transcript

Speaker 1:
[00:00] This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com or find Schwab Market Update wherever you get your podcasts.

Speaker 2:
[00:29] She loves it hot, he loves it cool. The Pod by 8 Sleep is a smart mattress cover that fits on your bed and keeps each side at the perfect temperature all night long. By staying comfortably warm or cool, the Pod helps you sleep deeper and wake up feeling more rested.

Speaker 3:
[01:00] My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Man Money starts now.

Speaker 4:
[01:16] Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramerica. I was being with my friends. I'm just trying to save a little bit of money here. My job is not just to entertain, but to do some teaching. So call me at 1-800-743-CMC. Tweet me at Jim Cramer. Tail spins can be mighty nasty. If you own a stock that's caught in one, it's very hard to hang on. But sometimes the market happens to be wrong, and it's worth riding out the turbulence. That's why after another down day, Dow lost 293 points, S&P dropped 0.63%. Nasdaq shed 0.59%. I want to talk about some successful examples of stocks that have come back to life. Stocks that can rally in the face of even the off again, on again peace talks with Iran that seemed decidedly off again this evening. President extended the truce, so we are back in purgatory. Better to focus on something that can help us make money. Rather than just endless fretting about what will happen in Iran, I want to use this in a regdom to show you even in these uncertain times what happens when the facts dawn on stories that have been thrown out or cast into the wind. I'm going to start with a familiar one for some of us. Let's start with CrowdStrike. Here's the premier cloud native cybersecurity company that has one of the greatest records in the industry. If you recall, there was a major outage caused by CrowdStrike. It was a routine security update put through on July 19, 2024, and it ended up shutting down 8.5 million Windows systems globally. Now lots of doomsayers thought the company would never come back from the hit. Within a month, CrowdStrike's stock fell from $343 to $200 and changed. It was back above pre-outage levels, though, by mid-November that year as George Kersh, the CEO, took it upon himself to have a tour, a hundred accounts, a hundred days, a little bit more or less. But you know what? The stock never looked back after that until late 2025. When we started to hear that Anthropic was gunning for their business. We owned the stock for the child protection. I was misled by why anyone would think that Anthropic would offer cybersecurity for other properties, let alone its own. I know they were working with CrowdStrike to ensure that data was protected. But no one listened to me and the stock started its steep decline. Now, I had George Kersh, the CEO of CrowdStrike, on the show several times to explain how Anthropic wasn't looking to directly compete with their kind of cybersecurity. Nobody cared, this stock got pummeled some more. It only got worse when Anthropic revealed that it has a model, Mythos, which is incredibly effective at spotting software vulnerabilities. Anthropic is an Uber responsible company that correctly recognized that the release of Mythos could lead to real security issues. So it brought in who? How about CrowdStrike as part of Project Glasswing, a consortium of organizations put together to study the risks and fix them. But the takeaway remained that with or without Mythos, Anthropic would compete directly with CrowdStrike.

Speaker 5:
[04:14] You can't make this stuff up.

