Mad Money w/ Jim Cramer 1/28/25
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My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Let me tell you, my friends, I'm just trying to make you a little money. My job is not just to entertain, but to educate, teach you. So call me at 1-800-743-CBC. Tweet me, Jim Kramer. Nobody ever made a dime panicking.

No matter how many times I've said that, it always feels like the first utterance. But if you match yesterday's carnage in tech with today's bountiful harvest of winners, you know why I have to repeat myself. If you panicked and sold tech yesterday, you missed today's cornucopia of tech winners, with the Dow gaining 137 points as it'd be climbing 0.92%, but the NASDAQ filled with tech going up 2.03%. Now, before we dig into what happened today, I want to emphasize that when I say no one ever made a dime panicking,

I'm actually not even talking about being opportunistic. I'm saying that if you wanted to sell NVIDIA into the worst single day loss in history of a market capitalization, then maybe you learned your lesson as the stock bounced back furiously today, up nearly 9%. Because as bad as this deep seek thing might be for NVIDIA, it might not be that bad.

No, it's not back to where it was. I get that. Maybe it shouldn't be, but it really got oversold and therefore caught a bounce when there was only one downgrade. A lot of positive chatter that it isn't over for what was not long ago the world's largest company.

I get that it wasn't easy to do nothing. You had to sit on your hands. So you had this Chinese alpha come out of nowhere and announced basically that you don't need as many NVIDIA chips as you thought for AI because you can get much more out of each chip, maybe 10 times more if you just use their software. And that's pretty much what DeepSeq was offering. And it's certainly a frightening prospect for NVIDIA as the company has been perceived to be a monopolist that price gouges.

The way I see it, that's nonsense. NVIDIA invented this business, spent billions upon billions of dollars building it up, and it's simply charged with the market bear. Until last week, we figured that to get most tasks done, to get the best use out of NVIDIA's product, you had to order a colossal number of chips at obscene prices. Now, though, if someone comes along and says, hey, you know what? You can get 10 times as much output from an NVIDIA chip that you thought. You've got to figure you only need to order one-tenth as many chips as you thought you needed, right? Isn't that the math?

And that's why Nvidia stock got obliterated yesterday. What if everyone who's ordering these chips cancels 90% of their orders? What if you only need one-tenth of the data synergy you planned? Okay, that is enough to scare anyone. But fear doesn't necessarily generate the right decisions when it comes to the stock market.

Remember, I'm not talking about being opportunistic again. And buying NVIDIA this morning when it went from plus four to minus one, I'm just talking about not selling you the biggest route in history. Or to put it another way, because I really am trying to get this point across, obviously, doing nothing was actually a great strategy. You didn't expose yourself to more risk. And if you're truly worried that NVIDIA might lose nine tenths of its orders, you got a chance to sell at a much better price simply by waiting a day. Sell, sell, sell.

The panic yesterday was so palpable that people even sold the beneficiaries. The companies that are doing well might even do better if Deep Seek's formula for success spreads. Bunch of knuckleheads. At one point yesterday, we saw some huge potential winners get hammered. Stocks like Meta, Microsoft, Amazon, Albit, all four of them came roaring back today. They were all fabulous buys.

House of pleasure. Yes, panic can cause smoke screens that obscure what, in retrospect, were some fairly obvious opportunities. If Meta's buying 500,000 chips from NVIDIA and the price of those chips comes down because people realize they don't need as many, well, how is that negative for Meta? The only way to frame this as a negative is if you've got a problem with arithmetic, in which case, instead of doing this, I suggest some remedial math classes might help.

All right. Irony of ironies. How about the fact that Apple, which had been in free fall for weeks, has made an abrupt U-turn two days ahead of earnings and has now rallied from $222 to $238. How crazy is that? And once again, I want to remind people that I want to own Apple, not trade it. That's how we feel for the trust. But a lot of people sold yesterday at $222. I wonder what they're thinking.

That said, if you can't handle the fear of owning the stock of Apple through a quarterly report that is almost universally regarded as horrible, awful and miserable before it prints, which is going to do on Thursday. Well, you're now free to sell the stock at a much higher price. I say go forth and sell.

