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 5/10/24
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There's always a more market somewhere, and I promise to help you find it. Mad money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer America. I'll give my friends just trying to make a little money. My job not to entertain, but to educate, teach you. So call me at 1-800-743-CBC or tweet me to Kramer. Finally, finally, we've got a market that's confusing the heck out of the bears. We can still get an A-straight update for the Dow, getting to 125 points. S would be advanced 0.16 percent. Even the NASDAQ. Okay, it did 0.03 percent. And this stream's confounding a lot of people who don't understand that what certain public figures say is not necessarily what they mean. It's as though the whole thing's choreographed, like a Netflix series. It's probably rated number eight on the new release page. Although as exciting as this market strength is to me, I admit it's a baby ranger or a man in full. Oh, actually, the latter's not so good. So maybe our drama, it's a better watch. Let me go directly to the game plan, so you know exactly why I say it's a Netflix drama, because I really got to get you involved with what's in my head right now, because I'm really kind of tired of hearing things and not being able to interpret them to you. For instance, on Monday, Loretta Mester, the president of the Cleveland Fed, speaks at 9 a.m. It'll be well covered, of course. She's both a hawk and a bear. Been one forever. Her talk with Philip Jefferson, the level-headed vice chairman of the Fed's Board of Governors, will give Mester a chance to articulate the most negative view imaginable. I predict it'll cause a sell-off, because there isn't much else happening here. And you'll hear endless commentary and news clips about how the Fed's never going to cut rates. She's pretty naturally negative. I wouldn't be surprised if she talks about the need to raise rates. That kind of chatter causes people to dump stocks and sends buying yields higher. I know it makes it so that everything's very unsteady. And that, in turn, keeps people off base. Not unlike what Neil Cash carried, the Minneapolis Fed president, who's bearish today and made people feel gloomier and more circumstance, did. I mean, this is the game. Or this is the drama, I should say. See, the sellers are allegedly fretting about the Fed's so-called timeline. What will be one cut? No cut, two cut. These Fed heads make you feel like we are never going to cut rates. So the audience each time is stunned. But the real story is that the loudmouth Fed officials make everyone confused, cautious, worried, and at times just plain scared, which by itself causes the economy to slow down. That's the goal. See, the slowdown then becomes self-fulfilling, causing a rollback and prices everywhere. Hey, maybe you're from Home Depot, which reports next week to McDonald's, where we're hearing about a talk about a fabulous, cheaper rollback hamburger. See, the more these Fed officials entertain us with their hawkish commentary, as long as they keep us on the edge over their seats, well, the more likely it is that the Fed can cut rates and they're not too distant future. The twist of the drama is that the more we hear from these hawkish officials, the worse the economy gets. And eventually, we all win, because the Fed needs a soft economy before it can cut. The old days, they used to go before the Netflix, they used to go at jaw burning. It's okay, but don't be fooled. Maybe we're in the prequel right now. Maybe that's what's happening with eight straight updates for the Dow. These Fed officials either know the data's been working for a month now, the so-called "brown shoots" that I talk about, and they wanted to get even weaker, or they haven't been paying attention, still believe the economy's going strong. Sadly, some of these officials don't do a lot of homework. Maybe they don't have the staff. I don't know, maybe they're too theoretical. Maybe they lack context and contacts. Or I know, thank heavens, is that the Chairman Jay Palace is the opposite. He's not part of the drama. He's the real deal, not fictional. Thank heavens, and he does do his job. But no matter what, the Loretta Masters need to keep up the good, scary, frightening work. Even though I think she's wrong, dead wrong, her comments alone do help fight inflation by fighting the heck out of business, which is always worried it'll be caught with too much inventory and not enough buyers. Hey, Speaker the Devil, Home Depot reports on Tuesday. And I really hope that they announce some rollbacks. Home Depot needs to play the role that we really want them to do for the American consumer. It needs to use its marketing power. It's store-powered and tell suppliers enough already. If you want to sell into our stores, you cut prices. And tell us who's doing that so we can go buy their stuff. If the Despot did that instead of just talking about the $18 billion acquisition of SRS distribution, which I think they paid a fortune for, that's a builder's first-source competitor. You know we like builders first-source. They'd make headlines to potentially do more business because American people want champions in the fight against inflation, more than anything else right now. Or if you're more of a glass half-empty guy, Americans have gotten cheaper. So we'll bring our business anywhere we can get a bargain. Alibaba also reports Tuesday. And we'll be watching because the People's Republic of China needs to show that as an internal combustion engine, rather than just a whole economy built around exports. Like its cheap electric vehicles that are destroying nascent domestic EVs around the globe. Alibaba's a tremendous internet company. It really felt my favorite, by the way, Chinese company there is. With the exception of maybe Zika, Z-E-K-E-K-R. That's a Chinese electric vehicle company that came public today and has some incredible course in trucks. Alibaba