Mad Money w/ Jim Cramer 6/9/25
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Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson report.

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Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. I'll be your main friends. I'm just trying to make you a little extra money. My job is not just to entertain, it's to educate and teach you. So call me at 1-800-743-CNBC. Some stocks should not be downgraded. Sell, sell, sell.

It's just not worth it because it's only a matter of time before they snap right back. Yet we see this happen every day, including today. Dow dropped one point. S&P gained 0.09%. NASDAQ climbed 0.31%. It amazes me that analysts refuse to learn from the mistakes that some stocks should not be taken off the buy list. Today, Morgan Stanley downgraded the stock of McDonald's, saying it was arguably too expensive and that it would probably not be insulated from some structural pressures on fast food. Now, with the stock at 25 times earnings, its assessment is too high.

Morgan Stanley moved to equal weight, or hold. The stock dropped $2.58, or 0.84% on VAT. Now, it would not have made much of an impact on me if McDonald's hadn't also been downgraded by Loop Capital on Friday. Again, concerned that it won't beat the consensus numbers. Look, I understand the downrange. Stock's up 5%. It's holding its own. But I think that in the long run, it has never paid to downgrade Mickey D's. It's the king. It offers good value, and it's incredibly well run. Let

Let's leave Morgan Stanley's valuation downgrade aside for a moment, focus on group capital's Friday downgrade, because it's much more visceral. It's observable. You're on it.

The main thing who upsides for what they think will be a shortfall is negative reaction to the new chicken strips launch. That's right, a dish that's turning off people. The analyst said that he was hoping the new dish would turn things around for McDonald's. But it looks like customers do not like how the strips are made. Customers seem to favor heavily breaded chicken. And the lightly breaded chicken they're serving? No, not buying it. Gets worse.

The strips apparently are not attractive. Some would say they're ugly compared to previous McDonald's offerings. And then the coup de grace. McDonald's was supposed to be offering a snack wrap based on the strips. And while the good news is the strips will cover up how ugly the wrap will cover up how ugly the strips are. The bad news is that maybe they don't taste good. Well, Loop says that's hardly a reason for optimism. And I understand that. Everything I heard from what they said makes some sense. But.

We have to wait. The wraps will be rolled out regionally soon, and the available nationwide on July 10th. Sounds bad, right? That's not what I want to wait for. I say this. I say, wait a second. This is McDonald's. Do you think this company is stupid? Do you think that CEO Chris Kempchinsky doesn't pay attention to these things? Do you think he ignores the franchises? Do you think he doesn't know the product's ugly?

Do you think that he'll bet everything on a product that people don't like? Listen, McDonald's is an amazing company. It didn't become amazing because it stuck with bad ideas. I remember going to McDonald's when they released the Arch Deluxe Burger. It was so exciting. I couldn't wait. Yes, it was that big a deal. Came in this plastic thing. I got it. I opened it up. And the lettuce and tomato were wilting.

I was bummed. I admit it. But I didn't even want to tell anybody because the hype was so great. I didn't want anyone to think that I didn't like it. I didn't want to say anything to anyone. Well, this was McDonald's. I thought they'd figure it out, but they couldn't. So what'd they do? Did they stick with it? No, man, they killed it!

The Arch Deluxe, 1996, biggest launch in years, and they just killed it. Why? Because it wasn't good enough. They knew it was a loser, so they just discontinued. It was plenty embarrassing, but they did it anyway. That's who McDonald's is. I'm sure it was embarrassing when McDonald's fired a CEO for misconduct. They just blew him out. They didn't convene a panel of lawyers and board members to study while the CEO hung on, fighting the inquiry. He was brough. It was embarrassing when they let go of another CEO because he failed to deliver. But they listed the franchisees, and they fired them. The results each time, the company got better.

better. And that's what happens at great companies, great companies like McDonald's. Or how about how they raise the prices? People said it was too aggressive. They heard a backlash. So what did they do? Simple. They offered a value meal that people loved. It was a great idea and it is a hit.

Every one of these decisions was made without fanfare, but they were done and done with alacrity. That's why I say this chicken strip failure, well, if it doesn't work, it's going to be gone. Hey, by the way, the rap, too. Take that. The strength of the McDonald's is that they don't fight battles they can't win. When something doesn't work, they just dump it and they move on.

Which is why I say you downgrade a stock like McDonald's at your own peril. Now, it's a big reason why I don't want to bet against Tesla, even after a host of downgrades. We got two of them today. Look, I don't like the spat with the president. Must have told his opinions, but it was a bad call for the shareholders, right? I don't like that cars aren't selling well. I see that, too. I want him to focus on the car, focus on his robots. Blow things away, for heaven's sake.