Speaker 4:
[04:16] Stop kind of moderating again. I could not believe this. How could people not see that AI and Anthropic weren't headwinds for cyber security and CrowdStrike? They were tailwinds. You need much better security in a world where hackers also have access to AI tools. Last night, KeyBank came out and said the same thing I've been saying literally for months. It was a piece, research said, quote, AI tailwinds have arrived and the Falcon platform well positioned upgrade to overweight Falcon platform being CrowdStrike's line. The analysts surveyed a bunch of chief information security officers and guess what they found? The majority felt that mythos would positively impact cyber security budgets in the next 12 months. In other words, these companies plan to invest more in cyber security to protect against anthropics issue. Now on a down day with many stocks getting just clocked, CrowdStrike rallies nearly 4% on the exact same thing that I've been telling you for weeks and no one's cared. Go figure. At any given time, you might have wanted to bail on this because every time I said it was good and people said it was bad, the stock went down, OK? If you thought it was true that anthropic was gunning for CrowdStrike, OK, you know, gunning for the whole industry, I get that. But it was wrong. I think this was day one of CrowdStrike's comeback from purgatory. Yeah, I like that. The stock's still down for the year. That's nuts. Or how about Microsoft? Now, we've learned from the chat with us for ages. I've been looking pretty silly, frankly. We're aware that copilot is issues, but we're also aware that Azure Cloud Infrastructure business is robust. Windows franchise remains second to none. So we hold on to it. Stock's been ugly, fell from 555 at its heights to last summer to $356 at the end of March, where it began a sustained run, during which all I heard was derision, and how could you be so stupid to own it? How could I be so stupid to bring in a company that I brought in to Goldman Sachs? I don't know how many years it was. What was it, 86? Anyway, then today, after the beginning of a nice rumble higher, an incredibly positive Citi piece of research emerges and ignites the stock. What have they been saying? How about what I've been saying? So what? The analysts polled resellers and business is very strong. Many bears have said that Microsoft's gonna miss numbers. Citi actually raised numbers, said that the Azure cloud business showed up terrific results. This is the first positive piece I've seen on Microsoft since the negatives took over the microphone, okay? Microsoft's enterprise software is doing incredibly well. Some product lines, sure, some are gonna get hurt by Anthropic or even OpenAI, which is their partner, but it's got a fantastic balance sheet. It can improve its AI offering and it can take some hits for heaven's sake. I am glad we didn't dump it. First day I've said that a long time. It could have been a big mistake. Stocks back up to 424, up six bucks today. I bet you analysts come out of the woodwork and say, you know what? We really like Microsoft. All right, Blackstone, BX. Not that long ago we were reading about how this terrific private equity firm could be crushed by its private credit business line. Now, it owned a fund that had big redemptions because of fear that the fund's software investments would be destroyed by Anthropic. See the theme? The stock fell from all-powerful Anthropic. I should say that each time, by the all-powerful Anthropic. The stock fell from 160s in January to the low 100s. Other private equity firms gated funds or did limited redemptions. Blackstone, what did they do? They actually went to their employees and said, hey, would you like to step in and buy some of the private credit funds to help recover redemptions? I actually know they did this voluntarily. I was screaming up and down because it was voluntary that you had to buy the stock, you had to buy the stock. But I just thought, it quickly fell another 10 points. I felt like I was the kiss of death for these guys. Then the software stocks and the most important software index rang back to life. Too many short sellers, but not a lot of failures. It looks like Anthropic is not the kiss of death after all. Blackstone stock roars back to 133 at one point today, even though it pulled back in the afternoon to 128.50. The move was worth catching, even as it seemed like throwing good money after bad when the stock kept falling after the employees made their contribution. Then there's United Health. This company's long been the queen of the health insurer crop, but it got hit by some serious management missteps. Sure, this was a tougher one to see coming. Steve Hemsley, a tremendous CEO, ran the company from 2006 to 2017, and his company was the best in the industry by far. UNH ran aground, not because the business went bad, but because management went bad. Look, I don't need to rehash it. Others say that Hemsley returned to the CEO role in May of last year. He made it clear that he needed some time to fix the company, pulled guidance, said there was a lot of work to do. I was genuinely worried that UNH might be permanently broken. I was wrong, the balance sheet was good, Hemsley was the same old great self. Today the company reported what I think will be the first of many upside surprises, just like the way Hemsley always used to do, clockwork. You don't just get one good quarter from Hemsley, you get many. Stock shot up nearly 7%, I think it's a bot. I think it can return to its former greatness. All these, CrowdStrike, Microsoft, Laxda, United Health, require faith, faith in management, faith in the model, faith in the balance sheet, faith in the comeback. All these companies have tremendous leaders, all have immense financial firepower. The first three deserve the benefit of doubt, and the fourth earned it when Hemsley returned. Here's the bottom line, there are plenty of instances where it might be hard to discern a turnaround. I talked about how hard it is for me right now with Nike. There's plenty of fright in all four of those situations, but I think in a few months' time, we will look back and the doubters will say, what were we thinking? And the remonstrators will say, why the heck didn't we buy them? The answer, because you let your fears get the best of you, and that's the opposite of what great investors do. Let's go to Sandy in Virginia. Sandy.

Speaker 6:
[09:58] Hi, Professor Cramer. I've been a club member since the start and really appreciate your great stock.

Speaker 4:
[10:06] Thank you. That's very nice. Thank you. And I'm glad you do. We come to play every day, Sandy, Jeff Marks and I. What's going on?

Speaker 6:
[10:14] In the summer of 25, when there were predictions of interest rate cuts, I bought two homebuilders that you said were good companies. Toll in Lennar, toll's been fine, but Lennar is down about 20% since I purchased it. So what do I do now?

Speaker 4:
[10:34] Sandy, you buy Lennar. I saw, I read through Horton's, DR. Horton, the largest homebuilder. I read through the Carver School today, I said, holy cow, the combination of that fellow who was on the hill today, Warsh, and this, you're gonna make money in the homebuilders. I think you buy some Lenore tomorrow and Stuart Miller will not let you down. Trust me, right? Look, it's hard to identify the turn in some stocks, but you can't let fear get the best of you when you're dealing with companies that are best at reaping good balance sheets and great management. On Mad Money tonight, RTX and GE Aerospace both shot the lights out with the earnings report, so why did the stocks sell off today? I'm running through the numbers to find out, don't despair. Then I'm no poet, but I'm reading through the spanzas from poet technology to see if it could be a fit for your portfolio, as one of you've asked me. And as tensions continue to flare up with Iran, I'm sitting down with the CEO of Flexport to get a real time read on the situation in the Strait of Hormuz and other factors in trade. So stay with Cramer.

Speaker 5:
[11:35] Don't miss a second of Mad Money. Follow at Jim Cramer on X. Have a question? Tweet Cramer, hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com, or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.

Speaker 1:
[11:57] This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts.

Speaker 7:
[12:26] Men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need and that needs to change. I'm Dr. Guy Winch, your host for Season 3 of The Visibility Gap, presented by Cigna Healthcare. This season, we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day and why opening up can feel so difficult. Join us for the new season wherever you stream your podcasts.

