
44:19 Share

Trading at Schwab is now powered by Ameritrade. Unlocking the power of thinkorswim, the award-winning trading platforms loaded with features that let you dive deeper into the market. Visualize your trades in a new light on thinkorswim desktop with robust charting and analysis tools, all while you uncover new opportunities with up-to-the-minute market news and insights. thinkorswim is available on desktop, web, and mobile to meet you where you are. It's built by the trading obsessed to help you trade brilliantly.

Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a thing. Give it a try at mintmobile.com slash switch.

♪♪♪

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people make friends. I'm just trying to make a little money. My job, okay? Not just to teach and entertain, but I am going to give you a lesson tonight about what not to do when these bombs start flying. So call me at 1-800-743-7666. You can tweet me at Jim Kramer. Nobody honestly expected that Iran would do nothing to retaliate against the United States, right? The arsenal of fiat

seems to have more missiles than people. Certainly more than we seem to have ourselves.

But the whole point of this exercise was to take out Iran's nuclear program. And they clearly don't have nukes anymore. Or maybe they would have used them by now. Today, the market breathed a bullish sigh of relief when Iran simply fired ordinary missiles at our military bases in the region. At least so far, there haven't been any casualties. President Trump said Iran gave them advanced knowledge of the missile attack, which seems like a bit of a waste of their arsenal. He thanked them in social media for the heads up. We blew up the nuclear program and that's all they can come up with.

Those conventional missiles fired at U.S. soldiers in Qatar were not enough to stop this market. This is a market that wants to go higher. Dow advancing 375 points. S&P gaining 0.96%. NASDAQ climbing 0.94%. And look, clearly the stock market's got it right.

Because the price of oil only closed down more than $6 or 8% today. If it looked like Iran was going to do something serious to retaliate, oil would have stayed up. But either they can't or they won't. And oil is saying that this spike of the last few weeks, it is over.

Perhaps Iran launched this pro-form of missile attack because they can't afford to close the Straits of Hormuz. As that would cut off their own ability to fund whatever is left of their anemic economy, it would be the height of folly for them to take out their principal method of export. Yet we heard they were going to do that all weekend. It's never happened. Either way, the Iranian response didn't matter. Oil's back to where it was before the war started. And that was the signal to buy stocks, which is exactly what people did.

Sure, maybe Iran's holding back something. I know. But if this is all they have, then Iran is a real poor hand. And this region's chaos stays in the region. Without oil going higher, the only thing that might impact our economy, our economy, the market tends to move on. That's it.

At the end of the day, chaos in the Middle East is business as usual for Wall Street. So what happens now? Do we focus on our own response to Iran's lame attack? No. We go back to where we were thinking before the airstrike on Saturday night. Before we get to what happens next, can we please go back to what happened that afternoon for a little lesson here about not panicking?

Let's go over that moment, because as is so often the case with anything military that puts our soldiers in harm's way for the first time in a new land, it was a time of terror for many investors, maybe for you, maybe for you. And it's the last teachable moment that I want to use before I tell you what business as usual now looks like.

When the U.S. dropped its bunker busters on Fordo and the other targets, I was at a fabulous wedding in Napa, California. Congratulations to Madison and Tommy DeCibio. The officiant told us to silence our phones, which means, by the way, turn them off. But just a few minutes after the bride correctly said, I do, we knew both the launch and the result. A second away from the procession's exit, people began to ask me about what it would mean for Monday. Oh, they were all so scared.

I got up to speed. Instead of answering, I turned the tables and said, well, what do you think? OK, get this. The range down 500 points to down 5 percent for the entire market.

Nobody said it was going to go up. I said that that's the case. You got to buy. Why? Why? People asked. I came back and said, well, what would you sell and why? No one had an answer. And mind you, these are people who own stocks. I asked them if they liked their stocks. They said yes. So I said, why not buy more? They said there could be retaliation. I was unconvinced. Iran's been firing missiles at Israel for a while now and it hasn't made much of an impact. See, this kind of weak thrust and sensible parry about stocks, it went on all night.

Everyone had a desire to sell or thought the others would sell, so therefore they should sell. They didn't know whether to join the sellers in the end, but it seemed like the right thing to do. I came back and said, what do your companies have to do with the selling in the S&P 500 futures that could monopolize things? That will be what goes down. Why not hold fast? Why not buy? It's just too counterintuitive for most people to process. Was it counterintuitive for you? Let's think about this. Here's what's missing. The

PE. That's right. The price to earnings multiple. It doesn't go down when there's something like a missile strike because individual stocks simply can't be related to an extraneous event like this. If the U.S. hadn't slammed Iran's big nuclear facilities, then maybe someday Iran would have dropped the nuke on Israel. That's an existential threat that could impact everything. But if you take out the Iranian nuclear program, then Iran's just another country that's at the mercy of our nuclear armed allies.

