Mad Money 08/04/26 | Audio Only

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. Mad money starts now. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Cra America friends. I'm just trying to make a little bit of money here. My job is not just to entertain, but to explain how days like today can happen. So call me 1 800743 Sim Z. Tweet me Jim Kramer. Okay, legitimate question. Where did all the sellers go? I think they've left the building at least metaphorically. And that's how you get this kind of incredible day where the Dow gains 97 points. Uh close to record high. S& rallied 1.79%. Best day since April, setting records on both an intraday and closing basis. And the NASDAQ jumped 2.59%. Still not quite at those early June records, but who knows when those will be taken out. I go back to the same question. Where did the sellers disappear to allowing many stocks, but especially the data center and silver stocks to gallop higher without much resistance at all? No supply. Well, do you know that ever since we found out that Liupold Ashen Brener's hedge fund situation awareness blew up last week, we've seen tech stocks flying all over the place. Unleashed, Unbound, Roaring Higher, catapulted by the lack of sellers of any size. They seem to be all gone, leaving little stock for sale in their wake, causing the buyers to take stocks up with their own buying, one after another. Listen, I used to be a hedge fun manager. I've been caught with my pants down more than once. I've seen stocks move in the wake of my failures. Millions of dollars of stock just sold out from underneath me because of margin calls. You can see my sad footprints everywhere. But I want to tell you that this Leopold guy, I mean, captain of the over situational awareness fund, he did this stuff maybe a million times bigger than I ever did. Even as his fund went to kingdom come, don't worry, he'll be back. They always come back. We're still living in his wake. It's his wake that's behind this magnificent rally, even as it seems inconceivable if you have never traded that it could possibly have had that kind of lasting impact. It does. The stock market's about supply and demand. people can handle any pretty much any amount of stock that trades buy side, sell side. But now we've learned that when this hedge fund, this hedge fund collapsed, this colossus, the positions that were for sale from Ashton Brener and his imitators were too big for these stocks to handle without being massacred. >> The house of pain, >> they plummeted because of this man's leverage. They were smashed because he was forced to sell into a vortex, a miasma of other sell orders, much more than this stock market could handle at any one level. How come? Who let this happen? Situational awareness was allowed to borrow $4 for every $1 he had under management. That alone is insane. Who the heck would give this guy, a 25-year-old rookie, that kind of power? How do you get that firepower? Of course, the brokers would. That's why. Because they make their biggest money lending on margin. No, not trading, but lending. So, they gave him $4 for every dollar he had under management, helping to take his fund to 45 billion at its peak. a lot of borrowed money there. To look at his position list is to look at the topology of this entire tech market. We know that he absolutely love love love the data center. He adored the companies that built the data centers. This wild man bought hundreds of millions of dollars worth of nebius, Bloom Energy, Cornwave, Iran, just crazy positions. He cherished the semis, buying them like a madman. But as much as he loved the data centers, he hated the software stocks. He seemed to think that this whole core would had to be destroyed by AI. So he shed the hell out of them. Now here's the way things unravel. Ashen Banner had a couple great years and became a bit of a pi piper. Situational winners had a lot of investors who knew what he was up to and they wanted to own his stocks. He had these 13 he had to follow with the government each quarter revealing his positions. And when you got a hot hand like this guy had, there are always imitators even if those positions are old by the time you see them. The brokers he used. Oh, they probably bought his stocks. They they I'm sure they were probably doing like this. Yeah. Go into the maybe go in the hall and say, "Listen, the big kahuna the big kahuna is buying some nebulous. Go buy some nebulous. Get ahead of him." The or maybe after him. The investors in his fund knew what he owned, too. They probably cherrypicked their favorites of his positions. We'll never know how many people were piggybacking off this guy when his fund reached 45 billion, but there were a ton of them. When Asher Benner's big trade started going ary in June, all these imitators began to panic. Remember, these people don't KNOW JACK. They don't do their homework. They have no conviction. Do you think they're like, "Hey, the kahuna is sell it." Uh-uh. Of course, it took a lot to derail the situational awareness. I mean, it was a freight train. Of course, it took higher oil, a huge inflation scare, much higher interest rates. Uh, on the macro side, on the same time, a host of red hot stocks went parabolic thanks to terrific earnings. One after another, memory stocks, semiconductor, capital equipment, data center builders, they all just kept going higher as a surprisingly large group of camp followers bought them with borrowed money. Parabola. Parabola. What do I tell you? They always end in tears. And in the end, situational. Well, you know what? It wasn't as much of a topple as kind of a game of Jenga. We had a huge amount of supply hit the market at the same time. Offerings from Google, SpaceX. Yeah, they reported 55 fine. And ultimately, SKHX, the Korean semiconductor company that decided to list here. In the end, we ran out of buying power. Looking back that SK Hinx deal was a deal too far which he participated in by the way and that might have been the Jenga piece that