Speaker 8:
[12:56] When Mother's Day means celebrating your mom, your wife, maybe even your daughter as a new mom. Trust 1-800-FLOWERS to help you celebrate every important woman in your life. With double blooms from 1-800-FLOWERS, order one dozen roses and get another dozen for free. It's a simple way to give beautifully with colorful blooms that make Mother's Day feel meaningful. For every mom you're celebrating, order with confidence and get double blooms at 1800flowers.com/sxm. That's 1800flowers.com/sxm.

Speaker 4:
[13:34] What the heck went wrong with the aerospace and defense stocks today? I've been pretty bullish from this entire group, both the commercial aerospace side and the defense contractor side. But this morning, GE Aerospace and RTX, two of my favorite companies, reported very good numbers. Yet both stocks got slammed, with GE falling $16.87, or 5.56%, and RTX declining $8.62, or 4.4%. We know there's tremendous demand from the commercial aerospace side, with years-long backlogs for anything that goes into airplanes. We know defense budgets in the United States and in Europe have surged, and now our military needs to replenish its stockpiles after exchanging so many missiles with Iran. You think this would be a great moment for GE Aerospace and RTX, two iconic aerospace defense places. But while these stocks have been tremendous long-term performers, no doubt about it, GE Aerospace up 94% over the past two years, RTX up 84%. They've pulled back substantially from their highs over this year. GE Aerospace has quietly come down 18% from its all-time high in late February, while RTX is down about 13% from its all-time high in March. I was hoping their earnings reports could turn both stocks around. Sadly, that didn't happen. Let's start with GE Aerospace, which reported first this morning and gave us an incredible set of numbers. Every key line was above expectations, with revenue up 29%, year-over-year operating profit up 18%, earnings per share up 25%. This was a 26-cent speed off $1.60 basis. I'm telling that pretty darn impressive. At the same time, their free cash flow was up 14% year-over-year. Both sides of the business were on fire, with the commercial aerospace business up 34% and the smaller defense division putting up 19% growth. Even better, orders surged 87% versus last year, and GE Aerospace's total backlog stood at more than $210 billion at the end of the first quarter, with $170 billion of that coming from commercial services. That's going to be, that's going to pay off. Really, there wasn't much to quibble with at all here. Demand is insatiable, and that's true on both sides of the business. Management's self-improvement plan designed to fix supply chain issues and improve outputs is paying immense dividends, while GE Aerospace's operating margin declined a bit. That was expected. The actual numbers still came in above the estimates. I was expecting good numbers, but when I spoke to CEO Larry Culp this morning, I was positively gushing with surprise. Oh my god, that backlog. But rather than rallying in response, the stock tumbled $16.87, 5.6%. Why? Mostly because management decided not to raise their full year forecast. With the types of beats that we saw for the first quarter and the fact that GE Aerospace has tremendous visibility to the future, a lot of people hoped they'd raise their forecast. I thought that was unrealistic. And yet, raising your forecast after the first quarter would be an unusual move, especially given what's happening in the world, right? I mean, come on, let's be realistic. In the end, management reiterated every line of its full year outlook, even as they also noted that they're trending toward the higher end of these numbers. Plus, they clarified that the full year forecast includes several negative assumptions about the global economy, like persistently high oil prices through the third quarter, a near term impact from fuel shortages, and a reduction of global GDP estimates. Basically, GE Aerospace gave us a pretty conservative forecast, so I'm not really sweating the fact that they didn't give us a classic beat and raise quarter. You can read between the lines and understand that the company is doing extraordinarily well, but management wants to be cautious about the future, given all the disruption that we've seen from the turmoil in the Middle East. Given how dramatically this stock sold off on a very good quarter, I'd be a buyer down here, and if it pulls back again, I think you should feel confident about buying more. I thought about putting it in the Chapel Trust bullpen today. Next, how about RTX? They post an excellent set of results too, also beating expectations on every key line. Revenue grew 9% or 10% organically, while operating profit was up 14%, free cash flow up 65%, earnings per share grew 21%, that's a 27% beat off $1.51 basis. Wow! RTX also said that its order activity remains robust, end quote, with a 1.14 book to bill ratio in the quarter, meaning they're bringing in plenty of new business, and their backlog stood at 271 billion at the end of the quarter. These are astounding numbers. All three of the company's segments, which are fairly evenly sized, beat sales and operating profit expectations. The Collins Aerospace Unit grew sales by 5%, operating profit by 6%, while the Pratt Whitney Aircraft Engine business and the Raytheon Defense business grew sales double digits and saw operating profit at more than 20%. Unlike GE Aerospace, RTX did raise some lines of its full year forecast. Company ticked up its adjusted sales outlook by $500 million, taking it to the $92.5 to $93.5 billion range. They raised their earnings guidance by 10 cents, the $670 to $690 range, but they left their organic sales and precast flow outlooks unchanged. Maybe that partial guidance raises why RTX held up a little better than GE today, but still, they reported an amazing quarter and the stock got clobbered anyway, probably because investors were hoping for even more of a boost. That's unrealistic, unrealistic. As I mentioned before, much of the focus for RTX is about what the company is doing to grow its capacity, especially for the defense side of the business. That was still the case today, as RTX mentioned that it has increased its maintenance, repair and overall output for a key Pratt & Whitney engine model by 23% year over year, and that its Raytheon unit had ramped its total munitions output by more than 40% year over year. I mean, that's exactly what we want to see. Now don't forget, RTX should have years of upside here as one of the nation's leading producers of missiles. So it's worth noting that the Raytheon unit had $6.6 billion in awards just in the quarter. Maginer also said they're working with the Department of War to accelerate munitions production, and so far that's going well. RTX has already reached deals to boost production of certain missiles like the Tomahawk, the AMRAAM, and the standard missiles that have been burning through in the Middle East. Holy cow. The company's CEO, Chris Kalio, talked about huge demand from around the globe, not just the US. I was incredibly impressed. One last point, RTX spent a lot of time on its conference call talking about its Coyote counter UAS system. As we've been telling you, drones are playing an outsized role in modern warfare, and the Coyote from RTX is one of the leading counter drone systems that's been developed for our military. On today's call, RTX management discussed new types of Coyote counter drone systems, including lower cost non-kinetic versions and more mobile versions that can be recalled and deployed elsewhere. This is exactly what we need to deal with countries like Iran that love to lob tons of cheap drones at us and our allies. Long story short, GE Aerospace and RTX are both doing extremely well, even if their stocks got hit today, because they didn't give the investors the kind of full-throated guidance raises that the bulls were hoping for, but I felt was just ridiculously unrealistic. Bottom line, after today, the earnings estimates for GE Aerospace and RTX should be going higher while their stocks went lower. And guess what? These are exactly the kinds of stocks that get cheaper as they go lower. I think we're looking at some incredible bargains here, and as I said at the top of the show, sometimes winning investing doesn't occur immediately. But when we look back at the prices of these stocks that you're going to get over the next few days, I think you will wish you did some buying. Mad Money is back after the break.