has a great number. I expect it'll be greeted with a lot of talk about how it's finally okay to buy Chinese stocks because analysts can't resist doing that and they want the business. After the close, we hear from a company called NextTracker. We've had them on. It's a very cool solar technology company. It makes solar power more of an all-day, all-year business. If we could put up a good number here, we're counting on CEO Dan Schug, Schugard, and the delivery. You know why? Because Schug is the delivery man. As you know, as you need to know Wednesday, I mean oil, you need to know right here 8.30, CPI. Now, we often hear at the fetch preferred inflation gains, just the personal consumption expenditures. They call it the PCA, you know. But the CPI is the most visible reading. And we've had three hot ones in a row, which did a lot of damage to the market. Rent's been bad, insurance's been bad. Auto's not so great. This time, I think we're going to get a weaker CPI number. Now, here's where the Netflix drama comes in again, because the Fed heads are pretty much universal and stated worries about this particular number. They think this is going to come in hot. I think a weaker CPI will make skeptics understand why the market's been going higher for the last couple of weeks. And that should lead to a burst higher at the opening. Then the market we really overbought and then we'll probably go down. That's why it's been so great going in. Once we get the number about why it's been going in, there is a sell-off. Now, after the close Wednesday, not bad, don't worry. After those Wednesday, Cisco reports. And that's the CSCO kind. And it'll be awkward if they can't give us a positive forecast, because they can talk about the momentum of Splunk. That's a data mining company that we like so much that it just acquired. I hope CEO Chuck Robbins talks up his relationship with NVIDIA. And even though NVIDIA is a competing product, it's still partners with Cisco. Hey, did you see the University net? How cool that was today? Totally, that was a good one. Now, we talked with him yesterday, if you missed the show. Now, if you want to know who could blow up its stock by calling for national, every aisle rollbacks in price. Well, it's one of my long-term favorites. It's Walmart. Now, Walmart reports on Thursday. And honestly, I wouldn't put it past me to do exactly what I said. Now, I love these guys. Planning to go to this weekend to Walmart with my kids, because it's so darn fun. We go to a different one each time. Can you believe that we actually do this? And Walmart can already take credit for having lower prices. Remember my thesis, the Netflix drama gets resolved by the Fed Chief, ultimately needing to cut rates and being able to do it with credibility because of outfits like Walmart making it for a deflationary environment. Next, deer stock is up and its stock looks cheap. But I just don't know if it matters. Given the fact that buyers can't resist owning an industrial with a good brand name, I know it's counterintuitive. But that's what happens when we're at this stage in the business cycle, the stage where you know anything machinery is about to run. I don't want to be in formal equipment, though. Remember, we spoke with the CEO of Agco, a competitor, and he made me feel crazy about the whole group. I'm probably in the minority here, though. Now, finally, Applied Materials, the semiconductor capital equipment company reports you after the close Thursday. This morning, Taiwan Semic, that's the gigantic outsource chip maker that's based in Taiwan, had some very good things to say. So Applied Materials, which makes machinery that goes into Taiwan Semic, could have a whiz bang of a quarter. No wonder the stock, which is terrific, gained $3.40 a day. The company's solid. The sector's great. You could do a lot worse than owning a stock like AIMAT. Now, we also have two incredibly important analyst meetings, thrown by Dow and Cracker Ball. And I think Dow's doing extraordinary shit. Stock this week with the running has still got a good yield. They're doing extraordinarily well, considering the weakness in the material stocks and in some of their grades of plastic. The combination of dividend and the capital appreciation stream is hard to be. But speaking of dividends, we're going to be watching the stock of Cracker Ball to see if it cuts its very large payout. If it does, I know again, counterintuitive. But you should buy the stock because that dividend cut is widely expected to happen. Friday, you know what? We have very little market news. Unless somehow you think that my daughter Emma's 30th birthday is a factor. I know it'll be for me. But the bottom line, maybe we can see the end of the Netflix dramas becomes obvious that there are more brown-shoots than breaches in the economy. And sooner or later, the Fed's next move will be new cut rates. Seeing the movie is a good one. Let's go to George Imazori, George. Jim, you featured the stocks over months ago, and I bought a substantial number of shares. But the price of the stock has been basically flat. What is your prognosis for Honeywell? I'm so glad you asked me. See the stock went over 200. I was so glad. This is a very big stock for my travel trust. And candidly, I've been very disappointed like you. I think they have a lot of things. I was hoping they would do an RTX way that they broke into Otis. Remember that? And carrier? Or maybe they could at least do on the GE-GER space, GE, healthcare, GE, vernova. So far, they've kept the model intact, and it's not working. I'm with you. They need to take action and take action now. Bob and Connecticut, Bob. Hey, Booyah Kramer. Booyah, Bob. Thank you for what you do, Kramer. Oh, thank you. My question is about Morgan's family. I've owned it for several years. But my position has recently been called away. I want to ask you, should I wait for a pullback and repurchase Morgan's family? Or should I look elsewhere in the financial sector for a