Mad Money w/ Jim Cramer 6/25/25
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How those ahead stay ahead.

And another set of stocks that seems to do nothing or drift lower. They seem pretty equal in number. To me, the differences could be more stark, though. The winner is so obvious. The loser is walking around with an L on their forehead. But on a day where, once again, the sector action was hidden by the averages, Dow declining 107 points, S&P flat on the day, NASDAQ gaining 0.31%, it's worth breaking things down so that you can see what I see.

So allow me to break this market down into five winning sectors and five sectors that frankly can't measure up. Of course, things could change on a dime. The slow ones now will later be fast. Thank you, Bob Dylan. I'm always happy to own some minor accords. Talked about that in the investing club member today at lunch. But the bigger money is made simply by going with the flow.

No need to be contrary. First positive area is cybersecurity. The dangers have never been greater, and the group's winners are bountiful because there's just so much business because there are so many cyber criminals, and some of them are state-sponsored. We're doing something for the club that we've never done. We actually own two of them for the trust, two.

What are you talking about? Not diversified? I don't care. We own CrowdStrike and Palo Alto Networks. It's rare for us to have two stocks in the same relatively small sector. But the companies are doing so well that I kind of wish we even owned a third Zscaler, which is doing as well, if not better, than the two that we own. Still, Palo Alto and CrowdStrike are winning huge deals. And while their stocks have been volatile at reporting time, their long-term direction is clear. It's

Second group of winners, pretty much anything related to crypto. Now, some are linked to buying and selling crypto. Think Coinbase, Robinhood, the Circle Internet. That's that newly public stablecoin play, which came out of the IPO gate super hot. Let's cool off a little. There are lots of smaller stocks that emulate these big dogs, and you see them trading all the time. You know what I mean. Meme. Third, the data center.

which is just going bonkers. You need to know what's in the data center. It starts with NVIDIA, of course, which hit an all-time high today and is now the largest stock in the world. My late NVIDIA. The data center is built around NVIDIA's chips. Lately, though, we've been seeing AMD, their only semi-meaningful competitor, stock something like 40 straight points,

win a lot of business. Same with Cisco, Arm Holdings, Marvell Tech. Broadcom plays a huge role in these. Vertiv makes power and cooling equipment for the data center. CoreWeave runs data centers and rents out their computing power. Dover and Eaton supply parts of the infrastructure. Vistra Energy and Constellation Energy produce and sell electricity for the data center. Givernova makes the turbines for the power plants. I know it looks like turbine, but you pronounce it turbin. The

The data center alone has caused a huge spike in electricity demand, and the ancillary players from that anomaly are doing well, too. Fourth group of winners, the semis. Now, lots of overlap with the data center, okay, including the biggest being NVIDIA. But there are plenty of semiconductors and semiconductor capital equipment stocks that are on fire. There's Texas Instruments, NXP Semi, Applied Materials, KLA. This goes—you know what?

Lammer search. Got to put them in, too. Don't forget Micron, which reported a pretty good number this very evening. And CEO Sanjay Marocha will be on Squawk with me at Squawk on the Street tomorrow morning so we can find out more. Whoa, whoa, whoa. Fifth and finally, and yes, oddly, the banks.

It's been ages since there's been a leadership group. But interest rates are high, and the banks do well in that environment. They do terrific when unemployment is low because people really default on their debts when they have jobs. Well, Friday after the close, we're going to see the banks' stress test, the grades. Those are the ones that are administrated by the Fed.

I think it could be still one more positive catalyst for a group that's been a real winner under President Trump, who obviously favors deregulation. Today, the banks were told that they can have a little more leverage and don't need to put up as much cash. That's just incredibly bullish. My favorite is Capital One, which just closed on a key acquisition, Discover Financial. I think it's that it will turn its credit card business into an even bigger house. C-O-F. All right. Now, the losers. Let's start with housing.

We're seeing anemic new housing starts. We've seen terrible mortgage numbers. The homebuilders have put up awful reports. Inventories are beginning to rise in some of the big builders, so they're cutting price. Homebuilding is a terrible business right now. You can't touch this group until the Fed starts cutting rates. Toll Brothers, Lenar, KB Homes, all weaker, all toxic.

Second loser cohort, the autos. Right now they're in tariff hell. I have no idea whether they'll end up paying per car, what they might not pay. Who the heck knows? They don't know either. It's just incredibly complex. But they're so snake-lipped by the trade war. These companies need rare earth minerals from China. They need parts from all over the world. And they need financing to be cheaper. I mean, that's a real fearful trifecta. Third loser, freight transportation. Truckers can't seem to make their numbers. The railroad stocks can't get any momentum.