Speaker 5:
[20:52] Coming up, you called in, looking to learn more about an up-and-coming Optic stock, and Cramer has now written up his report. He's ready to wax poetic. Next.

Speaker 9:
[21:05] When I lost my sight, I found a way to win. Bank of America champions blind soccer player and coach Antoine Craig, and everyone who dares to ask, what would you like the power to do? Bank of America, proud to be the official Bank of FIFA World Cup 2026. Bank of America NA member FDSE.

Speaker 7:
[21:21] Men are struggling with their mental health at some of the highest rates we've ever seen, but most aren't getting the support they need, and that needs to change. I'm Dr. Guy Winch, your host for season 3 of The Visibility Gap, presented by Cigna Healthcare. This season, we're focusing on men's mental health, bringing together real stories and expert insight to explore the pressures men face every day, and why opening up can feel so difficult. Join us for the new season, wherever you stream your podcasts.

Speaker 8:
[21:50] When Mother's Day means celebrating your mom, your wife, maybe even your daughter as a new mom, trust 1-800-FLOWERS to help you celebrate every important woman in your life. With double blooms from 1-800-FLOWERS, order one dozen roses and get another dozen for free. It's a simple way to give beautifully, with colorful blooms that make Mother's Day feel meaningful. For every mom you're celebrating, order with confidence and get double blooms at 1800flowers.com/sxm. That's 1800flowers.com/sxm.