Some stocks were hailed correctly as winners in this environment, mainly the companies that benefit from less expensive hardware like ServiceNow, which rallied another 2.6% today, and Salesforce, which gained 3.7%, on top of a colossal gain yesterday. We're going to have CEO Mark Benioff to talk about this new deep seek and how it seeded the world later in the show. But now let's get back to the real issue here, because I've got to make another point. If you made it through yesterday's cataclysmic drop and still own the stock of NVIDIA,

can we just stop for a second and think about what deep seat might really mean for this incredible company first it's entirely possible the companies will place smaller orders if they can really get much more use out of nvidia's cheap chips it's just possible the price of compute could come down that's understandable if a company's setting up still one more ai powered customer assistant then it's entirely possible that there won't be as much demand for nvidia's highest end chips if that's

the case you could argue that you might even be able to use less powerful chips i don't from from amazon from amd salesforce is the king of the ai powered customer assistant so it's a gigantic winner from deep sea the more commoditized the hardware the better off for benioff but what if you're thinking much differently

What if you want to create a world of specialized robots that can do anything humans can do physically and do it better than we can? Actual physical robots, humanoids, call them whatever you want. Can DeepSeek do that for you? Uh-uh. Does DeepSeek help you create the best self-driving cars? Uh-uh. Does it keep your data private? Or like TikTok, does it just turn out to be a way for the Chinese government to influence us and gather our information? Uh-huh.

But one look at the incredible run the cybersecurity stocks tells me that someone besides me has thought about the implications. Do you think the stock of Chappell just holding CrowdStrike doesn't go up $34 or 9.35% in a single session for nothing? And then there's something else that bothers me about the slam job on NVIDIA with Wall Street suddenly treating it as a commodity chipmaker, like some sort of Intel not deserving of a trillion-dollar valuation, let alone a three trillion.

We may have just found out about Deep Seek because we read about it in the New York Times. Is it really possible that Mark Zuckerberg from Meta, Larry Ellison from Oracle, Elon Musk from everywhere, guys who've been ordering chips, video chips, the most aggressive, expensive kinds like mad, do you really think they were blindsided? Do you really think they didn't know anything about this? Were they as clueless as the people who sold NVIDIA in the S-14?

Were they so involved with President Trump's initiative and so eager to please the president that they ordered billions of dollars in chips just to show they liked them? Somehow, I don't think that makes a lot of sense. I hope you don't think so either. These folks didn't just fall off a turnip truck where they were frantically trying to buy some Blackwells. Here's the bottom line. The shoot first...

Julie in Connecticut, Julie.

Hey, Jim. How are you? Thanks for having me. I am good, Julie. How are you? I'm doing good. What's happening? Very good. Thanks. So I was hoping we could talk about the weight loss elephant of pharmaceuticals, Eli Lilly. Sure. What are you thinking? Well, so with the earnings just around the corner and a noticeable Q3 miss and the continuing momentum of the GLP-1 disruptors, it seems like the street can't agree if this is a buy or a sell.

So you're very right. That's very true. OK, so, I mean, we just found out today that Ozempic has something for kidney failure. And that means that maybe Lilly has. Now, Lilly has, I will say this, the single worst chart I have seen in a long time. And there are a lot of people on Wall Street are chartists.

However, I actually like the fundamentals. Now, David Ricks did on our show pre-announce a better than expected quarter and nobody listened. But I do believe in Lilly. We earned it for the trust. And I've got to tell you, I think in another dip, you get another opportunity to buy. And I'm sticking by that.

All right. Look, thanks for the call. Look, when things are as murky and complicated as the deep-seek news, sometimes, you know what? It's best to do nothing. That can be a strategy, too. All right, everybody. Tonight, New Corp is up on yesterday's report. But can the stock keep climbing? I'm talking earnings, tariffs, and the state of steel with companies top brass. Then as deep-seek shakes up the AI stocks,

I've got Salesforce CEO to get a better read of the landscape for tech. Hey, maybe he wants to bury the hatchet with Microsoft. You never know. Plus, I'm checking in with CEO of SAP to get a closer look at what's powering growth for that German software player, one of our Super 7 out of Europe. So stay with me.

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Look at Nucor go back when the steelmaker preannounced its results in December. Wall Street saw it as disappointment. But when Nucor reported last night, they reported a huge top and bottom line beat. Much better than expected. And that is why the stock shot up nearly 4% today. Now, over the last year, Nucor has come down close to 30% thanks to falling steel prices.

But with the new administration vowing to protect domestic steelmakers from foreign competition, I think this stock's become a lot more attractive. Let's take a closer look. We'll speak to Leon Tappalian. He's the chairman, president, and CEO of Nucor. We'll learn more about what's going on. Mr. Tappalian, welcome back to Mad Money.

Thank you, Jim. Look forward to talking today. OK, so I've seen the actually precipitous decline in steel pricing. And but I have not seen a concomitant decrease in activity in our country, which leads me to believe that there is some manipulation and there is some dumping, particularly by a country that is way too much steel, which is China. But we're not seeing it through China. We may be seeing it through our trading partners. Do you think the president can stop it?

