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 5/30/24
Hey, Fidelity. What's it cost to invest with the Fidelity app? Start with as little as $1 with no account fees or trade commissions on US stocks and ETFs. Hmm, that's music to my ears. I can only talk. Investing involves risk, including risk of loss. Zero account fees apply to retail brokerage accounts only. Sell or assessment fee not included. Limited number of ETFs are subject to a transaction-based service fee of $100. See full list at fidelity.com/commissions. Fidelity brokerage services LLC member NYSE/IPC. Homes.com knows that when it comes to home shopping, it's never just about the house or condo. It's about the home. And what makes a home is more than just the house or property. It's the location and neighborhood. If you have kids, it's also schools, nearby parks, and transportation options. That's why homes.com goes above and beyond to bring home shoppers the in-depth information they need to find the right home. And when I say in-depth, I am talking deep. Each listing features comprehensive information about the neighborhood complete with a video guide. They also have details about local schools with test scores, state rankings, and student-to-teacher ratio. They even have an agent directory with a sales history of each agent. So when it comes to finding a home, not just the house, this is everything you need to know, all in one place. Homes.com. We've done your homework. 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 Man Money. Welcome to Kramer America. I'll be with my friends. I'm just trying to make some money. My job is not to sit at hand but to educate and teach. So call me at 1-800-743-CMC or Tweet me to Jim Kramer. Say it ain't so, Salesforce! This long time market thoroughly, one of the great growth stocks of our year, finished the day down nearly 20%. After missing its quarter, cutting its forecast and just all around land and egg. It's a breathtaking come-up. It's for this cloud cling. The first serious shortfall since the Great Recession, it laid the entire market to waste. Because Salesforce is a component of all three major averages. Hence why the Dow lost 3-30 points as to be sank 0.6% and then as that tumble 1.08%. The House of Pay. Salesforce is a company that I've championed since it started. Well, I guess really since it came public to the single digits back in 2008. Yeah, I became a believer because I was still at TheStreet.com, which I've found in 1996. And when we use Salesforce, the product, I couldn't believe how much of a lift we got in selling subscriptions. You use Salesforce to get new clients and keep existing clients happy. They predict your client's behavior in an artificially intelligent world that measures value by who has the most data that they are the data keeper. I have never heard of an unsatisfied customer of Salesforce and I sure wasn't. Never. More important, Salesforce is a distinguished member of what has been the most esteemed cohort in the entire market. Formals and Generation. That is enterprise software. This is the kind of software that automates business processes, manages data, manages your company's interactions with customers, handles your enterprise resource planning and takes care of your business intelligence. In other words, enterprise software automates and discharges every aspect of your output. It's vital if you run a business, which is why there are so many companies that provide enterprise software from many different areas. You want to sell product? You use Salesforce. You want to keep track of the numbers? There are a half dozen companies that can do it for you. You want to help analyze personnel, handle human capital management, deal with supply chain. Keep track of the finances. Well, there are another dozen of companies that can help you. You need to be protected from cyber bandits or myriad cyber security software businesses. You want to put onboard people, design a website, keep track of receivables. There are a hundred companies that make enterprise software for those places, not to mention the hundreds of private enterprise software companies that are just praying to come public. And that's the real issue. A material reason for Salesforce is short pull. There are so many of these companies, so many publicly traded enterprise software names, we can barely keep track of them all and they are all nipping at each other's heels, making it much harder to be in this sector than it used to be. Yet these firms keep being pumped out of the venture capital well, because it has been the most lucrative part of the entire tech complex since the beginning of time, or at least since the beginning of Microsoft. Everyone in the industry knows that their easiest road to riches is to sell, not to the individual but to the enterprise. And every young person coming out of any major school that does computer work, they know to go into enterprise software. As Mark Benioff, the CEO of Salesforce could tell you, these companies cleaned up during COVID. Enterprise, after enterprise signed up for the new software subscriptions, it was a heyday for the entire industry. House of pleasure. In part because many of these enterprise software tools can help remote workers collaborate. Maybe too much of a heyday. Companies just spent too much on their vendors order too much, apparently much more than they can use or even open. Then something happened that nobody came on. What can they do better? What can they do better? Do we need to keep hiring if each person may not be as good as the AI co-pilot? Do we need anyone in our call centers? How about accounting? Contracts? Right now, big time executives in every kind of business from law firms, accounting firms, retailers and bankers, they keep pondering. Who do they really need? Do they need to hire? Who can they let go? With hiring administration increasingly in a certain world, why bother bringing more enterprise software? Oh, remember this is cloud software where you typically pay a subscription per user. Who they would pay more when they expect to have fewer people using stuff? How many fewer? We don't know. And that's what we find ourselves right now. You