FedEx showed you how hard this business is when it reported last night. Their business-to-business service has been stuck in neutral, even as the business-to-consumer side is okay.

But FedEx hasn't been able to make the street's numbers. I think we've got some opportunity here, though. FedEx has cut its capital expenditures and chopped the expenses. It's a coiled spring. I like coiled springs. But understand that it won't spring until we see how the tariffs shake out. Because so much of the business involves import-export. Until then, spring stays coiled. Next up,

Retail. Oh, man, it's all over the map. But for the most part, the stocks are awful. Kohl's looks so troubled. Macy's can't get out of its own way. Closed-down stores, Ollie's just downgraded. Burlington, Ross, TJX, all trading terribly. Target's been clobbered. Home Depot. Ouch! I like it, but it's very, very hard to own with such a horrendous housing market and a miserable garden season. Meow!

If you want Home Depot, you have to hold your nose and buy it in anticipation of the rate cuts for the Fed. That's what we're doing for the Travel Trust, but it's a struggle. I have a cold. This helps. We are sticking with it. Finally, there are the miserable consumer packaged goods planes. Oh, my God, they're so horrible. Today, the once invincible General Mills, we used to call it Generous Mills, put up incredibly weak numbers. The General used to be the most clockwork of the group. Today, the stock slipped over 5%.

Amazing. If you listen to management on the conference call, they don't even sound challenged. It seems like they think it's business as usual. They chatter on and on about some algorithm that gives them the numbers they want. They don't seem to understand that they've got to cut price big time or do some merging in order to make things palatable. Meanwhile, usually strong stocks like Colgate or Procter & Gamble, they can't get traction at all. Hey, two weeks ago, we got this quarterly report from James Smucker, a

With a name like Spucker, it was horrendous. Hurt by its ill-fated decision to buy Hostess Brands, the parent of Twinkies, right on the eve of the GLP-1, I am told that people who take GLP-1 are repulsed by ring, by all those. Damn!

Or how about Constellation Brands? The alcohol company has been four times cursed. GLP-GS1 drugs cut the craving for beer. Gummies give you the same high as many calories. I have no idea about that. Younger people don't want to pollute their bodies with alcohol. I don't know anything about that either. It's big Mexican beer brands Corona, Modelo, and Pacifica are victims of the White House immigration crackdown, which the CEO pointed out on their conference call in April. Unfortunately for Constellation shareholders, these immigration policies are impacting a meaningful chunk of their customer base.

So here is the bottom line. Now you know the five ins and the five outs of what's working in this market. Never forget it. Write them down in your hand. You know what I mean? Like, put it right here. Put them right here. Whenever we have downdrafts, even intraday downdrafts, remember what's been working and what hasn't. Right here. And things can change. But for the moment, I expect the winners to keep winning and the losers to keep losing. And now what we're going to do is we're going to speak to Bill from Indiana. Bill! Bill!

Hey, Jim, how are you? Thank you for taking a minute to consider my question, which is about Netflix and whether it's time to take profits or to double down on this. It's really been a durable stock. It keeps beating all the forecasts for profits.

and the price is surging. I mean, it's up 43% already this year. Well, but you know what? Let's think about this, Bill. I mean, they are going to be the entertainment channel, so to speak, for the world. It's worth $542 billion. That makes sense to me. I don't want to double down because I think you might get an intraday swing at a point where you can buy some, but I'm not going to go against this company, which may be one of the best-run companies in the entire world.

And I am not going to tell you to sell the stock. All right. Remember which groups are working. You can write them down right here. Okay? That's where they're handy. And which ones aren't working, put that on this one. Because I think the winners are going to keep on winning. And the losers...

are going to keep on losing. How many money tonight? SoFi's relaunching crypto investing, the first of many services planned in the space. I'm sitting down with CEO Anthony Noder to hear his plans to reinvent the future of finance. Then Amgen is entering the world of GOP-1s after getting some important data earlier this week. Should investors start viewing the stock under a completely different light?

I'm going to give you my take. And what the heck happened to the stock of paychecks today? I'm going to get some answers from the CEO. Makes sense of this post-earnings slide. So stay with Kramer.