Yeah, there's no doubt in my mind. We saw him stop it in his first administration. I think we'll see it again. And again, what you're going to see, Jim, in the coming days, weeks and months is a very pro-America trade policies and enforcements. We saw the memo last Monday on tariffs and what they're going to do. And I think they're going to be far reaching. And I think they're going to be very broad to, again, stop the illegal dumping, the manipulation, currency manipulation and subsidization of steels coming into the shores of the U.S.,

Can you please explain to people what transshipment is? That it's entirely possible that a country like China uses middlemen in Canada and Mexico to smuggle their steel in here, basically, because that's what it is. They're smuggling it.

Well, when you think about the U.S. consumption at about 100 million tons, about 100 million tons is leaving the shores of China looking for a home. And the greatest home and the greatest economic home in the world is the United States. So whether it's Vietnam, Canada, Mexico, it's got to stop. You know, Canadian and Mexican imports account for almost 40 percent of the

entire import picture in the U.S. So the trade agreements that were brought under USMCA have got to go back. We've got to reinstate 232 and again create a fair and level playing field. And again, today that is not the case. Now, let's make it clear. You are not saying that Nucor should have unfettered access. You're fine with these companies and countries. If they want to open steel mills in this country, you're more than fine. You're not trying to be. You're not against that.

Look, we'll compete against anybody in the world. We've said that for years and years and decades. And so, again, our cost structure, our team, I would stack up against anybody. Jim, it's exactly what you described. It's the illegal dumping, the subsidization of steels, and the currency manipulation that creates a very unbalanced and unlevel playing field that has hurt the steel industry for decades. Now, at the same time, you have been spending big capital improvements, and you're moving to a lot of different end markets.

One of them is, let's say, steel that might go into data centers. Now, suddenly we are concerned that there'll be fewer data centers built. Is this something that's been on your mind?

Yeah, absolutely. It's a mega trend for us as we continue to grow. As you know, we acquired Southwest Data Products company last year. And again, we look for the racking and the warehouse systems that we've got within the new core to continue to fuel that. But look, I've watched over the last 30 hours of the new cycle with what's happening in that. At the end of the day, that growth over the next

five, eight, 10 years is going to be continue to grow. If we think about the energy space and grid hardening and bringing the power to power the data centers, as well as all the other manufacturing growth that's going to be spurred under the economic policies of deregulation, lower interest rates, corporate tax rates. I think it's all fuel and Nucor sits at the epicenter of all of that, Jim, to not only build

the infrastructure for it, but supply the parts, pieces and components into all of those streams. All right. Now, one of the things that I also saw, I had been concerned about your your warehouse business, the doors business, because that had slowed down. But I don't know if you caught Prologis, which is the biggest actually called a bottom in warehouse just last week. And are you starting to see a similar thing, a bottoming of that business?

Yeah, not only the bottom, Jim, but you have to remember as well that it's the reason we acquired that is to prevent some of the cyclicality that we see in steel. So while it's off in terms of what we see in the steel, typical sine waves, it is much, much slower. So their their growth and their continued earnings is really strong. And again, we forecast that to be even stronger in 2025.

Now, I know that you are big fans of your stock. I am, too, obviously. You did repurchase a great deal of stock at $168. Do you just keep buying? What do you think is the right thing to do?

Look, I think at the end of the day, Jim, we are on the about two thirds of the way through a 16 billion dollar growth campaign in both organic and M&A activity. And what we've always done is we don't have a great home for that. We're going to return it to our shareholders. As over the last five years as CEO, we've returned twelve point five billion dollars or 60 percent of our net earnings back to our shareholders, as you know.

Our shareholders know and those that are active in terms of thinking about the dividend king that Nucor has been for 50 plus years now. All right. Now, how about what can happen here with Cleveland Cliffs as potential partner for U.S. Steel? I happen to enjoy Cleveland because I think they do a good job. The stock's been hurt just like yours, though, by Chinese, maybe even worse by Chinese dumping. Worth it to to be able to pick up something if you can from them?