only brought down this hedge fund. When the Jenga Tower crashed two things happened the huge positions Ashton Benner bought on margin and the copycats who took similar positions they all got wiped out. Being wiped out means that a huge amount of stock hit the market all at once. The stocks have been unnaturally high. Then because of his selling they went unnaturally low. At the same time the stocks he was shorting in software started flying when Surface Now reported a real good quarter. And unlike the last few times, it actually went higher. No one was leaning on it. That too caused an avalanche OF BUYING. >> Now looking back, you can see the footprints of the margin butchers who went to work slashing Ashen Brener because he couldn't fork up more money as collateral. Oh, they were everywhere in tech. An unbelievable conflict. Just when the tower situational awareness built tumbled, we hit earning season. And it turns out that so many of the broken stocks that ASHER LIKES ARE REPORTING AMAZING QUARTERS. But the companies he hated are reporting turf quarters too. Spectacular rallies and amazing short squeezes abound all over the place and the collapse of situation awareness. It what we realize we had is a clearing event. It wiped out all of your fellow shareholders with weak hands. Once it ended, there were no more force sellers. Many of the remaining large shareholders like the stocks and bought more on weakness. At this point, I think the big tech names are still too low and maybe concerned about AMD's guidance in this very evening will give you another bite at the tech Apple. The bounce back from situational's demise is why we've been rebounding like crazy and AMD will not derail that. Same thing on the software side as we realize that these companies were being kept down by endless short selling, not by the fundamentals. They're exploding higher now. Yes, Adobe's business has been truly workday is not so good. Maybe Salesforce down weaker. However, these stocks got way too cheap and with the shorts running out of juice, well, they got nowhere to go but up. This is why I say to Robert in New York who called last night that he could be really right buying into it. A classic wise guy AI short by traders who think that chatbt or Grock or Claude can do your taxes. Yeah, yeah, sure. Sure. Can you imagine being audited by the IRS and you blame Gemini? Hey, listen. Grock maybe do it. I'll stick with Turboax. What's amazing is that we're still seeing these short positions unwind. They were just so large and now the stocks are coiled springs. In the end, I come here neither to praise nor to bury situational awareness. As I said, I'm sure the guy will be back. I mean, everybody loves a comeback story and stock selections plus a little risk management would have probably led to a super gear. But situational was so big at its peak and there were so many copycats that the Jenga pieces fell all over the place. Situational's remaining positions that Ashenber couldn't sell fell to a smart alpha called Citadel. I have no idea what Citadel did with them. Whatever overhang they might have been though from Citadel that seems to have ended too. The bottom line today is still one more day where there seems to be no overhang, no stock for sale of any size. So much of tech, freed of the force selling goes ever higher. We all owe Leopold Ashen Brener a gigantic ocean of thanks. This is his rally. Too bad he didn't get to enjoy it. Let's go to Dave in Illinois, please. Dave, >> Dr. Kramer, how are you on this Palunteer breakout day? That Palanteer is a serious breakout. A lot of fun to listen to that conference call. Those guys do have game. No matter what you say, they are Shakespearean. They really are. I like them. What's up? >> Sure do, Jim. This $ 35 billion Canadian company provides product and service solutions for hardware platforms, supply chains, and cloud connectivity. 18 of the 19 analysts following Celestica, Inc. call it a buy or strong buy. You called them a long-term buy in the robust AI buildout. It's down 25 20% from its 52- week high. Jim, your thoughts on CLS? >> Dave wise uh why Dave is a wise man to bring me this. Now look, here's what I do. I read the Celelesu conference call every single time. They are incredible at what they do. I think it is a buy. I suggest that people say, "You know what? It's up 29. It's probably going to be too much." I say, "Buy some and then hope it comes down." Now, we're gonna go to Keith in Pennsylvania. Keith, >> Mr. Kramer, how you doing? >> I am good, Keith. How are you doing? >> I'm doing good. Uh, but I need you to please educate me on something. >> On your way. What's going on? >> A few weeks ago, GE Verova reported earnings and missed, and you stated that their order book was full and people simply weren't pricing in gigawatts. Um, could you please teach me how you value gig gigawatts and in the future? >> Absolutely. No, Keith, they did not miss. They had a terrific quarter, but the stock is very it's expensive. They hit it on a wrong day. I liked everything they had to say. I thought Scott Tracy did a good job. But what he was saying is, listen, we are putting on more. We are putting on more machines so we can generate more gigawatt power. Remember what they do is they turn the whatever fuel source typically natural gas into electrons and then that's what they turn into energy and they are able to turn only so many machines into energy and so much natural gas and energy it takes a long time to make the machines so what I think people fellas you know what they're not moving fast enough but I think they really are I think it's a terrific situation and I think the stock can go higher it was and is a rich stock though right tech has finally been freed from its forced selling and that's why we're seeing this levitation on May money tonight. Voyager Technology is shooting for the moon to power the new space economy. I'm finding out more about the economy with CEO. Then what's in the pipeline for drug banker MC