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Today, Kramer faves SoFi Technologies, the digital-first financial services company, rolled out plans to give its members all sorts of new cryptocurrency offerings, and that includes a crypto-enabled international money transfer service, as well as crypto investing. Eventually, they'll say they're going to launch a service for stablecoin payments, and they'll even allow customers, get this, to borrow against their crypto assets. Crypto

Crypto investing is actually a service that SoFi used to offer for backing away from the crypto space in order to get its bank charter in 2022. Now, though, we're living in a very different regulatory environment where the company can get away with operating as a bank and providing crypto services at the same time, which they always should have been able to do. So let's take a closer look with Anthony Noto. He's the bankable CEO of SoFi Technologies. Anthony, it's been way too long. Welcome back to Mad Money.

Thank you, Jim. Thank you for having me. Sure. Now, Anthony, you have offered a really what I regard as a broad new suite of products. And I want to give you the floor to tell people what you can get if you sign up with SoFi.

Sure. SoFi is a one-stop shop for all your financial services needs. We offer four different types of loans, a SoFi money account, which is a checking and savings account where you get 4% interest if you do direct deposit with us. In addition to that, we offer SoFi Invest, which is the ability to invest in stocks, fractional shares, ETFs, robo-accounts,

IPOs at IPO prices, as well as alternative assets. We also offer partnerships on insurance for home auto and life insurance. In addition to that, we have a credit card. So our goal is to be there for every one of the major financial decisions you make, like buying a home or paying for college,

and all the days in between, because we want to hopefully get you to the point that you have enough money to live your American dream, to have the size house you want, the size family you want, to retire when you want, to have the career that you want. And the only way to do that is to be there for all of those decisions. So we help you spend less than you make

and invest the rest. And that's the formula of success. Okay, so tell us why you need to offer crypto. Is there tremendous demand? Are you trying to get customers who otherwise would say, you know what, I really love this, but they're not giving me crypto?

First, we're a digital-only company, so we need to use technology to provide all of these services to you. We want you to have the ability to pay anybody, anywhere, any way that you want. And so one of the products we're launching, international payments, will allow you to use US dollars to pay someone in a foreign country in their local fiat currency. That dollar will be transferred into Bitcoin, transmitted over the blockchain, and then at the destination, converted back into fiat currency.

Today, the remittance market or international market is close to $100 billion from the US. We think we can provide a service that's faster, cheaper, more accessible, and most importantly, very secure. In addition to that, we know our members want to invest in cryptocurrency. We used to offer the product.

But we didn't take past as the future. So we went out and asked our members. And 60% of our members would like to have cryptocurrency offered from someone like SoFi that is a nationally licensed bank. And that is a big change. In the past, banks couldn't offer buying and selling cryptocurrency, but they can now. And so our bank license is now useful, not just to take deposits that are insured and lend them, but to actually provide a very safe, reliable way to buy and sell cryptocurrency. The other important thing.

Go ahead, Jim. Sorry. While you're saying that, I'm reading your Twitter file right here. I mean, you're not happy with the way the government's regulating the stable coin. I do think the Genius Act is an important step forward as it relates to stable coins, but it doesn't go far enough.

In America today, we embrace innovation. We embrace competition. But we also embrace getting fair value. And in the banking system, consumers give banks their deposits. The bank gives them back interest for the use of those deposits and lending to other people. In the world of stablecoins, this genius act prohibits the payment of interest on payment stablecoins. And that's just wrong. It just protects the big banks' deposit bases.

We have a very large deposit base, over $27 billion. Our deposit base will face competition if stablecoins are allowed to offer interest. But guess what, Jim? We will embrace the technology. We will embrace competition. And we'd be willing to give interest on payment stablecoins as well. Not giving interest to Americans on payment stablecoins is like not giving interest on a savings account. It's just un-American. The consumers, the Americans, work hard for their money. They should get paid for usage within the banking system. Yeah, I

I didn't know this until I read my background stuff on you, that this was so discriminatory and ridiculous, frankly. I mean, because if we're going to be the leader,

in digital technology, we can't do what they're doing. We just can't. Exactly. And there's two other important points. If interest was allowed on payment stablecoins, it would actually increase the demand for U.S. treasuries because you would want to put those dollars that are backing the stablecoin dollar for dollar into U.S. treasuries to get a yield on them that you could then share with the consumer. By not offering interest or prohibiting it, there's no demand for U.S. treasuries because there's no benefit to the consumer. Right.

In addition to that, outside the United States, you actually can provide interest on stablecoins, which means we won't be competitive globally. Oh, that's terrible. That is terrible. I didn't know that. I'm very surprised this administration that they haven't thought of that. Who should we talk to to make sure that that changes?