But I don't think he's done. There's another act coming from Musk, and I want to benefit from it. The RoboTax he launched in Austin. That's right. Thursday, June 12th. Stock got too down today, and you know what happened? How much did it go down? Was it down 10? Was it down 20? No. Let's just check it out for a little cinema verite. His stock was, oh, look

that was up $13.44 or 4.55% on two downgrades. Yeah, today in the wake of two downgrades, the stock is up $13.44.

Hey, finally, there's a stock that people now love to downgrade. It's like, hey, let's go downgrade that. What are you doing tonight? I'm going to go downgrade it. I'll downgrade it too. I was going to have a cocktail. Sorry, I'm talking about Apple. I expect to hear some downgrades tomorrow because of today's supposedly ho-hum Worldwide Developers Conference. Not that anyone thought it was going to be anything more than ho-hum, except for some people.

As I listened to what they were saying, I didn't get the sense that there was anything truly mouthwatering or earth-shaking from Apple, nothing that maybe wanted to upgrade my phone. But what the critics seem to be missing constantly is that the only question I heard was upgrade or not. Did you hear Switch? I didn't hear Switch. As long as I didn't hear Switch, I'm going to hold on to stock.

You may have to take a beating short term when people downgrade, but we're now at the moment when I hear far more negative comments from analysts and hedge fund managers than positive. That means that the downside is most likely more limited than you think. It still can go down. I'm talking about limited. Let's consider a couple of bullet points. First, Apple's in a dry spell. It doesn't have anything new that the people want, but it has plenty of optionality. You know what it should do? It should just go acquire perplexity. I know they don't like acquisitions. Well, anything can happen.

I wish they'd buy it. I hope these guys don't wait until some company offers to pay Apple to be their AI search engine, and it isn't the best. Perplexity is my favorite, and they definitely can afford it. Second, right now, Apple's staring down two guns. One, a ruling that declared Google a monopolist that may end its largesse toward Apple, like the $20 billion check it wrote to them in 2022, to be the default search engine. It's also on the verge of losing a key case involving Epic.

The gaming company that would let them get around the 30% chunk that Apple takes from every transaction in the App Store. I think Apple could lose one. It probably won't lose both. And if it doesn't lose any, whoa! Finally, let's understand something. Apple is not a company that stands still, okay? It knows how to bread the chicken strip.

We can sit here and criticize Apple endlessly. They're not perfect, but can we stipulate that in the last year, it's reasonable to believe that Tim Cook, the CEO, might have been a little distracted? Here's a man, a patriot, I might add, who's been trying to do everything he's supposed to do in order to meet the demands of the President of the United States. The President wanted investment in the U.S. What does he do? He announces that Apple's going to spend $500 billion in the U.S. over four years. No one ever made a bigger commitment. What are the other companies doing besides NVIDIA? The President then made it clear that he didn't want Apple to make as much product as he did in China. So unbelievably, in almost no time flat, Cook

moved a huge amount of iPhone production to India. Then Trump says that India's not the right place. The phones have to be made here. I mean, come on. With that pressure, maybe you can see why this may not be the biggest year for Apple. Most managers will be shell-shocked. All that happened here is that the Worldwide Developers Conference was ho-hum. No kidding. I'm glad they had it. As usual, Tim Cook handled all this stuff gracefully without a single complaint. I would say that would be difficult for most of us to do. I don't think we'd be having our most creative year. Do you?

So go downgrade. Go put the hate on them. Add that they don't put enough bread on the sticks. I don't know. I know that they missed the cycle. I know that the president made their plans untenable and they might have to eat a giant 25% tariff. But Apple's becoming one of the most hated stocks in the universe. When we get the downgrades tomorrow, many will say sell. I can't blame them. But the bottom line, as long as nobody switches to Android, call me sanguine about Apple. Not more than that. Not certainly less than that. Sanguine doesn't mean buy, but it sure doesn't mean sell in tomorrow's bite of holes.

I'm not buying those either. I need to speak to Michael in Florida right now. Michael. Hey, Jim. Thank you for taking my call. My pleasure. I just wanted to first let you know that you built my portfolio, and I love it. But I also wanted to thank you for your entertainment value. I have a six-year-old daughter, and she actually likes watching part of the show with me, where she likes to listen to you go and hit the big board of buttons, as she calls it. And then she asked me to do this. I said, what are you talking about?

She absolutely enjoys it. Thank you so much. It gives me a chance to actually talk to her and, you know, have a young person who's now learning about investing, even though maybe she doesn't know what's going on. I like that. You know, when we started the show, we had kind of that in mind. I said, look, I want everyone. I didn't think a six year old can't. But I just kind of wanted the family to watch it. But I really want it was fathers and daughters to watch together. But or, you know, mothers and I wanted all that. But go ahead. Let me help you, Michael. What's up?

Thank you so much. So my question is, ConocoPhillips, I'm thinking about selling some shares, but I'm worried about I wanted to buy Eli Lilly. Now, you told me to buy Lilly. I like your idea. I like your idea. I like your idea. I think Lilly's at a great level and Conoco is not. All the oils go to like 4% or 5%. You know, this is only 3.5%. I want you to sell the Conoco and buy the Lilly. I like that idea.