Well, let's say our machine. As a result, there can not be much that they can do. And when we realized that they couldn't against our great defense, well, the stock market roared. Wiping out the nuclear facilities was bullish for our stocks, plain and simple. So we don't ignore Iran, but because our initial attack went well, we kind of went back to our regularly scheduled programming. Now, what does that mean? We go back to earnings. We go back to secular theses. We go back, of course, to the Fed.

Today, two key members of the Federal Reserve actually talked about how rate cuts could be in our future, possibly as soon as next month if the tariffs don't bump things up too much.

No, it wasn't from J-PAL, who continues to be ridiculed by the president for declining to cut rates. But they were important enough to set the tone in the absence of negative news from the Middle East. Rate cuts? Market goes higher. Don't you dare outthink that. It was the chief reason why we went higher today after we found out that the Iranian missiles attack didn't produce any fatalities. Lower oil, lower rates? What's not to like?

Then we had news that could be traded on. Let's see. Meta's going on a hiring spree for top talent. Bullish. Microsoft's growing more lean. Bullish. Tesla gets the robo-taxi off the ground with a flat fee of $420. Really bullish. BNY, the old Bank of New York, trying to buy Northern Trust. Kind of deal that would never even be considered under the previous administration because of concentration of custodial bank industry. Extremely bullish. Netflix gets its usual push. Amazingly bullish. Palantir does nothing. Super bullish.

And on and on. Here's the bottom line. I know that all sounds glib, but it's accurate. It's what happens, and you need to know that.

I don't think we could have had such a bullish day without those Fed officials floating the idea of imminent rate cuts. But it's entirely possible that our government destroyed Iran's nuclear program. That means this war may be nearing its end and a jump in oil prices may have been taken off the table. If anything, oil could really plummet here as Russia and Iran flood the world with much needed for much needed cash. That's what the market's saying. And that's what I'm saying, too. Frank in Virginia. Frank.

Jimmy Choo, welcome back. Whoa, man, good to hear your voice. What's going on? Nothing much, man. Thank you so much. Big booyah from Northern Virginia. Thank you so much for all you do for us investing club members and, of course, the general CNBC viewer. All right, remember, Wednesday, 12 o'clock, Jeff Marks and I. It could be fireworks, could be sparks, or no, there could be education and teaching. Go ahead.

Oh, man, I can't wait. Well, Jim, my question today is about a red-hot stock, very popular, one that you keep raising your price target on. But I want to know, what's it going to take for you to get behind this stock like you do with the Coral Reef, per se? My stock is Palantir.

All right, but the corn we've got there, we got the four times there. That was a good one. All right, now, pounds here. At 50, I said it's going to 100. At 100, I said it's going to 200. Can I wait till it gets to 200 before I have to raise my price target? But I will, believe me. Hey, and thank you for the kind words. And don't forget that Wednesday meeting. Let's go to John in New York. John!

Hi, Jim. This is John from New York. Love your show. Thank you. My question today was about the Circle Internet Group. Should I hold or sell? OK, Circle is a short squeeze. Tomorrow morning, you will sell 50 percent of your position. Five. Oh, you will let the rest run. You will do that tomorrow for me. And I thank you. Hey, how about we go to Ken in Florida, please? Ken.

Booyah, Professor Kramer. I have followed you for decades and made a lot of money listening to your words of wisdom. Excellent. Thank you. The stock that I'm calling about has a P.E. of over 73 percent, but it only has an annual growth rate of about 25 percent, which I know falls a little bit below your two to one ratio. But it hit an all time high today of about three hundred and twenty dollars.

and only pays a de minimis amount of dividends. But it accounts for about 50% of my account actively traded IRA and about 16% of my personal account. And my basis is only about $50. So I only sell in my IRA account where I have been trying to pare down. And what stock would that be?

It's Heiko, H-E-I. Oh, man, that is an aerospace defense stock. That is such a good company. Look, I mean, it is reckless for me to say don't sell any with that concentration that you have. So you will take some off tomorrow just because you're going to be a good soldier. But I got to tell you.

I like the stock. Is that a contradictory thing what I just said? No, because discipline always trumps conviction. I have conviction that the stock will go up, but discipline says you got to do some selling. Look, the market is telling us that this conflict in the Middle East could actually be nearing an end.

that the president did take out those nuclear facilities. And if that is the case, we can go back to focusing on what's bullish out there. Oh, man, buddy, tonight, we need to get a handle on the situation in the Middle East more than we've done so far. What does it mean for the price of oil and gas? We're going to go to Rusty Brazil, Barbie and Energy to get some answers then.

Darden Restaurant supported a real strong quarter setting the stock higher last week. But after giving up some of those gains today, could the stock still have much more room to run? I'm going to give you my take. And then you stumped me with this little thing called Arlo Technologies. I've got to turn in my homework to you. Why? Because I work for you. So stay with Preem.