saw it with Salesforce, then you saw it again tonight with MongoDB, the next generation database, management platform, massively disappointed when we put it after the close. Only see it stock annihilated after hours. So far, this earnings we've seen by the same thing, by the way, with Workday. Crucially, there's concern about service now. Adobe, two tremendous competitors. I like it. Adobe's been stocks been going down for a while. Meanwhile, many once lowly hardware companies are finally doing terrific HP. HP Inc, surging nearly 17% today. There are just too many enterprise software companies that are offering to analyze your data and target your data, shift your data, spread your data, massage your data. And out of nowhere comes the greatest technology game changer in recent history, tenant of artificial intelligence. Thus, in the stock market, it's tremendous value creators. You can see from just glancing at the chart of Nvidia. But for those who are selling software, they dealt with traditional mode, nutritional model, period of artificial intelligence. AI kind of feels increasingly like a coin to us. Could be a banana if they get fit right into the new paradigm. But it could be the beginning of obsolescence if they can. Do we need as many orders if chat TPT can audit? How about low level accounts? What do we say to those who create documents? The same documents over and over again, ones in law firms and corporate finance. So suddenly, we're in this frightening situation. We're companies need to say something very different to Salesforce than they've been saying. Certainly something they haven't said maybe in over a decade. They say, "Mark, we have to wait and see. We're playing with co-pilots, doing remarkable things." Or, "Mark, we're thinking of putting our whole outfit on the hands of Dell, which is managing the transition for us, so we can't handle something new right now." Or maybe perhaps worst of all, Mark, we have no idea how many people we really need. So we have to figure out first and then meanwhile business is slowing anyway, so we've got to do measured thinking here. We've got to take our time. We need many people in on the decision. I'm sorry. We'll have to see you soon. The enterprise software people have had the run of the joint for so long that their stocks have become richly valued and for good reason. They've had consistently high growth, good profit margins for a long time. Now that growth has threatened like never before, and companies like Salesforce barely saw a common, or even thought the AI boom would be, they thought it'd be great for them, everyone's frozen. It turns out maybe it wasn't so good. It might be in the future, but who knows? For now, these enterprise software companies feel like the rudderless and their stocks are listless to that lifeless. And guess where they're going. The house of pain. But companies do engineering software companies like cadence that we had on last night. They are in a tendency. Anything that can make or help make transistors or semiconductors is where far more than it used to be. A personal computer can soon be an AI powered personal computer. A robot armed by an NVIDIA's Blackwell chips may render vast swaths of the workforce obsolete. No matter what, the housing and days of enterprise software may have run their course. And unless interest rates come down, I don't see their stocks may come back any time soon. Worse, the fact that these stocks are no longer immune from the business cycle is outright frightening to many people. Their fill with software might turn out to be superfluous people, whether in sales or marketing or coding, and you're supposed to pay by the person. Now, I'm not going to write on sales force. Too much cash, too much cash flow. Too good, too many smart people. When the smoke clears and the stock works its way down, perhaps under 200, call me a buyer. Provided we have a requisite number of downgrades that help shake out all the weak hands. Can't have them in there if we're going in. But the bottom line, we may be at the beginning of the great online of most enterprise software and the greatest sentencing, not of the people pictured with Jensen Wong, but of the ultimate clients who use his wares to figure out how best to put their employees to work in a world where AI is changing the entire business landscape. It's a changing the guard. And until some of these enterprise software companies drop to the point where they're more reasonably valued, just like the rest of the market, they are a very, very tough stocks to buy. Let's go to Natalie and Tennessee, Natalie. Yeah, Jim, I can't say Kyle and I watch every night and are members of the investing clubs to think for all that you do. Of course. Question for you. I've got a small position in F.D. Lauder. Is now the time to buy more or hold. Well, I debated that today when we had our conference call. We had our club meet at 12 o'clock. And what I said was until I see something actually good out of company, I can't keep buying it. It is a horrendous stock. It's the worst stock that we own now. And one of the reasons why it's the worst stock that we own is because China was bad. But China's inventory has been cleaned out. So I'm not as negative as the street. But there's no doubt about it, EL. I need to see something, anything positive, any sign, even just like maybe like a bottle of Mac. All right. Let's go to Daniel and New Jersey, please, Daniel. Jim, thanks for taking my call. You're quite welcome. Jim, I was calling you about Snowflake. S-N-O-W. Sure. I'm wondering if the company has been overly damaged from what's going on in the technology sector. Snowflake, as you know, is a very powerful company in the AI space. And I'm just wondering, what do you think of it moving forward? Well, I think that Snowflake's part of this vast cohort that I'm very worried about that really is... Look, they're not enterprise software so much as a complete cloud system. But I would say that my fears are that that gets brought down like everything else and the money's going to other sectors and staying away from that one. So it is a collateral damage situation because the quarter of your absolute right was