Listen to Jim Cramer’s personal guide through the confusing jungle of Wall Street investing, navigating through opportunities and pitfalls with one goal in mind - to help you make money.
Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 6/27/24
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Capella universities programs teach skills relevant to your career so you can apply what you learn right away. Learn how Capella can make a difference in your life at Capella.edu. My mission is simple. To make you money. I'm here to level the playing field for all investors. There's always a more market somewhere, and I promise to help you find it. Man Money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer America. I'll do great friends. I can try and make little money. My job is not just entertained but to educate and teach. So call me at 1-800-733-CMC or tweet me at your Kramer. Today, today we found out what's wrong with the drugstores. It's not the shoplifting. It's not the jury brick and mortar locations. It's not the maximum security prison of merchandise where you need to call the jail or to get a bar of soap. It's not even the often downtrodden employees who are tired of having to watch people walk out of the stores without pay. No. It's Amazon. On a day when the Dow gained 36 points, that's being stepped 0.09 percent. Now I think it's 0.2 percent. I see Amazon hitting an all-time high, putting it in the rarefied air of the $2 trillion club. I see Walgreens hitting a multi-year low of $12 down 22 percent today. You know, after reporting a visible quarter, it was its worst day ever. We had our CMC investing club meeting today and we discussed the greatest of Amazon. But I feel we gave a short trip. Amazon's so phenomenal that I think you can just worry pretty much any industry you choose to go after. It's the retail desk star. For example, just today we learned that Amazon's planning to launch a discount store to go after the ultra-low cost but often ultra-low quality of chemo and she and two online stores that source a great deal of product from China. These two outfits have already become the most powerful power makers in the world. Now that Amazon's rolling out a similar discount store to compete against them, I actually don't envy their prospects. But with Walgreens, all I can say is that Amazon taking no prisoners, TNP. First, I understand that Walgreens missed the estimates morning by a mile, causing its stock to cascade back to its lowest level since 1997. That is a long time ago. The company revealed that it will close a significant number of money losing stores. We don't have a firm number yet. Tim Wentworth, the newest CEO, didn't miss words in the com school, quote, "The severity and duration of the challenges in the operating environment have only added urgency towards teaching and operational review," end quote. He went on to say, quote, "We are at the point where the current pharmacy model is not sustainable and challenges in our operating environment require we approach the market differently and, quote, no one to stop us down 22 percent." Now, what was ideas including putting some serious money behind the pharmacy side of the business, the back of the store, so to speak, because that business is still good. That doesn't mean opening clinics as Walgreens has a stake in village MD, which they intend to monetize or unlock liquidity, although I do not know how they're going to do that. Remember, Walmart recently closed its 51 health care clinics in their stores because they couldn't make them work too costly, hard to stay up. So who they have to go to pay up for these properties? I don't have any idea. Maybe some private equity clown, there are a bunch of them out there. But let's deal with the reality of the situation. If you listen to the conference call today and it was really just a tale of whoa, frankly, you would have heard Tim Wentworth trying to make sense of the decline. You may not know that he's actually one of the finest business people in the world. Someone who turned around his press scripts and then sold to Signal for an immense profit for shareholders. He knows this business well. He's identified the edge that Walgreens has for the moment, the pharmacy in the back of the store. But as Walmart found out, pharmacists are also hard to find. While we're spending a lot of time talking to Deans at the 15 pharmacy schools, as well as talking the trade association, just to find some workers, it's vital. But how much will it even matter? It might be a foot race. Can they close enough weak stores, stop the pill bridge and hire enough pharmacists while they get out of bad leases and shrink the store so that it relies on its core competence for selling medicine? We'll write a close enough stores allowing Walgreens to get their best pharmacists or will Amazon simply eviscerate them like it did to the late lamented borders or the shrinking barns in noble bookstores. Here's the real Walgreens problem. For years and years it relied on shoppers who bought all sorts of merchandise at standard prices, apart because they needed to get to the back of the store and pick up their drugs and then walk back to the register and why not stop and get some cheeses. They were terrific almost captive customers who seemed more sensitive to time than price. We had two huge, beautiful stores of theirs within a block of our office. She had two. I know it sounds really stupid, but bear with me. I remember when the second one opened, you know, it was a gorgeous store. We actually, it had everything. It had sushi. I had the sushi. It was okay sushi. We actually did a show from it with an old CEO of Walgreens. I remember asking the manager how it was possible, how they could have two stores within a block of each other. The answer? Too much business to handle at one store. Now both stores are closed. Too little business. What really happened here? For one thing, service went to hell. They fired as many people as they could while still keeping the lights on, but then they became ground zero for theft. So they put