You know, Jim, we're the largest steel company in North America. So, of course, we took a look a year and a half ago and and we'll continue to look and see if those assets come back. But, you know, part of the reason we didn't move forward is valuation. We're not going to overpay for assets. We're going to be really disciplined with our growth. And there's been an awful lot of talk and chaos around the noise of the acquisition with Nippon and U.S.,

The nostalgia that U.S. Steel has thought about is from 40 or 50 years ago. It is a shell of itself, and it's not because of the hardworking men and women in their plants. It's because leadership didn't recognize the changes that were coming, the technological innovation, the competitors like Nucor that were going to emerge as the nation's largest, safest, most productive, and sustainable steelmaker. And so if you look at our net earnings, it would take the next three competitors combined to get anywhere close to what Nucor has done.

Well, I mean, that is that is incredible. And what I really like is you keep putting up plants in places that might otherwise not have any economic activity. I think it's important for people to recognize that Nucor is is much more forceful and important when it comes to growing communities that have been hurt than the U.S. government.

Oh, absolutely. You think about, again, all of our plans from Hertford County, North Carolina, Mississippi County in Arkansas, and again, across this incredible nation. We have incredible, hardworking men and women that make up this incredible family. And Jim, I'd be remiss if I didn't tell you, 2024 was the safest year in our history. And if you think about every result, every KPI we talk about, it is because of the men and women who make up this incredible Nucor family. And so we are poised to

And I think 2025 is going to be a better year than we saw last year. But in the years to come, Nucor is incredibly well positioned in our our best days are still in front of us. Have you seen the burst of enthusiasm and optimism that I've seen enough to be able to increase the GDP estimates from the Federal Reserve of Atlanta just this afternoon? Seeing that kind of burst of optimism, you know.

Yeah, look, we're seeing it everywhere. Our customers, our customers' customers. I talked to three of our largest customers last week, and that sense of promise and confidence in the economy is fueling the growth

the resurgence of reshoring, increased order activity or backlogs are up, water activity is up. And I think you're going to see that continue into 2025. Well, you tell a terrific story because you're a great company. And Leon, it's great to have you on the show. I really think that this is the level that you have to own Nucor. If you have any faith in the U.S. economy, which I certainly have, and I know you do. Leon Tappali is the chair, president and CEO of Nucor. Thank you, Leon, for coming on the show.

Thank you, Jim. Appreciate it. Yeah, money's back in for the break. Coming up, how are tech companies navigating the AI race after yesterday's big declines? Kramer's one-on-one with Salesforce CEO, Mark Benioff. Next.

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When we found out about DeepSeek, that's a Chinese AI model that can produce similar results to the leading U.S. models using fewer resources, people actually sold almost every stock involved in the AI ecosystem. Dumb. There are a few exceptions, like the AI-empowered software companies that are pure winners in a world where artificial intelligence development could be much cheaper.

Companies like Salesforce, the cloud software pioneer that was among the first to market with its own AI application for customer relations management. Agent Force. Stocks now up almost 8% over the past two days because it's a clear beneficiary in post-DeepSeek world. How much does this move the needle for? Let's go straight to the stores. Let's go to Mark Benioff, co-founder and chairman of Salesforce. Figure out what DeepSeek means for artificial intelligence. Mr. Benioff, welcome back to MadMoney.

Jim, it's always great to be with you. And thanks again for having me. Of course. Now, Mark, we do need to know how much it really does move the needle. When you get shipped away from or make hardware a commodity, then we start realizing that there are other things are gold, including data being interrogated, say, by people who want to use Salesforce to make more money. Is that what could happen?

Well, Jim, we've been talking now for, I guess, I don't know, a couple of years about these models. And you know how I feel, which is that these models are just commodities. And the real value is in the data and the metadata that's inside these companies, which is what drives the model and makes them special.

So what you see now is another great model actually from China, and it's not going to be the last Chinese model, Jim. You're going to see a lot more models from China and a lot more innovation in the model space. And this is inspiring a new generation of model that, yes, is lower cost, is cheaper. And as you can see with DeepSeek, this was 27 times cheaper.

than the open AI model. So this is an incredible advancement and inspiration for all of us. Well, but let me ask you, last week you said to my friend Andrew Osorkin, the United States of America has a tremendous lead in artificial intelligence and in technology. Is that not true?

