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Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 7/10/24
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Well, we've got Apple, Microsoft, NVIDIA, Alphabet, Amazon, and Meta and Shrine there. Those stocks are doing unbelievable well. Sure, one of these companies could slip back, but right now, I'm actually more focused on who could be the next to trade above a trillion dollars. Now, it's an amazing day for the Bulls with the down gain from 29 points as we climb 1.02% in the NASA jump 1.18% huge moves with the S&P taking out the 5600 level. I think it's worth going over the contenders, the company's closest to joining the trillion-dollar club, because for the most part, these are not traditional technology plays. Of course, it's not just the companies themselves that are driving things. We have a benign backdrop going here. Today, the Fed Chief Jay Powell, this time in front of the house, once again sounded dovish, meaning we're likely going to get some rate cuts and a fuel rallies. However, earnings season starts tomorrow, so we'll soon be back in real-world mode where valuations move in response to the actual numbers, not the price targets or the estimate bumps from the analysts. So you could say this is where the robber hits the road. What could be the end of the most buoyant period we've had in ages because of real earnings news? What company might be next to cost the trillion-dollar threshold? Let's look at the eight that come closest going into sending where, and believe me, some are really descending. First is Eli Lillie. By the way, I can hit this for every one of these because they're so good. At just over $893 billion, Lillie seems to be well on its way to a trillion-dollar market capitalization. They got the hottest, the world's hottest drug, this GLP-1 formulation, helping diabetics and overweight, but could also help many others, cardiovascular disease, fatty liver disease, hypertension, and perhaps many other indications. Lillie can't meet demand in its firstly trying to build more factories' high quality problem. It also has a new drug to fight Alzheimer's that could be a blockbuster. I nominate Lillie as the next to join the $1 trillion club. Second, Berkshire Hathaway. Now, this is a very close second and just under $893 billion, and I could easily see this one crossing the trillion-dollar barrier. Lots of moving parts here are Mosaic with an overweighting to insurance with Geico. Apple's a swing factor here, right? They got a monster size position, Berkshire. A lot of industrial exposure. Berkshire can go over a trillion dollars, but I think we'd actually need lower interest rates as Wall Street seems convinced that lower rates help this stock more, say, than any sort of the technology names. Even as I'd argue, there's enough here to go higher, regardless of the short-form direction of the interface. There's always some preparation about Warren Buffett's age. I think that Berkshire could certainly go trillion in a couple of months' time at this pace. The top two, though, could easily be surpassed by the real wildcard in the group, if we get one more surge in the stock of the unsinkable Tesla, which has been up for 11 straight days. Now, these days, Tesla's being pitched as more of a technology company than an automaker. And $840 billion, they just need to demonstrate the Tesla energy could become a much bigger piece of the business. We know that Tesla's vehicle sales are leveling off after a period of decline. We know their self-driving initiatives could be the biggest thing going. And certainly what Elon Musk seems to believe in, he'll talk about, the August 8th, robo-taxi presentation. We also want to hear about what he's saying about China, because China is allowing robo-taxi to several cities. Now, it could end up being a gigantic market. This one's got a lot of momentum. The next tech enliable to reach the trillion-dollar club is Broadcom. We don't talk about enough simple AVGO, the tech empire built by Hot10 that's integral to the data center. Broadcom helps connect the best of NVIDIA's chips to the networks of the world. It's difficult to imagine how the data center, or AI, would work without Broadcom. Without a tagline, it'll keep your memory. It's called connecting everything. We own the stock for the travel trust. It's been a big winner for us, because we believe it's reaching that position of VMware. It's just beginning to get integrated. And because it's other businesses related to cell phones, well, that's about the heat up, thanks to the new product cycle. All the cell phone components say we're bid up because of some very bullish projections for Apple phones. But Broadcom stock barely moved. That seems wrong to me. And you know what? I think this is one where you have to. Even though I don't like to buy right ahead of a stock split because there's usually so much churning. Now, there's so much to like here, not the least of which is this stock split. Let's talk about it. It's a 10 for one split. It's infected next Monday. That will make Broadcom shares more accessible to you regular investors. And $112 billion is more cap. I think it's an easy striking distance. But NVIDIA went down for a while after it did its split and so did Chipotle. So just be aware, I like this situation, but I am worried about the overhang of this split. There's a huge drop off after Broadcom, but any of these could catch up if we get favorable sector rotation in the next couple of years. Yeah, years, not months, because these are way down. Can a bank, for example, ever be worth a trillion dollars? If anyone can, it's JP Morgan, which reports Friday morning. Now, this is a $597 billion situation. The Amazon are whopping 800. There's nothing in this 600, 700 area. But I'd be a huge stretch to this one, go to a trillion. But think about it like this. JP Morgan, the best bank in the world, sells for only 12 times earnings. I think that's way too low. It's way lower than the average stock in the S&P. And if the Fed starts cutting rates, then I think this one could go undergo some huge multiple expansion, especially if the company also reports a blockbuster set of numbers on Friday. In the end, JP Morgan has generated a level of earnings consistency that merits a much higher stock price. Many thought that the last quarter was weak and the stock just got clobbered. But