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.

How does Arizona become America's chipmaker? How does Arizona deliver healthcare professionals? How does Arizona provide great teachers for its classrooms?

With the help of AZ Opportunity. AZ Opportunity invests in Arizona's students and their families to meet workforce demands in high technology, healthcare, education, and more. AZ Opportunity, Arizona's path forward. Supported by the Arizona Board of Regents. Learn more at azopportunity.com.

This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us, we brought in a reverse auctioneer, which is apparently a thing. Mint Mobile, unlimited premium wireless. I bet you get 30, 30, I bet you get 30, I bet you get 20, 20, 20, I bet you get 20, 20, I bet you get 15, 15, 15, 15, just 15 bucks a month. Sold! Give it a try at mintmobile.com slash switch. I'm

Some people feel we dodged a bullet today. Initially, when our government took out three Iranian nuclear enrichment facilities, Wall Street, of course, panicked.

Price of oil surged, which is what you expect whenever things get unstable in the Middle East. But then Iran retaliated by shooting some conventional missiles at a U.S. base in Qatar, and they were even warned to minimize casualties. It was crazy. Sure seems like they don't have the cards and they know it.

In response, the price of oil then plummeted. So could the worst be behind us? Or are there more complications we need to consider now that we're a whole lot closer to a war with Iran, some people feel? I'm not so sure. To answer these questions, we need to check in with the best energy expert out there, Rusty Brazil. He's the founder and executive chairman of RBN Energy. Rusty, welcome back to Mad Money.

Well, good to be back with Jim. All right. So, Rusty, you have taught me so much over the years. And one thing you've taught me is this whole discussion. Straits of Hormuz, 20 percent go through it. Just think about what the U.S. has done. Stop being like the conventional thinkers who believe that we are all hostage to this one little straight. Could you please just demystify the whole thing that I heard all for the last 72 hours?

Well, Jim, Iran has been talking about closing down the Straits of Hormuz for 20 years or more, every time there's a big conflict like this. And they've never done it. And the reason why is they've got 1.7 million barrels a day of exports that goes straight through the Straits of Hormuz. So if they end up cutting it off, they're going to end up cutting off themselves.

So it's pretty unlikely that that happens unless things get a lot more dire than they are, than they seem to be right now. And I think the reason why you saw crude oil prices come back down five bucks this afternoon or during the day today is simply because the market has concluded that it's simply not going to be as much of a problem as it thought. Well, see, I would think also that that $1.7 million that they would block themselves, I

I think that the U.S. would pick up some share if that occurred, right?

Well, if 1.7 million barrels a day was all of a sudden out of the market, then the price of oil is going way up. That's obviously going to impact what's happening in the United States. And that just means that barrels that are exported out of the United States become that much more valuable. So, you know, there's some positive sides to it if you want to look at it that way. Are we stuck at 13.5 million, or do you think that there is some unutilized capacity if we get all the different –

mechanisms to export from pipeline to very large crude carriers that we could have right in, you know, in piers right next to our country? Well, I wouldn't say stuck at 13.5. We've actually have our forecast going up a few hundred thousand barrels after that. But it's pretty much topped out. And in the next few years, say 2032 or 33, we're probably headed back down, but very slowly.

Effectively, right now, we are flat and it's going to stay flat for as far as we can see. All right. So let's talk about today. We got some real wild action today. And it made me feel like once again that the oil futures market may not correctly, accurately reflect what's happening. You know, you have these giant swings, Rusty. It is a little unrealistic, isn't it?

No, Jim, it's like any other market. It's just like markets were equities. There was a news event. Everybody jumped in on the news event. And as soon as the market got in there, the smart money looked at it and said, look, every single time there has been some sort of war, sable rattling, that sort of thing, as soon as the event happens, the price simply drops. So that's happened ever since.

The 2003 George Bush Iraq invasion, price dropped $10 as soon as that invasion happened. And if you look at the majority of times, every time there has been an event like this, the price has gone down, not up. So the market already has--

basically priced in the uncertainty in the market. And as soon as the uncertainty dials down a few notches, then the price drops down. And that's what happened today. Okay. I find that personally very bullish for stocks. Now, we...

are having a hard time with the Chinese. They would want nothing more than the best of the best, the NVIDIA AI chips. We, on the other hand, feel like we've got something that we can give them, but we can block, which is ethane. Now, the problem here is that we're not willing to give them the chips. They have rare earth minerals that they could hold back. Rusty, rare earth minerals versus ethane. Make some sense of this for me, please.

Well, rare earth minerals are a lot bigger deal than ethane is. Ethane is a very significant deal for the petrochemical industry and for the companies that are exporting ethane. So I don't mean to minimize the situation, but right now it's being used, ethane is being used as a bargaining chip in this magnet rare earth debate that's going on right now between the U.S. and China.