Well, Jim, as you know, every piece of legislation has to have compromises. And unfortunately, interest on payment stable coins was a compromise to get the larger act passed. And we're supportive of the larger act. We just don't think it goes far enough. So we don't want to stop in the communication and emphasizing the need to continue to iterate on the legislation and to get it right to help drive American innovation. But Jim, speaking of innovation, it sounds like that I might be able to get a home equity loan if I have crypto with you against the crypto.

Yes, today SoFi offers four types of loans. We offer a mortgage, we offer student loans, we offer refinance student loans, and we offer home equity lines of credit and home equity loans. In the future, when it's allowed, we'd like to offer secured lending against cryptocurrency. It's a great asset. It obviously is very volatile, so we'll have to have the right safeguards.

Our goal is always to provide our products with safety and soundness and an eye on ensuring consumer safety. But we think it will be a very attractive product when we introduce it over time when it's appropriate. All right. So just fill me in about how you're doing. I mean, credit quality, good. Employment is so strong. I got to believe that bad loans still are not a factor.

Yeah, we were off to a great start of the year. Q1 was a really strong quarter, another record quarter of revenue. We had over 30% revenue growth. We had over 30% member growth and over 30% product growth. And our fifth quarter of gap profitability.

So the business is hitting on all cylinders. Our guidance for the second quarter was for continued acceleration and revenue growth at the high end and continued strong durable growth that we've delivered over the last 12 quarters, despite all the volatility that's been in the market. As you mentioned, credit has been strong and continues to improve. In addition to that, we're seeing really strong demand on point-of-sale spending. And then finally, on invest,

our net flows have continued to be positive relative to the market. So we feel great about the consumer strength and the outlook. There's obviously a lot of uncertainty and things could change in a moment, especially with all that's going on on a global basis, not to mention inflation and interest rates. But the team's done a phenomenal job executing and delivering for our members. Well, I've got to tell you, I'm listening to you and I'm thinking in this new world where Bank of New York, BNY, is interested in buying Northern Trust,

I have to believe that SoFi is incredibly undervalued. And you're the only one other than Robinhood that has this demo. I can't believe that some of these companies don't want to just buy you to get the younger demo.

You know, we're focused on delivering durable growth quarter in and quarter out regardless of the environment and doing it by driving product innovation and brand building to become a household brand name. It's been a formula that's been working for the last seven and a half years. And we're going to focus on that and let the rest take care of itself. Well, I'm glad that I was with you, particularly when it was four or five and everyone was telling me that you were not money good. And I knew I knew that Anthony Noto has always been money good. Anthony Noto is the CEO of SoFi. Hey, it's great to see you.

Great to see you, Jim. Have a great summer. You too. We'll be right back after the break. Coming up, Amgen's weight loss drug results are weighing on company shares. So is it time to slim down or bulk up on the stock? Kramer digs deeper into the company's potential next.

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At the beginning of this week, the American Diabetes Association held its 85th Scientific Sessions Conference in Chicago, where we got some major updates on these revolutionary GOP-1 diabetes and weight loss drugs. Eli Lilly is making progress with a pill version. Remember, it's just injectable right now. Novo Nordisk worked on a new version of this obesity drug, although the stock didn't get any credit for it. But we got some surprisingly interesting data.

From Amgen, the quiet biotech giant that's been working on its own GLP-1 drug for diabetes and weight loss. Unlike Manjaro or Ozempic, which needed to be injected once a week, Amgen's Maritide is one shot per month. I prefer monthly over weekly when it comes to injections any day.

Before this week, these guys hadn't been able to generate much excitement for their GLP-1 platform. They reported some OK Phase 2 trial data on Meritide back in November, which showed 20% average weight loss over a 52-week period. But that's basically in line with what's already on the market. In fact, the stock plunged nearly 5% that day.

When the news broke, and then it spent over a month going lower before finally finding the bottom of January. Since then, it's been a bit of a roller coaster through mid-March, and then coming down through mid-May before rallying again, going to the American Diabetes Association, meeting people who thought there might be something really big.

So what did we learn when Amgen presented on Monday afternoon? First, the market didn't like it. The stock sold off hard in response. Let's talk about the actual data that people sold it off on.

This was simply the full data from the phase two clinical trial that they highlighted in November, meaning we knew the headline numbers about 20% average weight loss for people without obesity, but not diabetes, 17% average weight loss for people who have both obesity and diabetes. There were no weight loss plateau after the initial 52 weeks, indicating further weight reduction is possible after the first year. The safety profile was fine with one teensy tiny exception. It seems like Maritide almost inevitably made you puke.

if you started off on the highest dose. That said, there was some genuinely new information too. I'm talking about the phase one trial data from the separate trial studying much lower starting doses of Maritide with different escalation schedules. Farliss vomiting at the low doses.