the best merchandise in plexiglass prisons and now you have to call a clerk to open the gate. However, having fired a ton of workers, there aren't enough people to open the plexiglass lids. I once waited five minutes. I had it. I charted it on my phone. I pressed the button. I, you know, did all that stuff to see that it was really five minutes before the call of management? Nothing happened. Five minutes waiting for shaving cream. Happily pushing some button while I stood by idly. I finally just left. It's a lesson in how to turn a Walgreens customer into well at you. How about an Amazon customer? Think about it. Your name is on Prime's subscriber. You get dressed in the morning for work. If you're running out of something instead of taking some time during the day, you go ring the buzzers and hope that some downtrodden Walgreens employees will be able to break away from what they were meaning to do and open your plastic doors, or you just wear them from Amazon. For the last few years, Amazon's been working endlessly to ensure same day delivery for the stuff. Look, do you really care? Let's tell you, if you can't forget the shaving cream at 10.30 a.m. at the office of 10.30 a.m. at your home, you're not going to shave the next morning anyway. You don't shave every day unless you're like Richard Nixon or something. The only difference is that Prime's cheaper. Oh, and it's not like he was the president of the United States. Oh, and it's not like they only have the basic and stripped down razors and spleads and shampoos and deodorants. Instead of the exotics, they're almost always under locky key. No, Amazon has more varieties than Walgreens. They have like 42 different old spices instead of just the usual like 17 old spices. They got every old spice. How many new old spices came out there? But you haven't come back to me. Look, Amazon's never set out to destroy borders. They didn't set out to destroy Walgreens either, but they do set out to get the best products with the best values at the most vegan places. Most vegan places, meaning your home. Walgreens can't afford to have the lowest prices and we never expected them to. Who would have thought their stores couldn't be less convenient than Amazon? It's just, but it's a wonder to be home. Now, let's throw in one more issue. Watching people right in front of you steal what you're actually paying for. Now, I've seen this happen in Walgreens all over the country. I've caught people, I've seen, I've seen people caught by police and then released on the spot. I was part of a San Francisco catcher release problem. I'm not a program. I'm not getting a police officer. He told me. He says, listen, before he first asked me if I'm an angler and then he said, listen, we do catch from release in San Francisco. See, here's an amazing thing. You have to pay when you shop at Amazon. It's a bummer. You know, you got to press that button. It says pay. I don't know. You pay. Sorry. Meanwhile, beyond the front of the store, Amazon is constantly trying to be your pharmacist. They offer a bunch of medicine. You know, you can go to Gopit-1. They got the Walgovey stuff. It's right there on the home page for heaven's sake. I think it'll be game over for the back of the store once we begin to speak to an AI version of our doctor pharmacist, which is, by the way, what they're working on. And that doctor is a lot more empathetic than your doctor. Trust me, especially if you're the village, what is it, the village DM? What is it? The, what did they call that? The city MD summit, whatever. And that's when the drugstore goes the way of them. Dodo bookstore. Here's the bottom line. The stock market can be a brutal, brutal, brutal cashman. So again, capitalist, I'm sure the Walgies will come up with some way to make money before its debt position wipes it out. But right now, my money's on the company with the stock that's on the all-time high list, not the one that's on the new low list. My money is on Amazon. I feel like taking calls. I feel like going to Betsy in California. Let's speak to Betsy. Betsy. Yeah. Hey, Kramer. I've got one that is on the low list, and I'm struggling with it because the PE is 8.9. The profit margin is 13.59. And the institutions are 75 or 77 percent in, depending on which chart you read. And yet, the raw materials are, are left halfway across the country. And you need to process the raw materials into Coke before you even can make the finished product. Kramer, tell me when can I invest in New Corps again? Because we always money good. I think, of course, the greatest manufacturer in America, I think the problem is that the estimates are going to prove to be too high because this is slowing. This is what the Fed's doing, and understand that we're not against the Fed because we don't want inflation. But New Corps right now is a casually, and once the Fed starts cutting, you're going to be in that stock. Maybe it takes some pain now, Betsy, and you'll get some gain later. And by the way, when she's speaking of Coke, she's not even speaking of an illegal one or a liquid one. She's speaking about actually something that's made in a steel mill. I had to qualify that because I don't want people to get the wrong opinion of anybody. All right, look, I'm sure Walgreens will find a way to make some money before its debt position wipes it out. But my money is on Amazon. It's the company that's hitting all-time highs rather than the ones that are hitting low. So I may have money tonight. My pride is simple. New fell out of early. It's not a favorite today because of the forecast. That's ridiculous. I think it's garden variety profit taken to Red Hot Stock. But maybe somebody else is there. Why don't we just talk to CO? Don't miss my exclusive. Then, is it time to raise a glass of warning after the stock hit a 52-week high? I'm giving my take in sharing if the glass remains half full on the story. And what should you make of air environment here after the stock's major post-earning slump? I'm getting the latest from the CEO. So stay with Cramer. Don't miss a second of Mad Money. Follow @ChimCramer on X. Have a question? Tweet Cramer. #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. When you're hiring, the best way to search for a candidate isn't to search at all. Don't search, match. 