As it stands right now, it has not been resolved. So the problem that we have is that ethane exports, and we produce about half a million barrels a day, or export about half a million barrels a day, and about half of that goes to China.

And right now, all exports of ethane are prohibited by the Department of Commerce. And that is really causing some serious problems for the folks that actually export those barrels. Well, wait a second. That's what gets liquids. I know gutters to the large producer. We're right up there. You're telling me that we are that the Commerce Secretary.

is basically cutting our nose off despite our face. We've got real companies involved who make ethane, and we're telling them basically what? Their ships have to stay in the middle of the Pacific Ocean? We have to go out there and we have to park those ships, and as soon as we run out of ships to park, we've got a bigger problem on our hands. Well, but that, I mean, if I'm Enterprise Product Partners, a very, very good company, Energy Transfer, a company that does very well, they're the guys who are really going to get hurt. The Chinese aren't going to get hurt.

That is exactly right. So we've been advocating everything that we can in order to get this prohibition removed. And it's worse than that, Jim, because what's happening in the global markets is a lot of customers for U.S. exports are looking at what's happening to ethane and saying, look, you guys have a

have basically taken ethane and make it a bargaining chip in this entire debate. You could do that with any of your energy products. We don't know if we want to buy energy exports from the United States or not. In effect,

We've weaponized ethane. The market knows it. And that means that the market is no longer looking at the U.S. exporters of energy commodities as a trustworthy supplier. That's bad. I would tell you no one's making that point except for you. I've not heard that argued before. I think it's out.

Outrageous. If it doesn't do any good, why should our great American companies be hurt? It's not doing anything. Thank you for bringing that to attention. And thank you for all along telling me this and the whole 20 percent straight. That is not the way you should look at it, because I heard that all weekend. And I'm tired of being of getting the misdirection, because otherwise you'd be buying oil today and you just got crushed.

We got crushed. That's right. So we're right back to exactly where we were on oil prices before Israel ever did the first attack a week and a few days ago. That is incredible. Well, I knew that you always bring it to me straight. Other people, you got to listen to this, man, because you heard a lot of misinformation over the last 72 hours. I am telling you that. That's Rusty Brazile. He's the founder, executive chairman of R.

RBN Energy, something I start my day with every day because he does his fultons. But this one was like a 555 or 605. I love them when you do them the earlier the better. 605. Thank you, Rusty. Good to talk to you. All right. Thanks, Jim. May I have my hands back after the break? Coming up, could unlimited breadsticks lead to unlimited returns? Kramer's taking a closer look at a restaurant stock next.

Trading at Schwab is now powered by Ameritrade. Unlocking the power of Thinkorswim, the award-winning trading platforms loaded with features that let you dive deeper into the market. Visualize your trades in a new light on Thinkorswim desktop with robust charting and analysis tools, all while you uncover new opportunities with up-to-the-minute market news and insights. Thinkorswim is available on desktop, web, and mobile to meet you where you are. It's built by the trading obsessed to help you trade brilliantly.

Learn more at Schwab.com slash trading.

To claim this special double roses offer, go to 1-800-Flowers.com slash Pandora. That's 1-800-Flowers.com slash Pandora. At the open today, when oil was up significantly after the U.S. attack on Iranian nuclear facilities this weekend, a number of consumer-related stocks sold off hard. These investors figured they would look higher gas prices, going to take a big bite out of discretionary spending.

Most of that actually reversed itself after the limp-wristed midday response from Iran, with the consumer discretionary group ending the day as the best performing sector. What a day! But one consumer stock remained down for the day, and that's the one we're going to talk about, because I think it presents a compelling opportunity for you out there.

And I'm talking about Darden Restaurants, the parent company of all these names you know. I'm talking about Olive Garden, Longhorn Steakhouse, Yard House, Ruth Chris Steakhouse, Cheddar's Scratch Kitchen, the Capital Grill, one of my faves. Last Friday, Darden reported a phenomenal quarter. I mean, sending the stock to a new all-time high on Friday, despite an

Ugly tape. Now, this is just the latest in a long line of strong results from these guys, hence why the stock was up already 19% for the year ago in earnings. But today, the stock pulled back almost 2%. So I know, we talked about it was down a lot more at one point, but you're getting this great quarter for free.

I think that is quite simply a steal. Darden's blended same-store sales were up 4.6%. Wall Street was only looking for 3.5%. And it was driven by tremendous strength at Olive Garden and Longhorn Steakhouse. Total revenue and earnings per share both came in a little higher than expected. On top of that, management gave a solid full-year forecast, even if the headline numbers were a tad light. The stock still rallied on Friday because Darden also announced a $1 billion buyback, which is a lot for a company with just a $26 billion market capitalization.

They also raised their dividend by 7.1 percent to the point where now the stock sports a 2.7 percent yield. Not bad. So those are the numbers, which were fine. But the story behind the numbers was even better. And that's something you'd only know if you listen to the conference call, like I always tell you that you have to do before you buy any stock.