Now, Amgen is doing a 72-week phase 3 trial, studying Maritide, using three different starting doses. Listen, this is really important, because it seems to go down easier when patients start at a lower dose and then ratchet up gradually. So what exactly does this mean for Amgen, the stock? Again, Wall Street was not impressed. When Amgen published this data on Monday afternoon, the stock dropped an incredible 15 points in just a few minutes.

finishing the day down almost 6%. But over the past two days, the stocks recovered a big chunk of the ground that was lost. So maybe there's something good here.

People sold this thing Monday because they were worried about what's known as the tolerability data. We already have two very effective GOP-1 drugs on the market that don't make 90 percent of patients puke. Then again, when doctors prescribe Monjaro and Ozempic, they typically start you at a low dose and then gradually raise it. So I don't know why Amgen even had some arms of the trial start by pumping patients full of a high dose. Seems like it'll advise move.

At the same time, I think Amgen was hurt by the encouraging data from Eli Lilly's GOP-1 pill.

Again, we've already got two very good GOP-1 shots. So if you want to break into the market, you need to do something better than Eli Lilly or Novo Nordisk. It either needs to be more effective or have fewer side effects or come in a more convenient package. This is what you got to beat them. With Maritide, Amgen has a monthly shot instead of a weekly one, which is a better package. But Lilly's new GOP-1 drug is a pill you take once a day. People fear needles in this country. They always rather take a pill.

Both drugs demonstrated some pretty strong efficacy, meaning they seem to work just as well as the existing drugs when it comes to weight loss and controlling diabetes. So the question is, would you rather take one shot per month or take one pill per day? I'm more of a pill guy, but I can see how the monthly shot might be easier. The problem is Amgen's data says that their monthly shot has that very high chance to cause vomiting.

And that's why the stock's a little far. But again, I'm pretty sure that it's because Amgen designed some arms in the clinical trial in a way that seems, I don't know, ill-advised. They just started some people on the highest dose rather than gradually ramping it up. I know someone who did that with Ozempic and they were projectile vomiting for days. That's one off. It's anecdotal, but it happened.

When you look at the new tolerability data for studying Maritide at lower doses with a gradual ramp up, it looks much more appealing. There's no reason why Amgen can't figure this stuff out because it's already got the GLB-1 as a prescribed. And look, if you take a step back

And think about what Amgen is trying to do here. You can understand why the trial data ended up this way. They're trying to make an injectable GLP-1 treatment that you only need to do once per month with similar efficacy. So they almost have to give you a dose that's more powerful than the weekly shots from Lillian of a Nordisk. All these GLP-1 drugs come with some gastrointestinal issues. Some, of course, their stronger dose made people puke. I also know that they're working on one that you only have to take four times a year. Now, who knows what happens to that?

My bigger concern, we may not see Meritide get FDA approval and make it to the market until late 2027 at best. Remember, Amgen just started their phase three clinical trial for this one. Lilly, on the other hand, is hoping to submit its GOP-1 pill for approval by the end of this year.

Now, Amtron is very confident that their phase three trial will be successful by the time 2027 comes along. Millions of people will probably be taking that Lilly weight loss pill. That said, the stock down sold off to the point where I would not bet against it. I just don't know. I don't think that new Maritide data is bad enough to justify this decline. And now you're getting a bargain.

That's right. Amgen is a bargain basement priced 13 times earnings. Eli Lilly trades at 36 times earnings. And while Lilly is a great stock that certainly deserves a premium, we own it for the Chappell Trust, talked about it today at our conference call, I think Amgen has gotten too cheap by comparison. This is still a big biotech company with mid-single-digit earnings growth expected this year, not to mention potential upside for this GOP-1 drug down the road.

But here's the bottom line. We got plenty of American, plenty of data from this American Diabetes Association conference that ended earlier this week. And I think Amgen's trial results were misunderstood. The stock did not deserve to get hit this hard. Lilly's still my favorite way to play the GOP. There's one story. But if you're looking for a bargain, you can do a lot worse than Amgen. I feel we should take questions. Why don't we go to David in Florida? David.

Bullya, Jim, bullya. How you doing? I've been watching your show for 20 years. I've been watching your show for 20 years. Congrats on your show. Thank you. 20 years. That's your cadre.

Your cadre. I took a long position on Marvell last week, and shortly after, the insiders were trading $21 million of the stocks. But three of the four brokerage houses have a rating of 90 to $105 buy. Of course, my brokerage house has a huge sell on it. F. Marvell technology? They have a sell? Yep.