you know, it's come all the way back. Clean, resilient, don't rule out a trillion dollars, but it's going to take a couple of years. However, if there's anything at the $500 billion level that could double, and double within a reasonable period of time, I bet it's Walmart at $566 billion right now. America's largest retailers experience the amazing moment. It's pulling away from all the other retailers save Amazon and Costco, which by the way, just raises membership fee tonight and keeps rewarding investing club members as we've owned it forever. Walmart has an e-commerce initiative that's so strong, so broad that it's attracting a huge following, although it takes some time to make it truly formidable. This morning, Pepper Sandler said that Walmart could have $14 billion in ad revenue by 2030. Now, that's got to be pulled forward for this company to hit a trillion dollars. What I like most is the Walmart Plus membership initiative. Recently, Walmart offered important discounts on fuel at Exxon and on flights, hotels, car rentals for the summer season. I take a look at the bar, as well on the website. It's really pretty amazing. There are so many different deals and discounts that it's become one of the most attractive loyalty programs in the world, if not frankly, the most attractive. Seventh is Visa, and it took it on the chin today with the downgrade from Bank of America, questioned whether the company can grow sales above 10% over the next five years. Visa is the quiet half-trillionaire. It just continues to be the asset like risk-free financial technology play that doesn't get talked about enough given how consistent it is. But can Visa tackle another $500 billion in market cap? I think they'd need to make, I don't know, multiple decisions, maybe multiple acquisitions to have something happen like that, and I don't see that happening. Finally, there's Exxon Mobil, which was the largest company to market all the way back in 2011. Before that, it had been a fiction in the top five lists for many years. The incentives of tech knocked it well if it's perched, but it's $502 billion. Let me just a little speculate here. It's not a stretch to imagine Exxon joining a trillionaire club. If oil prices were to truly spike, the earnings would soar, and this stock would indeed go substantially higher. I'm not betting on higher oil, but it could definitely happen at some point in the next two years. Let me give you the bottom line on the speculative piece that I put together here. There's no trillion-dollar derby. Nobody's really doing any handicapping meetings up for me, but I think it would matter if a non-tech could crack into the St. billionaire circle, because that would call the most bearish judgment into question. That judgment is that we're merely riding a tech bubble. To me, it's going to be lily up next, but that your popularity of Tesla might allow Moss to sneak back to the top run, turning the Super Six back once again into the magnificent seven. Rod and Florida Rod. Hey, Jim. So what happened to Netflix today, given the higher price targets, and what direction do you see the price going into Friday to close before the next week? I have to tell you that Netflix has become so loved that I was actually glad that it got cooled off a little bit today, because every day another analyst, and I actually put this in my memo, I sent a memo out to about the 10 things that I'm looking at for club members, and I put together initially in my first cut, I said enough with the Netflix order. You can't just keep raising them the same thing. That's what people are doing. Let's wait and see, but I think it's fine. Mike, get on away. Mike, Mike, Mike. Hey, Jim, thanks for taking my call. Of course, Mike, good to have you on the show. All right, I am very curious why that the stock of WingStop is selling off. It's down about 12% since it's high a couple of weeks ago. Well, let me give you my issue that one, Mike. We happen to have a breaker, which is Chilly's one later this evening, and this whole group has come under pressure ever since McDonald's cut its price and offered that value package. Everybody thinks that you can't get the big deal anymore at these guys versus McDonald's. I think they're wrong. I think WingStop's a buy. Let's go to Steve and Missouri, please, Steve. Hey, Jim, I always appreciate talking to you. Thank you, Steve. How can I help? I'm talking about one of our club stocks, Lindy. It rocketed higher when it reported earnings in February, and then it reported earnings in May, and it's been struggling. Where are you on Lindy? Okay, I got to get Sanjeev Lambo on the show, Lisa Co. Here's what I think happened. Lindy had an amazing run like many of the industrials, and then it didn't have a blowout quarter, and the stock didn't get hit, but it didn't go higher. It needs to be able to show, I would say, a re-ignition of growth, of volume growth. That's what it really needs is five growth, and I'm going to touch, touch base with Jeff Marks again tomorrow on this. We do have a club monthly meeting next week, where I think I should bring it up after your great question. Thank you. Now, I think the bears have to take note of a non-tech company can crack through the glorified trillion dollar club, because it would end the idea that we're merely just riding one more big tech bubble like the year 2000. Well, maybe I could have fast food fans who are growing frustrated with the rising plus and combo meals, but could casual dining chains like Chili's be filling the void kind of like the question we just got about wing stock. I'm sitting down with the CEO of Brinkard to find out that what the heck is going on with the stock of hymns and hers I'm giving you my take on the vulnerable action. And you know the famous question if a tree falls on a forest, does it make a sound? But what about if lumber prices fall in the market? I'm searching for answers. So stay with Kramer. Don't miss a second of Mad Money. Follow @chimcramer on X. Have a question? Tweet Kramer. #MadMensions. Send Jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. Miss something? Head to madmoney.cnbc.com. I've got prostate cancer, but I really wanted to make it to the big game with my grandson. And here we are. Go, go, go, go. With Erlida, Apoludivide, being there, is possible. Erlida is a prescription medicine used to treat prostate cancer that has spread to other parts of the body and still responds to a medical or surgical treatment that lowers testosterone. Erlida may cause serious side effects, including heart disease, stroke, or severe skin reactions, which can lead to death, falls, fractures, and seizure. Seek immediate medical attention if you experience symptoms of a stroke or severe rash. Erlida can cause harm to or loss of an unborn baby. Common side effects were fatigue, joint pain, rash, decreased appetite, weight loss, high blood pressure, hot flash, and diarrhea. Ask your doctor if Erlida is right for you. 