with stock acts great. I'm going to go oneonone with the top brass after earnings and pictures are supported earnings after the bell. I'm getting the latest in the quarter and all the consumer trends. So stay with Kramer. Don't miss a second of MadMoney. Follow Jim Kramer on X. Have a question? Tweet Kramer #madmentions. Send Jim an email to madmoney@cnbc.com or give us a call at 1800743CNBC. Miss something? Head to madmoney.cnbc.com. We look at this phenomenal run in Voyager Technologies, the space and defense company that makes key components for satellites, missiles, and spacecraft. It's been racking up government contracts left and right. Last night, Voyage reported a very strong quarter with revenue up 51% just versus the previous 3 months. A narrower than expected loss and the backlog jumping 22% sequentially. That's versus last quarter, not last year. 90% demand is building faster than they can convert it into revenue. High quality problem. Uh they also raised their fullear revenue forecast pretty substantially. Some of that's thanks to the recent acquisition of Astrootic. It's a space robotics play and some of it's a core business. The stock jumped 14% yesterday even before the quarter and then rallied another 19.6% today in response to these results. Although it's still down roughly 55% from its post IPO highs last summer. So maybe I haven't missed as much as you might think. Should can it keep running? Should it keep running? Let's check in with Dylan Taylor. He's the co-founder and chairman CEO of Warrior Voyer Technologies to find out. Mr. Taylor, welcome to Mad Money. >> Thank you, Jim. Great to be with you. >> Okay, so I'm going to tell you, I usually I when someone I I've not seen, I look at the company, I think, is it really possible that you could be at the intersection of everything people care about, defense technology, national security, of the space economy. You put it all together. Tell us about your company because particularly for younger people, I'm going to say that because you're still losing some money, but I get that. How did you put this whole recipe together because it's what people want and it's where the where the puck is going. >> Yeah. Well, I appreciate the question. So, we're going to turn seven years old as a company in about two weeks. And the original thesis for the company was exactly this that at the intersection of national security, defense and space that a company like Voyager needed to exist because at the top of the heap you had the primes, highly capable but maybe not particularly innovative, maybe a bit slowm moving. Uh and at the bottom you had highly innovative entrepreneurial companies that weren't necessarily going to scale or couldn't enter and access the public markets. So the thought was can you build a purpose-built operating platform uh all at Danaher or Haiko or one of these highquality companies that's at the intersection of these things that are really important and we're a missiondriven company Jim because this is important not only for the US but for the western world because we're in a big race >> not just to the moon. No, I know. I mean, I went through the Palunteerh call multiple times last night and and it's very clear that this is existential for our country. Maybe uh kind of like when I was a little boy and I knew we had to get we had to get on the moon or we couldn't let the Russians win, which was true. We couldn't because it turned out to be more than just symbolic. It really was a fight that we had to win. Now, um let's let's do some defense first because Golden Dome a lot of people say, "Well, we have Golden Dome." Well, we know that Israel's got some gold on them. Where are we in this incredibly important project given the fact that some countries can launch missiles further and further and further to we should be worried. >> Yeah. So, think of Golden Dome as a moniker, >> okay? >> And think of it as a defense shield with layers almost like layers of an onion. So, obviously, you're not going to have a hypersonic missile interceptor for drone activity, >> uh, and vice versa, but you need uh architecture that addresses all the threats. So at the very top of the heap is a program we're on, next generation interceptor, >> which is intercepting hypersonic missiles from adversaries, typically nuclear tipped, mission critical. If you miss the missile, you lose a city. Uh so that's kind of the highest standard. Even sitting above that, a new part of Golden Dome are space-based interceptors. So this is intercepting threats that generate or uh emanate from space and then trying to eliminate those threats. So there are lots of different programs of record all being worked all addressing different threats depending on what the stratosphere might be or whether it's coming from space or whether it's something like a drone like we see in Iran. >> All right. Now it sounds like we're definitely ready for that. Now astrobotic acquisition the moon. We're going back to the moon. People don't even know we're going back to the moon. Tell us what's going to happen. >> Yeah. So there's going to be several lunar landing attempts with uh rovers. Uh so for example we actually have a mission uh roughly December called the Griffin mission that'll be part of Moonbase 2 and on that lander there'll be a rover so demonstrating mobility and ultimately what we want to do we the royal we the US and and allies are build infrastructure on the moon uh power propulsion mobility uh to ultimately be able to live and work on the moon and think of it almost like the eighth continent Jim that's the way I like to Think about the moon. >> The eighth continent. >> The eighth continent. Because you know there's >> back in school. >> Yeah. Well, I mean I tell you people say how how big can this lunar economy be? Well, I you know I say well what was the uh economy for a new a new continent when it was opened up? I think it's unlimited truly. >> No, you're right. I mean for us it was like it was Tang. >> Yeah. Right. >> We