That's just ridiculous. Marvell's an excellent company, and they want a lot of business for some of the hyperscalers. I don't know. That's crazy. Matt Murphy is doing a remarkable job. The stock is starting to act right. So, by the way, I'm leaving it to you for his AMD. So I think, Dave, you're on the right track owning Marvell, and that brokerage firm should rethink their negativity. All right.

All right, look, I think the trial results we got from Amgen's GLB-1 drug, I'm calling it misunderstood. Eli Lilly is still my favorite way to play the trend. I mean, obviously we have one for the Chappatrous, but Amgen could be bought here at a bargain price for potentially upside ahead.

There's going to be a lot of these drugs, people. Now, man money. What do we got? We got an exclusive with Paychex. Plumbing after earnings. Investors, maybe they're getting another buying opportunity like Amgen. Let's see. I got the CEO. Then a note out this morning called semis the new oil. But where do I come down on that thesis? I'll share my thoughts. Of course, all your calls rapid fire in tonight's edition of The Lightning Round. So stay with me.

All right. What the heck happened to the stock of paychecks today? Payroll processor and outsourced human capital management company. They cut one out of every 11 paychecks in the private sector. This morning, paychecks reported what the street thought to be a mixed quarter. Inline earnings paired with Oso slightly lower than expected revenue, which would have been fine. But they also people thought that maybe their full year forecast was

for revenue. A little light. Got to find out. On the other hand, their earnings forecast was fantastic. It seems crazy to me that the stock plunged 9% today in response to those numbers, making it the worst performer of the S&P 500. I mean, some of this disturbance might be because the company recently closed on a $4.1 billion acquisition of Paycor, a company you know I like very much, and maybe that makes their financials a little harder to understand today. 9% sell-off feels successively.

Hey, but let's check in with John Gibson, the president and CEO of Paychex, to get a better read on the business and the broader economy. Mr. Gibson, welcome back to Mad Money. Jim, thanks for having me back. Well, you know, John. Mama told me there'd be days like these. Yeah, well, look, let's puzzle through this. And I like that because that's where I am.

I went through everything without looking at the stock price because I like to do that. I like to think what would happen. And I saw there were some numbers that seemed, well, you know what? That's because of PayQuad. That might be a little bit harder. But the margins were really good. The revenues were really good. The retention was really good. The things that I look at, OK, the ones that forecast the future best. Am I looking at the things that are too positive and not thinking enough about the negatives?

Well, Jim, look, I think it was to your point. There's a lot of things that could confuse people about our results with both the pay core acquisition kind of mixing some things up.

When you look at it from the quarter perspective, it was in line with expectations. We really had a solid financial performance this past fiscal year, and we made a big strategic progress with the closing of PayCorps, and then we completed the first phase of all the integration activities in the first quarter. As you said, we had double-digit revenue and adjusted operating income growth in the quarter.

Full-year organic growth, if you take out a compare of the ERTC program, we continue to deliver constant paychecks type of deliverables. And then you mentioned margin expansion. We expanded margins. You take the acquisition out, 250 basis points reaching 42.5%. That's way above anyone else. You said we improved our retention rate year over year.

We raised the expectations on cost synergies to $90 million for the full fiscal year. And then for next year, we just entered our new fiscal year in June. Our revenue guidance for next year is between 16 and a half and 18 and a half percent and adjusted earnings is eight and a half to 10 and a half. And the consensus was eight. And we committed to 43% margins next year, adjusted basis. So look, I,

I look at those numbers and I feel pretty good about what we accomplished last year. And I and I personally feel very confident about where we are being positioned going into this fiscal year. I could not agree more. I felt that I thought the stock was going to rally into the close because it was so ludicrous that it went down so much. So tell me what it's like working with Paycor. How are we integrating housing? Who are you keeping?

How do you keep the morale going? Because you have a very good culture there, and I want to know how you're integrating. Yeah, Jim, that's one of the things I've probably been most happy about is the integration of the two companies from a cultural perspective. As you know, last quarter when we talked about

We had been doing a lot of planning jointly with some of the senior members of the team. Two members of the senior team have joined our executive committee. And we actually, because of the integration and feeling of strong culture, we decided to move more rapidly

So immediately after the close, over the six weeks, we reconfigured the sales and marketing organizations across the country. We reintroduced two programs, a Partner Plus program for our brokers. We've already signed up 1,000 brokers to help begin to take our message to the marketplace. We rolled out a new portal for accountants called Paychex Partner Pro. And we've basically—

expanded our sales coverage going into this fiscal year. We did all of that in six weeks. And that really is a testament to the great work that the team did jointly together and our confidence that

Together, both the teams, Paychex and Paycor, are stronger and better together. And like I said, I think we're very well positioned to deliver stronger returns and long-term value for our shareholders. So how's the client base doing? I know that you have such a great view because of the small business employment. I saw you on Squawk, but I didn't understand this micro bankruptcy issue. Is this something I should worry about?