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Just go to indeed.com/madmoney right now and support this show by saying you heard about Indeed on this podcast, indeed.com/madmoney. Terms and conditions apply. Need to hire? You need Indeed. Breaking news. The peanut butter group and chocolatey corp have merged to create PBC Inc. And the byproduct of the merger is the new delicious jiff peanut butter and chocolate flavored spread. I got the press release and get this. Critics tried to say it creates a monopoly on cravability. But obviously, it's not illegal to be irresistible. Calling it now, this will revolutionize the snack industry and the contents of my pantry. Visit pbcincorporated.com to try the flavor merger of the century, jiff PBC. Lately, the big restaurant chains have been seeing real pushback on prices. Either they give customers better deals or their traffic starts to evaporate. You put in a handful of restaurants a bit ahead of the game all the time, like Breaker International. The parent company of Chile is with its famed three-for-me deal. As well as Marjiano's, that's that family-style Italian eatery. After having a 52-week high of $76 at the end of June, Breaker shares it cool a bit, pulling back roughly 40% to 65% in change. I think it's a good entry point though. Even his competitors finally step up their value offerings. Don't take it from the middle. Let's check on the Kevin Hoppe. He's the president, CEO of Breaker International, and the president of Chile's Grill and Bar to get a better read on the situation. Mr. Hoppe, welcome back to Mad Money. Hey, thanks for having me on the show, Jim. I just wanted to do a quick shout-out to our teams for Marjiano's and Chile's in South Texas. They obviously got hit by the hurricane there. All of our employees are accounted for, and we're getting the power back on all the restaurants as we speak. And I just wanted to recognize Robert Mason, who's our vice president operation of that region and all the employees that have gotten us back up and running. Well, I'd like, and I want to thank you for doing that. And when you're a conference call, when someone does a good job, you call their name out. I've always wondered why more CEOs don't realize it doesn't cost anything to mention people's names who do a good job. Yeah, we have over 60,000 doing an amazing job. We are definitely on a roll on chilies, and we're getting there on Marjiano's, and it's because of the 60,000 employees that are making our guests feel special, delivering amazing value every day, and it's having great results. Thank you, Kevin. Now, I want to ask you in the last conference call, which was now, back in April 30th, you were talking about how there is a real pushback to consumers frustrated by the fast food prices, and it's been playing their hands strictly at 10-9-3 for me. Now, since then, it's almost as if these big fast food restaurant chains hurt you, and they've been cutting prices and offering deals. Has it hurt your traffic? Yeah, you know, I can't comment on existing traffic right now. We just finished a quarter. We're going to have an earnings call in about a month, but what I can tell you is we're going to continue to offer industry-leading value. We know that's what the guests want. They're looking for a great price point, a full meal. They don't want to get nickeled and dined and have to buy other things once they get to the restaurant, and with our 10-99-3 for me, you know, it really is a complete meal. We think it's the best value in the industry, and I think we'll continue to go drive that as long as it continues to work. Now, I just have to ask you a point blank. How come you can do something for 10-9-9, a big smasher burger? And when I go, I'm not going to pick on any particular fast food, but I happen to go to all of them. I really don't get... I'm paying the same price, but I'm not getting any service, and I'm not getting the big enough burger as far as I'm concerned. Yeah, one of the most important things, Jim, especially in an economy like this is to make sure you have offerings for all guests. You know, some of the guests want, you know, a low price point. They want to have a great value, a great quality, and the 10-99 is going to deliver that for them, but that's only about 7% of our business, right? If you think about the rest of our business where you can trade up to either double burgers or steaks or premium margaritas, you know, that's where most of the business is transacting, and when you add up all of that, even with a pretty good food cost on 10-99, we can make things work. We can continue to expand margins, continue to grow sales, and the customer's rewarding... you know, rewarding us for it, and you saw that in our last earnings call, you know, and we'll continue to deliver superior value as long as it continues to work. Well, I know that you have been a big believer in something that I think is very important. It's not that they come in there and just do 10-99. They order other things. It has to do with, actually, a feeling of not being ripped off. The American consumer right now feels like they've been ripped off by hyperinflation, and you are an answer to hyperinflation. Yeah, you know, I'll tell you something. I learned this was about nine years ago. I was in a focus, personally doing a focus group. We were trying to test some value concepts with customers, and you know, what we were told is, look, I don't want to do a lot of thinking about the value. Like, I just want it to be easy for me. I don't want to have to download an app. I just want to be able to get it every day, and I don't want to do a lot of spending. And when they meant by that was they want to attract a price point and they want to have superior value. That doesn't mean the cheapest thing on the block or the cheapest thing