Well, we absolutely do. You can see the majority of the models are American models. But here we see now the Chinese also coming in with not only an aggressive, competitive model, but one that's cheaper and lower cost. So it just gives everybody the motivation to keep going and going faster. But at the same time, and you and I both know Jensen Wong, what he's doing is another plane in a lot of ways. I mean, he's trying to make it so that we all, say, have a relationship.

robot assistant, humanoids. Make it so that humans are side by side with robos, whatever you want to call them. We'll call them agents. How about we call them agents? Now, that doesn't mean that you think that NVIDIA has run out of steam here. Well, Jim, you know, Jensen and I both agree with something very clear, which is that we are now in the third wave of AI, which is the agentic wave. And the agentic wave is driving this incredible new platform for many companies. The ability to make things much lower cost and much easier

And you mentioned we were just at Davos last week with Andrew and Sarah Eisen also. And I'll tell you, all of Davos ran on Salesforce, the entire conference, which has been true for more than a decade. But this year was the first year that we built an incredible agentic layer across the conference. So every attendee could work with agents, not just with humans, but agents as well, to plan the conference,

contact their friends, make restaurant reservations. All of these things were possible at Davos for the first time. And it's no different than we're doing now for so many exciting customers that we have, which is deploying humans and agents working together. You saw it at Dreamforce. Now you've seen it at Davos.

And you're going to start seeing it at so many of our customers across the world. Well, I understand. And I think that, of course, the data is what matters. And if you can make the hardware cheaper, it's even better. But do you think that maybe we even kind of fomented China to make data cheaper, hardware cheaper than we did? Was that our fault, so to speak? Well, I think they do what they do.

And look, technology is getting lower cost and easier to use. It's a continuum. And this is exciting. This is why I love my industry. I love being in the technology industry, Jim, because we're always how many conversations have we had exactly like this over the two decades or so? Another conversation we always have. I mean, it's.

From cloud to social to mobile to AI. And now we're talking about these models and how the models are compressing and getting more efficient and that no one company has a lock on any one model and everyone is having a model. This is very cool. OK, now, another thing we need to settle, another thing you and I talked about. Look, I think Matthew McConaughey, you know how much I love him. I think he's terrific. He's fun. He's so smart. All right.

And I see these ads and I'm telling Faber, David Faber, my partner, you know, look, this is like the greatest campaign. I love it. It's incredibly funny. And I bet you it's bringing a huge amount of business to Salesforce. And I think David's saying like, well, I don't know who watches it and then goes to Salesforce and buy something. But the fact

The fact is, it's about ubiquity. It's about the recognition that there's something going on that maybe your company should be involved in. Has it had an impact? If I went to your, well, wherever your headquarters is, if I went to talk to people from Salesforce, would they say, listen, Makani's killing it?

Jim, I'm looking forward to catching up on all of those details when the quarter closes. But what I'll tell you is I love Matthew McConaughey. And he brought Woody Harrelson in, as you know, to build an incredible campaign for what is by far the most exciting product we've ever had at Salesforce, which is agent force.

And you've already seen it at Dreamforce. You saw it now at Davos. You see it at Salesforce. We're live where our support agents are working with agents. So digital workers are working together to solve customer needs. We get about 36,000 customer support calls every single week.

Well, now about 31,000 are handled by agents and 5,000 are handled by humans. This is an incredible advancement for us. And we're doing it for a lot of our customers. At Davos, we also had the pleasure to be with Dave McKay of Royal Bank of Canada, who's deployed us on their wealth management business with AgentForce. And he's talking about how, you know, we're going to be able to save him hopefully hundreds of millions of dollars and I hope, you know, generate billions of dollars of revenue for him with

agent force so I couldn't be more excited about the progress and you're right every great product needs a great branding campaign and I think agent force has kinda gone from zero to hero in just about three months I mean how long ago would we are at Dreamforce where we heard agent force for the first time I think that was just September always it's an amazing turn it really is now I'm gonna try to do something that might be impossible

I see Microsoft making some personnel changes. I see them breaking up with perhaps with the people that we know at OpenAI. And I'm wondering whether you might ban the Clippy 2 talk. They've got to support people. Maybe they'll start making the system a little bit better. Why don't we bury the hatchet right here, right now and not inside his head?

You're right, Jim, that Microsoft has disappointed so many customers with Copilot. It just hasn't delivered because it's just repackaged ChatGPT. And I guess that's fine. But now you know with Stargate that got announced last week, it's really a bifurcation between Microsoft and OpenAI. Microsoft delivers their infrastructure. Azure, well, now ChatGPT and OpenAI are going to be running on this new Stargate infrastructure. This is a huge difference.

transformation and a lot of that has to do with

Microsoft basically starting their own frontier AI team, you know, under Mustafa Suleiman, who you remember was at Google, who started DeepMind, and then he had Inflection. Now he's at Microsoft running their AI efforts, building their own frontier models. This is a huge advancement, again, for the industry, another model. Right. But, I mean, at the same time, I mean, maybe Copilot becomes more of a pilot. Maybe, you know, maybe an astronaut. What do you say? Come on, right now.