discovered Tang. All right. Now how about Star Lab? Another I mean I can't believe where you are. You should be so excited to come to work every morning. >> I am. I am. Star Lab, Airbus, Mitsubishi, great partners. >> So the International Space Station, humans have been up there for 25 plus years. Uh best things probably humans have ever built, Jim, honestly. But it's a I think so because not only for international diplomacy, but it's a complicated machine and um I think it's an expression of what humanity, you know, could be possible for, right? Um, however, it's aging and so the intention is to replace that instead of a government-owned station with commercial space stations. So, our effort, as you mentioned, is Star Lab, Palunteer, Airbus, Mitsubishi, and others are part of that group. >> Great partners, huh? >> Great partners. And we're the controlling uh shareholder of that. And uh that'll be we won phase one with NASA. This will be an effort for phase two, which should be selected uh later this year, early next year. >> Okay. So people are going to say, well, listen, he does satellites, whoever. Where is he with space? Where is he with SpaceX? I mean, you know, and I say, look, it does, you know, there's a lot of companies. It doesn't have to be with SpaceX, but you're obviously an observer of them. Uh something to do with them. >> Yeah. I mean, they're a partner really. I mean, they're launching our space station. We were one of >> So, they are there's only a couple that do it, right? >> They have to, you know, you need them or one other two. I mean, Blue Origin, obviously. >> Exactly. and our space station is so large that we need that heavy lift rocket capability. So I think we're one of their commercial first commercial customers. >> So they're great partners. We love working with SpaceX and they've done a lot for the industry. I think Starship is a gamecher for the industry. >> Yeah, I do too. >> We use their comms. >> But you don't think it's crazy that they might put data centers up there, right? >> I think longterm it makes sense. I think the form factor matters. the physics, it's very hard to build a large school bus data center in space because of the radiation issue with dissipating heat. >> But if it's a form factor roughly the size of a Starlink satellite and you do a mesh network, which is what I think Elon plans, I think it works >> well. Okay, look, here's what we're going to do. I want you back on. We're not giving you enough time. These are amazing projects. I didn't know your company well enough. Obviously, it bothers me because there's so many interesting pieces here. I have tremendous respect for what you're doing. Okay. Seven years you're building. It's not it's a it's not a small cap overnight success. It's some major opportunity for our viewers. And that's what I care about. This is Dylan Taylor. He's the co-founder, chairman, CEO of Voyager Technologies. And what can I say, guys? Just it's it's just I do wish I were back at school. I probably end up working for you. Thank you so much. Thank goodness back after the break. Coming up with Merc in motion after reporting earnings. Kramer's dissecting the quarter with the company's CEO next. Is there room in this world of AI dominance for Pinterest social media platform/verirtual pinboard site? After struggling for years, stocks had a nice comeback over the past 6 months. Up 85% from its February lows for today's close. Picture is getting slammed in after hours trading after reported. And I got to tell you, I'm honestly I'm a little flabbergasted because the quarter looked darn good to me. Company beat on every major lie. Revenue, earnings, free cash flow, monthly active users, average revenue per user. Maybe the market didn't like that management's revenue guidance for the current quarter was in line. I don't think that justifies this card. It's crazy. Could be a good opportunity here for one of the best still independent properties on the web. Let's dig deeper with Bill Ready. He's the CEO of Pinterest. Get a better read on the quarter. Mr. Welcome back to Mad Money. >> Thanks for having me, Jim. >> Okay, so I think you put a little perspective here before we go into this action of the stock. I care more about the what the company did because that's where the source is. You reported better than expected revenue up 18% year-over-year. EBIT up 24%, earnings adjusted earnings up 30%, cash flows look real good. This seems like a very strong quarter from Pinterest. It was it was a very strong quarter for us and I think at the core of it uh is really strong momentum with our users. It was our 12th straight quarter of record high users, 11th straight quarter of double digit growth with users, more than half of those being Gen Z. So we're really winning with the next generation. And what's let us do that is we've really turned Pinterest into an AIdriven shopping assistant. Uh stated simply, Pinterest is where Gen Z goes to shop. And we're seeing that that's not only really resonating with users and that we're growing at a time when a lot of social platforms are struggling to get user growth. We've had 11 straight quarters of double digit user growth and we're seeing that our advertisers are increasingly able to get really great results from that high commerciality on our platform. More than half the users on our platform are there to shop. So it's a very natural uh commercial interaction that's a great place for advertisers to meet new customers. Now, when can you uh get and I've asked you this before actually. I'm hoping things will get a little better, but uh domestic is great. US you make a ton of money. Internationally, you have so many users, but you just don't get to make as much money off them. Why is that? What's so different about them from us? Well, the interesting thing is, you know, that as we've really transformed the platform over the last few years, we started first in our home market, uh, our user growth has been broad, broad-based and global. So, we're