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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. AI might be the most important new computer technology ever. It's storming every industry and literally billions of dollars are being invested. So buckle up. The problem is that AI needs lots of speed and processing power. So how do you compete without cost spiraling out of control? It's time to upgrade to the next generation of the cloud, Oracle Cloud Infrastructure or OCI. OCI is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds, offers one consistent price instead of variable regional pricing, and of course, nobody does data better than Oracle. So now you can train your AI models at twice the speed and less than half the cost of other clouds. If you want to do more and spend less like Uber, 8x8, and Databricks Mosaic, take a free test drive of OCI at oracle.com/advanced. That's oracle.com/advanced, oracle.com/advanced. What that just happened to stock on Micron? Last night the commodity chip maker, I don't really know ever this list. I'm ever going to call a commodity, by the way, reported what I thought was a pretty darn impressive set of numbers. Yet the stock didn't get hurt with closed down 7%. Micron reported a monster 14 cent earnings beat off of 48 cent basis. It's earnings per share of 48% from just the previous quarter. Sales were up 81.5% gross margin of short. Sounds pretty good, right? I certainly thought so, and mostly, and I'll agree, but the stock got slammed anyway. So what gives? I saw people saying the problem was Micron sales guidance for the current quarter, which is merely in line with the consensus estimates, not dramatically above expectations. That strikes me as a very bad reason to dump this stock. Really, I think it was just that Micron was due, okay? It's up 67% for the year. It's doubled since a year ago. That's what I think is going on. Don't take it from me. Let's check in with Sanjay Marocha. He's the president CEO of Micron Technology, a better central quarter. Mr. Marocha, welcome back to Mad Money. James, great to be back on your show today. Oh, thank you, Sanjay. So let's just step back for a moment from the day-to-day trading. You have come up with some incredible chips. They're not commodity chips. They're incredibly proprietary, and you have a high bandwidth memory chip. This is probably going to be the star of the next maybe 10, 15 years for AI. You are not given to hyperbole. There are people who want you to be hyperbolic. Is it not true that these chips could be the high bandwidth memory used chips for many, many years because of AI? Absolutely. We are in the very early innings of AI here. High bandwidth memory last year was in single digit billions of revenue, low single digit billions of revenue in our industry. And as we look ahead, in 2025, the high bandwidth memory is going to grow to over $20 billion of revenue. And Micron, in the very first quarter in FQ3 that we just reported, we began shipping this product and already achieved 100 million of revenue. And we said in our fiscal 24, we will have several hundred millions of dollars of revenue, and growing into multiple billions of dollars of revenue in our next fiscal year, which will start in September. And this product is already a creative. And Jim, what is exciting is that this is a highly complex product. Micron has the best product in the industry, 30 percent lower power than any other product. And you know that in AI applications, data center applications, performance is important. And of course, we have better performance with our product as well. So this product is critical to AI applications, because this is what increases the pipe for the communication between the GPUs and the memory. And that's the data intensive workloads. That's very important. That's what enables ultimately AI applications. It enables generative AI. So yes, we are in the early innings. I think we have a long road ahead of exciting opportunities. This is HBM3E in 2026 time frame. There will be HBM4 and follow on generations of HBM4E. So exciting roadmap ahead. And we are very much focused on it and excited about the opportunities and Micron team is very much focused on execution here. Okay. Some people know the Micron, say from the 90s and the early part of this century, and then the last even 10 years, that is boom, buzz, boom, buzz. But the product you just described is not a commodity. It is a secular growth chip that people aren't used to seeing Micron do. And therefore, I think they don't understand that you are not going to sit here and say that it's going to be huge, although we don't know what's going to happen after. That's not the trajectory of this HBM. HBM enables tremendous opportunities for differentiation, enables opportunities for differentiation, the future generations of HBM that I mentioned, like HBM4, actually enable processor and memory to come together to even drive greater innovation, faster performance at the compute platforms at the accelerator levels in terms of interface with the GPUs. And important thing also is that HBM is the kind of memory that takes three times more silicon to produce the same number of bits. So as HBM grows in penetration in the DRAM market, and of course it will scale up as AI gets bigger, it actually is a headwind to the supply growth in the industry. So HBM is really a great margin accretive product for not only by itself, but it actually has an impact, the ripple impact on the pricing increases through the rest of the DRAM industry as well, because of this supply impact that it has. At the same time, this is a great product. An important thing, Jim, is that of course HBM is a great product for AI, but AI is permeating through edge devices as well. PCs and smartphones where micron is well positioned are also, you know, enabling AI, and they require more memory