Just say it's going to get better and that we should stop making fun of Microsoft on man-mining. Look, Jim, you know that Microsoft's the number one software company in the world for enterprises. Salesforce is number two. It's important that we paint the clear differentiation between Copilot, which has not been able to deliver these results for customers, and AgentForce that is. And look, we can see it right in my own company that this is a tremendous platform. And I just spoke with hundreds of customers last week

at Davos, I didn't find a single happy co-pilot customer there. All right. Well, we didn't get exactly that hatchet-burning moment, but that's OK. That can happen some other time. I am thrilled to have Mark Benioff, who is the co-founder, chair, and CEO of Salesforce. Great to see you, Jim. And I want a couple agents next to you next time I see you, OK? I'm going to hire a couple agents. Jim, it's about humans with agents working together. All right. We're all pals. This is the digital labor revolution. We're all pals, Mark. Thank you so much. Good to see you. We have money back every moment. I disagree.

Coming up, fresh off its earnings report, what's in store for software giant SAP? Kramer's catching up with the CEO next. Over the past couple of years, this SAP, German enterprise software giant, has become quietly one of the best stories in tech.

The stock's now roughly 250% from its lows, September 2022. It's a cloud business. It's called Fire. It's an AI rollout. It's been incredibly successful. Now, this morning, SAP reported a strong quarter with an impressive full-year forecast, though the stock didn't get any credit for it. It's still up 11% for the year, though. I think it's got a lot more upside, especially because it's kind of tech stock that's basically immune to the deep-sea shakeup, and it's got accelerating revenue growth. We call that ARG. But don't take it from me. Earlier today, we had this chance to speak with Christian Klein, the CEO of SAP. I want you to take a look.

Christian, once again, you delivered excellent numbers and I want people to be reintroduced to how great you guys are. We named you one of our seven, super seven of Europe. And a lot of this because you're not a small company, but you had accelerating revenue growth this quarter.

Absolutely, Jim. I mean, Q4, the total year 2024 was a record year for SAP. I would go that far that it was the best year in SAP's history. And look, I mean, cloud revenue accelerating. Our total cloud backlog is now mounting to 63 billion euro, up 40%, outperforming our peers. Customer satisfaction up. And of course, AI, 50% of the deals

have already AI embedded. So it was a fantastic year for SAP. And yet at the same time, as I read through all the different things about your company, it does seem that you're early in your customer cloud transition, even after all the success.

Jim, that is right. I mean, look, I mean, the company actually was founded over 50 years ago. We are in a massive transition. But, you know, also, I mean, it's actually a great, you know, treasure to have all of these customers, 400,000 customers. We have the richest business in the world.

data set of all tech companies and of course in the age of AI that is of course a ground tool what we have also sitting at the nexus between business and technology and that really matters not only in the cloud but also about infusing AI into the businesses of our customers.

Well, let's go there because it does seem like you're infusing it and it really doesn't matter. You're kind of agnostic into whose AI infrastructure you're using and that what's far more important is that you have the data and that the data is the secret for the best AI solution.

Jim, I could not have said it better. Actually, this is exactly what we are doing. This is what our AI strategy is about. We are actually sitting on a very rich set of business data, HR data, finance data, supply chain data, sales data. And by bringing this together in our AI foundation, think about a gigantic AI. You can predict demand.

you can actually hand it over from the sales agent to the supply chain agent because you have to deliver you have to have to write inventory the right spare parts at the right time and then of course you can go over to the procurement agent to make sure also procurement is closely in sync and that's completely automated really delivering higher automation but at the end also a great consumer experience and

Indeed, we are agnostic to any kind of large language module, and this is actually our winning formula. Business data of SAP embedded in the business of our customers together with the best large language modules. That is what we are doing. Well, okay, maybe you could, for our people who are not as close to large language models, things like that, just talk about, for instance, what you do with GM. Because GM reported today it's a great company, and I know that you're a great customer.

Indeed, GM is a great customer and actually they really decided to bet on our platform to drive the transformation of GM. So to give you a few use cases what really matters for them, what drives high value for GM. First, when you think about spare parts management, it's actually about really delighting the consumer that the spare parts are available at the right time at the right price.

place. And what our software does, what our AI does is predicting this demand, you know, very accurate and then making sure that you can always optimize inventory. So you are delighting your consumers, but you also optimizing inventory, which can save billions of carpets.

Second, I mean, material traceability. Is the raw material still available to not get any kind of supply chain disruptions? We have 17 million suppliers lined up. We are connecting the end-to-end supply chain to really predict, you know, could there be any supply chain disruptions? And that are two use cases. Third one, maybe one more, it's on total workforce about, you know, the skills are changing in the age of AI.