different dividend-paying stock? Let me put a little spin on it so that we can answer your question in an effective way. Jeff Marks and I talked about whether we should be selling the stock here. I said maybe we should let some more go. He said, Jim, it yields 3.5% and it's going higher. Let's do this. Let's put the difference. It's at 98. If the stock goes to 95, then I want you to... But otherwise, right here, don't lie. Don't lie. Fair enough. As it becomes clear that there are more brown shoots than green shoots in this economy, sooner or later, the Fed's next move will be to do some cutting. And they're setting us up for it. Made my thing. You put CRH on our radar and we were intrigued by the name. So after giving it our blessing a few months ago, the stock has climbed over 40%. I'm hearing what's working for the building materials coming my students with the CEO. Very exciting. Then it's tough to believe people in this market, but I'm sharing the areas where I am seeing real strength and helping you stay focused so you don't miss out on an opportunity. And recursion pharmaceuticals has caught the eye of NVIDIA. You're buying SoundHound. Forget about it. Buy this $150 million investment by the king of AI himself. And I'm learning how pharmaceutical research is being aided by our official intelligence. Why sit down with the company's top-rests of it? It's a very speculative company. 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. Take your business further with the smart and flexible American Express Business Gold Card. It's packed with benefits to help unlock more value from your business purchases. That's the powerful backing of American Express. Learn more at americanexpress.com/businessgoldcard. Fact, running a business is not getting easier on your wallet. With higher expenses on materials, employees, distribution, and borrowing, everything costs more. 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A little over six months ago, we were in a homework segment on CRH. That's an Irish domiciled building materials company and everything in a close look. I told you it was at least as good as Martin Mariette or Vocal Materials. We've been recommending those for years. Those are the go-to names in the industry in our country. Arguably, I said maybe it's the best of the three. Fast forward today and I'm glad I got that question because, wow, CRH is sort of 47 percent, trououncing Martin Mariette up 38 and Vocal up 31. And that move includes a 4.3 percent pop today after CRH reported a strong quarter last night. And by the way, I mean last night because it was in the middle of the night. Well, this is easily the least significant quarter for these guys. They make that clear a couple of times. They beat on nearly every major line item, which makes for encouraging start to the year. So let's take a closer look with Albert Manifold. He's the CEO of CRH. Find out more about the quarter and where's Business Lieutenant Mr. Manifold. Welcome to Man Money. Hey, good to be here, Jim. Let's talk to this morning. Ah, we like to tell you. I got it pretty early to see how your quarter was because I was afraid it was going to be a good one. I always liked to have good news on the show and it sure was. And I also learned, just so people know, you're a lot bigger than the ones we've been following and how, aren't you? Look, Jim, but we are the largest building material business in the United States, in fact, with the largest building materials business in the world. And in fact, if you look at our US business alone, it's actually bigger than the next four of our competitors added together. So we like our peers. We manufacture cement and we manufacture aggregate. We're very different. We convert those basic materials into end-to-end solutions for our customers. And we're here today in the United States, faced with the largest period of growth ahead of us that we've seen for many generations, backed by significant development funding for infrastructure spend. We're off the back of 11 consecutive years of revenue growth and profit growth and margin improvement. We've had a strong start in 2024. Our first quarter is ahead of what we expected to be and that's continuing ahead into the second quarter. That's looking for a good first half of the year. And all I'm told, I think this will be another record year for the series in 2024. Well, I think it's really incredible. Look, we're Americans and we don't do enough. I'm not that we're xenophobes and believe in ourselves over others. But I had no idea how well Europe is doing too. I mean, I know we're bigger, but that's a pretty good book. The business you got over there. Yeah, look, we're the largest building materials business in Europe. The backbone of our business is actually essential and needs to European business, which is very much like Texas and Florida. High-growth high investment backed by a significant European funding for the infrastructure. And also we're seeing, as in the United States, the reshoring and ensuring of critical manufacturing backed into central recent year, that's the backbone of our business year. So that's going very well as well. Well, I also miss not to talk about your the business that would be regarded as utility capital spending, which is just on fire. You know, the utility index has been the strongest index in the last month. I think that they must be doing a lot of business with you. Well, it has again supported by government subsidized spending. We've seen the IR Act, AI Act, chips and science act funding exactly in about power generation, the critical transportation of fighting utilities and water, which is a very, very big business for us. I mean, a lot of the problems we have here in the US are we've got too much water in some parts of the US and not enough parts of the other parts. And what we need to do is we need to carefully and safely sequester the water where there's too much water and transport it safely away from the communities and try and