Yeah, Jim, look, as I said, our client retention was actually up year over year. And I would say if you absent some anomalies we saw in the fourth quarter, which I'll talk about, we would have had a fabulous retention year. So I think the value proposition we're delivering is fine.

What we saw in the fourth quarter, soon after Liberation Day, was a spike in bankruptcies and financial distress in the micro segment. Think entrepreneurs, kind of small businesses. Now, what I will tell you, that's not uncommon when we see an external shock. People just kind of throw it in. The other thing that

often in that time of year can happen is you have a lot of seasonal businesses, think landscapers, lawn people, that all of a sudden are about ready to get back in the business. They may look out in the future and say, you know what, I'm not going to do it this year, and they shut down their business. So I'm not overly alarmed by that. When you look at our index in May, we saw good, moderate growth. We see no signs of recession. And Jim, next week we're going to announce June, but I'm going to give you an early read.

I think what you're going to see in June is exactly the same thing. Moderate and stable growth in small businesses, continued deceleration in wage inflation. Look, I think there's a lot of optimism in small businesses right now. What they're waiting for is clarity. And I think if we can get some clarity on taxes, clarity on tariffs,

I think that there's going to be a lot of optimism and really propel growth in small businesses going into the recession. With your connections at the Fed because of the work you do, you're sharing this four-year low 2.77 wage inflation number, right? Because that's a number that would make the president say, hey, listen, here's a fact about why you should cut. Not just jawbone, but here's a fact.

Yeah, I think, Jim, look, I think the Fed chair made some comments in Congress yesterday or two days ago. I've kind of lost track with time. But I think he made some comments relative to the fact that one of the challenges the Fed has right now is that you look at the underlying data and probably have some things to be pleased about. And then they have this uncertainty of what are the impacts or how is the whole tariff thing going to resolve itself. So there creates a degree of, well, should we move or should we not move? As I said...

Clarity is important. That's one of the things we decided to do with our integration with Paycor. We decided let's move because what we couldn't have for our employees, our clients and our strategic partners was a lack of clarity. So we got it all out of the way in the fourth quarter so that they had clarity going into this fiscal year. I would give some advice to our policymakers. Let's bring some more clarity to the situation. And I think we'll see entrepreneurs

I have advice to the analysts who cover. They ought to look at the clarity that you're providing because that's why the stocks should go higher. John Gibson, president and CEO of Paychex. John, well explained. Thank you, Jim. Coming up, Kramer takes your calls and the sky's the limit. It's a fast fire lightning round. Next.

It is time. It's time for the lightning round. And then the lightning round is over. Are you ready to keep that to the light? Let's start with RJ in California. RJ. Hey, Jim. How are you doing today? Okay, RJ. How are you? You know, hanging in there. I was hoping that the market could have shown us what it did yesterday.

Can't be great every day, but we did well. Let's go make money together. What do we got? Hey, I wanted to understand your thoughts on APLD, Applied Digital. Okay, this is high-performance computing infrastructure. And HP high-performance computing is on fire. That company doesn't make any money, but I think it's a very good spec. Let's go to Jim in Texas. Jim.

Okay, all right, all right.

Okay, listen, sunshine. That stock is up like 50 points. The stock is straight up from 20s to the 50s. What we have to do is tomorrow, we got to ring the register a little bit and say to ourselves, congratulations, and go buy yourself something fabulous, okay? Because you just hit it out of the park. Now I need Carter in Tennessee. Carter!

Jim, what do you think of DocuSign? You know, I thought the last quarter was good and nobody liked it. I swear to God, I thought all the different innovations were good. People thought the revenues were too weak. I'm going to go with the flow and tell you it's time to sell. Let's go to Tom in New York. Tom.

Good morning, Alvin. Good morning. Evening, Jim. Well, whatever. I'm fine with morning. What's happening? I was listening to you and David speak about enterprise software this morning. And on that note, I'd like to get your thoughts on Workday.