Speaker 4:
[22:28] Last week, BK in Massachusetts called in to ask about Poet Technologies, which is an optical play that sits right in the middle of the AI data center build out. Because I wasn't familiar with it, as always, I said I'd circle back and give a more informed answer. Now, we've seen a bunch of winners in this optical space. Like, we've had these companies on coherent momentum, which I mentioned earlier this week. Photonic computing is becoming core to the AI build out because as data centers get bigger and more power hungry, you just can't use copper to move data around. That's what we're using right now in most data centers. It absorbs too much heat. Instead, you need to transmit signals through light using fiber optics. Remember that term, which brings me to poet technology. This stock shot up nearly 20 percent today because the CFO fired back at a short sellers report from last week. Now, it's up more than 72 percent in the past month, 175 percent over the past 12 months. So what exactly do these guys do in the optical space, and does it deserve really to be up this much? Okay, Poet is a packaging platform. Their silicon based technology is designed to replace a lot of traditional manual assembly with semiconductor style automation. It combines electronics and optics onto a single chip without wires with the goal of lowering cost and improving power efficiency. While other companies make individual parts, Poet's focused on the stage that holds those parts together and helps them connect more efficiently. Lasers have to be aligned very precisely, often by hand or by expensive robots to lay fiber. Poet argues that its optical interposer can simplify the process by using semiconductor style etching and automation. That would be terrific. Basically, this is a company trying to make optical packaging cheaper, smaller and easier to scale. And look, that's when you think about the niche role in the stack that this has. Well, you know what? You have to go back to what Nvidia CEO, Jensen Wong, would tell you about the need for better packaging and integration will only grow as the fourth industrial revolution keeps rolling. That sounds exciting for POET. In plain English, the pitches that POET can make light source products smaller, cheaper and easier to scale for data centers. That's why the story gets people so excited. It's a potential enabler that can scale with the industry. But maybe the word potential is the operative one. And look, it's not like POET came out of nowhere. They've been at this for decades. But the stock caught fire last month when POET entered into a strategic collaboration with Lighteon to design next generation optical communication modules for AI data. They expect prototypes, members, prototypes, by late 2026 with high volume production likely coming next year. Then POET said it was expanding its partnership with Lessengers. That's a South Korean optics outfit to deliver high-end optical transceivers for ultrafast AI network connectivity. I know all the buzzwords you want to hear. That makes POET's technology more relevant to the hyperscalers like Microsoft, like Google. In a world where data rates keep climbing and power efficiency matters more every quarter, anything that gives you faster connectivity at a lower cost could be a real winner. Still, while I like the story here so far, let's not get ahead of ourselves with these recent announcements. POET's got a joint development agreement. They're not producing this stuff at scale. I'm calling it early. The stock's trading like they're already in mass production, and that bothers me. Just look at the numbers. POET's financials make it look more of a science project than a business. In the fourth quarter of last year, they had $341,202 in revenue, admittedly up big from around 29 grand the year before. But those are rookie numbers, easy compares. For the full year, they did $1.1 million in revenue, and they posted a net loss of $63 million. Hard to make that one up in volume. In other words, with a market cap of more than $1.5 billion, Poets trading at nearly 1,500 times last year's sales. And that is hard to take seriously. But then you look at the growth estimates, the companies projected to grow its revenues nearly tenfold, to $10 million this year, meaning it's trading at over 150 times this year's sales. And I don't expect eightfold revenue growth in 2027 to 80 million, at which point the valuation no longer makes me want to puke, at least figuratively, because literally I've had an upset stomach all day and the tums just ain't working and I need some Pepto. Maybe not that salient to you, but it is to me. Anyway, you really have to understand the full stack and the complexities of optics before diving into one of these plays when they trade at such rich valuations. These are not simple stories either. If you don't know exactly where a company fits into the data center, what part of the bottleneck it's solving, it's very easy to pay too much for something you don't understand. That's why I have a hard time telling, say, a conservative investor, to chase this thing after the move is already made. I said something similar about this light-wave logic last week. The stock's become one of the market's favorite speculative ways to play photonics. This is a small cap company trying to prove it belongs in the all-important AI supply chain. Some would award this poet meme status. I don't know if it knows it. That means the upside can be real, but only a poet can pull off the execution. With a company like this, the challenge is never just whether the technology works in a lab demo. You got to figure out if it can be manufactured consistently and shift at what we call scale. Poets talked about manufacturing progress. It has a Malaysia assembly relationship, and it says it's moving toward production. But none of that changes the fact that the company is still in the prove it stage. The road from an interesting platform to a durable AI supplier is a long one. Now, let me give you more insight into last week's big short report. Poet recently responded to a report by Wolfpack Research, it's a short selling firm, claiming that investors are on a collision course with the IRS by accumulating so much cash through dilution while generating so little operating revenue. The short selling firm also wrote that the company has spent significant amounts of capital on questionable promotional activities, and characterized Poet's journey from solar to photonics to AI optical components as evidence of serial strategy failure. The company's CFO, Thomas Meekle, responded by saying, I'm going to quote you here, they called us a promote company, which we're not. We're a real company with real products. I just don't think they understand that in the technology space, it takes a lot for a company to get started and face the challenges that we have faced over the past 10 years. Meekle also offered the company's current product line as a counter. He stated that Poet now holds a $5 million production order for its 800G optical engines, and has invoices from Celestial AI, which was acquired by Marvel Technology earlier this year. There's a good brand. The stock was trading over $7 for the report. It came down about a dollar, and now it's at 10 and changed, thanks in part to that rebuttal. They also clarified a way around the tax issue. So where do I come down? Look, I like the theme a lot. You know that. The scramble to secure lasers, transceivers, optical integration technology, it's happening. Poet has a more interesting story than the average speculative small cap tech name. But I'm not ready to recommend Chasen here. If you want to play the theme, I'd still rather you own the more proven companies, like Lumentum, like Coherent, both of which have invidious endorsement and money. So the bottom line, while I can't endorse speculating on poet technologies, given how much this doc has run, it has a lot of potential and it's definitely worth watching. If you really like it though, I'm begging you to wait for a pullback before you pull the trigger, as I don't think you can consider yourself to be early to the story. And that's sometimes what matters the most. Let's go to Young in Pennsylvania. Young.

Speaker 10:
[30:05] Hey Jim, this is Young from Spring House PA. How are you?

Speaker 4:
[30:08] I'm from Spring House. I'm good. Nice to see you, neighbor. What's going on?