challenge those areas to the leaders. And that's a big part of our program for the next decade ahead. Now, normally, I would think that that would trade with, say, residential, but they're very different. And residential could be slower, obviously, but it's actually, you know, not as horrible as I thought, given the fact that interest rates in our country are pretty high, and interest rates over there are still high. And although they may, they've indicated they're going to cut them in UK. Yeah, look, I mean, residential has been in a very challenged position because of interest rates for a number of years now. We're probably going to build about 1.4 million homes here in the US this year. But that's probably three or 400,000 below the ongoing need. And remember, we have a deficit of about five to five and a half million homes as it is. So as soon as interest rates reduced, we expect to see residential recovered quite strong. In fact, in some parts of Europe, as you rightly say, interest rates are are soften quicker than the heart of the United States, particularly in the non-Euro zone in Eastern Europe. And we're starting to see residential perform very well there. So we're hopeful for that later this year or early next year. Now, a lot of us are concerned that we may have already spent a lot of the money for, say, the IRA. I always hate to call it the inflation reduction now because it's actually somewhat inflationary. But are we still in early innings for the rebuild or has the money started to trickle out? We are just getting to the end of the beginning. Really? I mean, what you're seeing here is the biggest investment program in America's infrastructure that we're seeing since the new deal in the 30s. It's very positive for the US economy because you're building out the super structure of the economy, which is the basis for economic growth. And on top of that, we're seeing the onshoring and reshoring of critical manufacturing back to the US, which has been helped by funding by the US government. And you're bringing back to the US, high tech manufacturing in the area, chip manufacturing, bioscience, life science, pharmaceuticals. And all of this is building back the industrial base of the United States. So when you put those two together, this is a really very progressive program of investment for the next decade that will build the US economy for decades and beyond. Now, I want to make clear to people, you are not just a rock company. You do far more than that. You have a lot more intellectual firepower and property. So why don't you explain the difference between a company that's just trying to get the rocks to the driveways and to the roads and to the bridges versus you guys and what you do? You're absolutely right. We don't just provide rocks or cement. We provide end-to-end citizens. So let me explain how that works in reality. So a big major part of what we do is roll building with the largest road builder in the United States, with the largest road builder in the world. So what our competitors do is they supply millions of tons of rock and dumping into the construction yard of our customers. Now, we do that too. But we also take that rock and we code with expensive fishermen and we make asphalt. We then pave the roads with that asphalt. We maintain the roads and we provide the clovers, the off-ramps, the on-ramps, and the bridge components for that. So we don't just make one sale. We have six sales. We don't provide rock. We provide roads. And that's why we're the biggest. That's where the highest profitability, the best returns, and the highest cash generation for our business. It's a different business model, but it's a better business model because we create a higher cash and higher returns. Well, sir, I got to ask you, how do you find workers? Because everyone tells me that the workers who would do your kind of business are in very short supply. Well, actually, our business is actually about manufacturing products off-site and actually bringing them to the construction sites. So they will deal with the fact that it's difficult to have workers. We build modular components that where contracting companies actually pop them together rather than building them on-site. It's the future of construction because construction is changing. We need to build quicker, cheaper, faster, more as a unit, and with less labor. And M2N solutions, customers like ourselves are the ones who will do that. And we do, in doing that, we have higher levels of profits. Better returns, higher margins, and crucially, more cash. We would have a treasure talk about 35 billion dollars of cash over the next five years. This year alone, we're investing about 5 billion dollars growing our businesses through M&A and actually capital expenditure. And we will return another 3 billion dollars back to our shareholders. That gives us a fantastic paradise for our business, not to know just not the organic business, but also to an organic world as well. Well, I bet you're also bargain for us, for the American people. Because when we do it the other way, where nobody makes any money, it tends to be real bad for us, the taxpayer. I want to thank Albert Manifold, CEO of CRH Industrial. You obviously just heard, this guy's the biggest, okay? And if you believe in infrastructure, this is Mr. Infrastructure. Thank you so much for coming home, man, money. Sorry, it's so late there. Thanks for staying up. You got a chance. You got a chance. All right, man, money's back after the break. Coming up from arms sale to salads, this market tied some investors in knots. Kramer has a cure for the overthinking blues. Next. When you're hiring, the best way to search for a candidate isn't to search at all. Don't search, match. With Indeed, Indeed is your matching and hiring platform with over 350 million global monthly visitors, according to Indeed data, and a matching engine that helps you find quality candidates fast. Use Indeed for scheduling, screening, and messaging to connect with candidates faster. Plus, 93% of employers agree Indeed delivers the highest quality matches compared to other job sites, according to a recent Indeed survey, leveraging over 140 million qualifications and preferences every day. Indeed's matching engine is constantly learning from your preferences. Join more than three and a half million businesses worldwide that use Indeed. listeners of this show will get a $75 sponsor job credit to get your jobs more visibility at indeed.com/madmoney. 