There were a bunch of positives here. Olive Garden brought back this buy one, take one promotion. One entree in the store with a second to take home starting at just fourteen ninety nine. What is that's terrific deal. It was a huge success. Matt said that Olive Garden same store sales outpaced the broader industry by four to 50 basis points during the promotion. Customer seeking value seems to balk on anything worth of eleven bucks. OK, so two meals at seven fifty.

Olive Garden's delivery business is just en fuego. They recently launched a new campaign to promote delivery across multiple channels, including free delivery promotion that's partially funded by Uber. Apparently, average weekly deliveries per restaurant nearly doubled during the last two weeks of the quarter, all thanks to this program. Now, this is really exciting for me because this happens to be one of my absolute favorites.

people don't understand how good it is, Longhorn Steak. Longhorn Steak, that starred in second largest brand. Management said, quote, their ongoing commitment to quality, simplicity, and culture continues to drive the momentum, end quote. As their, quote, entire team remains obsessed with serving the highest quality steaks in casual dining, end quote.

Simple formula, but it's clearly working. Longer at a new all-time high for customer satisfaction in the quarter. And the concept reached some major milestones, surpassing $3 billion in annual revenue for the first time in the 2025 fiscal year, which ended in May. And the Bloody Marys are unbelievable.

That's the analyst didn't say that I did. Of course, not every corner of the company is doing as well as Olive Garden and Longhorn Steakhouse. In Darden's fine dining division, which includes the Capitol Grill and Rue's Chris Steakhouse, same store of restaurants, the sales decline 3.3% in the quarter, far worse than the 0.2% decline that Wall Street was expecting. That is very disappointing.

Madden said, quote, the fine dining category as a whole continues to be challenging, end quote. But they offered a silver lining by adding that, quote, they're seeing sequential improvement in guest traffic from households earning $150,000 and above, end quote.

The final segment is other business, meaning all of Darden's smaller restaurant chains like Yardhouse, Cheddar, Scratch Kitchen, Seasons 52, Eddie V's, Bahama Breeze, and now Chewy's. The smaller brands, same store sales, they grew 1.2 percent, which was a little better than expected thanks to strength at Yardhouse and Cheddar's. Darden also said that the integration of Chewy's is progressing as planned.

But some of the other concepts are struggling, like this Bahama breeze, which Darden's actively shrinking by closing many of its locations. On Friday's conference call, CEO Rick Cardenas also gave a quick summary of Darden's new five-year plan. I found it pretty encouraging. As part of the five-year plan, uh,

the company made the decision to pursue the strategic alternatives for the small Bahamut Breeze chain, which only has 28 stores left over after 15 of the worst performing locations were closed in May. They're also planning to pursue more opportunities in franchising, including with Olive Garden in Canada. Cardenas said that one of the reasons that Darden acquired Rooskris a couple years ago was to give it more scale and expertise in franchising, which is still a small part of Darden's business, although they're hoping to grow it a lot more going forward. But

Perhaps the most interesting thing from the company's earnings call came from a response that Cardenas gave to the first analyst question. That was from Eric Gonzalez from KeyBank, who asked, quote, Perhaps you can give us your perspective on why casual dining is having a bit of a moment right now. And, quote, specifically, I want to know why some of the larger chains like the ones run by Darden appear to be doing much better than smaller operators. Cardenas explained that it's all about value.

During the past five years, while the price of everything is going up, Darden has worked hard to keep his price increases below inflation. This is absolutely true. And now that the consumers have become more value conscious, they're going to places like Olive Garden that offer them tremendous deals. It's gotten to the point where Darden is taking share from the fast food and fast casual change. They used to dominate on the value front.

That tracks is what we've seen on Wall Street, where some of the best performers in the space in recent years have been Darden, Brinker International, parent company of Chili's, and my personal favorite, Texas Roadhouse, which we own for the Chapel Trust. Same goes for Cracker Barrel. More recently, I've been pushing that story. You know that since last summer, explaining that consumers are still willing to spend on meals away from home, but only if they feel like they're getting their money's worth.

And according to Darden, right now that means they want casual dining. And they love the $11 and lower price points that these chains offer for dinner. Now, today, after the strike zone ran over the weekend, many consumer-related stocks opened down, presumably because Wall Street's concerned that higher oil prices will leave consumers with less money to spend on everything else. The stock at one point had dropped $8. But, you know, then it cut that loss in half.

When we found out how ineffective the Iranian attack was, oil ended up closing down more than 8%, which is incredibly bullish for Darden stock. The bottom line, I think you're getting a tremendous opportunity with the Darden pullback today. Not only are you getting a good quarter for free,

But if higher oil really does take a bite out of consumer spending, companies like Darden might be able to take even more market share because they're the ones that offer people the best value at this moment. With the stock selling for roughly 20 times this year's earnings estimates, supporting a 2.7% yield, not to mention that $1 billion buyback, I bet this one is a winner. Joshua in Georgia. Joshua. Booyah, Dr. Kramer. First time welcome. Booyah.