growing across every geography that we track, every demographic that we track. And on the monetization side, we started bringing more of that uh commercial modernization, more of that advertising uh and shopping capability to advertise in the US first because it's our largest market by revenue, but we're now taking that international. We've seen really good early signs there. But you're exactly right. You know, more than 80% of our users are outside the US, but only 20%ish of our our revenue is outside the US. So there's a lot more room for growth there, and we've had good early progress on that. But it's one of the things we talked about on the call is that we're really really leaning into that and taking that UKAN playbook that's been so effective for us and has really reacelerated revenue in the US 5 percentage point acceleration this past quarter in in Ukan that we're now taking to international. >> Okay. I want to go back to to AI because you have a a novel model actually what you're using are the open source models. Closed ones cost a fortune. We now know that. I don't know how you knew to go to open source but it's certainly not a compromise at all. If anything, you're going to be able to at the gross margin going to go up big as this takes hold. >> Yeah, we were very early on open source AI or openw weight models. Um, and we use our own compact fitforpurpose models uh for things like core computer vision and things like that. So, we've been doing those things, but then for more than a year, I've been talking about how these open source models are getting much more capable and in a lot of ways are superior to the closed models on multiple dimensions. First is that the cost element I shared on the call we're seeing that for comparable models we're getting cost per transaction at less than 8% of the cost when we use open source models versus closed models but on top of that they're also more effective. The open models let you train based on your own data. So they become more effective. So I share that our our latest multimodal visual search models are 30% better at providing relevant recommendations on shopping for our users in our use case. So these benchmarks uh you know talk about things that could happen in the abstract. What really matters is what happens in your environment. And so you can now take these openweight models and train them on your own data and get better results. And then lastly, they're actually more secure because you can run them in your own secure cloud environment and know that your data stays your data and that your data isn't being used by somebody else to compete against you in the future. So, it's been really exciting to see how much the open- source AI community has progressed, including really great US labs and US hyperscalers that what what hyperscalers have always done is is take open-source software and make it really safe and accessible and secure for others to use and they're now doing that with with these openweight models as well. Uh, and I think that's a really great thing for the broader ecosystem. it will unlock a lot of innovation as more and more players have access to this capability versus being locked up with only a few. >> Now, also uh the you've got the right people coming. Uh you have reason to be optimistic because you said on tonight's call, Gen Z continues to be our largest and fastest growing cohort. Um now, how are they positioned to be able to buy things? Do we have data on them and how much they they look and then how much they buy and where they go to and is do you want to try to keep them on your site or is it okay if they go elsewhere? Well, so we want to make it just really really simple for users to take action when they find what they're looking for. So we shared that we we've more than 5xed the number of clicks to advertisers over the last 3 years. >> So more than half the users on our platform are there to shop and we're driving a lot of actionability to those advertisers and we're making it really really seamless and simple for the user and the advertiser. And the new thing that we talked about this quarter is that our assistant where we've been using AI in the background to serve really great relevant recommendations, we're bringing it to the foreground so that now when you have some of those follow-up questions that you found that great pair of shoes that you really wanted on Pinterest or that outfit that you wanted on Pinterest, but you have a little follow-up question like, well, I haven't bought this brand of shoes before. Do they run big or they run small? You can just ask it right on Pinterest and we're going to give you a great answer using LLM capabilities post-trained on our data so that we give something that's really personalized and relevant to that user that really makes it so they can find everything they need to go take action on our platform and then we bring our advertiser a customer not just a transaction because we help the user go to that advertiser to go complete the purchase which is we see being a great thing for us drives great repeat engagement for us. >> Well, I just want to be sure that I didn't read this wrong. I mean, there's no way that you could that people could say, this is reference to the stock that uh that somehow you didn't deliver on what you your forecast or or that you gave a forecast that's that's that's lower than expected. It's right in line. It is not like someone has come in and say, you know what, you disappointed and and now we have to sell the stock. It is just not the case. >> Well, you we always try to focus on delivering on what we say we're going to deliver. So, you know, Q2, we did a, you know, we were above our own guidance range. It was a multi-point beat on Q2 and as we look forward, we basically continued that momentum. Uh, and as you said, it was in line with with, uh, the external markets expectations. Um, but importantly, it's continuing the momentum that we've talked about in the ways that we've talked about