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. Boy, it's tough to find people who believe in this market, even though it's had a major term for the better. This is a bull market like no other, and it's timing both young and old. What's throwing people off other than the utilities? The strength is uniform. You say it has its own winners. They tend not to have any pin action. But they can make you bull. Bullload of money if you've got it. Plus, so many stocks that people give up on in the income roaring back just a few days later. Take yesterday, just yesterday. On Squawk on the street, we had the CEO of Arm Holings, Renee Haas, a semiconductor architecture company that's a key partner for the video. This company reported a quarter that was wildly panned because even though it delivered mostly terrific numbers, there was one disappointing line item. It was for chips for the Internet of Things, IoT. Arm stock was there about 106 when it reported it for the closed Wednesday night. Then it collapsed the high 90s shortly after the open yesterday. Gloom had totally come off the rose. Then we had interviewed Haas. He explained how the Internet of Things was weak, but he put it in perspective. Talking about how good 20,000, 20,000, 26,000, 27 will be. Wait a second. That was terrific. The stock came off its lows and ended up down just a couple of bucks yesterday before roaring back today. Now it is actually up a few bucks since the quarter. That's what happens in a bull market, people. You buy the sell off. You don't sell it. And you know what, you make some real good money at the sell of sneezer. Today it's sweet green. The salad chain had been treading water for a long time with so-so same-door sales. Then these street guys from Georgetown reported a great quarter with beautiful 5% of same-door sales growth. And it drew a forecast. So what happens? The stock jumps 34% like a paint over beer. The neutral position there made the move a lot more explosive. Sweet green joins Texas. Well, it adds some breakers, restaurants, stocks at this quarter that were rewarded with reevaluations. It also couldn't now falls right in line with Kava, a huge winner, and Chipotle, one of my absolute favorites. We do have a tendency to forget the paint and embrace the game very quickly. The house of pain implodes on its quarter, falling 10%. Next, you know, it's coming right back. Lindy, symbol L.I.N. falls almost 23 points on what I thought was a decent call for the industrial gas company. And then boom, ever since its stock just keeps plowing higher and higher. I know it's Chapel Trust names and you can say, hey, I'm talking to my book. But we wouldn't know any for the Chapel Trust if we didn't even go higher. This market's gotten so good that sometimes things go up for seemingly no reason. Okay, Goldman Sachs, Wells Fargo, and JP Morgan. They just won't quip. It's not a lot of underwriting for M&A. That's about the cut rates. If I should get any better, are they simply rising as people stop trying to fight the tape and simply go with it? Unless you are a theoretical gas bag. It really doesn't matter, doesn't it? Other companies put up decent numbers and it's enough to propel their stocks much higher. Costco has broken down to around 700. Next, you know, boom, 787, blink of an eye. How about these industrials? Consider the wealth that's been created quietly, with the merger and breakup of the United Technologies and all the old Raytheon. You have Otis and Carrier and the new Raytheon putting up extraordinary sales earnings, forecast and stocks. Same with GE, breaking into GE, healthcare, GE, Vernova, and GE Aerospace is quite rich. Finally, there's TAC, especially the semis. They bump along as leaders. Then they fail and then something happens. People talk about selling them. They're so proud. And then, this time, for instance, we got orders from Taiwan, semia, do monthly orders, the fab to the world, suddenly the whole semiconductor cohort blasts off with no qualms, as if there was never anything wrong and all those sellers look like idiots. Yep, this is the kind of bull market behavior we haven't seen in ages. People don't know what to make of it. I do. When you get a bull market like this and it is very rare, the most despised in yours, I can tell you what to do. You ride it for all that it's worth. Today, one of the creators of about 90% of the chips in the world helps manufacture putting video, Apple, and more. Today, we're going to jump in sales from previous April, 2023, 60%. I want to talk about PSN. And I want to talk about, because when I went over those numbers, I was just down, you don't get a link month that's powerful unless you got big orders from NVIDIA and AMD. They have the orders, they have the fabs, they make the chips the cheapest and the best. Very good call. Let's go to Sandy in Colorado, Sandy. Hi, Jim. This is Sandy from Colorado. It is graduation season out here. And I hope all graduations go off as planned for the for the proud parents who have every right to be proud. How can I help? Absolutely. My daughters graduating from high school going to college. So of course, we're thinking about dorms decorating. So I want to get your thoughts on Wayfair. Look, I think Wayfair is exactly the way you decorated dorm. It's just, look, the stuff is good. We actually buy a lot of it, because you know what? I mean, what the heck? I like a bargain like everybody else. I think Wayfair is terrific. Let's go to Bob. Oh, no, we have to wrap things