that we have in our restaurant. They want something that's going to literally fill them up and not nickel and dime them. And that's what we're doing with the three for me right now. It's a complete meal. It's a price point that's really clear. You don't need to trade up or add things to it in order to have that great meal, and you don't need an app to download it, and you don't need to come a certain time and day or a certain day of the week. It's always going to be there for the guest. I think that's where we're getting rewarded for it. No, I also know that you do a lot of specials. I mean, and you don't want to take her too much. You've got, you know what, you make 200 million dollars with the fajitas. You don't want to change the fajita, but you have to keep coming up with something new for people to come in. Yeah, well, there's two things that, you know, in an economy like this, that's really important. Number one, as guests pull back trips in the industry, it's really important to uplift our service model, right? Because if they're going to take less trips, they need to make sure that they go to places they can trust because they can't afford to have a bad experience. And that's, you know, number one, what we've been doing is upping, you know, all of our guest scores, putting more labor in the restaurants, making sure we simplify the menu so we can deliver it to the guests. The second thing is you got to keep value interesting and you got to bring some new innovation into it. So for example, you know, our big smash burger, it's doing exceptionally well at 10 or you know, we just launched as part of, you must see a lot of shark content on TV lately. We have a $6 margarita a month called the berry shark bite. I'm getting it right now. And it's got Luna Zoltakila. It's got coconut malibu ramen. It's got fresh sour and it's only for six bucks. You know, that is a jaw dropping prices like we like to call the berry shark bite margarita. So as long as you keep those things fresh, keep the value coming. We think the guests are going to continue to come back. And I want people to know that that would be at my old boy. That's a 12 buck. That's a 12 buck mortgage. So you're doing it for half of what you would do at another restaurant. That's really an amazing price. One last thing. Are you still monitoring where you are with this? I love this. The GWOP, the guests with a problem that have dropped to 3.3, is that still going down? Yeah. So we look at that literally on a daily basis. Now I can't share with you the most recent results. Once again, we're in a quiet period given our our quarter ended, but we're continuing to add labor to the restaurants. We're continuing to simplify things. And so there's no reason why we wouldn't continue to see progress as long as we continue to write things for the business. And we continue to that the guests experience it and continue to get better and they're going to continue to reward us with their business. And that's the plan going forward. And you know, we hope to stick to it. Well, look, I want to thank you for fighting inflation, which is what I really hear. There's Costco. There's you. I got Texas Roadhouse and then everybody else. Oh, Walmart. Everyone else just keeps raising prices. So obviously you can make a lot of money for shareholders and still let the customer have the greatest feel. That's what I think of when I think about Brinker. Yeah, I know I appreciate that. I think as well as continue. We continue to win with the guest, have a proposition that they're excited about. They're going to continue to reward us no to continue to reward our shareholders. So that's the plan going forward and we're going to stick to it. Let's call it good business sense. Kevin Hoffman, President, CEO of Brinker. Simple eat. Thank you. Always pay to see him. Hey, thanks so much. I appreciate you having me on the show. Of course, of course. May have money is back up in the break. Coming up. What the heck? A health check for a modern stock with time-tested headwinds. Next. Walmart Plus members save on meeting up with friends. Save on having them over for dinner with free delivery with no hidden fees or markups. That's groceries plus napkins plus that vegetable chopper to make things a bit easier. Plus, members save on gas to go meet them in their neck of the woods. 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And if you somehow missed their ubiquitous ads, this is a digital health and wellness platform focused on sexual health, skincare, mental health, and weight loss. Basically, they set up a website where you can talk to doctors via text in order to get treatment for, let's say, more sensitive health issues. They sell generic versions of treatments for ED and for male pattern baldness. Somehow, the rest of the world still hasn't recognized that bald is beautiful. Weight loss drugs from what are known as compounding pharmacies. That's the other thing that is a GOP kind of knockoffs. In short, they treat anything embarrassing, where it's easier to talk to a computer than a doctor. That's the basic idea behind hymns and hers. Now, when we first spoke with CEO Andrew Doodham in late February, the stock was just red hot, and it came more than 30% in a single day after the company reported a strong quarter issued a very bullish full year forecast. That break out into the teens in late February was important, because hymns and hers, Health, came public via a spot approach that closed in early 2021. This was the moment it finally broke out above the baseline spec level of $10. Even late last year, the stock was stuck in the mid-single digits. Just another post-spec play that wasn't working that hurt people. You know what I mean. But ever since that blowout quarter in February, well, the market had started taking this story very seriously. Now, bring all this up, because after some choppy trading in March and April, hymns and hers started rallying like crazy. From early May through mid-June, the stock climbed from around $11 to a high of 25 and changed. I don't know if you saw it. It was almost like levitating every day for pulling back to $20 and changing today. Still, even back down here at 20 bucks, the stock's up 127% year to date, and up just another 50% since our late February interview. So it's long passed on to play catch up and explain what the heck is going on here. First, when hymns and hers