not that bad. But it doesn't really matter, does it? Look, I hate to say it, but we may be seeing the beginning of a larger unwind in the once most loved group of the entire market, enterprise software companies like Salesforce. And now we're seeing the ascendancy of companies using AI to optimize their businesses, however they can, and may be with less enterprise software. We may have been to tell you, best by sword hire after earnings cost this morning. And with the PC refresh cycle on the rise, and this charitable trust name continues to be a winner. Don't miss my exclusive with the CO. Then I first turned in my homework and electricity company Vista last August, but it's nearly two hundred fifty percent run. Well, is it warranted? I'm breaking down the business again to see if we can keep powering it higher. And to make our spam and planners reporter before the bell today, so I'm checking in with Hormel CEO after a slower quarter brought the stock down hard. Stay with Kramer. Don't miss a second of Mad Money. Follow @JimCramer on X. Have a question? Tweet Kramer. #MadMensions. Send Jim an email to MadMoney@cnbc.com. Or give us a call at 1-800-743-cnbc. Miss something, head to MadMoney.cnbc.com. 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. 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. ♪♪ We keep hearing that retail struggling right now. The consumers over scratch but certain individual changes keep putting up quick numbers. Take Best Buy, which we recently bought for the travel trust. Make me look like a genius. I know because the stock shut up 13% today. In response to the quarter. Of course, look, the actual numbers Best Buy reported this morning were not perfect. Software revenues, software same store sales, offset by really good cost controls. Loud the company delivered 13% earnings beat off $1.7 basis. Man, it was guidance to the current quarter. But it was OK slightly lower than expect the same for sales guidance, but I saw things that I liked. But, and this is a big, but on the cop school. Best Buy told us that May trends significantly improved from previous months, reiterated that the year should be getting better as it goes on in part. Thanks. Yes, of course, the new generation of AI fuel personal computers because you're going to get one there and so am I. And that's why even though the stock initially traded lower after results, which I knew was wrong, it always finished the day a bit. I think it's got more upside. Don't take it from me though. Let's think deeper with Corey Barry, the CEO of Best Buy to learn more. There's Barry. Welcome back to Man Money. Thank you so much for having me too. Oh, you're kidding, Corey. I'm thrilled that you're here because you are going to be the first person who's going to explain to me how AI actually is helping your business and how you can make AI help my business. Because I don't know how the heck to use it. One of the most ironic things about AI is that it actually is the most human of technologies. It takes things that used to be really human in nature and then allows us the ability to recreate those things at scale. So we're using it in our business. Like I'll give you a great example. Right now you can go out to our website and you can look at reviews that are left by customers. Those reviews are now collected and they're summarized. And then you can sort by those reviews. Just like if I was to talk to a blue shirt, I would say, help me understand what people like or don't like about this. Now you can do that digitally across all of our product categories. And so the way that we're going to start to use AI is to take these devices that can be like cold and electronic and actually it will start to be a real human counterpart to what you do day in and day out. Now this also means to me that there are two different companies that I'm thinking about getting my AI PC. Dell and Hewlett Packard. I've got to figure out which ones I want. So what I will do is go to Best Buy because I don't know how it works. And I won't pit them against each other. But I'll say you show me one, you show me the other. I believe that will that not be the way that most people are going to get in what's going to be the biggest refresh cycle in history? I think what is one of our superpowers is the fact that we are very agnostic to the technology. We are focused on the consumer. And so a lot of this is what is your preference? What matters to you? Does battery life matter the most to you? Does overheating or using it really frequently matter the most to you? Does form factor, lit up keys? What matters to you as a customer? And so our job is to understand the widest or more. We're going to have 40 different SKUs at launch. 40% of those will be exclusive to Best Buy, which is the largest in a retail channel. And our ability will be we don't care which one you like the best, Jim. I'm going to help you find the one that solves your particular needs. No, I don't mean to slide everything else. It's just that I know we're all going to go. I mean, for instance, I follow when you said the Samsung phone is doing great. But why? Because it also has great AI. Well, and what's interesting is it's not just about the AI. It's about how do you bring the AI to life? One of the things that our teams do really well is they work way upstream with our vendors because we understand what people are actually looking for in the products. And we've partnered with Microsoft. We've partnered with Qualcomm with others so that we can help influence what actually comes to market. And then we can talk about it in a really human way. It's one thing to say this phone has AI on it. It's another to say I can circle that lamp and it will tell me immediately where to go by that lamp. And we're trying to help bring the story to life no matter who the vendor partner. Now, again, I've got a I have the biggest screen that you sold. I got that and you guys put it up for me. And I think others are too because movies come so fast to the home. But it was a business that I had to finance. I want to know if rates came down, obviously things would just go so much better. You've got that great private credit card. But people