content in those devices as well. And this is why, Jim, we say that micron will be one of the biggest beneficiaries of growth enabled by AI in the semiconductor industry, because our exposure to AI growth goes from data center to edge devices such as smartphones and PCs and automobiles. So really, I don't think besides Nvidia, any other company has as large exposure to the AI growth as micron does in semiconductor industry. I want people to know your history. You came on, you told me back in literally a year ago, that look, inventors which had been very bloated, and I many, many times it said, please give me the go ahead, give me the go ahead, the inventory, he said no, Jim, the inventories are elevated last summer. You said that. That's when the stock was in the 60s. What, and that was money good, and everybody who listened, who I'm double, who listened to you. I am hearing you now saying, listen, and I know that these products are harder, so you don't get the yield immediately, that you are not saying that, look, we are in the six or eighth inning. You're saying we are early because this is a different kind of chip for micron. Absolutely, AI is in early innings, generative AI is in early innings, high bandwidth memory is absolutely in early innings, and it is really a generational product, totally transformative kind of product for our industry. But again, it's not just HBM, micron has products, high density dams, which will be $700 million in our second half of this fiscal year for us, as well as low-power DRAMs, which also go in data center servers. And of course, we have a strong portfolio of products that go into smartphones and PCs and automobiles, and of course, solid-state drives. Our enterprise, the SSD drives, actually hit a record for us in our FQ3 that we reported, again, driven by growth of AI. So we talked about it in our earnings call yesterday, Jim, that our data center revenue mix this year will be a record level, and it will grow from here on in fiscal year 2025 as well. So we are absolutely playing along the strategy that we defined a while ago to continue to shift the mix of our products toward higher margin solutions, and data center is an important piece of that. At the same time, I was trying to say, listen, kind of call an end of the PC cycle, and you said, no, no, no, and that too was dead right. But now with AI and the PC, I hear you saying that things could be quite good. Things have largely played out as we said before, Jim. We had said data center inventories will normalize by mid-summer. They have normalized, and you are seeing a strong buying pattern for memory in data center. We had also said some time ago that because of increasing prices of memory, as well as tightening supply that our customers were seeing with memory shifting more and more toward data center, and of course, their AI PCs and AI smartphones coming online in the second half of the decade, some customers in PC and smartphone markets built some inventory. But this is really to address their demands. And as we look at 2025, AI will drive growth in PC and smartphone as well. PC is going to have refresh when 2012, Windows 12, as well as expiration of Windows 10, and new AI PCs is going to drive a new replacement cycle. We are positive on PC and smartphone, and well positioned to address growth there as well. And I want people at home to understand he did not say that because he is hyperbolic. Sanjay, and he's right here, so I feel a little awkward saying it, behind his bag of your problem, is conservative. And that's one of the reasons why people sold down the stock. And don't ever hurt, say, I'm going to sell a stock because someone gave concern of guidance when they've been right about their guidance the whole way, in the sense that they did not put any hype into the numbers. Sanjay Marucha, thank you for coming on Mad Money. I think you're really told it's the way the way people should understand. Great to see you. Thank you, Jim. No hype, just great numbers. Mad Money's back in the morning. Coming up, in case of profits, great glass, a stock screen about a stock that helps make screens next. 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. AI might be the most important new computer technology ever. It's storming every industry, and literally billions of dollars are being invested. So buckle up. The problem is that AI needs lots of speed and processing power. So how do you compete without cost spiraling out of control? It's time to upgrade to the next generation of the cloud, Oracle Cloud Infrastructure, or OCI. OCI is a single platform for your infrastructure, database, application development, and AI needs. OCI has four to eight times the bandwidth of other clouds, offers one consistent price, instead of variable regional pricing, and of course, nobody does data better than Oracle. So now you can train your AI models at twice the speed and less than half the cost of other clouds. If you want to do more and spend less like Uber, 8x8, and Databricks Mosaic, take a free test drive of OCI at oracle.com/advanced. That's oracle.com/advanced. [Music] Look, I'm always watching the 52-week highlist searching for new ideas for the past few weeks. You know what? It's become impossible to ignore corning, which used to be an incredible performer many years ago, but it's been absent from the new highlist for ages. Corning makes specially engineered glass, ceramics, and plastic products. Think the glass used in fiber optics, so for flat panel displays, not to mention all sorts of car and truck components. This stock was a huge winner for the .com bus. In 2002, early 2021, it gradually worked its way higher. Again, though, in fits and spurts, it's been a hard stock to own. So the problem is, there was a ton of pull-forward demand in corny's end markets during the pandemic. Everything from electronics to autos to semiconductors to lab equipment. That pushed their earnings to record levels. They over-earned, though, because this is when we got over COVID, corny got hit with a serious slowdown, because we already had enough