Speaker 10:
[30:12] Good. I had a question about Marvell Tech. I was really sad to see this go from your bullpen, but because of you, I have more than a triple bagger when it comes to this stock. The fundamentals and the bookings on this stock or this company have just been accelerating due to the build out of the data center. So I was wondering, why does the past price action matter more than the future outlook?

Speaker 4:
[30:37] No, no. Look, you're right about it. I think the world of Matt Murphy, I've liked him ever since the stock was in the 20s. My problem is we had a big hit in it, then we didn't come back in time when it fell. We did have him on. I'm proud that we had him on talking about that he's the signal, not the noise and that he bought a lot of stock. I'm glad that you bought it. Sometimes, we own a lot of stocks. I try not to have more than 30 stocks. I didn't pull the trigger in the bullpen. And, you know, I was talking to my wife the other day, and she said, Jim, people really hate you on boards all the time. I said, I don't read any of those. But I'm always willing to admit when I screw up, I should have pulled the trigger. I didn't. We bought some other stocks. Fortunately, they were good too. Look, I can't endorse a new position in Poet Technologies right now, given how much the stock has run already this year. But it's intriguing, but it's run too much. Much more than Mad Money had, including my sit-down with Flexport. The private company plays a major role in managing supply chains around the world. I'm getting update on the situation, the straight-up removes, the straight from the CEO. And I gotta tell you, there's so much that this guy can tell us. We gotta stay on top of it. And Tim Cook announced yesterday that he will step down as Apple's CEO later this year. So tonight, I'm taking a closer and personal look at his legacy and the lessons every CEO can learn from his incredible leadership. Between the Supreme Court overturning most of President Trump's tariffs and the reins closing the Strait of Ramos, they've been one crazy year for companies with a global supply chain, significant shipping needs. That's why we gotta check in with Flexports, the privately held company that uses technology to help its clients coordinate global logistics. Company gave us a lot of insight back during the COVID-induced supply chain crisis. Now we got a different kind of supply chain crisis or crises. So let's take a cold look at what is happening all over the globe with Ryan Peterson. He's the founder and CEO of Flexport. He had a better sense of what's happening. Mr. Peterson, welcome back to Mad Money.

Speaker 11:
[32:38] Boo-yah, Jim. Thanks for having me. Boo-yah back.

Speaker 4:
[32:40] All right. Listen, I got to tell you, Ryan. As between what's going on next to Iran and what's going on with the tariffs, how do companies get by? Because to me, there's just so many things that are going wrong. I almost want to only invest in domestic companies.

Speaker 11:
[33:01] Well, on the one hand, the tariff refunds is a huge windfall for the American companies that do import and do business in the US. You got $166 billion of IEPA tariffs about to be refunded to those companies. And so domestic-only companies are going to miss out on that.

Speaker 4:
[33:19] Well, but at the same time, I listened to the president speak this morning of the Gang of Squawk Box, and he's talking about how he'll remember, how he won't forget the people who don't file for the money, which to me means he will remember the people who do. What size do you think he will remember? I doubt if some toy company that imported some $5 million is gonna get in trouble. But do you have people say, listen, do you think that the president's gonna spot what I do?

Speaker 11:
[33:48] Probably, I mean, I haven't heard it first hand, but you remember what was it about six months ago when the president's at the news conference called Amazon, a treasonous company for passing through the tariffs to their customers. And so yeah, probably some of these big companies are gonna have to have conversations that are unpleasant. But for the rest of us, I mean, we just gotta get our money back. It's too much money to leave on the table.

Speaker 4:
[34:08] Oh, absolutely. I wonder, I mean, Costco was the one that really was very visible. It's a position for my trust. I don't know, maybe, look, they're gonna do what's right for their customers, for the card members. They're not sitting there trying to figure out whether we'd anger the president.

Speaker 11:
[34:23] Costco said they're gonna actually pass those refunds back through to their members. I haven't seen more about how they've done that.

Speaker 4:
[34:28] Yeah, well, that's what I'm waiting for that. I'm probably one of the biggest ones. I'm all set for that. Now, let's talk about what's going on with this trade of vermouths. When you see this, and it's on again, off again, on again, do you just tell people who come to you and say, what should I do? Do anything but go there. Go to the Panama Canal, which apparently is also a problem. Go around the Cape of whatever. I mean, what's your suggestion to people?

Speaker 11:
[34:56] Basically, I mean, the big impacts here on the global markets, of course, if you're shipping through the Middle East, then it's highly disrupted, it's very difficult. But the broader impact here is actually on freight that's going from Asia to Europe. And air freight often would stop in Dubai, Qatar, in these airports and get trans-shipped and moved onward. And that's been heavily disrupted. So the number of flights or the volume of capacity is down about 40% since the war started on Asia to Europe lanes. Prices doubled. And we're getting very creative. Here at Flexport, for example, we built an ocean service. It actually brings the freight across the Pacific Ocean to LA, and then brings it over to LAX Airport and flies it to Europe. So just avoiding the region altogether, like you said.

Speaker 4:
[35:43] Holy cow. Well, I mean, how much of things determined by insurance?