And that, ladies and gentlemen, is the conclusion of the breaded chicken strips. And don't you love that? The breaded. That's how we created a great American company. And they didn't put enough bread on the chicken strips.

Next thing you know, they didn't like the dark meat. They didn't like the white meat. I mean, how about the, hey, how about the neck? I always like the neck. Apple's quickly becoming one of the most hated stocks in the market. But as long as people don't start switching to Android, call me sanguine on Apple, please. Man, but tonight, oh boy, it's so frustrating to watch a company report strong earnings only for Wall Street to send the stock lower. I'm thinking of what happened with Broadcom and why I'm still sticking with it. And Circle FBOs was far from being square. I'm thinking of this red hot listing. Give me my take on the name.

And what should we make of the state of the consumer? Data from 100X found some conflicting data that I think is important for investors to know. I'm getting all the details from the company's CEO. So cancel the chicken fight.

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

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Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for $15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm

I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of $45 for three-month plan, equivalent to $15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. See full terms at mintmobile.com. There's nothing more frustrating than watching one of your favorite companies report a strong quarter, only to see the market find some reason to send the stock lower. But in retrospect, these can be great buying opportunities.

Just look what happened to Broadcom last week. That's ABGO, longtime Kramer fave, big holding in my charitable trust. But the stock sold off hard after the company reported on Thursday night. Sell, sell, sell, sell. Why? OK, Broadcom reported revenues of just over $15 billion, new record for the company, and up 20% from a year ago, coming in ahead of consensus expectations. All good. Seven-dollar sales were up 17%, up from 11% in the previous quarter. That's more than half the business.

On the infrastructure software side, which makes up the remaining 44% of revenues, WorldCom also posted better than expected numbers. 25% growth. Throw in solid margins, you get a two-cent earnings beat off of a $1.56 basis. 44% year-over-year. What do you need here to get someone to like a stock? Even better, management had a lot of good things to say about the current quarter. Their guidance was healthy, yet the stock still sold off 5% the next day.

Now, some of that's because the quarter wasn't perfect and the stock had already run up pretty dramatically going into print. This thing did have some hair on it. WorldCom's non-AI semiconductor business was an area of concern for some investors. Revenue was declining 5% year-over-year. While management indicated that they believe the non-AI semiconductor business is, quote, close to the bottom, they also mentioned this business has been relatively slow to recover. Now, look, it's been less than stellar. And no one knew I was expecting a real big rebound.

We also didn't get much in the way of major customer updates. Broadcom has three major customers that they don't mention by name, likely Alphabet, Meta and ByteDance, the parent of TikTok. In addition to the big three, the company has highlighted four prospective customers that we are hoping to get more color on this quarter. Instead, well, there was a lack of notable commentary and prepared remarks. And when asked directly about in the Q&A, CEO Hawkins said simply, and I think this was perfectly fine when he said,

No comment. We don't talk about prospects. We only talk on customers, end quote. Fair enough, but some people were hoping for more. What else? Broadcom's gross margin guidance for the current quarter came in light.

Down 130 basis points from the quarter that they just reported. Not egregious by any means. But as lower margin custom auxiliary processing units became a larger part of the sales mix, that might continue to put pressure on the overall margins, although I think it's going to be less and less each quarter. Putting it all together, though, I think the main problem is that Broadcom stock had run up so dramatically from the April lows. Think about this trajectory. The stock bottomed at $138 in April. It was at nearly $260 before it reported last week.

Under those circumstances, anything less than perfection was going to be punished. And while the quarter was very good, it certainly wasn't perfect.

which is why despite the post-earnings sell-off, I still like this stock and think you may be getting a terrific buying opportunity here. As I mentioned earlier, the headline numbers for last quarter were solid. But even beyond that, I think the bears are missing some even more important positives for the quarter, outside of just the headline numbers. For starters, Broadcom's AI revenues came in at $4.4 billion. That's an increase of 46% from the previous year and up from the already impressive $4.1 billion just last quarter.

While that was merely in line with expectations, it underscores that the company's seeing the most enticing part of its business inflecting. I like this. This strength is coming from both parts of their AI business, with custom AI accelerators growing double digits last quarter, while AI networking grew an astounding 170% year over year. While Brokham's guidance for 9.1 billion semiconductors this quarter might not have been an absolute blowout, AI chip sales were

are expected to get to be 5.1 billion this quarter, and that's up another 700 million sequentially, mind-boggling 300 million more than the analysts were looking for. That's something. This would represent 60% growth for AI chips year over year. That's amazing.