reported in February, they not only reported strong growth in a surprise profit. Imagine it also gave incredibly bullish guidance. COA and June do them, explained on this show that the whole business model is about breaking down barriers to access for these drugs, which brings a ton of new people into the market. The stock took off again. After hymns and hers reported another phenomenal quarter in early May, a monster topped on the bottom line beat, up 46%, subscribers of 41%, earnings before interest taxes appreciated an organization growing by 434%, coming here in five cents per share, and I was finally looking for a penny. Now that's a spokeshell. Imagine a setting could put up these numbers because they were offering a wider breadth of product categories on the platform, including weight loss drugs. In response to the quarter, the stock immediately jumped 6%. But that wasn't even the biggest positive catalyst of the past couple of months. On May 20th, two weeks after the first quarter report, hymns and hers announced that it would start selling GLP-1 injections. Remember, people are desperate for these revolutionary weight loss drugs. That said, the company isn't actually selling the patent protective stuff from Eli Lilly and Novo Norris. Instead, they're selling what's called compounded medications, which use the same active ingredients in a copycat formula of the drugs. Normally, the regulars won't let you violate someone else's intellectual property like that. Those compounded drugs are only allowed in situations where the supply of the real drugs are limited, which is exactly what we have with GOP-1s. Of course, this product that hymns and hers is selling isn't actually FDA approved, but the upshot is they're selling the active ingredient for much lower price than you can get anywhere else. It starts at $109 per month, which is a fraction of what the real or zenperger's at-bound cost. When hymns and hers announced the new access to GOP-1 injections, the stock rightly jumped nearly 28 percent in a single session. Even if the news wasn't exactly surprising, people would speculate about the story for months. How big of a business could this be for hymns and hers? Analysts at the healthcare focused research from the Marine partners took a stab at this question last month, and here's how they put it. "We have built our first cut at a sensitivity analysis to understand just how big the opportunity could be with estimates that get quite large, quite fast," end quote. "White large, quite fast." I like that. Specifically, the rank projected that these compound and GOP-1 drugs could increase hymns and hers even if that's the earnings before interest taxes, interest expense in taxes, by anywhere from 7 percent using conservative assumptions to 150 percent using more aggressive estimates. That's a lot of leeway, I know, but it sounds pretty positive to me. Now, why don't the stock more than double from early May to mid-June? Hymns and hers finally took a breather once the stock reached its mid-20s, but then something else happened. On June 27, an outfit called Hunter Brook Media, which is a new venture that's part hedge fund, part media company, and similar in nature to an activist short seller published a negative report on the company's move into these compound and GOP-1 shots. They're thesis. First, Hunter book points out that hymns and hers ability to sell these compound and GOP-1 drugs could end at any time, and that is true. Like I said before, you can't just violate another drug company's paths. It's only allowed as a temporary measure when there's a shortage of something important. We know that Novo and Lily are working really hard to bring more production online, and if they're able to get more supply than these compounded drugs, they'll just stop, they'll be shut down. But you know what? Demand for these GOP-1s is so strong that I think it'll be some time. It might be a while before there's enough official supply to state demand. I'd add that hymns and hers has said that they'd like to work with Lily and Novo in order to get their users access to the real thing. That's nice to hear, but it comes with additional questions, including how much of a margin that they take from that change. The lower price point of the compounded GOP-1 is the huge part of the appeal here. So switching to the real thing, let's just say it certainly wouldn't be all that lucrative. The other relevant negative from the Hunter Brook report on hymns and hers, the authors argue that the company's getting its compounded GOP-1s from a single supplier, Belcher Pharmaceuticals, which has in their words, quote, "previously unreported ties to fraud and bankruptcy," end quote. Now, that was news to us. It was certainly not a great look for hymns and hers, though. I'm not sure how much it impacts the estimates. The Hunter Brook report also said basically that people can get the compounded GOP-1s through hymns and hers without speaking with a doctor, which opens the company up to littagation risk, especially as these compounded GOP-1s are not FDA approved. At least they're putting it out there. Now, the stock had already pulled back from 25 to 21 before this Hunter Brook short report came out, but then a couple of 20 after it came out and traded sideways ever since. So what do we do with the stock here? Okay. Frankly, I'm actually torn about this one. While it makes sense that the stock's word on the compounded GOP-1 news, I don't love that it's now trading on what's essentially a temporary business. However, I liked hymns and hers before this whole GOP-1 rally and sent it to the stratosphere. Those great first quarter numbers didn't have any benefit from knockoff GOP-1s, and I bet the business stays strong. So the bottom line here, I'd never recommend paying up for hymns after that big run of 25. But now as pulled back to 20, I think you can justify building a position here, especially if you buy a graduate in the way down and don't place all your hopes on a temporary GOP-1 business, even as it is incredibly strong. Let's go to Mike in Illinois, please, Mike. Hey, Jim, how are you? I am good, Mike. How about you? I'm great. Thank you for all you've done for me and for all the all the numbers. You're going to turn up to you and Jeff has helped me out a ton since I joined. I'm up over 40 percent in my portfolio in the last year, and I'd say you were a good