Do you have the right skills? Is there any kind of skill gap? Which skills do you need to develop? Which skills, which people do you need to recruit? That is done via success factors and this is what is really helping GM to transform. Now, I guess what I think people will say is,

Well, how does GM measure whether their company's doing better and making more money after SAP comes in? Now, you must have multiple examples about how once SAP comes in, the sales go up and the earnings go up. Is that how you pitch SAP? Because I want people to understand that this is a great stock to own.

Yeah, indeed, Jim. I mean, look, when we invented ERP 50 years ago, it was a transactional system. And today, actually, it's a business suite with so much intelligence embedded. So it helps you to automate your business, to drive efficiencies, to make smarter decisions, to help with predictive simulations. That is what our suite is about. And of course, it runs integrated because a GM, like any other company, needs to run end-to-end to delight customers.

the employees, about really connecting them with each other, but also delight your consumers because actually, you know, your customer experience doesn't stop with sales. It needs to go over into the supply chain space, et cetera. And this is what SAP actually does.

Now, I do want to tell you, we do have a Mark Benioff on tonight from Salesforce. He is arguing that it really doesn't matter, again, about the hardware. What matters is the data. But I wanted to ask you, do you think that it's so irrelevant that perhaps the price of compute is going to drop rather dramatically? Which I know I'm not asking you to apply on NVIDIA's fortunes, but that would upend pretty much everything that we've been thinking is going to happen post-Deep-Sea.

Yeah. I mean, look, Jim, in this place, I absolutely have to agree with Mark. He's right. I mean, look, when you look at cloud, when you look at big data, the innovation always started on the infrastructure layer. You need better hardware, better technology. And then actually it goes up the stack. It goes to the platform. It goes to the application layer. And that is now what is happening at AI.

I mean, the value creation really happens, you know, how can AI build a more resilient supply chain? How can AI help to sell more, to make sure you optimize your inventory? This is where the value creation sits. The infrastructure, the large language modules, I mean, we are using the best large language model for the different AI use cases we have to run.

The value is the business data. The value is about infusing AI into the businesses of our customers. All right. That is excellent. That is one of the reasons, many reasons why, including the fact that the performance of your stocks has been unbelievable, that we like you as one of our super seven. Christian Klein, CEO of SAP, congratulations on the great numbers. Thanks a lot, Jim. Absolutely. We have money back afterwards.

Coming up, lightning doesn't just strike twice in Kramerica. Booyah, Jimmy Chil. Booyah, booyah, booyah. Thanks for taking my call. It strikes every day. Kramer is back in a flash with your questions. Next. It is time. It's time for the lightning round. Kramer, that's where it's about to go. We're going to be saying this stuff. Tell everybody about my social media. We're going to be doing the whole stuff. We're going to be doing my stampede. We're going to be doing the plan itself.

And then the lightning round is over. Are you ready? Let's start with George in New York. George. Professor Kramer. How are you, George? Good. Good to talk to you, buddy. What's up?

Tell me, what's going on with Viking Therapeutics? Okay, people think that even if Lilly's stock can't go up, why would we want Viking Therapeutics? And a lot of people were in it for a takeover. So far, it doesn't look like that's materializing. So they're giving up and they are selling it. I prefer Eli Lilly. I want to go to Terry in Florida. Terry.

Hi, Jim. It's Terry in Port Charlotte, Florida. I've been watching your show for a long time, and I sure appreciate what you and your crew always do. Thank you. So anyway, this solar stock has been battered quite a bit of late, and I'm wondering if it's time to start nibbling on first solar.

It is a very inexpensive stock. I'm telling you, I'm still reeling from the fact that NXT, next tracker, Shug, actually put an upside surprise tonight. And if I look into that and it says that it's good for solar, I will tell people who belong to the Big Travel Trust, to CNBC Investing Club, whether it's time to get a little more aggressive on solar. And let's go to Richard in California. Richard! Richard!

Hi, Jim. I've called you a handful of times over the past year on my favorite stock. Last time we talked, I was so excited to tell you about the wonderful AI sales and core business growth.

You simply said, Rich, it's up 100% in the past year. Wow, you're right. The stock came in quite a bit. Now it seems to me with the core business growth of 10% per year and the digital platform of 30% per year, the stock is a screaming buy. It's also best in breed. And truly, all healthcare really can't be relevant without imaging. How do you feel about me picking up on this dip on Radness?