See, this is why it's so hard for me to justify the pullback of Broadcom stock. They're selling a stock that's guided for AI semiconductor sales to come in $300 million higher than expected because they're worried about the slow growth non-AI part of the business. That's nuts. As for the networking side of Broadcom's AI business, that was a

A hundred seventy percent. Managers expect this momentum to continue, helped by the launch of the new Tomahawk 6 switch just last week. This newest iteration is important because it gives customers the ability to use more AI chips to build more larger and larger and efficient AI networks. This should have been the added benefit of increasing AI spending from Broadcom's customers.

As for those three big customers and the four prospects, while it would have been nice to hear more commentary about any of them, I think anyone who's worried about this is missing the big picture. CEO Hawk, that's what we all call him, Hawk, stated that these large customers are, quote, still unwavering in their plans to invest despite the uncertain economic environment, end quote. While I never bought into a fear about a slowdown in AI spending, not all that long ago, the market was totally gripped by this concern. Remember the deep sink fiasco? So the sentiment feels pretty meaningful, huh?

Positive commentary didn't stop there. Management remained optimistic that the strong growth rate of AI semiconductors in 2025 will be sustained in 2026. As Hawk put it, quote,

They may actually see an acceleration of XPU demand into the back half of 2026 to meet urgent demand for inference on top of the demand we have indicating from training, end quote. On top of that, Hoctan told us before, quote, we eventually expect at least three customers to each deploy one million AI accelerated clusters in 2027, end quote. That's another sign the company sees no slowdown in AI spending anytime soon.

Round things out, there was also some positive commentary on VMware, the virtualization software company that Broadcom bought last year to bolster the cloud infrastructure business. High margins there. Management called out momentum in VMware Cloud Foundation, where 87% of the top 10,000 customers have already adopted it.

And if that wasn't enough for you, Blocon paid out $2.8 billion in dividends last quarter. And on top of that, they spent $4.2 billion to repurchase 25.3 million of their own shares, a return of $7 billion in capital to shareholders. Always good to see the company buying its stock right alongside.

Here's the bottom line. Contrary to the market's reaction, there was plenty to like about Broadcom's quarter, and the stock only sold off because some investors were expecting an insane blowout. Honestly, I'm more positive on Broadcom than I was for the report. And the fact that you can buy the stock at a discount here, I think it's a steal. Mad Money's back after the break.

Coming up, looking to round out your opinion of Circle's recent IPO? Kramer's circling back to the name after its first few days of trading and revealing what it means for the state of cryptocurrency. Next.

Are you still quoting 30-year-old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now. It pays to discover. Learn more at discover.com slash credit card based on the February 2024 Nelson Report.

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After freezing earlier this year, the IPO market is back and arguably bigger than ever. Last week, we saw one of the flashiest deals of the year when Circle Internet Group came public. Now, this is a crypto platform that's the issuer of the second largest stable coin out there. And Wall Street lapped it up. We will explain stable coin in just one second. Now, see, there was so much demand for this deal that both the size of the deal and the price of the offering were raised twice.

Originally, Circle was looking to sell 24 million shares at a price range of $24 to $26. But by the time the offering was finalized, it had been upsized to 34 million shares and priced at $31, raising $1.05 billion in gross proceeds.

When Circle was set to begin trading last Thursday, there were whispers that the deal was something like 20 times oversubscribed. I mean, honestly, you always hear that for hot deals and you can never really take it too seriously. It just turns out to not be the case. Well, man, it might have been true this time because CRCL opened for trading at $69 on Thursday. That is up

Well, over 100 percent from the deal price. And that was just the beginning. Certainly in the first day, $83, up 168 percent from where it came public. Then tacked on another $24 on Friday. We're getting another $7 and change today, closing at 115. Did these bankers misprice it?

So what the heck is going on here? Why are investors so freaking excited about Circle? And by the way, what's a stable coin? All valid questions. Let me explain. First, let's talk stable coins. If you think about the world of cryptocurrencies as one big casino, then stable coins are basically the chips for the crypto casino. When you're going to the casino in Las Vegas, you give them your change, right? You give them dollars. In exchange, what do you get? You get chips with the dollar-based value assigned to them.

Crucially, while you're at the blackjack table, you wouldn't want the value of a dollar chip to fall to 50 cents, right? Or even just to 95 cents for that matter. They're valuable because they can be exchanged back dollar for dollar.

Same deal with stablecoins. You give your dollar to the back of some stablecoin, in this case Circle, and in exchange you get a stablecoin. Circle's stablecoin is called USDC. It's worth a dollar and crucially will stay worth a dollar. That stablecoin then can be used to buy all sorts of other cryptocurrencies. It can buy Bitcoin. It can buy Ethereum, Dogecoin, Polkadot, Fartcoin, you name it. Think of Bitcoin.

Think of Bitcoin as the poker table, Ethereum as the blackjack table. Why don't we make Fartcoin the roulette wheel, all right? Once you swapped your stablecoin for a currency, you're playing that game. Everyone talks about cryptocurrencies, but you never want to use most of them for actual transactions because they're so volatile. Stablecoins, though, are basically digital dollars. Now, the biggest stablecoin issuer globally is something called Tether.