it with our investors. So I think if you step back from it uh you know we told our investors you know 3 years ago that we thought this could be a consistent mid to high teens grower and that we could deliver 30% plus margins and we've done exactly that every quarter since Q1 of 2024 and in fact for this year we increased our margin outlook for for the year even as we're accelerating the usage of AI back to like how cost effective it is for us to use our own models and open source >> 18% revenue growth 26% margin you have rule of 42 I mean I I that's Why? I didn't normally want to I've never asked you about the stock, but tonight I'm so darn mystified. I just thought I should throw it out there given what I see is tremendous growth and a great franchise. I want to thank you, Bill, Bill, for coming on the show. Uh, and I again, sometimes you get mystified because the stock shouldn't be where it is. Maybe it should be higher. Thank you so much, CEO of Pinterest. Man, money's back after the break. >> Coming up, you've got questions, Kramer's got the answers. Get charged up for a fast fire lightning round next. Is there room in this world of AI dominance for Pinterest social media platform/verirtual pinboard site? After struggling for years, stocks had a nice comeback over the past six months. Up 85% from its February lows through today's close. Picture is getting slammed in after hours trading after reported. And I got to tell you, I'm honestly I'm a little flabbergasted because the quarter looked darn good to me. Company beat on every major lie. Revenue, earnings, free cash flow, monthly active users, average revenue per user. Maybe the market didn't like that management's revenue guidance for the current quarter was in line. I don't think that justifies this card. It's crazy. Could be a good opportunity here for one of the best still independent properties on the web. Let's dig deeper with Bill Ready. He's the CEO of Pinterest. Get a better read on the quarter. Mr. Ready, welcome back to Bad Money. >> Thanks for having me, Jim. >> Okay, so I think you put a little perspective here before we go into this action of the stock. I care more about the what the company did because that's where the source is. You reported better than expected revenue up 18% year-over-year. EBIT up 24%, earnings adjusted earnings up 30%, cash flows look real good. This seems like a very strong quarter from Pinterest. It was it was a very strong quarter for us and I think at the core of it uh is really strong momentum with our users. It was our 12th straight quarter of record high users, 11th straight quarter of double digit growth with users, more than half of those being Gen Z. So we're really winning with the next generation. And what's let us do that is we've really turned Pinterest into an AIdriven shopping assistant. Uh stated simply, Pinterest is where Gen Z goes to shop. And we're seeing that that's not only really resonating with users and that we're growing at a time when a lot of social platforms are struggling to get user growth. We've had 11 straight quarters of double digit user growth and we're seeing that our advertisers are increasingly able to get really great results from that high commerciality on our platform. More than half the users on our platform are there to shop. So it's a very natural uh commercial interaction that's a great place for advertisers to meet new customers. Now, when can you uh get and I've asked you this before actually. I'm hoping things will get a little better, but uh domestic is great. US you make a ton of money. Internationally, you have so many users, but you just don't get to make as much money off them. Why is that? What's so different about them from us? Well, the interesting thing is, you know, that as we've really transformed the platform over the last few years, we started first in our home market, uh, our user growth has been broad, broad-based and global. So, we're growing across every geography that we track, every demographic that we track. And on the modernization side, we started bringing more of that uh commercial modernization, more of that advertising uh and shopping capability to advertise in the US first because it's our largest market by revenue, but we're now taking that international. We've seen really good early signs there. But you're exactly right. You know, more than 80% of our users are outside the US, but only 20%ish of our our revenue is outside the US. So, there's a lot more room for growth there, and we've had good early progress on that. But it's one of the things we talked about on the call is that we're really really leaning into that and taking that UKAN playbook that's been so effective for us and has really reacelerated revenue in the US 5 percentage point acceleration this past quarter in in Ukan that we're now taking to international. >> Okay. I want to go back to to AI because you have a a novel model actually what you're using are the open source models. Closed ones cost a fortune. We now know that. I don't know how you knew to go to open source but it's certainly not a compromise at all. If anything, you're going to be able to at the gross margin going to go up big as this takes hold. >> Yeah, we were very early on open source AI or openw weight models. Um, and we use our own compact fitforpurpose models uh for things like core computer vision and things like that. So, we've been doing those things, but then for more than a year, I've been talking about how these open source models are getting much more capable and in a lot of ways are superior to the closed models on multiple dimensions. First is that the cost element I shared on the call we're seeing that for comparable models we're getting cost per transaction at less than 8% of the cost when we use open source models versus closed models. >> But on top of that they're also more effective. The open models let you train based on your own data. So they become more effective. So I share that our our latest multimodal visual search