reason, one of the major reasons that happened. Oh, thank you. Jeff and I were talking back and forth today. We got a meeting coming up next week. We're going to try to review what we talked about at our annual meeting, give like a six-month look-see, but thank you. You encouraged us to make this work harder. I really appreciate it. How can I help you today? Well, one of my dogs is Abbott. It's actually my biggest dog. I'm done about nine percent since I bought it. I've added two at a couple times. I know it went up today. I know you said that this loss is going to come through and that'd be nearly as damaging to the stack, and hopefully it'll bottom at that point once that comes out. But I'm wondering what you want me to do. Let's take it. You know me. I take it head-on. They report on the 18th. I don't know. I think the company's doing incredibly well. The lawsuit is in Missouri. It's the worst venue. That's why I've prepped everybody to think that they could lose it, even though I don't think they should, which is why we're holding off buying anymore until it breaks under a hundred or else we're happy with our position. That's our plan. And I thank you for those incredibly kind words, and I'm sure Jeff will too. Let's go to Richard in California. Richard. Hi, Jim. Richard, what's up? You always say pick best and breed. Well, this company is only in breed. This AI tech service company is exploding in all financial metrics. They just entered a very large market in Texas. Growth will be rapid. All their core markets are growing like a weed. The White House has them in the moonshot program to help end cancer, and they're at the top of their list. Their breast prostate lung cancer AI is already up and running with serious revenue and growth. They're developing generative AI to run all basic company needs, billing, appointments, work flow, et cetera. It will be a game changer for profits by year end. Most importantly, this product will be for sale. It will revolutionize health care services, hospitals, imaging centers, diagnostic centers. This company's growth over the next 12 months, and beyond, will be mind-boggling. Radnet. Oh, Dr. Berger. Yeah. I mean, this is one of the reasons why, candidly, I thought the GE Healthcare would be doing better because they're a big supplier to Radnet. Radnet is just doing incredibly well. You're definitely right. It's a very interesting story, and every time we've had them one, it's been terrific, and I think it's going to stay terrific, and it's a really good call by you. All right, listen, as long as you're not centering your investment thesis for HIMS, a Radnet's GLP-1 business, and I think you can start building a position at these levels. Much more money at Monday. Wearhauser has been going down, but is it too late to yield timber? I'm checking in on where the lumber producer stands at which recent severe underperformance. Then the only thing more toward than the love for tech hardware stocks is the absolute hatred for enterprise software. I'm giving you my Caitlin the love hate relationship, trying to make some sense of it, and all your calls wrap and fire tonight's edition of the Lightning round, so stay with Kramer. I love that when key commodities come down in price, shows we're winning the fight against inflation. But what in the world is happening with the price of lumber? I know it's a weird moment for the economy where brownshirts are developing weeks have turned into flashing yellow lights, and the Fed seems inclined to get more dollars, with the possibility of a rate cut in September. That's what I'm expecting now, and that's what you expect when the economy finally cools down. But within this environment, commodity prices are all over the map. Gold and silver are both holding up well, copper is being okay before pulling hard down less of late, but iron and steel are very weak. Oil's held up pretty well, although natural gas is broken down completely after a nice run this starts of summer. Now, most agricultural commodities have been weak, except for special situations like coffeebeats. Now, at all paints, a pretty mixed picture at best. However, lumber tells a much clearer story. The price of lumber has been going straight down for the past four months, falling nearly 30 percent from north of $600 per 1,000 board feet in March to the low 400s. Now, you might remember that just a couple years ago, at the height of the COVID-induced housing boom, lumber was one of the hottest commodities on the planet. The price of wood climbed nearly sevenfold from about $250 at the March 2020 lows, to almost $1,700 at its peak in May of 2021, extraordinary. Lumber made another run in late 2021 or early 2022, when overall inflation readings were purchasing their highest levels. In the end, lumber put in another peak, above $1,300 in February of 2022. Then, the Fed started raising interest rates, though, and prices collapsed as everyone assumed the housing market would collapse, too. And without housing, there's really not as much demand for wood, and pretty much anything else. Ultimately, housing turned out to be far more resilient than anyone expected, and lumber rebounded from its lows. It seemed to be doing fine until it started rolling over again this March. So, what's going on here? You know what? It's a classic case of supply and demand imbalance, with some unique twists, though. When lumber prices soared years ago, the industry scrambled to increase production, particularly in the southeast, where it's cheaper to produce southern yellow pine lumber. That's the right term, southern yellow pine. New lumber mills take time to build, but more production has come online in the past couple of years, particularly production of that cheap southern yellow pine. More important, because everybody expected a bunch of rate cuts in the Fed coming this year. The lumber companies maintained high levels of production. Finger began a lot more home building activity and remodeling work. That seemed to be the right zeitgeist, but the rate cuts that they never materialize. At least, not so far. Meaning, mortgages are still expensive, and homebuilders are hesitant to build aggressively. In fact, they pulled in their horns. Housing starts have been deteriorating since February. May housing starts from down 5.5% from April, and down 19.3% from the year before. In fact, this was the lowest housing starts reading