hardware and fiber off the infrastructure. We didn't anymore from corning, and that's why the stock fell 46% from its highs in 2021 to its lows last October. Now, for the last eight months, though, corny's really been on a roll. Now, first of all, it wasn't much to justify the rally. These guys reported a hideous quarter last October, and that had slightly better numbers, but still gave a weak outlook when they reported again. In January, and you can see, you know, look with the stock, okay? You get a good look at it. Finally, two months ago, we saw what the buyers were anticipating when corny reported a strong quarter in the stock jump 5% response. Since then, it's kept running, hitting $40 and change last Friday. It's highest level since early 2022, although after nasty pullback yesterday, it's back to $38 and change. So what's driving this unexpected comeback and, boy, is it ever unexpected? More importantly, you can corny keep running. Okay, let's start with the numbers they posted at the end of April. While this was by no means a blowout query, it was a solid set of numbers with management giving us an optimistic outlook for better days ahead. That's all they needed to do, given how awful the previous two quarters had been. When you look at corny's six individual segments in the four largest optical communications, display technologies, specialty materials, and environmental technologies all came in stronger than expected. Only the two smallest divisions came in a week. Most importantly, right at the beginning of the conference, while corny chairmen's here went a week, kicked through the high level financial highlights of the quarter, and then said the magic words. "We're seeing encouraging signs of improving market conditions. We continue to expect that the first quarter will be the low quarter for the year." End quote, things say no more. Corny believes that the first quarter will be the low and business will build from there. That claim got some extra credibility because management also offered better than expected core sales guidance for the current quarter, as well as in-line core earnings per share outlook. Now, the company's got a three-point framework for higher earnings. The first point being that sales have already bought, and I like that. Second, management plans to grow at sales by $3 billion in the next three years. That's a substantial sum for a company with 13, which is $3 billion in revenues last year. More on that later. The third and final step, corny's in an industry with high fixed costs and relatively low variable costs. They've got all these expensive factories that aren't running at full capacity. So, when they get a huge sales boost, most of that money flows right through to the bottom line. Corny actually introduced this three-step framework for higher earnings back in January, but nobody cared at the time because management also hit us with low-ball guidance for the next quarter. It was like the company was saying, "Look, the first quarter will be bad, and then it'll get better from their trust to us." Not many were willing to give them the better for the doubt until we saw the things we're playing out as predicted when they reported again at the end of April. Still, it's easy to say you can grow sales by $3 billion over the course of the next three years. It's much harder to deliver on that promise. Corny's got some exciting stuff planned, talking about 85-inch TVs, automotive glass that supports autonomous vehicles, products for solar, energy, and innovative pharmaceutical packaging. But there's one product category that's far and away the most important, and here it goes. Optical communications equipment, talking AI. See, alongside glass for various flat-screen displays, optical is Corny's largest segment. Unfortunately, it's also been one of the last parts of the business to find a bottom begin turning around. That's primarily because the top customers here and telco carriers, every years of investing to build up their 5G networks, many of these outfits have been dialing back their capital spending plans. That's done serious damage to Corny's optical business, which saw its sales shrink by 20 percent last year. Even in the first quarter of this year, optical sales were down 17 percent. However, I think this division is already turning. For Corny, their first quarter optical sales were up 3 percent from the previous quarter, and that 3 percent sales bump translated into a 14 percent increase in debt income. Remember, when the sales go up, the earnings explode here. On the latest conference call, management said that the process of telco customers were working through their inventory, and ordering new products was well underway. But I'm more interested in the new growth drivers for Corny's optical division. First, we've got federally-backed programs to expand broadband access for rural communities, including the $42.5 billion broadband equity access and deployment or Bead program. That's practically a subsidy for Corny's fiber business, and the money should start kicking in next year. Second and more important, and you know what? Else needs fiber off the equipment, data centers, especially the ones being used for artificial intelligence. These new data centers that are being built, being purpose built for AI require a ton of fiber, a lot more fiber in order to connect their NVIDIA chips into super powerful GPU clusters. Corny's going to win a ton of his business. Corny's also coming up with entirely new products for these modern AI data centers, including something called the rocket ribbon cable, which reduces cable diameter by 60%. That matters because smaller, denser cables are ideal for AI infrastructure. When you're dealing with tech, smaller is always better. Putting a lot of data in Corny increasingly feels like a stealth play on the hottest trend in the world, doesn't it? People have started to notice. Late last month, J.B. Morgan upgraded the stock to overweight, saying I'm going to quote your "cyclical and secular drivers in the primary business of display and optical