are worried about high price of money. If that came down, would we see many more of those larger appliances go? I mean, I think rates are always going to be helpful not just in the credit side of things, but also obviously in the home buying and remodeling side of the business as well. So as rates go down, I think you just see a consumer who tends to have a more positive attitude toward those bigger ticket purchases. And so obviously that's helpful over time. But what we're trying to stay focused on right now is no matter who the consumer is in their current situation, how can we help them, whether that's financing, whether that's lease to own, whether that's by now pay later. We have many options that I think can help across a consumer market. Let's go back to PCs for a second. Do you think that these big companies which don't have their own retail outlets finally, frankly, will be driving traffic towards you? And then when I get there, will there be people really well educated from Dell and you'll know HP, who will be able to tell me these differences? Yeah. So I think that what everyone is going to look to do is find the right outlets where the consumer can find the most information. And we are, as you can imagine, arming ourselves on every angle to be the single best place to come experience this across the assortment. So you're going to see physical demos of all the products that you can touch and feel and play with. And importantly, you're going to see us certify and have zoned specialized associates in hundreds of our stores. And we know when we certify our employees, they have a better customer experience that tends to translate into a more fulsome purchase. We will have geek squad agents who are certified. We will literally have thousands of employees who are certified in the next generation of AI enabled computing so that we can try to bring this to life for you in a way that really resonates. Okay. It's not clear for me yet exactly what the timeline should be. If I want my new PC, when will I go to be able to get it? Be sure you have it and walk out with it. The actual products from Microsoft will be available for purchase on June 18th, but we will have some demos in our stores available to play with, touch, feel and start to look at even before that and pre-orders are actually available now digitally and those will be fulfilled in about the middle of June. In the meantime, how's the Apple product selling? This has been another bright spot for us. And I think it underscores the thesis that we have had about our business. We index best when there is innovation in the marketplace because that is what we bring to life in partnership with our vendors better than anyone else. And we're seeing some strength in those new tablets in the pro and in the air. And importantly, Jim, what that allows as well is some of the older generations of tablets. They come down in price as you have some of the new generations, which means you have value across the spectrum for anyone who's just looking for that new tablet. But definitely part of what we saw in that uptick in May from the trends we were seeing prior is some strength in that tablet category as people gravitate toward these beautiful new devices. Absolutely. Now, look, one last thing. I know you're busy. I've got a huge schedule. June 16th. I know that's only a few weeks away. Will you come? Will you let us go to one of your stores in New York City and sell us and we'll all buy them? And we do it on film because I would love for you to be there. Jim, I would be happy to spend some time with you and the team, but let me be clear. It won't be me selling you. We have an army of blue shirts that are out there ready and waiting to try to be helpful. And they are super excited to see you. Then we'll rely on them and you can show us around the store. How about that? That sounds perfect. Fantastic. That's Corey Barry. What a quarter. CEO of Best Buy BBY. Yes, large position for the travel trust. You can meet all that. We talked about extensive retailing. Our conference call may have money is back here for the spring. Coming up. Kramer doesn't stay slumped for long. He's done his homework. Is the heat from this energy play flashing V for victory? Keep it here. Fact. Running a business is not getting easier on your wallet. With higher expenses on materials, employees, distribution and borrowing, everything costs more. Also a fact. Smart businesses are reducing costs and headaches by graduating to NetSuite by Oracle. NetSuite is the number one cloud financial system. Bringing accounting, financial management, inventory and HR into one platform and one source of truth. With NetSuite, you reduce IT costs because NetSuite lives in the cloud with no hardware required. Accessed from anywhere. You can cut the cost of maintaining multiple systems because you've got one unified business management suite. You improve efficiency by bringing all your major business processes into one platform. Slashing manual tasks and errors. Over 37,000 companies have already made the move. See how you'll profit with NetSuite and then you can think of all the ways you could be spending the money you save. Company retreated in Malibu, anyone? By popular demand. NetSuite is offering a one of a company that works for a few more weeks. Head to NetSuite.com to start saving. ♪♪ ♪♪ A couple weeks ago I got a call from Russell in taxes. We didn't know about Vistra. A diversified utility. Its reality is to spend us 354% just since the end of 2022. ♪♪ We actually got a call about this one before. It even turned into a homework assignment. Well, I was generally positive in the story. I clearly wasn't bullish enough. Nobody's been bullish enough on this one. So what in the world is driving this Vistra's incredible move and more importantly? Has it got more room to run? First let me give you some background on the story. Vistra was originally known as Texas Competitive Energy Holies, which emerged from bankruptcy of energy future Holies back in 2016. Then they changed their name to Vistra Energy before rebranding it's just Vistra a few years ago. Vistra's intriguing. This company used to be mainly an electric power distributor