Speaker 11:
[35:50] Well, certainly transits in the Strait of Hormuz are largely determined by, well, some degree of insurance and some degree of, just not wanting to put people's lives at risk. There's probably a balance of both of those things. But the insurance rates have gone through the moon. So to ship a tanker through the, to bring a tanker through the Strait, it used to be around $600,000. It's gone up to as high as $12 million just for one journey through the Strait. And honestly, I'm not even sure if that's the right price. That's what I read about. But it could be even higher than that on a given day and on a given transit.

Speaker 4:
[36:20] What do you do with companies like, we've been applauding Tim Cook, okay? He's been known as a logistics genius. What is a logistics genius? What does that person do that sets him or her apart from everybody else?

Speaker 11:
[36:34] Honestly, I think one of the hardest parts in logistics is planning, figuring out how much to buy, how much product to buy. And the logistics is a big factor in that because that's your transit time and that has a huge impact. That's cargo that's sitting on the water is just money. It's taking another form, another shape for a period of time. But getting that planning right so you know how much inventory to buy at the right time, when to buy it. Then as far as procurement, yeah, I mean, Apple has the luxury of very high margin products. So like, they're not that worried. Do you actually do the math on the weight of an iPhone and the dollar that air freight costs? It's like one dollar per phone. Now it's two. You don't have to be a genius. Like you can afford it. It's fine. Your margins are good enough. It's much harder in the low margin companies that can't afford to pay for air freight and have to get much more creative. And there it's really about how do you load these containers or load these shipments to eliminate all waste? I mean, we're able with algorithms to eliminate about 10 percent of containers just by playing Tetris inside the shipping container, shipping fewer things.

Speaker 4:
[37:39] Okay. Well, look, I do want to get people understand some of the things you do. Talk to me about the Flexport Atlas tool.

Speaker 11:
[37:46] Yeah. So Flexport Atlas, you can see it at atlas.flexport.com. We've built this sort of world view of Ocean Freight. And so we have all the world ships on there. And how do they actually sail? What ports do they go through? How do these container ships actually arrive from one destination to another? The real, actually, think of them like a bus route. What do those bus routes look like around the world? And therefore, what's the transit time? And it helps with that planning decision. So if you've got to move a container, you want to know, like, what's the cheapest contract that I can get that will get there on time? And so Atlas is designed to solve that problem.

Speaker 4:
[38:18] Okay. And also, I know that you've got Flexport funding, maybe trying to figure out what your timing is, because you did a big fundraising, $935 million. That's a very big fundraising, valuing the company at $8 billion. What's the state of things with you?

Speaker 11:
[38:35] Well, of course, we want to go be a public company. I think we're probably a couple of years away from that. There's some things we want to get done in the private markets right now. So driving growth, driving efficiency, really proving that we can, I mean, this industry should be one of the biggest beneficiaries for AI, and not just for those planning problems I discussed, but just automating of routine work, solving customer problems with technology. I think we have a lot to reinvest in right now, that we like being private, but I definitely see our future in the public markets.

Speaker 4:
[39:05] Are you writing the software? Are you using like a Claude Code to do it yourself? What are you doing?

Speaker 11:
[39:11] We use Claude, Codex, a little bit of Gemini. We love all the models, all of our children. We love them equally. We try everything as sort of the mantra, but Claude's probably the one that's most popular right now.

Speaker 4:
[39:22] All right, I mean, what can I say? We've learned one thing, it's just Claude is unstoppable for heaven's sake. Anyway, Ryan Peterson, CEO of Founder and Flexport. Thank you so much for shining some light on a very difficult area to understand.

Speaker 3:
[39:37] Mad Money is back here for the first.

Speaker 5:
[39:40] Coming up, you've got questions, Cramer's got the answers. Get charged up for a fast fire lightning round, next.

Speaker 4:
[39:58] It is time. And then the lightning round is over. Are you ready? Let's start with Sam in Pennsylvania. Sam.

Speaker 12:
[40:14] Jim, back in 2025, Blackstone brought this company public. I'm looking at LGN. It's in the center with a lot of winners.

Speaker 4:
[40:20] Oh my god, it's the HVAC data center once again. It's just unbelievable. It's a mini-Vertum. It's a mini-Vertum. There you go. Let's go to Pete in Alaska. Pete.

Speaker 12:
[40:31] Hey, Jim Cramer from Anchorage, Alaska, my friend. How are you?

Speaker 11:
[40:35] Thank you for taking my call.

Speaker 4:
[40:36] Of course. How can I help you?

Speaker 12:
[40:38] Pete. Beautiful. I got my golden retriever here. He's got his nose in my ear, wants me to ask you about Chewy, but I'm going another direction. Thinking about changing or rotating some position out of Nike, which is a loss and into Levi Strauss. All right.

Speaker 4:
[40:53] I like Levi Strauss at 23, 24. Now, I've liked it. It's been right. And I've got to tell you, I think Michelle Goss doing a good job. I'd buy the stock. But I'm not done. Let's go to Sherry in Texas. Sherry.