Will Keurig Dr. Pepper be able to compete with Coca-Cola long term despite high debt? Thank you. Yeah, no, I don't want to touch that one. I think if you want to be in that space, you want to be in Coca-Cola. I think Coca-Cola has demonstrated. First of all, I don't want to be in that space because there's just I got the secretary of health and human services is against it. The GOP dash ones, the new income, Amgen just makes it tougher and tougher. You don't want to be in the space. But if you had to be in Coca-Cola, I found a gym can.

I don't know if you guys check the cans. I always check. And, you know, James Quincy knows that. He's the CEO. I'm always like, one was like amigo and one was friend. And I said, Jim. There's never a Regina one. My executive producer, Regina, has said there's never been a Regina. Let's go to Miles in California. Miles.

Good afternoon, Jim. Thanks for having me on. My question today is about Visa. I know it has a strong history of success over the 10-plus year period it's been traded. They're in over 200 countries across the world, despite them being a bit of a zigzag, but generally trending up to the right. My question is, what do you think their prospects are for future growth, given that I'm just now thinking of initiating a position?

There seems to be, you know, lots of activity in the financial space with the advent of stable coin, crypto. And then you have the more traditional players such as Venmo and PayPal who have been operating very similarly, as well as the back end companies such as Chime. And I'm forgetting the other one. But with their stripe, you start stripe is there.

Right? I mean, that's what people say. It's not real, but... All right, well, look, let me just go over this Visa situation. There have been many, many times in my career that people have challenged Visa. Many times that people have sold Visa. Every time they are wrong, and they will be wrong again.

Anyway, I think you're getting a great buying opportunity right now with Darden. And with the stock's increased dividend, new buyback, I'm betting it's going to be a winner going forward. You ought to really check it out. It's down 2% today. Should have been up. Now, much more mad money ahead. Arlo Technologies has almost doubled in the last few months. I'm surveying what's behind the strength in that small cap stock. Very compelling story for your portfolio. Then we lost a real disruptor this weekend. FedEx founder Fred Smith was a personal friend of mine. I'm looking back on the life and legacy of a man who really did change the world. And

We're all the worst workers. And all your calls rapid fire in tonight's edition of The Lightning Round. So stay with Craver.

Whenever I get a call about a company that I haven't been following or don't even recognize, I take the time to do some homework. I want to come back to you with a considered opinion. I don't want to cuff anything. I've got another one for you. Right before I went on vacation, Brian, in my home state of Pennsylvania, asked about a company called Arlo Technologies. That's A-R-L-O. This used to be Netgear's home security division before it was spun off as a separate business back in 2018.

Basically, they make smart security systems. Take everything from outdoor cameras to video doorbells to normal home security systems backed by the company's 24-7 professional monitoring services.

Arlo Technologies also has a personal safety service with 24-7 emergency response and automatic crash detection. When you get old enough, you need this stuff to protect yourself. Even though the home security market in the United States is worth about $25 billion, most of that is old-fashioned security systems. Management says that smart home security services only have about 7% of the market opportunity.

Management also sees an opportunity outside of just single family households. Arlo has seen the adoption of their cellular-enabled products in a variety of different use cases, including for neighborhood watch groups, construction site monitoring, wildlife, and outdoor trail surveillance, and helping with surveillance for large events.

They also bundled all this stuff together in one AI-enhanced subscription service, and the most expensive version costs less than $25 per month when you sign up for a full year. That, to me, seems like a bargain. So how's the business doing? When all the technology was reported last month, the headline numbers were more than solid. The company posted a modest revenue beat, even though its product sales were

We're down 25% year-over-year, thanks to lower average selling prices across the entire industry. Our little subscription business, though, grew by 21%. They added 298,000 subscribers last quarter alone, ending the period with 4.9 million paid accounts. That is up 51% year-over-year. I mean, that's insane growth for a company in the home security business. In fact, as we learn on the conference call, our little subscriber account just broke through 5 million users.

Management now sees an opportunity to eventually double that number, hit 10 million subs by 2030.

As you might expect, the growth in the subscription business has been more than made up for that drop off in the product business. It doesn't hurt that the subscriptions and services have substantially higher margins than the rest of the business. That's how it happens. And that's why the gross margins for Arlo expanded by 600 basis points year over year, rising to 83%, which is the kind of number you normally only see in sulfur. These sulfur stocks, they tend to have that same level.

That helped the company reach a record free cash flow number for the quarter, along with record earnings per share, which also came in well above expectations. Not that there were a lot of expectations, though. When you take down Arlo's average revenue per user grew 7 percent just versus the previous quarter, 15 percent from the previous year. Wow. As management explained in the conference call, the lifetime value of their average member is now over $700.