In fact, with a current aggregate market cap north of roughly $155 billion, Tether is the third largest overall cryptocurrency, behind only Bitcoin and Ethereum. But I've mentioned before, Tether is a little...

Question. It's controlled by some mysterious figures, and more importantly, it's not totally clear what Tether's doing with its reserves. Now, in the spirit of fairness, there's never been a big blowup with Tether, but they're not exactly a model of transparency. And if Tether doesn't like that classification of their business, their reclusive chairman Giancarlo Devasini is welcome to come and make money any time and tell me why I'm wrong.

I bring this up because over the past seven years, Circle's emerged as a more sanitized, less sketchy version of the stablecoin concept. USDC was launched in 2018. From the get-go, it's been focused on offering better transparency about how its reserves are invested. In fact, when Circle mentions Tether in its prospectus, they refer to it as an El Salvador-headquartered affiliate of China-based crypto exchange Bitfinex.

Unlike Tether, which invests in some riskier assets like secure loans, precious metals, and even Bitcoin itself, USDC is backed by genuine reserves of fiat currency. And Circle's found a lot of success with that pitch. The market cap for USDC has grown to around $61 billion, which makes the second largest stablecoin and also the seventh largest cryptocurrency overall. The primary way that Circle makes its money is by investing their reserves, which is

When you give them a dollar and receive one USDC in return, Circle then invests that dollar that you've parked with them, and they get to keep the profits from those investments, which are very safe vanilla things, simple bank deposits, barrier interest, along with short-dated U.S. Treasuries, overnight Treasury repurchase agreements.

Now, Circle Internet Group does some other things beyond the core USDC stablecoin business. They have a euro-denominated stablecoin offering that's called the EURC, largest in Europe. They have all sorts of auxiliary products for the USDC ecosystem, like a type of crypto wallet, institutional payment solutions, and tools to help create smart contracts. But at the end of the day, the stablecoin business is responsible for the vast majority of Circle's business,

Last year was 99% of the revenue. Holy cow. Hey, speaking of financial circles numbers, they're pretty impressive. In the first quarter of the year, they posted 59% revenue growth, 75% net income growth. So at the end of the day, where do I come down on circle?

Look, this is actually a pretty darn good business. USCC is popular. The financials look pretty good for an IPO name. But the stock, OK, look, very hard to recommend after watching the company's valuation jump from $5.5 billion at the beginning of the IPO process to over $25 billion in just a matter of weeks. I mean, if we divide Circles 2024 net income by the number of shares outstanding at

after this offering. Then last year, it earned about 70 cents per share. At its current price, that means Circle's selling for roughly 165 times last year's earnings. By comparison, I'm going to use Coinbase as a compare. That's roughly 27 times last year's earnings.

Now, if we use the growth rate from the first quarter of the year and project it forward, then Circle's trading at 94 times that back of the envelope earnings estimate. Coinbase trades at roughly 50 times. OK, long story short, I like Circle. I'm having trouble getting to this price. I'm not willing to pay through the nose for it. That doesn't help that more than half of the shares sold in Circle's IPO came from early investors and company insiders, including the CEO rather than the company itself.

In part, that's because the company didn't really need to raise money, which is good. But if the insiders are reading the register at...

At 31, do you really want to be a buyer at 115? Or maybe the insiders were dead wrong. I don't know. Plus, Circles joined at the hip with the crypto ecosystem and crypto is inherently volatile. I think you'll get a better opportunity simply by being patient. Honestly, the IPO market is starting to get a little crazy here. Remember CoreWeave, the AI data center play? Came public in March right before the IPO market went on hiatus for a few weeks. I loved CoreWeave when the deal was priced poorly at $40 and stock plunged to the 30s.

But just two months later, it's $162. And that one's, that feels a little extreme to me. This is the type of action that gets people hurt. So I need you to be a little careful. Here's the bottom line. Circle Internet Group's a solid company, but the stock right now has gotten too hot for me. I can't recommend it up here. Why don't you let it cool off before you even think about pulling the trigger? Wow. What money's being made though? Let's go to David in Tennessee. David.

Hey, I just want to get your quick thoughts on Marvel Technologies, MRVL. Okay, it's starting to react correctly. When they reported that great quarter, people didn't think it was that good. That's nonsense. Matt Murphy did a terrific job. I like the fact that the stock bounced at 60 and then started heading back at one point, traded at 71. I think you're in great shape with Marvel Technology. I really like it. Okay, guys.

This circle, I know you're going to, it's so hot. It's just so attractive. It has a lot going for it now, but the stock is simply too hot for me to recommend at these levels. Let it come down before you consider buying. It's okay.