models are 30% better at providing relevant recommendations on shopping for our users in our use case. So these benchmarks uh you know talk about things that could happen in the abstract. What really matters is what happens in your environment. And so you can now take these openweight models and train them on your own data and get better results. And then lastly, they're actually more secure because you can run them in your own secure cloud environment and know that your data stays your data and that your data isn't being used by somebody else to compete against you in the future. So, it's been really exciting to see how much the open- source AI community has progressed, including really great US labs and US hyperscalers that what what hyperscalers have always done is is take open-source software and make it really safe and accessible and secure for others to use and they're now doing that with with these openweight models as well. Uh, and I think that's a really great thing for the broader ecosystem. it will unlock a lot of innovation as more and more players have access to this capability versus being locked up with only a few. >> Now, also uh the you've got the right people coming. Uh you have reason to be optimistic because you said on tonight's call, Gen Z continues to be our largest and fastest growing cohort. Um now, how are they positioned to be able to buy things? Do we have data on them and how much they they look and then how much they buy and where they go to and is do you want to try to keep them on your site or is it okay if they go elsewhere? Well, so we want to make it just really really simple for users to take action when they find what they're looking for. So we shared that we we've more than 5xed the number of clicks to advertisers over the last 3 years. >> So more than half the users on our platform are there to shop and we're driving a lot of actionability to those advertisers and we're making it really really seamless and simple for the user and the advertiser. And the new thing that we talked about this quarter is that our assistant where we've been using AI in the background to serve really great relevant recommendations, we're bringing it to the foreground so that now when you have some of those follow-up questions that you found that great pair of shoes that you really wanted on Pinterest or that outfit that you wanted on Pinterest, but you have a little follow-up question like, well, I haven't bought this brand of shoes before. Do they run big or they run small? You can just ask it right on Pinterest and we're going to give you a great answer using LLM capabilities post-trained on our data so that we give something that's really personalized and relevant to that user that really makes it so they can find everything they need to go take action on our platform and then we bring our advertiser a customer not just a transaction because we help the user go to that advertiser to go complete the purchase which is a we see being a great thing for us drives great repeat engagement for us. >> Well, I just want to be sure that I didn't read this wrong. I mean there is no way that you could that people could say this is in reference to the stock that uh that somehow you didn't deliver on what you your forecast or or that you gave a forecast that's that's that's lower than expected. It's right in line. It is not like someone has come in and say you know what you disappointed and and now we have to sell the stock. It is just not the case. >> Well you we always try to focus on delivering on what we say we're going to deliver. So, you know, Q2, we did a, you know, we were above our own guidance range. It was a multi-point beat on Q2 and as we look forward, we basically continued that momentum. Uh, and as you said, it was in line with with, uh, the external markets expectations. Um, but importantly, it's continuing the momentum that we've talked about in the ways that we've talked about it with our investors. But I think if you step back from it, uh, you know, we told our investors, you know, 3 years ago that we thought this could be a consistent mid to high teens grower and that we could deliver 30% plus margins. And we've done exactly that every quarter since Q1 of 2024. And in fact, for this year, we increased our margin outlook for for the year, even as we're accelerating the usage of AI back to like how cost effective it is for us to use our own models and open source. >> 18% revenue growth, 26% margin. You have rule of 42. I mean, I I that's why I didn't normally want to I've never asked you about the stock, but tonight I'm so darn mystified. I just thought I should throw it out there given what I see is tremendous growth and a great franchise. I want to thank you, Bill, Bill, for coming on the show. Uh, and I again, sometimes you get mystified because the stock shouldn't be where it is. Maybe it should be higher. Thank you so much, CEO of Pinterest. Man, money's back after the break. >> Coming up, you've got questions, Kramer's got the answers. Get charged up for a fast fire lightning round next. It is time and then the lightning round is over. Are you ready? I'm going to start with Ian in Florida. Ian, hit me. >> How's it going, Jim? Ian here. >> This is an exceptionally fabulous day. Exceptionally fabulous. Go ahead. >> What's up? >> Yeah, I have a question about Robin Hood. Um, you know, they launched this new blockchain with tokenized stocks. It seems like it's getting a lot of attention. Do you think this will positively affect the hood stock or do you think it hurts it long term? >> I don't I do not think that will matter. What will matter is that they continue to be able to add new products that are loved by people, but that they open up more and more accounts and they've been consistent doing that. God, I was talking with a guy yesterday. Have you ever bought a stock? He pulls out his Robin. He said, "Look at this. I'm trading. I'm trading. I'm trading." But he was trading crypto. That's okay. He's trading. I think Robin