off. But you know what, there's all the next seven years and that letting gentlemen's inclusion of a piece that I didn't count on, not for lighting around. This is the kind of bull market behavior we haven't seen in the ages. My advice, ride it for all it's worth. Much more mad money ahead in video's Jensen Wong. We said if I were to start from nothing, I would do it the way recursion does. So off we got to talk to these AI-enabled pharmaceutical companies that is disrupting the space without the CEO. And as I just said, it's tough to find believers in the market. But look at what you're missing. I'm helping pay America's tape focus and continue to win in this tape when we play "Am I Diversified?" And yes, of course, I'm going to throw in a lighting round, because why not? I've done 4,000 of them. Stay with Kramer. We all know artificial intelligence can and will eventually change the world. But there are some industries where it's already made a huge impact, but you might not know it. Like biotech, which brings me to recursion pharmaceuticals. That is a small clinical stage biotech company with an AI-fueled tech platform that uses sophisticated machine learning algorithms to help them with new drug discovery and speed it up. It doesn't hurt to recursion as the most powerful supercomputer in all of bio pharma as well as a partnership with NVIDIA. It included a $50 million investment from the leading AI technology company last summer. NVIDIA is now helping them develop a second, even more powerful supercomputer. Of course, look, it's early stage, okay, so we always got to be careful. Their most advanced drug candidates are only in Phase 2 trials. Remember, we got to get through Phase 3 to make it all work. I'm going to again say it's speculative, but I like this story. I think it's a great story. Why don't they show us the future of the industry? Do not take it from me. Let's take them with Chris Gibson. He's the co-founder and CEO of Recursion Pharmaceuticals who learn more about what they're doing. Dr. Gibson, welcome to me Abani. Thank you so much for having us. Thanks, Jim. Okay, so when I spent time out there, GDC with our crew, we spoke to Jensen extensively and he brought you up many times. One of the things he did say was, "If I were to start from nothing, I would do it the way recursion does it." What does that mean? Well, you know, today, 90 percent of drugs that go into clinical trials fail. And the reason is because biology is so complex. And so what we've built is an unbiased platform. No, no, no, explain that. People are going to say, why is that biased against certain people raised to whatever? No, no, no, no, no. We want to make sure that we are letting the data drive our decisions as opposed to us making the decisions. So we've got a room just like this, just like this trading floor full of robots that are doing the equivalent of my PhD every 15 minutes, generating petabytes of data. And then we're using ML and AI tools to look through all of that data to find new relationships across biology and chemistry that we can try and turn into medicines, especially for diseases that nobody else is working on. Okay, so are there some diseases that might, if you use the old way, might take 20 years of your life? And instead, you might be able to do in, say, 20 months? Maybe, I think with clinical trials, there's still going to be a few years to get through the clinical trial space. But to find the drug and get it into the clinic, I think we can shorten that from five or six years and hundreds of millions of dollars into perhaps one or two years and just 10 or 20 million dollars. That's great because drug companies have stopped taking on hard missions because they know that 90% failure and they don't want to lose money. So they don't take on the things that you and I both know have to be solved for families that just have a terrible situation. Why don't you give us one or two of the things that you're tackling that no one else was willing to go to because it's too expensive and too much failure? I'll give you two. Okay. So one is we're going after a rare disease called cerebral cavernous malformation, which you probably haven't heard of. No. This disease affects six times as many people in the United States as cystic fibrosis. But nobody understands how the disease really works. And so until we took this approach to use this automated platform with ML and AI, nobody really had an idea of how to make a drug. And now we've got a drug that's almost done with its phase two trial. We'll be reading it out next quarter, which is an exciting catalyst. Wow. And this is this is the opportunity of the kind of approach. We look like what we think the bio pharma industry is going to look like in five or ten years. And what's the other drug? You mentioned you talked to. So another one is we we're working with Roche Genentech, one of the largest companies in the space. The fabulous company. We know that they have a good relationship. They're fantastic. And we're going after all of neuroscience for a decade and one oncology indication. And in just 18 months from starting that partnership, we already found an exciting new opportunity in oncology. And I can't tell you a lot more about it. But it's a new exciting potential drug that we're driving forward with our partners at Roche Genentech. Now neuroscience people have to understand because they've done some work in the area. Almost every drug company has given up. They just just gave up because they don't understand the brain because it's too hard. It's so hard. It's absolute. I mean, it's littered with failures. But that's why we think this new approach of using technology to map biology. I mean, think of it as like Google Street View driving around taking pictures of everything. We have microscopes taking tens of millions of pictures of cells every week. And we're using a lot of the same AI algorithms to turn those images into mathematical representations of biology that we think could