are lining up favorably for the company and should position it well to leverage the up cycle in revenue." I could not agree more. Look at this, will you? While the stock's already up 53% from its October lows, it still sells for just over 20 times this year's early assessment and 17.5 times the extra short assessment. This is assuming the estimates are too low, frankly. Here's the bottom line of this, what I think is a very exciting story to me for the first time since 2000. In 1999, actually, if you believe in the turnaround here, then Corny's going to have a lot more room to run, and me will just call me a believer. Let's take some calls. Let's go to Trey in Texas Trey. Jim, I drive a Hertz for a living, and I can tell you there's one thing we last responder is no better than anyone else, and it's that life is short. Therefore, I must escape the rat race. Something about being a 45-year-old man asking permission to take a vacation doesn't sit right with me. You might need to retire early stock. I'm thinking it may be AI and cybersecurity champ data dog. What do you thought? Look, I hadn't think data dog is an incredibly good company. I wasn't totally enamored in the last quarter, but it's certainly better than some of the others like MongoDB. I'll do this. I will tell you that I don't think this data dog's going to be an Nvidia. I don't, but I do agree with you that I think it can trade higher, and it's a very well run company. I wish that I'll live be able to come on, because it's a great story. All right, look, if you believe in corny's turnaround plans, then the stock is going to have a lot more room run. It's a really accessible, good, great American company. Count me as a believer, much more made money at. Our environment stock is seeking on earnings, but could potential geopolitical threats make the company a compelling play? I'm going to talk to the CEO. Then should you really be selling me buys all the way down here at the list, they have some support. I have a message for the sellers in this legacy denim company, and oil calls rapid fire tonight's edition of the lightning round. So stay with Kramer. All right, look at this decline in air environment. The defense contractor best known for its high-tech drones, ground robots, all this stuff that represents the future of the way war fighters are going to do their job. Last time our environment reporter, a solid set of results, gave what people thought was muted guidance for the full year, and it crossed the stock. I mean, sending down more than 50% of its lows, although all the way it rebounded as people as cooler heads prevailed. How about that? Does it make sense to abandon this one after maybe a weaker forecast? I am a huge believer in this business and this company. Everybody who's watched the show for any long time knows that I like this thing way. I don't know. Maybe it's probably going up more than four times from when we first started talking about it. So let's take a close look right now with with Waihi Gawabi. And he is the chairman, president and CEO of Air Environment. Well, he's welcome back to May of Minds. Great to have you. Great to be with you, Jim. Okay, so we have, I'm proud to have been with you for a long time because we felt that you offered the alternative to these big heavy systems, which to me seemed very outmoded because you have to have ground war fighters be able to shoot and live and have people have it up in the sky. All that I've seen so far that I'm most proud of you about is this, well, there's been many things, but you were the first one in this replicated program, which to me is the Pentagon saying, listen, we're not tolerating these types of stuff anymore. We want precision and we want it done without a huge amount to the taxpayers. Tell us about the win. Jim, you called it right four or five years ago when our stock was in the 20s and 30s and where we are today, it's fantastic. And of course, we are just starting. The fundamental shift in warfare is that distributed, intelligent, robotic systems, loading munitions, small drones, that's what we specialize in is going to be a much bigger piece of the warfare in the future. Conflicts in Ukraine, conflicts in the Pacific, it's always with that. Replicator is the first initiative that the Department of Defense has taken up to the under secretary, deputy secretary of defense, Kathleen Hicks. Dr. Hicks has actually made it a mission to bring in these types of capabilities, to be able to deter China and also defeat our adversaries in that theater. And we were honored to be selected as the first awardee for the replicator program, the switchblade 600. And the Army said that they're going to buy over a thousand of those immediately on the first launch of the replicator initiative. And you're ready. Right. Now, people have to understand that you are early on, I know, because we met and we talked about agricultural drones because the government, frankly, the military was not as ahead as what you saw what happened. You predicted all this. Unfortunately, we have real wars going on, but you predicted that Taiwan would have to be protected. You predicted that Russia could be a problem. Now, Ukraine and Taiwan are gigantic markets for you. That's right. Absolutely. So, Ukraine today to date, we've delivered thousands of units of our robotic systems, nine of our different products, nine of them are in use in Ukraine. We are the workhorse of Ukraine as an air force. The Puma and Puma at least are flying all over. Almost every artillery that the USDUD is given to Ukraine has a Puma flying in front of it to try to find targets, assess the battle space, find targets and sweeten the targets for them so they're more effective. You know, having a Heimar even, fire without the knowledge and intelligence and surveillance of a Puma, it's less effective. But the Puma makes it a lot more effective. So, we want to increase the efficacy of these systems that we're providing to Ukraine. And Taiwan is going to be very similar. And we're the only company that I know of that can actually produce these