operator in Texas, the Northeast, the Mid-Atlantic, the Midwest, and California. That doesn't explain how the stock in quadruple less than a year to have. What's really got people excited about Vistra is its power generation business. This company's now become the largest competitive power generator in our whole country. They produce enough energy to power 20 million homes. Viva Viva! More important, while Vistra uses all kinds of power sources, there's a renewable kicker here with solar generation, battery technology, a store solar, along with nuclear. Regular viewers know I love nuclear power because it's the only serious way for companies that talk about going zero carbon to actually achieve that at scale. Other than this, your Vistra completed the acquisition of Energy Harbor, giving them the nation's second largest fleet of competitive nuclear power plants, along with many more solar and battery storage assets. Now, like I mentioned before, when we covered this stock lately this summer, we just weren't bullish enough. While I certainly wasn't negative in Vistra, and even issued an open invitation for Vistra's management to come on the show, in the end, I set a rather cyclical constellation energy, the independent power producer that's the closest you can get to a pure play on news. Since then, constellations up 110 percent! But it's gotten nothing on Vistra up 251 percent over the same period. So, Miyacopa, I got that wrong. That was easy. But what exactly did I miss? What couldn't I see Vistra's incredible move coming? It's my job! Well, first off, even though I knew about the pending Energy Harbor acquisition, and told you I liked it, I still didn't appreciate just how well time the deal would be. It generated a massive amount of excitement for this stock Vistra. Now, that was a $3 billion cash in stock deal, and that's on March 6th of 2023. Close on March 1st of this year. It matters because it gave Vistra three additional nuclear plants in Pennsylvania and Ohio. Previously, the only one. Crucially, this happened just as Wall Street was falling in love with nuclear power all over again, as businesses increasingly realized that nukes are the only reliable source of carbon-free energy. By the way, it is a tragedy that the environmental movement spent decades fighting against nuclear power because, admittedly, of the intractable issue of nuclear waste, because nuclear power is really the only way to beat global warming on any reasonable time scale. In addition to going increasingly positive on nukes, over the past year and a half, Wall Street's also gotten a lot more bullish on the independent power producer business. Why? Basically, it goes back to the AI boom. Right now, we're in the midst of an enormous AI infrastructure build-out, meaning tons of tons of data centers that practically devour electricity. With all of these data centers, companies are desperate for additional energy capacity because traditional regulated utilities simply wouldn't be able to support all of that demand. Now, remember, electricity demand is now growing by about 5% a year in this country after not growing at all for many, many years, and that's when the independent power producers come in, especially the ones that can provide clean energy, like vistra or constellation energy. And the thing is, there really aren't that many independent power producers to begin with, and even fewer publicly traded ones. Aside from those two, there's energy energy, another stock that's doubled in under a year, and not much else, by the way, energy energy, I like that one, too. For vistra specifically, that AI data center power demand story is a huge driver of the stock's strength. But it's not the only secular growth story out there. The other part of the equation, vistra's got a major presence in taxes, and in Texas, they're electrifying the oil and gas business, especially in the oil-rich, Permian Basin. And that's why vistra stock has been such a juggernaut. Everything else flows from there. I could throw in more details, like the fact that the company reported a blowout, I mean, unbelievable quarter early this month, or the stock was out of the SP500 early this month, taking the spot where it's open when Pioneer and that was bought by Exxon. But in the end, it's about data center driven demand for energy, especially clean energy, and the increasing electrification of those oil fields in the Permian Basin. So what are we supposed to do with vistra with the stock at these levels? That's tough or cool. Obviously, with the thing up 350%, since the end of 2022, including 173% gain a year today, it feels a little precarious up here. But you know what? When we looked at vistra's valuation compared to constellation energy, again, the closest comparison, you can see the vistra's substantially cheaper than constellation. Vistra has an enterprise moldable. That's the enterprise value divided by the release before interest, taxes, depreciation, and realization of just 11. This is the way you do the compare, 11, based on this year's estimates, while constellation's enterprise moldable stands at over 18. We like to use EBITDA with utilities because they're increasingly capital-intensive businesses, lots of debt that need to take big depreciation charges for the machinery. And on this metric, I mean, vistra, it just looks like an out-and-out bargain. I got my buy! That said, if you made me choose between the two, you know what? I'd still stick with constellation energy, despite the valuation disparity, simply because I'm more familiar with the story after following it for longer. I've spoken to the management team a few times since I started pounding the table on the stock in the early 2022. More important, constellation's much closer on being a pure play on nuclear energy, which I really care for, although vistra is now much more nuclear-focused than it was when we first covered it last year because of that energy-hard ordeal. Finally, constellation's gradual move higher looks more sustainable than the parabolic move we see in vistra. Then again, vistra is still cheaper. Here's the great news that you know how to choose? You got my blessing by either one, and