There's much more May have money, including my exclusive with data in Atlanta's firm 100X. You know we love the AI chatbots on May have money, but which is trending most favorably with consumers? I'm getting the numbers from the CEO, and which is not doing that well? I got that too. Then, mutations come in all shapes and sizes. I'm sharing how to spot one and what you can do if you have a stock caught in the middle of that kind of action. And of course, all your polls rapid fire tonight. So stay with Kramer.

You know us, we're always on the lookout for new sources of market intelligence, which is why I keep highlighting the monthly reports put out by a company called 100X. It's a privately held alternative data firm with real-time feedback from actual customers from more than 4,000 brands. Now, many of these firms look at historical data to make predictions about the future.

Uh-uh. 100X directly asks people about what they plan to buy. This helps bridge a crucial gap that currently exists between forward-looking, what I call soft data, which is predictive and less reliable, and backward-looking, hard data, which is more dependable, but also out of date by the time you get it.

So last week, 100X published this report with key insights from their May 2025 surveys, including some of what I think are pretty counterintuitive data on aggregate consumer spending plans and some really interesting data about their feelings on the top generative AI platforms everybody talks about. Don't take it from me. We got work to do. Let's check in with Rob Pace. He's the founder and CEO of 100X to find out what's going on. Mr. Pace, welcome back to Mad Money. Thank you.

All right. So, Rob, there are some things here that are frankly just mind boggling. You got to help me. Everyone knows that every single company I talk to says, look, the consumer's worried, consumer's bad, consumer's not spending. I'm not getting that from this. No, that's exactly right. Our May data, actually, the consumer told us they were going to spend one percent higher than

than they did in April. And as a reminder, they're picking the brands out of 4,000, as you said, and they're saying over the next 12 months, am I planning to buy more of it or less of it? I was as surprised as you are. In fact, we're back, Jim, to a year ago levels, which, as you'll recall, was sort of the 2% to 3% economic growth. Well, given the fact that I know how thorough the way you poll people, so to speak, it makes me think that maybe the other guys just aren't being rigorous. Right.

Well, I think that in a way the consumer has kind of tuned it out. You know, that's what we see. They're not buying or selling the news. They're going on with their life and they'll deal with the events as they unfold. And they'll deal with the events in Los Angeles the way it is, the events in the UK. I think that's a great analysis and I'm going to stick with it and use it. Now, it gets even more interesting when we start talking about the generative AI situation because I've got to tell you, you blew me away with this stuff.

I think people, if you ask people, they'd say, well, listen, there's chat. That's got, I don't know, 80% share, and the rest of it is just scrum, and nobody knows how they're doing. Not true. Yeah, I mean...

We get the most feedback on chat. And we get to have about 20,000 users. Really? Yeah. And in terms of use of AI in products, we have over a million. So a pretty good sample. But chat, they get very positive feedback. But what's going on is the...

AI game is changing. At first, it was the wow factor, ease of use, speed, et cetera. Now it's reliability, quality, sourcing. And that's where perplexity has come out of nowhere. Our data in terms of future use of perplexity is up 17 percent since the start of your meeting. Since the start of the year. Since the start of the year. It's unbelievable. Look, I mean, you know, I have to tell you.

I use these heavily. And I switched entirely to perplexity. Why? Because I think it's right more than it's wrong. Maybe I'm not alone here, obviously. I mean, these numbers are staggering. They are. In fact, over 50% of the people talk about reliability as one of their key considerations. But only 19% of consumers have a positive view currently. And perplexity is double digits improvement over that.

So they're kind of hitting the kind of the key. They're scratching the key itch that consumers have in this space. Well, I mean, were you yourself surprised? I mean, it wasn't even in the running last year? No, it was down a lot. I mean, it's an analogy. It was like a horse race. You'd be like perplexities coming on the outside. It's just pretty staggering, as you said.

Not everything is sanguine here for the others, too. I noticed that you can say since January of 2025, Copilot has not done that well. Yeah, in fact, they've declined in our data, and it's precisely over that issue. Their reliability scores, their sourcing scores, etc.,

are below average in our data. And now they do have something very positive, which is the Microsoft umbrella in terms of trust and security. And that's a huge edge because that's the other kind of Achilles heel in this area. So I wouldn't count them out, but I would say actually, if anything, they are receding in our data versus advancing. I think that's important. Now you do have Apple in here.