since June of 2020. That's not helpful for the price of wood. At the same time, the restoration remodel market, which is even more important this industry than new construction, has also stalled out. People are putting off projects because the cost of financing is too expensive. They'd rather wait a year or two betting, well, you know, getting a home happily alone, paying for big renovation, betting, and defense is going to cut. Now, normally, when housing and remodeling slows, you'd expect the lumber industry to pull back on production. This is key. It hasn't happened to you. Why? First, the industry invested so much to stand up these new mills in the southeast. Now, if they're operational, they don't want to cut production. In some cases, they borrowed so much money to new mills for the new mills that they don't have a choice. They need to sell lumber to service their debts. With the labor market so relatively tight, lumber producers also don't want to lose their workforces. More important, remember, these mills in the southeast have much lower break-giving points than even their competitors in Western Canada previously in the heart of the lumber industry. Plus, there's a feeling in the industry that things will turn around once the defense starts cutting rates. They think that's right around the corner, so they're holding steady in the hope that they get bailed out by Jay Powell. That's how we get this stunning decline in the price of lumber. An understandable decline in demand paired with stubbornly high supply. Hey, how do you play it? I want you to consider the stock of a warehouser. That's the Seattle-based real estate investment trust. That's one of the world's largest private owners of Kimberly and one of North America's largest manufacturers of wood products. Given that the decline in lumber prices, it's no surprise the warehouse of stock has fallen 24% since late March. By the way, this is the lowest level since late 2020. That decline is justifiable. I get it, but I also have to say that if you have a long-term investment horizon, this is the right time to buy a warehouser, not sell it. All of this supply demand imbalance is temporary. This is a good bounce back. During your appearance at a rate at the real estate investment trust industry conference last month, warehouse or CEO Devin Stockfish addressed the softer moment for the lumber market, knowing that for warehouser, the issues are more related to the renovation and remodeling business than single-family housing market. But Stockfish also stressed that his company focused on its long-term, multi-year initiatives, acquiring $1 billion with the timberlands, raising lumber production by 1 billion board feet, and growing a carbon sequestration business that used to be an afterthought, but is scaling up, and I'm very interested in it and been following it. Warehouse has also been cleaning up its balance sheet and growing their base dividend, which currently yields 2.9%. Beyond the base dividend, warehouser likes to return excess capital to shareholders via special dividends and share a purchase at management's discretion. I think they've got a great long-term strategy in place, and if you're willing to ride out some of the near-term choppiness, then warehouser all the way down here should be fine over time. Honestly, I think the lumber industries right that were close to a bottom, and once the rate cuts start to be true, as this fall, the homebuilders will begin to build more, and they'll be more renovation and more remodeling work, and that will improve the lumber prices, and they will be sustainable. It could be a real rally. At the end of the day, we still have a jaw-dropping housing shortage in this country, right? We need several million more homes than we currently have, and over the long haul, that's a huge positive for coming like warehouser. It's going to come together, people. All that said, the corporate board's in about two weeks, and given that lumber prices were straight down the second quarter, and we have to assume that the numbers won't be particularly good. I'm not telling you to buy warehouser ahead of the quarter. I suspect you'll get a much better buying opportunity ultimately after the quarter, but you can't be sure. Bottom line here, the lumber markets collapsing right now, along with the lumber stocks. I think this is temporary, though. After all, this is a classic boom and bust industry, which is why you should look for opportunities to buy a vestibeary and warehouser into the weakness. I understand the warehouse, or when they report, it may not be perfect. We have one who's back after the break. It is time for the Lightroom special, Robert Olin, taking this off. I thought about myself so sick, we were known in the course, and I put it in my step versus everything. I would play this out. And then the lightning round is over. Are you ready, skate? Dang. I'm talking to the Lightroom Wrestling special with Dave and Illinois Dave. Dr. Kramer, my good man friend. You know, the weather doesn't get much better here, so when will you and Lisa return to Chicago for some poor pillows and a bunnies bottle finding? Well, I don't know, but I'm going to check in at the bear, please, now that I know that Tina's got that job for a long time. There you go. What's going on? Jim, this $24 billion suburban Chicago company has kept pace with the S&P so far this year. Among Dover Corporation's supply of electronic equipment and components, they make thermal connectors, a critical component in liquid cooling of data systems. So Jim, would data center spending on the rise? Your thoughts on DOV? Oh boy, David Sethley put it, once again, right his finger right on the pulse. That is a terrific, I'd like to come out there and see that maybe they didn't invite us. This is a terrific industrial company that really is making a great move in the data center. I think the stock can go to 200. I will talk it up next week. Just, you know, when I go over what I like when we have our monthly meeting for the club, Dover is going to be a big name for me. Let's go to Jack and Ohio, Jack. Hey, thanks for taking my call, Jim. Of course, Jack, what's up? A bind for the dividend income, S-F-L corporate. Now, if you're going to do that, you want to buy Dow Chemical Dow. Not a little no longer Dow Chemical Dow Inc, which back yielding 5.4%. I think it's the right play at $51, with Jim