the AI driven electricity boom is just too good to ignore. Ideally, you wait for a pullback in these incredible hot stocks before starting a position, but I'm certainly not going to tell you that the rallies are over. They're both wide in the theme that should last through the end of the decade or longer. Let me give you the bottom line here. We weren't bullish enough on vistra. We just weren't. It's an excellent story. It gives you exposure to one of the best themes in the market right now, which is why you definitely should think about only either vistra or constellation. I know after working on this piece, I am thinking about the same thing my child will trust, which you can follow by joining the CMC Investing Club. And I can't believe I missed it darned it all. It was right in front of me the whole time. Let's go to Len in Texas. Len. Jim, thanks for taking my call. A long time listener, first time caller. My question is about the conical Phillips with the recent announcement of acquiring marathon oil. How will this impact the relationship with the other marathon related entities? Specifically, you have NPC and MPLX. One handles the downstream. One handles the mid-stream. And I'm just concerned about the, I guess, the dividends that MPLX has been offering are paying almost 9% for a long time. Are these in jeopardy? Or do you still recommend these? You know what? You know I like them. You know I like them in MPLX. I like it. My understanding is they separate. I find it else wise. Otherwise, I will certainly tell you. You know, I think MPLX is a terrific situation. And I don't want to back away from it. Thank you for that call. Let's go to Jeff in New York, Jeff. Hello, Mr. Kramer. This is Jeff from Sotas, New York on the South Shore of Lake Ontario. Perfect. Hey, was some officially starting this past weekend? There's no better place to spend it than Rochester in our Finger Lakes area. And your wife should come up for a visit sometime. All right, look. Think of it. Think of it. Actually, go into Saratoga. I know it's a little too far east. I'm going to Saratoga in a couple of weeks. I should go west. I should go west, young man. Help me. We are out here and watch those ponies while you are in San Saratoga. But, Mr. Kramer, thanks to all the knowledge that you provided me over the years. My mom thinks of a good investor and she asked me to manage her small IRA. He's just recently retired and that's a stock in her portfolio that's been giving me trouble. Should I continue to hold or cut my losses in Boeing? Oh, it's the toughest stock in the world. Oh, my. I'm not kidding. I mean, this is one. I have done it right. I've done it wrong. I've done it right. I've done it wrong. I'm going to say that it's down 33% for the year and you can continue to own it. But, please don't buy anymore. And thank you for thinking that I could actually do a good job on Boeing because that's about, that's the toughest stock in the whole S&P 500. Thank you. All right. Look, I try and wait for pullback in this vista before you pull the trigger. But I think the story's fantastic. It gives you exposure, one of the hottest themes in the market right now. Cheap power. That's clean. What's more, may I have money? Include my shoes, but more mell. If today's post-turning is dipped, can we expect a bounce back in demand for this packaged food player? Head to CO. Then with another potential drug approval and deck, I'm diving into what I think Eli Lilly can blow past estimates and keep trending higher. And of course, oil plus apple parts tonight's edition of the lightning round. So stay with Kramer. All right, what on earth is supposed to do with the stock of Hormel Foods? The protein-oriented packaged food company behind spam, apple gates, kippy peanut butter, planters, peanuts, among other major brands. The sporting Hormel reporters seemingly mixed quarters. A small revenue miss, a small earnings beat. Imagine even raising their low end of their full year earnings forecast. Yet some of the stock got obliterated. It's down to only 10 percent. Why? I don't know. Imagine made some comments about this office and certain center of the store items. So is this an overreaction? Maybe buy an opportunity. Let's check in with Jim Snees, the chairman, president, and CEO of Hormel Foods to get a better sense of what happened today. Mr. Sne, welcome back to May of Money. Thanks, Jim. Great to be with you again. Okay, so Jim, I went over all your hero brands, all the things that we all know and love. And frankly, they all did great. I'm talking about I'm looking at it. It's Skippy. It's Spam's. Spam's a great name, St. Brand. Apple Gate, which we love with you great. So the mystery for me is what made it so people feel either that you're not doing great or knocked down the numbers to the point that those major brands were not, didn't get the shine. Yeah, well, you know, Jim, I mean, we had a really strong first half. Consecutive quarters of better than expected results. You know, and when we look across our segments and our brands, you know, really, really strong performance and retail brands, just like you said, Spam, Skippy, Apple Gate, all performed really well. Our food service business continues to outperform what's happening in the industry. Really good recovery in our international business, probably ahead of schedule from what we thought. So, I mean, as we think about what we said today about the first half of the year, and then as you said, raising the low end of the guidance for the back half of the year, you know, we feel really good about the condition of the business and where we're headed. All right, so maybe we just go over some of these things that, like St. Piper Sandler mentioned, Turkey price headwinds persist. I know that Genio Turkey did well, but whole turkeys did not. Yeah, so Jim, there's a couple of dynamics happening in the business, especially on the retail side. And so the first part that I think is important is when you think about scanner data, right? That's what's reported out of retail outlets. Our scanner data was really, really strong. And then more on the commodity side of the business, we do have an element of whole turkeys, and that