unlock some really exciting secrets. Okay. Now let me ask you some of my today. That sounds all well and good. But do they understand that it's not just about research? They got to produce something and make some money. About what? About 300 million in the bank? It just stuff costs a lot of money. What are you going to do? Well, that's exactly right. And so we have a whole bunch of partnerships that have the potential to bring us non-dilutive milestones, options, royalties. We think that's going to significantly defer some of our cash outlay. And then we also have the potential for new partnerships. We are talking to lots of companies and we think in the near term we could announce some new partnerships that will further extend that right away. These are great ways not only for us to subsidize our own platform that we're building, but for our team to learn from some of the best folks in the industry. Okay. Now let me just just shot in the dark here. But this Jensen ever come by? Well, Jensen is incredible. We got to spend time with him at a big health care conference, JP Morgan in January. He'd co-hosted an event with us. And our chairman was on stage with him for 45 minutes talking about biology. And what I found fascinating, Jim, Jensen was more fluent in biology than really any biopharma CEO is fluent in technology. And don't underestimate that guy, right? No, never. Oh, no. A lot of people have lost some money underestimating that man. Now, how about you? Do you want this to be a major pharmaceutical company or do you want to be a major research company that works with pharmaceutical companies? You know, we wanted to be a major research company when we started. Okay. But I'll tell you, one of our pivots have been that it feels like the industry is still moving pretty slowly. And there's more and more opportunity for us to verticalize. And so unless the industry starts picking up its pace, you could see us start to become a more fully integrated biopharma company over the next decade. Well, I'll tell you, I'm listening to you and I'm thinking younger people, like your kids or your younger people need to own a stock like this, because this is a long-term fantastic idea that could revolutionize the whole industry. We're in this for our career, the next 10 or 20 years, we're going to be building this. Well, I believe you are. That's Dr. Chris Gibson. He's the co-founder and CEO of Recursion Pharma. Now, the symbol is RX, RX. I'm going to say it one more time. It is speculative. None of us would disagree, but that doesn't mean it can't be owned. Everybody's back. When we return, master the markets, one stock at a time. The lightning round is up next. It is time for the lightning round is over. Are you ready, skid, day, day, time for the light round. How's it going? It's going well. How about you? Doing well, doing well. Thank you. I've been a long time viewer for the same color. Thank you. I'd like your take on biogen. Yeah, I'm not really impressed with what they're doing. I can't believe the dementia. I thought was going to be much better at the dementia drug. I will point this out. It's really important. I think you are always going to crush them in this business, and I'd rather see you in that one. Let's go to Joe in Marlon Joe. Hey, Jim, how are you doing today? I am doing well. How about you? I got fed for an old timer. There you go. I'm going to tell you what I just bought into a defense company all long ago, and I do value your opinion, and I'd like to know if you think I ought to buy more, or just hold on to what I got, and that company would be Kratos. Kratos, we recommended that like repeatedly when I was at 12, and it did nothing for so long, I am glad it finally moved, but let's keep it the size that you have it, because that's had a very, very nice movement. I don't want to come in on top of it. Let's go to Matt New York, Matt. Hey, Jim, big boy off from upstate New York. All right, could you have been on the show? I'm going to help. We're calling out to get your thoughts on a memory storage solution company that's coming to upstate New York. The company name is Micron. Okay, I like Micron, and I like Sanjay Baroque trip. What's this stock? This is a stock, by the way, that when it starts rolling, it doesn't just roll for a quarter or two. It rolls for a couple of years. We're mid of that move, just in the middle of it. Let's go to Brian in North Carolina, Brian. How are we doing? We're going with Bank of America. Yes, we are going to go with Bank of America, which in a 52-week high today, yields two and a half, and is still way too cheap at 11 times earnings. Not done. Let's go to Brandon in New Jersey, Brandon. Hello, Jim. Hey, Brandon, what's happening? I'm calling in about a company that IPOs. Hello? Hi, I'm sorry. There you go. Go ahead, go ahead. Okay, I'll be quick. IHL. Not a favorite. Up too much, don't like to cohort, don't insurance, sorry. Let's go to Harrison in California, Harrison. Hey, Jim, thanks for taking my question. Oh, absolutely. Me and my buddy, Steve, we're both buried in this stuff. They reported earnings yesterday. What do you think we should do with symbol frog? Okay, frog, I'm going to give you two animals. They'll give you a frog and data dog. Both of them can't turn out to be too expensive. I wouldn't be a seller of almost all the enterprise software companies here. They are not where to be. They are yes for you. Let's go to Brian in Texas. A lot of Brian's. Brian. Booyah, Jim. Both of the 52-week high, um, chevron, any further up there? Oh, man. My worth is just driving that thing. That's how it sees 200 before it goes. It sees 200. That's what I'm looking at. And that ladies and gentlemen, who puts it up the lightning round. The lightning round is sponsored by Charles Schwab. Coming up, survive the unknown. Thrive in any market. Kramer invites you to the Game of Games. Play. Am I diversified? Next. All right, we do celebrate the market because we want you to make money and the Dow