It's interesting before we get into that, uh, there was a panel that was held by my friend, Scott Wapner earlier today was out West. And some of the people were saying, Apple should just buy perplexity and solve its problem. This doesn't look like it has a problem to solve, but maybe if they did, they should. Well, it's interesting. You, you know, I was a former Goldman partner and M&A banker. So I've had that thought, but that's no longer my swim lane, but it's, but it's not a crazy idea. Certainly in terms of filling a key need. Excellent. Now, uh,

There's something involving. I'm not a member of Sam's Club. I'm going to say that point blank. I am a I am a very, very big user of Costco. But there is a way that they are doing things at Sam's Club that people are like in the way that they shop. I think you should describe it to people because it seems like it could be the way of the future. Yeah, I think it's a big deal in retail and it actually ties into what we were just talking about. So they have a thing called Scan and Go. We have 40 pages of comments online.

unsolicited comments from Sam's Club customers. Oh, no, when you say unsolicited comments, what does that mean? They pick the... We're not saying, what do you think of Sam's Club? And we're not even telling... We're saying, give us a comment. They're...

calling it out. And they use words like genius, love. So let me explain it. In effect, you can kind of skip the checkout. And what you're doing is you're building your cart as you put it in. With your phone. With your phone. So it's more important. It's not just the convenience. It is you have to have the app.

which is huge for the retailer. It probably can address shrink because as you leave, and it's a great application of AI because for all of this to work. So it's a big, big deal. Why aren't they using it at Walmart? Well, it's a great question. As you know, obviously, they're a subsidiary of Walmart. They've been working at Sam's, I think, for six years. So it's probably not one of these overnight. Because I know Costco is a club. We don't want to hurt other club members. No, see, Walmart.

Walmart has made great inroads on convenience. Yes, they have. And this is a convenience play. I think if Walmart adopts this and has price and convenience, watch out. And then one last thing I just want to get, I know that just from everything that you looked at, going back to what you said at the beginning, are prices,

Are people just able to really turn off a crazy time? Because you know what? When we're with family members, when we're together, Rob, we don't feel that way. We feel that things are out of, I've talked to both left and right because I talk to everybody. Things are just crazy. That's what people say.

But they're just crazy, but they're just doing their thing. Well, we're kind of pioneering a new class of data. We call it future hard data. So soft data is sentiment. How do I feel? Right. Confidence. Hard data is what actually came in. The problem is in the rearview mirror. Right.

When people are answering, are giving us feedback, they're not thinking about, they're just thinking about, am I going to eat more at Chili's? Am I going to buy more of this? So we take out the emotion and just have a practical view of, hey, what am I planning to do? And so far, it shows that what's encouraging is you should let the Fed have- The tariffs. I know. I mean, inflation coming back. Yeah. Yeah.

I'm just telling you, you know, data points. Rob, I don't know whether to think, wow, what a great country or what the heck are people thinking? But you are the most thought provoking guy who comes on. Thank you for this. Rob pays bad ratio of 100 X with some breathtaking stuff, including that maybe Apple should buy perplexity. That's my view. He doesn't work at Goldman Sachs anymore. Mad money's back there for the break.

Coming up, lightning doesn't just strike twice in Kramerica. Booyah, Jimmy Choo. Booyah, booyah, booyah. Thanks for taking my call. It strikes every day. Kramer is back in a flash with your questions. Next. It's time. It's time for the White Mountain Reds. I'm Sam. It's not said by Bob. It's also said by the course. I'm Sam. We play this out. Ah!

And then the lightning round is over. Are you ready? Let's get it. Let's start with Tracy in Nevada. Tracy.

Jim, I am calling to thank God and thank God for you and thank you and thank NVIDIA. I lost my eyesight as a young child and my husband passed away from cancer in 2009. I had to short sell our house in 2011. I began watching you in 2007 and reading your books and your optimism, your encouragement really got me through some very dark times.

Thanks to you, I was able to buy a new home in 2013. Thanks to you and NVIDIA, I was able to pay off that home last week. Oh, Tracy, that's so good. Let's throw in Jensen Wong too, Tracy. He helped us too. But geez, what a great, that's fabulous that all these good things happened. I did something right. I did something right, Monica.

Thank you. Without you, honestly, things would be so very different and they're so very wonderful. But what you do is just...

It's truly life-saving and life-changing. And thank you, thank you, thank you. I'm just going to keep doing it, Tracy. Thank you so much. You're a very kind person. Seriously. Thank you. I pray for you and your health and your happiness. I'm good. I've got a great wife. I've got a great kid. I'm good stuff. I'm good stuff. Let's go to work together, and I'm glad that I've done a good job for you. So my wing stop wasn't doing awful, and now it's doing great. Wing stop.

That's a tough one for me. I'll tell you why it's a tough one. Because they didn't provide the guidance that I wanted. You know how much I want transparency. They didn't give me the transparency. I see the stock going back. But I'm not, you know, all those nice things you said, I got to tell the truth. I'm not the call wing stock because I don't see what they have that I'd like to see. I don't see the visibility. But thank you for those kind words. Let's go to Frank in California. Frank.

Hey, Mr. Kramer, how are you? I am real good. I'm getting some good feedback. How about you? I'm great. Hey, just want to ask, you know, with all the madness going on with the tariffs, I was kind of trying to spread my wings in a different direction. I wanted to ask you about Amentum Holdings. Yeah, that's like a catch-all company. Yeah.