market, that commodity market has decreased substantially. And so that's outside of our control, right? We're at the mercy of what the market does, and I think it's important to know that both of those things can be true at the same time. We can have great scanner data strength with our brands while we're still battling the top line headwind of the Turkey markets. But I really don't think that takes away from strong first half performance and what we think we're going to be able to get done in the back half of the year. Well, the brands that are, say, center storage, some of the canned foods, are they being, are you getting any price pushed back from, say, a Walmart? They're saying, listen, we're not as interested in some of these older brands. Yeah, Jim, our brands have got great history. They're great legacy brands, and they still resonate with consumers. We already mentioned them, but Skippy had a really strong first half of the year. Spam, really strong first half of the year. Now, are there pockets within the center of the store that are underperforming? Absolutely. And that's on us, right? That's what our team has got to do to make sure, whether it's promotional activity, price pack architecture, all the things that we do to make sure that we're making a more relevant for the consumer. But from a pricing perspective, that's dealing with our customers. Passing along pricing is never easy. But we always know that when we go to them, we're going to have good, solid rationale for why we do need to take pricing. Okay, so maybe what confused people was the planters facility interruption, which obviously will not be repeated. That was one time, but it did hurt earnings. Yeah, so what we talked about there, Jim, is we did have a supply disruption. And I do want to make the comment that we, Food Safety's paramount. And so we made sure that we did all the right things. We shut down the plant for about five weeks, and we're back up and running. And so the impact of that is going to be in our Q3 performance. We said about three cents per share. But even in spite of that, right, we said for the full year, we're going to, we're going to raise the low end of the guidance. So it's going to have an impact. And if that hadn't happened, we'd be talking even more positively about our performance. Of course, now, Jim, this morning I was watching the CEO of Nestle's very smart man. And he was saying, look, we are really seeing impact from these GLP-1s. And he was very forward about it. And he said, we've got to have more protein. That's what we're going to do. We're going to put more protein in the lineup. I look at your lineup, and your lineup resonates with protein. So when are you able to take offense on that and say, listen, we've got the protein that you want to mark, or else you're going to be frail if you're using or augmenting with these different drugs? Yeah, I mean, you and I talked about that last quarter, or this is something that's front and center for us, Jim. Is our portfolio lends itself to the opportunity that you're talking about. And so we really need to think about what day parts do we want to own? What brands, what products really resonate with those consumers who are on the GLP-1 drugs? We know there's an opportunity, and it's on us now to do just what you said. We have to go on the offensive because whether we think about Justin's nut butter, skippy peanut butter, any of our snacking items, planters, all of those fit the criteria for what those consumers are going to be looking for. So we know the opportunity, a little bit of work to do, and we are going to go on the offensive. All right, last thing is so important for our viewers. They'll see the stock down. The first thing you say is, well, how about that dividend? Your cash flow is extraordinary. Dividend, if anything, you'll have no problem, the board will probably, if they have to, I'd be happy to raise it as usual. Yeah, I think there's a couple of things, right? We said strong first half performance, incredible cash flow, improved margins. I mean, there's a lot to like about the performance and the business, and we are a dividend aristocrat, and we're going to stay that long. All right, that's terrific, Jim. Thank you for explaining everything to us. It is time to play offense. You've got the right lineup for a world where people are going to be taking these drugs, and I would rather be in your shoes than Nestle's at this very moment. Jim Steve, President, Chair, and CEO of Hormel. Thank you, Jim. Good to see you. Thanks for having us, Jim. Absolutely, knit my back here for a break. Coming up, hit us with your best shot and electrified fast-fire lightning round is next. It is time to start the little lightning round. It's our full performance. We're going to never see it. It's about by myself, literally, 'cause it's not my step for instance, but you bled us up. And then the lightning round is over. Are you ready? Skinned dead. Total lightning cover is about to start with John and Illinois. John. Hey, keep up the good work, Jim. I'm watching the Bitcoin and miners dip, and I want to get your opinion on riot platforms. No, look, if we're going to be in that, we're just going to go by Bitcoin or go by Ethereum. Either one is fine with me. Let's go to John and Virginia, John. Hi, Jim. Thanks for taking my call. The stock I'm calling about has risen 90% over the past 12 months, but there have been 19 insider sales and no insider purchases during this period. The president has sold 40% of his own stock. Since I purchased the stock, my share is a triple, almost triple in value. Well, the question is, how much of my stock should I sell? And this is KLA? KLA. All right. It's triple. I want you to take out half. Okay. Take half and let the rest run. Then you'll be in great shape, kit and lose money, and I think that'll be terrific. I do like KLA, but it's up a great deal. Let's go to Brendan in New Jersey, Brendan. Hey, Jim. So you're looking like an animal guy. I saw in your ex-hate you got two new dogs. They look very cute. So I was wondering what you think about beyond me as, you know, alternative meat stock? No, don't want to own that. Way too risky. I'd rather