just closed out its best week of the year. And it's higher for eight straight sessions, which is amazing. Just amazing. But as Brown shoots continue in birds this early season, you know, I think Brown shoots them what we need because we need the Fed to cut. It's one point that ever reevaluate your holdings. And we got to make sure you're diversified. Pay for any market. Maybe a barbell strategy where you have some soft, good stuff and some heavy goods. And that's why we play Am I diversified? This is where you call me. You tell me your top five holdings. I tell you your portfolio is diversified enough. Maybe you got to mix it up a little, which is fine. I want to start with Anthony in New York. Anthony, you're our first caller. What do you got from me? Jim, how are you? I am doing well because it's Friday. You know that. Let's see my daughters this week and have a great time. How about you? Should be a good Mother's Day and a happy Mother's Day to all the people out there. I got to get something. Oh my. I'll finish the show and then get something. All right. All right. I just want to say how much I appreciate all that you do as far as installing your wisdom to everyone and teaching us all about the stock market. Thank you. I mean, it is so not a trading show. It is so a teaching show. It's taken us 20 years to get to where we just heard what you said. And I thank you very much for doing it. You just made my weekend. Let's go to work. Well, and I just want to let you know that your staff is excellent. They are fabulous. Make me look good. I tell that to people. I would not look good without them. So, let's go. My holdings are Apple, Aeon, Berkshire B, Eli Lilly, and NVIDIA. Jim, am I diversified? All right. Now, we actually have a little bit of a problem here. We're going to address first of all NVIDIA. That's an unit. Don't trade it. We know NVIDIA. Of course, it's the king of AI. Eli Lilly, we know that's the king of the GLP-1s, the weight loss drug. We got Apple on it. Don't trade it. Got two on it. Don't trade it. Now, Aeon ensure, okay, a lot of reinsurance, and Berkshire Hathaway ensure it goes to Geico. But what I'm going to do, because they are on the largest, but what I'm going to do is say that Berkshire is a conglomerate, and that's going to allow me to own Aeon. So, we can say we have conglomerate, insurance, tech, drug, and now you could say, "Listen, isn't that too tech?" I regard this as consumer tech, and this is business to business tech, and therefore, it's different, and I thank you for the kind words. Now, we're going to go to Mike in my homesteaded Pennsylvania, Mike. Hey, Jim. Thanks for having me. My five stocks are Eli Lilly, Patterson, UTI, Ford, NVIDIA, and UnitedHealth. Am I the best? All right, all right, all right. Well, Ford, Ford, Ford, Motor, Underfish, under 12 today was frankly very disappointing. They got to do a buyback. Eli Lilly, we just covered them, but I'll add that they have this Alzheimer's formulation that we should hear about very soon. Patterson, UTI, now I'm presuming that this is the Patterson that indeed is the drug. It's not the dental, but it is the oil company. So, we have oil. We have tech, as we know in video, obviously, UnitedHealth. Does it conflict with Lilly? This is a health insurer, and this is a drug company, but they trade together in the health cohort, although sometimes when you trade on a cyber hack, it's still a little different. So, what we're going to do is we're going to get rid of UnitedHealth, and I want to substitute a true industrial. And the one I have my island is RTX. That's the one that was the Raytheon Emergency Night Technologies. I've been working on it all week, and I think it is so good, but it's getting away from it, that's what I'm going to suggest. Next up, we have Larry in Oklahoma, Larry. Boo, Yoskey, Jim. Man fired up. I think I've seen the movie, I think I've seen the movie Ted too many times. Hey, that could be. Here are my five stocks. Microsoft, CrowdStrike, Exxon, One Oak, and Apple. And I divide. Okay, so now we have to go back into is Microsoft to a consumer tech to go with Apple. I'm going to allow it because Microsoft and Apple are owned by my travel trust, which of course you can follow if you join the CMC investing club. Exxon Oil Company, I prefer Chevron to Exxon for the record. One Oak that's Walter Holz is the CFO there. He's unbelievably fabulous. This is a great dividend play, and I think it's terrific. CrowdStrike versus Microsoft. They are both in cybersecurity. CrowdStrike's just offered a program, an actual program to augment Microsoft, I'll call it, and that's George Kirch and he's terrific. So I'm actually being a little too loose here because I'm going to allow this cybersecurity consumer tech, business tech, although of course we all have to use windows, oil and oil pipeline. And I know that people will say, "Well, listen, you can't have both of those," but they do very different things. Here's what I'm struggling with. Just, you know, my travel trust was Microsoft and Apple. How can I justify owning both of those and then tell you to sell Microsoft? So I'm not going to do that. Now, it's a tough game today because of a lot of similar situations that I'm using new silos for. I'd like to say there's always a good market somewhere. I promptly started buying just for you. Right here I'm at Money. I'm Jim Kramer. See you Monday, 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. Norman, we need to pause this surgery. What, doctor? Because Xfinity Mobile just got even better. Now you're automatically connected to Wi-Fi speeds up to a gig while you're on the go. Plus, existing Xfinity customers can buy one unlimited line and get one free for a year. Visit xfinitymobile.com to learn more. Offer N621. Restrictions apply. Existing Xfinity internet service and two new unlimited lines require. Reduce speeds after 30 gigabytes of usage per line. Data threshold's my vary. Actual Wi-Fi speeds vary not guaranteed. [BLANK_AUDIO]