has got a winning site and I think he's going to continue to do well. Let's go to John in Massachusetts. John. >> Yes. Jim, first time caller, longtime watcher. >> Okay. >> Uh, Northwest Energy for a long time hold. It's recently just gone down a little bit and kind of >> listen to me. Listen to me good, John. That's a winning stock. That's what someone brings to me. That's the kind of thing you can put in your portfolio and just for well, you can't just forget about you always have to check. But I like that stock. I like it. Good call by you. Let's go to Bill in Texas. Bill. >> Booyah. Jim. >> Booyah. Bill. >> Proud club. Proud club member and longtime student here. >> All right. Fantastic. >> Wanted to get your thoughts on a regional bank that continues to expand their presence and deliver value for shareholders. My stock is Origin Bank Corp. Simple OBK. >> You want to be in a stock like Origin Bank. It's a great regional bank that sells at 13 times earnings. I love that kind of situation. That's a good one. And thank you for bringing it to our viewers attention. And that conclusion of the lightning round. >> THE lightning round is sponsored by Charles Schwab. Coming up as we wrap up another frenzy day on Wall Street. Kramer's giving you his keys to keep on keeping on. Next. There are times in my investing life where I've seen money made in buckets like they're giving it away. The returns are stunning. This is one of those times. The problem is these moments tend not to last. As Ken Langon, one of the greatest investors I've ever met, co-founder of Home Depot, puts it, there are about seven days a year when most of the money gets made. You never know when those seven days are going to come, though. So, you need to hang on through the bad times to reach the promised land. Most people just can't handle the pain. >> When I was preparing how to make money in any market, I wanted to figure out why this happens. My conclusion, well, rather than just give you what the pain is about, I said, look, maybe do this. Force yourself to buy shares in your favorite stocks and or an index fund, regardless of the current price. You'll do fine, maybe better than fine. You might even just get rich like the grandma of the kid I saw when I went to get a haircut today who bought a little invid video on a regular basis because of the show and she made a fortune. The hard part isn't picking winners. It's forcing yourself to stick with them when the whole world wants to frighten you away from stocks. What does make it so difficult? First, it is scary. Most people don't know what makes a stock go up or down. Could your stocks really be going down because some 25-year-old hedge fund manager borrowed billions to buy stocks. And when they pulled back slightly, the margin clerks forced him to sell everything, bringing the whole tech edifice, including your stocks, to its knees. And yet, that's exactly what happened with the situational awareness fund. But the story sounds so crazy, it's hard for people to believe it, to get their head around it. Second, there is the problem of risk. You feel good when your stocks go up, but you feel very bad when those same stocks go down. It's asymmetrical because the pain is much greater than the pleasure. On the way down, most people reflexively panic. Third, there are always people telling you that you don't know what you're doing, even if you do. Often these people want to manage your money. They're very rich and very convincing. But in this market, I think it's all about the fourth reason. The media loves negativity. They think it sells. It really doesn't, but they think so. And right now, it's especially negative. There are endless articles being written about how the data center thiefs is about to be cut short any minute by politicians protesters or how the Warner Ramble could cause non-stop inflation or may we need radar maybe two radics. Oh boy, really scary. Or how the hyperscalers can't afford to keep spending like drunken sailors. You're reading the same things I do endlessly. And if you buy into the negativity, so what happens? All right. Well, you're going to miss out on today's stunning 29% gain in Palunteer. Even co Alex Karp told us repeatedly that he would crush the numbers. You miss the 30% move in Wayfair, even though they sell great furniture that you probably bought some. You miss the gains in the data center suppliers, even as the mega caps keep spending fortunes on the stuff. See, there's a whole cottage industry of negativity that exists to shake your confidence to stories like these. That's why so many people throw in the towel along the way. I see you can't afford to listen these sirens of pessimism. You may have to strap yourself to the master at times. You may have to take some pain, maybe lots of pain. But if you can just accept that there'll be days of pain, I'm telling you that you can and will prevail because I've seen it happen so many times. Even if you don't want to pick stocks, you can park your money in index fund once a month so you never miss those seven days where the big money gets made. That's much better than being a bystander trapped by fear and the pessimists who pray on you. If you look at the gains today, I bet you knew many of these stocks. I know they were getable by you. So don't just stand there. Get to work doing some homework and get ready to buy something. I'm not saying you're guaranteed to win if you hold on to a stock long enough, but if you don't stick with your favorites, you're absolutely going to miss the biggest gains of the year, just like the very gains we had today. I like to say there's always a market somewhere. I promise try to find just for you right here on Man Money. I'm Jim 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 or its 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 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 or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full MadMoney disclaimer, please visit cnbc.com/madmoney disclaimer.