have your own whormell down here. I think it's a better play. Let's go to Cathy in California. Cathy. Cathy? Yes? Go ahead. You're up. Oh, okay. How are you? Jim? I'm good, Cathy. How are you, Jim? I'm good, Cathy, how are you? Okay. I'm a long-time follower from California. I just want to give you opinion on what do you think and your take on M.C., the advanced micro-divide. Okay, Vince, but right now, Tech's going to be weak for a couple of days because a lot of stocks per sale. I think AMD under 150 would be terrific. It does not have what Nvidia has. It's real good, but it doesn't have an Nvidia. Let's go to John in New York, John. Jim, John, from South Shore, Long Island. Oh, good to have you on the show, John. What's up? Summer has come in, Jim. Hopefully, lots of sunny days ahead. Okay. My question is, is the future bright for Warby Parker? You know what? I'm thinking about what, uh, what, let's see if y'all have told me about from, uh, from Tanger. He was saying, this is quite a, a, a, trying to get these guys in the store. Uh, a lot of people feel it's a great thing to have in the mall. So I'm going to say, yeah, it's okay. It's all right to buy. And that, ladies and gentlemen's conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. Coming up, this update from Goldman Sachs could impact a big farm of favorite. A peek into Eli Lilly's pipeline when Mad Money returns. ♪♪ ♪♪ Typically, there are two ways for a stock to go higher. First, the animal spirits of the market, meaning when investors get excited and become willing to pay up, purely in order to chase momentum. They can't resist buying higher in these situations, even when nothing actually happened. I don't like that way. Too emotional, no rigor. And then there are situations for the numbers, specifically the earnings estimates, just keep going higher and higher. When the estimates go up, the stocks naturally work more. So it makes perfect sense to pay up. ♪♪ The stock will be like only one of the greatest performers in the year. It falls distinctly in the second camp. It just won't quit because the numbers keep getting better and better and better. As they find more uses for their incredible GOP-1 drugs. We're starting for diabetes, then weight loss, and now possibly many other applications, including increasingly lifesaving ones. This morning, Goldman Sachs updated the rest for global obesity drug sales. Instead of $100 billion by 2030, they now think it's going to be $130 billion. Maybe they watched the new South Park Special, the end of obesity. In 2024, Goldman estimates that the Louisiana State of BC revenues could hit $5.3 billion, up from their previous estimate of $4.7 billion. Hey, how about 2030? They think it would grow to $56.6 billion rather than the previous estimate of $49.7 billion. Hey, by the way, the entire company only had $34 billion in sales leisure. And so that is extraordinary. I think Goldman Sachs estimates will turn up below. I believe these drugs, which started out as diabetes drugs, and then became weight loss drugs, will probably go down as the greatest cardio treatments, starting with dramatic declines in intractable blood pressure for even the toughest cases. That could be remarkable for people with fatty liver disease, too, which is often fatal. With each new indication, lowly stocks should go higher because the estimates will go higher. With each new country, it's approved it. And for each new use case, the stock will go higher because the estimates will go higher. It's hard to get a handle on what these GOP-1 drugs can do. For example, I don't expect the clinical trial, but I believe it could be the ultimate weapon against alcoholism or against heavy drinking, because it kills your quavies for a hard liquor. And there are a few things less than healthy than being a heavy drinker. There are millions upon millions of heavy drinkers. All of these indications are huge, and I reiterate that they're not currently reflected in the estimates. The only getting factor is one of our astute investing club members pointed out today, is that you can't get at the product. It's not enough to go around. You'll have at least fewer to try to put plants up around the globe to make the stuff, but it can't take to make them fast enough, and they ain't rushing it. Now, that's not all Lily is going for. It also has an anti-dimension drug called Denonimab that could potentially be approved 11 days from now when the FDA advisory committee for Denonimab is scheduled. Talk about something not being under the numbers. I don't think many owners will even think about this drug that could be revolutionary for Alzheimer's. If the dementia drugs improve, the S bills will get another boost, and then you'll see Lily's stock trade even higher. I know there are many dollars in the GOP-1 drug class. I heard that people stop taking them after a time because they don't like injecting themselves. Some are worried about frailty because the drug takes a huge amount of body fat off, but it also takes muscle. You need to boost protein and take to try to balance things out. People don't want to do that either, and they like to taste the food, not anymore. No matter, these drugs are lifesavers, and their use is saving, it's just still in its infancy, frankly. When Goldman predicts that the GOP-1s will do 130 billion in sales in 2030, I'm betting that estimate is way, way too low. And when they adjust their numbers higher, again, what do you think will happen? Yeah, Lily's stock will go higher, too. Like I said, there's always a bull market sober. I promise I'll just figure out your money out. Do Kramer, see you tomorrow! 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. This podcast is supported by FedEx. Dear small and medium businesses, no one wants happy customers more than you do. That's why FedEx offers you picture proof of delivery, packageless and paperless returns, as well as weekend home delivery to 98% of the U.S. on Saturday and 50% on Sunday. See the FedEx Service Guide for delivery information. FedEx Ground Service is also faster to more locations than UPS Ground. See what FedEx can do for your business. Absolutely, positively, FedEx. [MUSIC PLAYING]