While there were some concerns earlier in the year that Arlo might struggle in this tricky economic environment, the business is clearly doing just fine. In fact, management disclosed that they haven't seen any drop off in demand through the first five weeks of the current quarter. If you're worried about the economy, you might spend less on discretionary goods. But I really doubt most people think of home security as discretionary spending. In many places, it's a necessity.

How about the impact of tariffs? Well, Arlo gets less than 25% of its revenue from hardware devices that are imported from overseas. They might get dinged, but not by very much. In fact, the majority of their revenue and nearly all their earnings are unaffected by the president's tariffs. Plus, the company now gets 58% of its revenue from that subscription services business I talked about, which is totally unrelated to international trade. Doesn't hurt that the subscription business is, yes, booming.

Looking ahead, Arlo is now planning its largest ever product launch for the 2025 holiday season, which will encompass over 100 different items. That includes Arlo Secure 6.0, which has new AI-powered intelligence features like fire detection, advanced audio detection, detailed video events descriptions, and powerful video search capabilities. Basically, it can give you notice of everything from breaking glass, screaming, and gunshots to your neighbor's noisy dog.

So Arlo's business looks strong. Where do I come down on the stock? Here's the problem. It's tricky to analyze a company like Arlo Technologies because there's a lot of competition in that home security space. We're not just talking about mom and pop outfits here. We're talking about serious established companies like ADT and mega cap technology outfits that have stretched their tentacles into home security. Think Google Nest, Amazon Ring.

That said, Arlo stock is darn cheap compared to its growth rate. Companies earnings are expected to grow at 55 percent clip this year. Yet the stock only sells for 27 times earnings. We're on from that steel. While competitors like ADT trade at a much more modest 10 times earnings, they also have much slower growth rates. In some markets, growth oriented managers would be willing to pay more than 50%.

50 times earnings for a company with a 50% earnings growth rate. And honestly, that's pretty unlikely. While Arlo's products revenue is down, their higher margin subscription service business is growing like a weed. Just keep in mind that you're buying stock that's up over 50% since it reported in early May, buoyed by the announcement earlier this month that Arlo had eclipsed $300 million in annual revenue. That's the recurring revenue. Okay, so here's the bottom line. This is a tough one here.

See, I think Arlo Technologies has a real good story, relatively cheap stock. But then again, the thing has run up so rapidly that it might be due for a cooling off period. I don't like to recommend stocks that have moved that far that fast. So here's what you can do. You've got my blessing to put on a small position here, but you've got to wait for a buyback before you buy more. We have money back here. Coming up, Kramer takes your calls and the sky's the limit. It's a fast fire lightning round. Next. Next.

It is time. And then the lightning round is over. Are you ready, Skate? Gary. Good afternoon, Jim. Thank you for taking my call on your wonderful staff. Oh, my staff is brilliant. They're great. I know people who just kill to work on that staff. Go ahead.

I have a question. It's about Oklo. O-K-L-O. Okay, I know Oklo really well. There'll be a time where I said, listen, don't touch it, but you know what? Nuclear's coming back. I'm not going to keep anybody out of Oklo. It is just too likely that they actually do okay. Let's go to Kevin in Virginia. Kevin. Yes, sir. Big booyah to you, Jim. How you doing? I am good. How about you? I'm great. Sweating a little bit out here, but not too bad. All right.

Try air conditioning. It works. It's amazing. That's right. When do you get your thoughts on Roblox? Roblox goes hard. Dave Buzuki, it turns out to be the real deal. And I know that some people are concerned that they weren't doing the right thing ethically. I see it. I think Buzuki, ethical man, ethical product. People really like it. Let's go to Nikhil in Michigan. Nikhil. Hello? Nikhil, speak to me. Hi. Can you hear me? Yeah, absolutely. You sound clear as a bell. What's happening?

Hey, Jim, thanks for taking my call, man. I really appreciate it. No problem. And first of all, thanks for doing this lightning round that really helps a small investor like us, you know? Okay. I have a question about Lulu.

You know what? I'm going to say something I don't like to say. I don't think I'm the call in Lulu. I did tell people that I thought it had bottomed and I was dead wrong. And it's important to own up that I was wrong. I thought it had come down enough that perhaps it could have bounced and I didn't get it right. So I'm going to punt and say I don't understand Lulu. I got it wrong. And let's just move on. I need to go to Bill in Massachusetts. Bill.

Jim, I have to do a little testimonial here. I have 12 stocks, five that would be the green light of a club stock that have doubled, quadrupled, tripled or quadrupled in the last 18 months. Yes! And don't forget, Wednesday we've got a meeting at 12. People got to join the club. I met so many club members this vacation. It was incredible.