You know, it's got some things that are like engineering and some that are that are that are cyber terrorism. Let me come back on that one. There's just too many things in that company. We understand how that holds together. That's what I have to do. Let's go to Andrew in New York. Andrew. Hey, Jim.

Now, I know you're going to say that you personally won't invest, but this company has been successfully transitioning away from its combustible portfolio to its best-in-class reduced-risk products with Zinn and Icos. Despite the recent pullback, the stock's been on a tear, doubling over the past year. I think it has room to go higher. We're talking Philip Morris International. It's a very, very good company and a very good stock. They're trying very hard to get away.

from from cancer sticks so to speak we know they're doing that i've met with the company they i was at a presentation that they made uh i think that i'm not gonna recommend the stock for precisely what you said but i will tell you it is a very very good company and it's a stock that has done very well and probably will continue i just can't get behind it because of what they do let's go to kathleen in pennsylvania please kathleen

Hi, Jim. How are you? We love your show. Oh, thank you, Kathleen. Thank you. So my husband is retired after 32 years with UPS. We payroll deducted stock, obviously, for most of that time. Right. Based on UPS's current financial performance,

recent strategic initiatives like the Amazon reduction and the overall industry outlook. Do you believe UPS is positioned for growth? I think Kyle Tomei is trying to get it so that it works. It's got a 6.6% yield. I've been reluctant to recommend it because I thought the business was not good. Business for FedEx isn't that good. It's down 20% for the year. I have to tell you,

I don't know if it goes up from here. I don't. But I know that it seems like that they are getting their act together. But it's a very tough stock to own. And if you didn't, if your husband hadn't worked there for 30 years and had a lot of stock, I would say don't own the stock. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, from great to good, Kramer on the rotation that's shaking up stocks and why it could turn ugly if the market's not careful. Next. Sector rotations come in all shapes and sizes. You can see a rotation out of industrials into staples and utilities. You might see a rotation out of expensive consumer discretionary stocks into cheaper consumer discretionary plays and necessities.

Or you can see one out of excellent stocks into not quite as good stocks because the excellent ones have just gotten too expensive versus their cheaper brethren. Call it growth to value, even as there isn't all that much value to be found. As an example, last week, one of the premier tech hardware companies that I've liked very much in my trust, Broadcom, which I talked about earlier, reported, like I said, it was a pretty good quarter. Nearly every line item exceeded. It showed a lot of momentum that you want for a premium company, but it wasn't enough.

The stock did get clobbered from the get-go, even as everyone in the know realized it was just a classic great quarter. But because it's an expensive stock, people weren't willing to chase it.

But that failure rally triggered a kind of rotation that I haven't seen lately, one that saw money flowing out of the best tech stocks into the good ones, like Dell, AMD, Texas Instruments, Marvell Tech, got a call on that one. All these companies are doing well, but not as well as Broadcom. So traders say, if I can't make money after Broadcom, I'm reporting a great quarter. The playbook says time to move into the lower quality, cheaper stocks that are less likely to disappoint or should never have been down to begin with.

I understand the sentiment, but the problem is that these stocks are already rallying pretty hard, too. Take Dell. It reported an excellent quarter on May 29th, a week and a half ago. Stock initially failed to rally, but that's because it had run up into the quarter. I saw some upgrades for AMD and Texas Instruments. Same deal. They've moved to special, especially AMD, by the way, on speculation it might be involved with any China deal. Rare earth materials for us, AMD chips for them. Now, this kind of rotation could be a good one.

The stocks that are rallying are excellent. They may be just playing catch up. It's a heavily broadening out of the winners, right? Remember when it was just the max seven? We've come a long distance. But what comes after this could be treasurers. I've seen the end of rallies and they often take up the laggers last.

After it happens, if we have good news, everything's fine. However, if there's any degradation in the numbers, it could get very ugly. Right now, we're fine. I think Dell's incredibly cheap versus last quarter. The stock can go up 10 points before I would even think about worrying about it. I've always liked AMD. As you know, my client had a good quarter last time. I think he could go higher. I just think that in the vast progression of things, you might find we're more at the end of a rally

than at the beginning, unless the stocks of companies like Broadcom can recharge and start going higher. And look, this is not isolated tech. In retail, we had terrific names.

They reported great quarters, Costco and TJX, but then they failed to go up. Wow. They went down. So what started doing better? Target, Dollar Tree and Dollar General. Three companies with stocks that represent value that have been in rally mode ever since Costco failed and TJX failed. It's all rotation from companies that are excellent to ones with stocks that got too cheap.

We'll be safe if the market returns to Costco and TGS. But if the current crop keeps going higher and higher still, and we keep having so much froth in the rest of the market, the nukes, the quantums, the cryptos, the flying cars, then we are indeed headed to the danger zone. Not yet, but soon. I like to say there's always a bull market somewhere. I promise I'll find it just for you. Right here on MadMoney, I'm Drew Kramer. See you tomorrow.

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

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

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