Well, I'd like to see some sort of, I mean, the stock did bounce $2 today. I know that, you know what? It's a very expensive stock. I'm trying to sell a lot of GE healthcare if I can, just because I kind of just feel this group is just not strong enough. That includes this one. Let's give it a pause for a second. Let's see if it can't bottom for more than just one particular day. But I understand it was a great stock for a long time. I need to see a real bottom.

Let's go to Stanley in California. Stanley. Hi, Jim. Happy New Year. Same to you, Stanley. How can I help? Great to speak to you. I've been watching you since 2005 or 2006 when you called HCI the stock of the year. That's how long I've been watching you. My God, Allegheny Technologies. That was a great play on stainless steel. Really, Boeing was ordering a ton of it.

So my question is, do you think it's a good time to start a position in WM, waste management? I don't know. I like waste management very much. I think it's an absolutely terrific stock. I think Jim Fish is a remarkable CEO, and the answer is absolutely yes. I would start a position right now. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

Coming up, is it time for investors to set sail? Kramer's breaking down why now is the time to buy the cruise stocks. Next. Booyah, Jim. Your integrity makes you the booyah saint of Wall Street. Booyah, Jimmy Chil. Booyah, Jimmy Chil. Booyah, Jim. Quadruple. That's a lot of booyahs.

We're also focused on the impact of deep seek on the tech sector that we seem oblivious to the opportunities surrounding us. Opportunities that are a lot more straightforward than figuring out whether we need more power plants or fewer data centers or more downside before Nvidia stock can bottom. Those are really hard questions.

I much prefer the easy ones. Want the obvious? I take the stock of Royal Caribbean, which soared 12% today. What did they do this time? Well, they reported a huge upside surprise with a spectacular increase in the revenue they generate per available cruise day. How about this, Jim? Momentum continues in 2025 with bookings accelerating since the last earnings call, resulting in the best five booking weeks in the company's history. Oh,

Oh, and you want some excitement that got the analysts totally jazzed? In 2027, Royal Caribbean will introduce river cruising with 10 new ships to take advantage of a fractured market, this double-digit growth over the last decade. These guys have a tremendous reputation, so it's easy to imagine them gobbling up market share, which allows their analysts to raise their estimates, not just for now, but for what we call the out years.

You know, the funny thing about Royal Caribbean and the whole cohort of cruise lines, they're so great at what they do that the analysts never seem to catch up with their earnings power. Hence the long string of better than expected numbers and subsequent monster rallies. Maybe Wall Street keeps getting taken by surprise because let's face it, this industry is full of snobs.

who don't understand the appeal of going on a cruise. In fact, they probably wouldn't be caught dead on one, which is why they can't get their heads around these stocks. So what's the appeal? As Jason Liberty, Royal Caribbean's boy and CEO, laid out in a conference call, consumers place significant value on visiting multiple destinations, and this is even more important to millennial and Gen Z consumers, end quote.

Meanwhile, the macro environment, Liberty says, favors experiences over things as leisure and travel spend continue to grow. Hey, to me, it means the cruise lines were cyclical stories before COVID, but now they've become a genuine secular growth place. And they may stay that way for a generation. Many investors can't bring themselves to accept that cruises have gained so much adherence in such a short period of time. But Royal Caribbean reminds us that it travels a $2 trillion business. Cruises are considered an amazing value within that $2 trillion.

No wonder Disney's planning to double its fleet size in the next six years. Plus, the cruise companies like Royal Caribbean, Norwegian and Carnival have become incredibly disciplined about not adding too much capacity at once, which makes the industry much more resilient than it was before COVID whipped them in shape. They used to have too many ships coming online all the time.

Stepping back, I think the travel and leisure stocks remain undervalued because so many analysts keep thinking this story just can't last. American Express, phenomenal stock because people think that travel can't maintain this incredible pace, yet all it does is accelerate. Same reason why Marriott stock keeps climbing. If you want to go one step further, it may be a good reason to start buying some Boeing stocks.

Because it's now only one quarter away from a big earnings breakout. I don't think most money managers are going to wait for that to happen. They want it ahead of time. Of course, not everything is rosy in travel. While I like Delta, United and Alaska Airlines ways to play travel. There's still some laggard haggard companies out there that can act like skunks at a profits party.

That's what JetBlue was today with its terrible earnings and outlook that caused that stock to lose over 25% of its value in a single session. Still one more reason why I always like to say I'd rather own shares in the worst cruise line than the best airline. Oh, I also like to say there's always a bull market somewhere. I promise you I'll find it just for you right here on MidMoney. I'm Jim Cramer. See you tomorrow.

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