Speaker 13:
[41:04] Hey, hey. Jim, with all the spending and rising competition, what really supports this valuation? And is this still a buy or just another overvalued trade?

Speaker 4:
[41:19] Oh my God. Look, I didn't recommend Nebius, and then Nebius just took over. I'm not going to veto your rent. It's speculative, speculative, speculative, speculative, speculative. Oh no. And that, ladies and gentlemen, includes the Lightning Round.

Speaker 5:
[41:34] The Lightning Round is sponsored by Charles Schwab. Coming up.

Speaker 3:
[41:40] Tim in California, Tim.

Speaker 14:
[41:43] Hey, Jim. I'm calling from Cupertino, California to be exact. This is Tim Cook at Apple, and I want to congratulate you on 10 great years of Mad Money.

Speaker 5:
[41:52] From his Mad Money debut to today, Cramer takes stock of Apple under the leadership of Tim Cook.

Speaker 4:
[41:59] Next. You've heard a lot about Tim Cook today, and for good reason. Not just because of the spectacular returns he's given us in Apple over the years, but because he's accomplished what most people in business would tell you is impossible. He inherited an amazing company from the late Steve Jobs, and he made it better. He built the greatest consumer-based enterprise in history. It might help you to hear some lines from his classic goodbye letter that came out yesterday so you can understand what this man has done. Tim starts out by talking about how he starts his day, which is by reading your emails to him. Many have pictures of moments in your life you want to share with this stranger, others tell heroic stories, like how a simple watch saved the life of someone's mother. Think about these words, quote, in every one of these emails, I feel the beating heart of our shared humanity. I feel a sense of deepening obligation to work harder and push further, end quote. But most of all, he says, he feels a gratitude that he cannot put into words about how he got to be the person on the other end of these emails. He says that Apple, quote, ignites imaginations and enriches lives in such profound ways, it defies description, end quote. And he thanks all profusely for how you believed in him, quote, to leave the company that has always put you at the center of our work, end quote. I want to start by saying how rare that kind of goodbye is for multiple reasons. If you know Tim, you know these are not platitudes. No one wrote this for him. It's how he speaks. It's how he thinks. It's how he does things. I know it because I've sent in those kinds of pictures. I've told him about a mother I know who was saved by the watch. The goodbye letter isn't meant to be a clinic or a how-to about Apple stock and how it increased about 1900% under Tim's watch or that Apple bought back 43% of the company stock under his watch. Tim explains that real success requires no compromising on quality or integrity, something that's just too difficult for most CEOs to accept or do. The vast majority of CEOs think that without some sort of compromise, they won't succeed. Tim is living proof, that's not the case. Listen, in business, there are two kinds of companies. There's companies that are devoted to the consumer and those that cater to the enterprise. Right now, for example, we have two new companies that are setting the world on fire, OpenAI and Anthropic. We hear tremendous things about both, but when push comes to shove, Wall Street likes Anthropic more because it caters to the enterprise. OpenAI is trying to shift toward the enterprise, but right now, some of the consumer company not worth as much. Wall Street always puts a much bigger valuation on an enterprise company than on a consumer-oriented company because enterprise customers tend to be consistent, sticky, while consumers are fickle, easy to pry away by a competitor. That's what's driving the love for Anthropic right now. It can change, though. You and I may think it's silly, but we all know that a successful consumer business at scale is almost impossible to do consistently. When you read Tim's goodbye letter or you study anything about his leadership at Apple, you realize that a successful consumer business requires a ridiculous amount of dedication, heart and love for the customer. The kind of effort that Tim Cook was willing to make, like none other. He never sacrificed any consumer on the order of expediency or earnings per share. He never stopped working as hard as he could to please Apple users. I'm not denigrating these CEOs who go after the enterprise. I'm saying that it's a heck of a lot easier to handle, say, 1.5 million used corporate customers versus 1.5 billion individuals, the number of iPhone users. And it can take a lot less effort and well love for those who buy into it. What Tim told you in that goodbye letter is that he loved the customers like no other CEO I've ever met. No, not all 1.5 billion of them, but if you've seen him at the product launches or the stores or walking around town, he has time, he makes time, and he smiles because he knows you appreciate what his company has made. That's what he's lived for. And not only that, he likes it. Almost no one can do what Tim did, which is to make you so happy with his devices that you think you're his friend. No other device has friendship, and I doubt there will be any other one in our lifetime. It's too hard to build them, too hard to sell them, too hard to service them. That's why in the end, the enterprise is so much easier because the enterprise has no friends. If you have one of these, one of these, let me tell you something, as crazy as it sounds, you are his friend and he is yours. Maybe that in the end is the real secret sauce behind Apple's success.

Speaker 15:
[46:26] Thank you.

Speaker 4:
[46:26] Like to say this, it's always a bull market summer. I promise to find it just for you right here on Mad Money. I'm Jim Cramer. See you tomorrow.

Speaker 15:
[46:35] All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates, and may have been previously disseminated by Cramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer'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.

Speaker 1:
[47:07] This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com/marketupdatepodcast, or find Schwab Market Update wherever you get your podcasts.