Yes, sir. Yes, sir. Listen, can I get you reading on Reddit? I'm making a... I like Reddit. I think Huffman's the real deal. I think that their advertising, you can reach people there. It is best advertising break there is. I am not kidding. You can target an audience with advertising. It is so much cheaper than all these social medias. And one day they're going to be able... Everyone's going to find out about it. I'm telling you, between you and me right now, while also the rest of the audience, thank you for those nice words. How about we go to Art in Maryland? Art.

Art? Art? Hello, Art? I'm here. I don't know what to do. You know, I'm going to have to move on. Art, they are! Whoa, that was close. What's going on? Yo, it's Art in Bethesda. I had a question about Black Sky. Be...

Yeah, Philadelphia zone. Okay, now this is a very hard look. They do this real-time spatial. I saw Maxar does that for the Times. I think it's a competitive space. I'm not sure I want to be in it, especially because the stock's up a great deal. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, Kramer's taking a look back at the life of a corporate visionary who changed the game for Americans. A tribute to FedEx founder Fred Smith. Next. Most famous people put their pants on one leg at a time, just like anybody else. You don't even do that. Remember the name of Fred Smith, the founder of FedEx.

Fred passed away this weekend, and to me, that's hard to process. He's been an unstoppable force for ages, Yale graduate, dedicated Marine, and a visionary who changed everything because he knew that there had to be a better way to send mail than the U.S. Postal Service. So he came up with overnight mail. The rest was history, but not easy history. When at Yale, Fred wrote his economics thesis on overnight delivery. You got to see. An ill-advised professor thought it impractical.

No, Fred didn't set out immediately to prove him wrong. He joined the Marine Corps after graduating. He told me recently that going to Vietnam was what you did because you loved the country. That's the way it was. He did not one but two tours in Vietnam, finishing as a captain, having been awarded the Silver Star, Bronze Star and two Purple Hearts. In short, Fred was a hero.

Only then did he come back home to start his vision, 71. Bernie threw his inheritance and a nice chunk of venture capitalist money down to his last $5,000. Stung by rising fuel costs, Fred went to Vegas and won big at Blackjack. Worth of 25 grand, he told me, saving the company with the proceeds.

I first got to know Fred a couple dozen years ago when he was a regular guest on Kudlow and Kramer, my old talk show, which we pitched as sort of a business-oriented version of Crossfire. He was our show's chief economist, one of the few individuals that both Larry Kudlow and I trusted. He was pretty much right all the time. Fred was an admitted globalist who knew that commerce was a uniting force that could bring down barriers. It was a good thing. He was at the forefront using robots to replace humans at the loading dock because humans, he would tell you, were in short supply.

I stayed in touch with Fred when we went to the Eagles-Steelers game last fall. We got to go on the field and spend some time with his son, Arthur Smith, the Steelers offensive coordinator. Fred talked business with me, but what he really wanted to talk about was how proud he was of his kids. And he and my wife would chat just about that.

She got to sit next to him at a presentation by Drew Brees, legendary Saints quarterback, and the current quarterback from the Bengals, Joe Burrow, right before the Super Bowl in New Orleans. My wife's a great judge of character, someone who typically disdains captains of industry because of their lack of humility. That sure wasn't Fred. She loved him.

When we weren't talking football, he talked Marines. He had a picture of his outfit in his wallet. He showed me how many men in that picture died for our country. I told him about my dad, who got a bronze star during World War II in Lady Gulf. He was so proud of my pop and looked him up at this thing called the American Battle Monuments Foundation, one of the many charities he supported. Fred was monumentally charitable. I gave and will continue to give to that charity in his honor.

Fred can be remembered for so many things, but since this is a business show, I want to acknowledge that he was someone who had a dream and he made that dream happen. Too often we only hear about dreams coming true in Silicon Valley, but you need to know that Fred was a pioneer just like those greats out there. He created something genuinely useful to change the world. He did this while staying humble. He always introduced himself as someone from FedEx, not the founder or the former CEO or the CEO, just another worker.

but he created, he executed, and now we all know it and use it. Remember, one time FedEx didn't exist as anything more than a college thesis with a mediocre grade. Then when he got back from the war, he pulled it off for the greater good while never being anything other than Fred Smith, a real good dad and a husband who ran a business that did indeed change all of us. Fred, we will sure miss you. You were the best we had. I'd like to say that this was an all-usable market summer. I promise to try to 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.

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.

Trading at Schwab is now powered by Ameritrade. Unlocking the power of Thinkorswim, the award-winning trading platforms loaded with features that let you dive deeper into the market. Visualize your trades in a new light on Thinkorswim desktop with robust charting and analysis tools, all while you uncover new opportunities with up-to-the-minute market news and insights. Thinkorswim is available on desktop, web, and mobile to meet you where you are. It's built by the trading obsessed to help you trade brilliantly.

Learn more at Schwab.com slash trading.