things in thousands of units at the DOD quality and rigor today. And we should talk about that. There was, I remember when Ukraine, we're first talking about funding Ukraine. There were a lot of things, a lot of pictures about the javelin and the javelins, not yours. And when you looked into the javelin, it was very expensive. And it also seemed like you had to see the target, which therefore almost always means the target can see you, which means that the losses, the number of men and women who were killed is way too high. What's the difference between your, uncrewed and the javelin? So, our Switchblade 600 has essentially the same warhead as a javelin. It's an anti-main battle tank warhead that can go through any type of armored vehicle, including Russian tanks. Javelin is a line of sight. You have to physically be able to see the target, as you said, within two to four kilometers. That is a very close fight. It's way too risky for the warfighter to be that close. We do not want our men and women in uniform to be that close to the actual enemy. Our solution, Switchblade 600, can be shot from almost 90 kilometers away. Typically 40 plus kilometers. And once you get to the target, you could also loiter for about 40 more minutes to find the target. I know that's a very important term. It's a term of art in your business, but people might think just kind of hanging out. What does loiter mean? So loiter means that you have a very sophisticated gimbal or sensor in the front of the UAV or drone that actually looks in the landscape and finds the target. You're going to look around to see if I can find a Russian asset that's worth taking out a tank, a radar system, a compound, a forward operating base, a munition depot, et cetera, et cetera. Once you find it, then you designate the target to the Switchblade, and then the Switchblade then goes and actually hits the target as an explosive munition. And so that's when it actually achieves the lethality piece at the end game of the actual hitting. So once you get to the site, which is 40 kilometers plus away, then you have another 40 minutes to keep looking to find the right target you want to engage. And then you take it out. A lot of people say well, Rand's got these $500 things and they're every bit as good as what you're doing. Could you please explain to us what the bad guys have versus what we have? The best way to describe it is that American innovation, including ours, is by far the best in the world. There's nothing that our adversaries produce that is at the caliber that we make in the United States. This is a tremendous strategic advantage for the United States, and we need to keep that up. That's the reason why we invest 11 to 12 percent of our revenue in R&D. And this year we're going to set up with the root 20 percent. People don't like that you're spending so much on R&D. I do because we know men and women in our armed forces deserve it. Now let me ask you, there is a presidential election tonight. I understand from what the replicated program is, is the current administration is trying to say, you are the hope because you're not going to break the bank. Do you think either presidential candidate has a different view on drones on what you're doing? Not to my knowledge. Right now, both houses of Congress, both political parties are both the Pentagon leaders. Everyone actually believes in this future because it is the future of what's going to be a much, much more wars of drones. The Ukraine conflict proved it to us. You predicted it. You came on the show and I was saying, when are they going to start ordering? I actually talked about ordering myself and trying to set them over there. You told me you're not allowed to do that because you had them all the whole time. You said it and I couldn't believe that we were spending millions and millions and millions and getting almost no bang for the buck. But you've changed that. We have definitely changed that and we've actually proven it in real life when our systems arrived. And now they're very, very effective in the battlefield. They sure are. And the Ukrainians love them and it's actually doing a lot of good. And I hope you save Taiwan because we cannot put soldiers there for some reason but we can at least put drones there. We are ready to defend and provide these systems and tens of thousands. Perfect. That's what I wanted to hear. That's why you know I'll be chairman, president, CEO of Air Environment. I wish I'd been able to come on midday when the stock was down mechanically. That was ridiculous. Man, money's back after the break. Thank you. Thank you, Jim. Coming up, pop open those umbrellas and tee up your toughest questions. Kramer takes on all comers in the lightning round. Next. It is time for the lightning rounders over. Are you ready? Ski, daddy, come for the lightning round. I'm going to start with Brandon New Jersey, Brandon. New Jersey, Booyah, Jim. Right back at you, Garden Stater. What's happening? Hey, I was looking at a stock you mentioned a couple months ago. How in here? It's up 52% year to day and 20% month over month. At this point, is it too late to get in? Well, if they would tell you what they do, no. That would help. I mean, a lot of things I tried to look at. It's one thing behind giant black box. Everything consumer product goods come to me. So I'm going to have to say there's other people better to ask. Let's go to Brian and Nevada. Brian. Booyah, Jim. How you doing today? I'm doing well. How are you? I'm good. My question is about a stock I've been accumulating for over three years now. They have a top-notch leadership team, including a CEO that receives no pay or compensation. They're a stage for economic uncertainty and investment opportunities of over four billion cash on hand. What is your honest opinion on GameStop? Okay, GameStop raised enough money off the backs of the apes, the memes, the kitties, whatever, that they can reinvent the company. If they reinvent the company, then you're absolutely right. They have such a big war chest. They can just close all the bad GameStops. And