I'm worried. There's a lot of companies coming for Workday, and I don't like that. I think that what happens is we begin to see what's happening to Salesforce right now, where people just don't want to own Salesforce. So I want to stay away from Workday. I got enough pain right now with Salesforce. Now I want to go to Sam in Massachusetts. Sam! Sam, how are you doing? I'm pretty good. You know, I'm kind of losing my voice. That's my worry. But I, you know, I'll come in strong tomorrow and Regino will yell at me and get me some tea.

No, she won't. I'll get her to see. She deserves everything. She deserves everything. Whatever. Yeah. No, you've got a great staff. Glad they got me on today. Got a question on Denny here. You know, the company has a history of making really good acquisitions, and it's historically been very resilient.

through times of uncertainty. So looking at it right now, it looks like it's down 25% year-to-date. We've got an aging population, healthcare is speculable. So, Chris, what do you think about Danne here? Sam, you've got to listen to me because I spend a lot of time talking about this in my club call today. We can listen to replays.

I am horrified about what's happening to Danaher. Everything you said is true, but the CEO, Rainer Blair, I mean, what is he doing? I mean, the guy has done nothing. This stock has been such a disappointment for me that I just have to stand. I mean, I would get on this desk right now if I were younger. I would jump up, I would scream, and I would say, Danaher, make changes now. But instead, I just said that. I think that was pretty emphatic. Let's go to Michael in New York. Michael. Yes, sir. Do you want to?

SMN, which one? SM, the old St. Mary Energy?

All right. Listen to me. This thing I saw it down great today. They are doing not well. OK, I think you should go by Coturra if you want an oil. That is not a company you want to own right now. I'm sorry. And that, ladies and gentlemen, is the conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. Is it possible that this red hot semiconductor rally is only just getting started?

This morning, Ben Reitz is with Mellius Research, perhaps the most provocative and thoughtful analyst of the moment. Put out a piece that tries to relate the current remarkable move in the semis, their drive in this whole market, to the incredible energy rally back in 1980. In those days, oil made up 30% of the S&P 500. Right now, the semis make up 12% of the S&P. NVIDIA and Broadcom account for three quarters of that themselves. What he wonders, if the rally broadens out to other semis,

What could happen? There's certainly enough use cases for them from the data center to robots to autos to the Internet of Things. It's an interesting idea.

But first, I want to say that having traded in 1980, the energy stocks were going crazy back then because of some oil supply shocks stemming from the Middle East and Jimmy Carter's removal of price controls the year before. Inflation was high. Oil was scarce. The big oil companies were pretty much the only part of the economy that was growing. But they were growing by leaps and bounds. It was an anomaly that lasted for some time. And if you didn't own any oil, then you didn't know what you're doing. So I get the comparison because that's how the saving doctors right now feel.

If money managers don't want to be left behind, they can't stop buying these things. Perhaps that's what we're already seeing now with the ascension of AMD, Micron, Marvell, as well as the semiconductor capital equipment makers like KLA, Applied Materials, Lamb Search. But there's one very big difference. Oil, alas, is a commodity.

Those stocks roared in 1980 for reasons that had little to do with the companies themselves. That's certainly not the case with the semis. The companies are beholden to the broader economy. And while our chips dominate the world, that doesn't mean they should dominate the S&P 500. Right now, the tech sector technically accounts for about 32% of the S&P. That number would expand to 43% if you included Meta, Amazon, and Alphabet, three tech titans that somehow aren't considered tech companies by the keepers of the index. Go figure. If the

If the semis became like the oils in 1980, then tech would be account for about 60% of the S&P 500. And I think that's unrealistic. We already have the NASDAQ, for heaven's sake. It would become self-fulfilling where money managers would keep buying NVIDIA and Broadcom because they keep becoming bigger in the index. And that kind of thing can't last.

I just think we've got to curb our enthusiasm a little bit. And everyone knows I love the sector. It's hard to accept that a stock like NVIDIA, currently the largest company in the world, could double or even triple if Rice's bullish forecast comes to life. But that's what would have to happen. Again, I think the world of NVIDIA. But I don't see it tripling from here, at least not anytime soon.

Of course, over time, tech can certainly become a larger percentage of the S&P, and the semis can keep moving up in value. But the comparison to the oil boom, that's too much for me. Plus, it's an ominous comparison because after 1980, we had a multi-year oil glut.

If you just go back a few months, we saw what happens when the economy ticks down or when the president presses the tariff issue. The semis get crushed. So if you really feel the need to double down on the group, at least wait for the next big sell-off before you pull the trigger. Oh, and congratulations to NVIDIA for reclaiming the crown of the largest company. It is a stunning achievement. I like to say there's always a bull market somewhere. I promise I'll find it just for you here on My Money. I'm Jim Cramer. See you tomorrow.

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