Fitterley at the helm. That's the one to buy. Bob in Illinois, Bob. Yes, sir. I've been a holder of Cava in about a month ago. They upgraded their guidance for the year. And in the last, since that time, it's gone down about 10%, including 5 points today. Well, you know, there's a lot of these high technology companies and a lot of fast growers and a lot of companies that just came public in the last three years that are really giving up big gobs while the stock center, of course, we know, NVIDIA and Apple keep going higher. I don't want you to lose faith, but you have to understand, this is a concerted move by the companies that have come public in the last five years. They're all getting hit. Don't panic. Understand they're coming down. One, just as a resecter rotation. How about Caden in Texas, Caden? Yeah, Jim, I want to get your take on new fortress energy. I know you've been a fan of West Eden, the new fortress energy in the past, and I could talk about this story and all the positives for a while. But to make it short, is it that they continue the delays of their Altamira FLNG and uncertainty from investors. Cardo delivery was said to be this month as production was opposed to a starting last month, as the missioning is now complete at that plan. Now, I think the problem here is, frankly, that President Biden had put a pause. And I know that just a judge just said no to that, but I think it put the whole multi-year plan under question, and that's why it's going down. And that, ladies and gentlemen, it's the conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. The only thing more extreme than this market's love for tech hardware is its hatred for software, especially enterprise software. We've had plenty of incredibly positive moves for tech, but with the exception of Microsoft, the gainers have been in semiconductors and devices. Meanwhile, software losers just keep losing, even in today's otherwise upbeat session. The dichotomy was when photos play in the middle of the night when Taiwan's semi-reported really 33% sales growth in the month of June, far better than even the loftiest investments. Given that Taiwan's semi-the-manufacture of both Nvidia and Apple chips, not to mention semis for Broadcom and AMD among many others, the pin action, it was just incredible! Nvidia has rallied to another 2.7% Apple, Vans almost 2%. I know I said like a broken record, but these companies are all part of what Nvidia's Jensen Wong calls the new industrial revolution. Chips made to Taiwan's semi-founders are part of the simultaneous march of accelerated computing and generative artificial intelligence. Hardware is in the Senate. It's like I have never seen my baby in the '90s, and when you consider the size of these companies, the only trillion-dollar market capitalizations, it's remarkable. The goal between hardware and software, it just keeps widening. This warning into it, a financial service company that I like very much, announced layoffs that management indicated were artificial intelligence-related. Into it, the software company has been saying that it would be one of the leaders in using AI to improve the customer's spirits. It does have a host of divisions that can easily substitute AI for employees. It made a ton of sense. I understood the announcement. Many of the people that go could be re-hired. To me, it sounds like CEOs has some good RZ is doing exactly what the new technology allows them to do. Even it's always been a very tough medicine, of course, to fire people, but the market's reaction was severe over the stock losing almost 2.6%. Now, some of that may be related to the turmoil it's likely to accompany these layoffs, but I think there was skepticism about the layoffs. Skepticism that this enterprise software company for small media-sized businesses may have a slowing or a stalling. The reverberation was swift. We immediately saw enterprise software post-to-voice sales force get hit. As did service now, even though both stocks did rebound nicely into the close, saved by a positive tape. They never should have been down big in the first place, but you know what? They're enterprise software. In reality, I think service now is doing incredibly well and these temporary pullbacks are buying opportunities. But the problem here is pretty simple. The valuation for software stocks are going lower because they no longer have the level of certainty that money managers are willing to pay a premium for. There have been so many of these kinds of companies created in the last 15 years that they have nowhere near the scarcity value they used to have. They get from major hardware winners these days, and of course, it's entirely possible to enterprise software customers simply don't know whether they could be doing what into what's going to be doing, making them less willing to pay up for long-term software subscriptions for large numbers of employees. Plus, there used to be a ton of takeovers among these stocks, but Bloomberg broke a storage today that Alphabet, which may have been looking at a company called HubSpot, which is kind of a mini sales force.com, decided it wasn't interested in HubSpot and its stock plummeted 12%. Hey, by the way, smart move by Alphabet. It would have crushed its own stock if it had bought HubSpot. At the end of the day though, hardware's love, software's hated, accepts your Microsoft, and maybe never the twin shell meat, at least not in this environment. I like to say, there's always a more market somewhere, and I promise you I'd find it just for you right here on Mid Money. I'm Jim Kramer. See you tomorrow. Last call starts now. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions, and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Jim Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer'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/madmoneydisclaimer. Earning your degree online doesn't mean you have to go about it alone. At Capella University, we're here to support you when you're ready. From enrollment counselors who get to know you and your goals, to academic coaches who can help you form a plan to stay on track, we care about your success, and are dedicated to helping you pursue your goals. Going back to school is a big step, but having support at every step of your academic journey can make a big difference. Imagine your future differently at capella.edu. [BLANK_AUDIO]