you know what? They can open nationwide ice cream parlors. Ben in Jersey, Ben. Thanks for all you do and great club meeting today. I need to help you. Thank you. Recurge him. What do you think of the secondary offering? I didn't lie. The secondary offering. I thought the second derivative, price it at six and a half or they desperate. I've seen them on the show like that's an act of desperation. Don't do desperate things. Desperate things do desperate things to stock. I don't like desperation. Let's eliminate desperation. Let's go to Richard in Florida, Richard. Hey, Mr. Kramer. Thanks for taking my call. Of course. What's up? I just wanted to get your thoughts on Ion Q. Yes, you know, this is a copy that if we were actually to make money, I would start like you. Let's go to Ray and Marilyn Ray. Hey, Jim, how you doing? It's Ray from Baltimore. Hey, Ray, what's going on, Ben? What's happening? I wanted to call to say thank you so much for what you've done for me over the years. I really enjoy the show, but as much as I enjoy the show, I think I like your books even more. Oh, thank you. I might there might be another one in the works, but I don't want to jump the gun there. Let's take no prisoners. What do we have? My question is about Marvell. I've owned it for a couple of years and I've done well, but in the last few months, it's been, uh, it's been plateauing. Should I continue to hold? Yeah, look, Matt, Matt, Matt Murphy has a division that's unbelievable on another division. It's not the unbelievable division continues to be unbelievable, but not so might get better. So therefore, you should hold on to it. And that ladies and gentlemen, the conclusion of the lightning round is sponsored by Charles Schwab. Wait a minute, should you really be dumping the stock of Levi Strauss and company down more than 15% as it was today? Because the company failed to meet very high expectations when reported last night? I think not. Last night on this show, Michelle Goss, the CEO of Levi's delivered a quarter with light sales, but a huge early speed. It wasn't enough because Levi sells denim, and there's nothing hotter than denim right now. So people expected a sales blow out. Now, there's no denying that when a retailer doesn't blow out the sales, it won't necessarily be able to make it up on margins. Even if Levi's pulled up this time, but the stock really deserved to get whacked that badly. I look at these situations and I recognize that the quarter had real issues. If you have a Beyonce Levi's style, so on top of the hottest trend in apparel, this should have been Levi's moment. But the company's undergoing a difficult transition, trying to be more direct to consumer, unless wholesale, where they aren't in control of their own destiny. These transitions are never easy. And it's got this doctor's division that disappointed and hurt the quarter. But what happens after the direct to consumer pivot? What if they just decided to get rid of doctors the way they say that Ralph Lauren sold Club Monaco? What if the guidance, which hurt so badly turns out to be conservative? After all the company did raise this dividend by 8%, which is major sign of competence, I think all of these have come into play. Before you sell something based mostly on the forecast and the incredibly high estimates that were almost impossible to beat, you'll have to believe that nothing can go right going forward if you're going to sell Levi's down more than 15%. I think that's a sucker's bet, especially because this is the best denim cycle I have ever seen, and I have seen a bunch of it. Don't abandon the best of breeding this early stages of this kind of cycle. We often see stocks that should go higher on earnings, but they get ready in my management trying to be pruned. Sadly, Wall Street's rarely a big fan of prunes. For example, I think Sanjay Morocha, the CEO of Micron, whom you heard earlier today, he kept his guidance lower because it could be, well, I don't know, there's absolutely nothing in it for him to get old bull up about a given story. Anyone who's followed Sanjay knows that he's a cautious executive, he's not given to hyperbole. He did flag at the bottom last fall that him towards had gotten to lean. That was very good, but he didn't ring a bell saying it's time to buy. He didn't beat his chest and make a cold shot that this is the moment to mind my craft. It's almost as if Sellers wanted him to stake out an outrageous position for no reason, other than to help get traders out of it stock at higher prices. Sanjay's not trying to appease or make money for traders. He's running a business. Look, I know people take guidance as gospel. That's why both stocks got whacked, but every time I see this kind of sell-off of guidance, I hark back to another time of man money when I was interviewing the legendary Frank Sleubman, an amazing business person who was known for crushing the numbers. At that point, he was at snowflake. He had just delivered still one more terrific quarter, but he gave us guidance below expectations that did send the stock cascading lower in after hours trading and was shortly before I started interviewing. I promise my question by saying I had to get it the big decline in the stock triggered by a very soft forecast because that was indeed the skunk at the garden party. He gave me an answer I'll never forget. He said, "Jim, the guidance is the guidance." In other words, he had to pick some number, so he did it wasn't enough. So what? It didn't matter. He didn't want me to take it. Me or anyone else did take the stupid numbers seriously. So my message to you Sellers is simple. If you're dumping these stocks because of what's happened next based on management's comments about the future, let me just say something you should never forget. The guidance is the guidance. I like to say, there's always a more market somewhere. I promise I'll find it just for you right here. My buddy, I'm Jim Kramer. See you tomorrow. Let's 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. 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