Mad Money 10/01/26 | 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 Craig, friends. I'm just trying to make a little money. My job is not just entertain you, but to educate, do some teaching. Call me 1800 743 CNBC. Tweet me at Jim Kramer. When a quarter runs to its conclusion, you have to look at what went right and what went wrong. We talk a lot about bonds here. We talk a lot about oil. We know interest rates are flying and the Fed's tightening again. Always a tough situation for stocks. And a third aircraft carrier with 10,000 troops is reportedly on the way to the Gulf. Disconcerting. But on the first day of a brand new quarter, October 1, you need a compass. You know what provides you the best compass? What can navigate you the best? Last quarter. Luckily, today was a sedate session with the Dow advancing 21 points. This would be climbing.19% and NASDAQ edging up. 04%. Though I thought it was going to bust out until we heard about that aircraft carrier going to the Gulf, which stalled a nent and much needed bond market rally. We all use our S&P 500 as our benchmark in this business. Now, the index finished up 2.03 003% for the third quarter. Not bad, not great. But if you own Mona, you got rich as it finished up 175%. Except it was a oneoff game because Merna, after years of toiling in the oncological wilderness, came up with a big one. A melanoma vaccine along with his partner Merc. The medical community is trying to figure out exactly how big this could be. Doctors are hoping this vaccine will virtually eliminate a recurrence of melanoma. And that's why the stock soared. It's come back a bit because of talk that there might not be a follow through to other cancers. I get that. But the fact that Merna formerly viewed as a one-trick COVID pony now as something that could be huge in cancer, I think it verifies the excitement and the move. Next up is one I had to look up called Everpure up 66%. Turns out Everpure is pure storage a data storage company except for this quarter it's become a hyperscaler play. Meta chose Everpure to handle some of its storage. Others may choose it, too. The stocks had a miraculous run. I wouldn't be surprised if it's got more upside. Some stocks are bounceback stocks. Remember that SAS apocalypse thing? That theory where all enterprise software would be destroyed by AI. Viva, a company that makes software for life sciences have been put through the AI displacement meat grinder. When the displacement didn't happen, those betting against it blew up and the whole group came running back. And that's how Viva finished up 61%. At just over 30 times earnings and almost 135 points from the bottom in April, I've just got to say, uh-uh, I'm not going to be in this one. I'd rather be in the bounceback that is Salesforce, a competitor that has a lot further to go. Finally, there's Palanteer, also up 60%. I believe in these guys. They're among the fastest growers with great gross margins and smart tough leadership. I've been using a $250 price target. I've been too aggressive so far. The stock got as high as 207 and then it got woped. It is now back to 190 where I would still buy Palanteer. Okay, now how about the worst performers? The ones that really did not help. How about that? Versus fair Isaac, the keeper of the FICO scorch down 50%. LOOK LIKE A SPLIT TO ME. P uh Bill Py, the head of the Federal Housing Finance Agency, jack of all trades kind of believes FICO to be too powerful and too expensive. He's been trying to get more competition to make it cheaper to get a loan. I I'm in favor of that. But the banks I surveyed, they actually like FICO. They think it was work. It's works. It's worked for years. They trust it. Fair Isaac's been a winner for so long, but now has a powerful opponent in the government. Who wants it to go away? Next, app loving. Once a favor of the momentum crowd for its ability to connect advertisers with the right audiences, had the field of inapp advertising all to itself until Android came in and wrecked the story, leading the stock to fall 44%. Now it's still a $94 billion company. That's just way too much market cap for me. Hey, then there's a great one, Corning. It fell almost 40%. Now, this one's misleading because it spiked from $88 at the beginning of the year to $255 at the end of the previous quarter. So, Corning's trip down to 154 last quarter was pure profit taking digging. We had a big moment this one for the Chapel Trust because we visited Corning factory where they make the glass for uh Apple Howardsburg, Kentucky. From that trip, I became certain that fiber is the future of the data center, not copper. So, I'd happily buy this one back if it ever dips again, which it doesn't seem to want to. All right. What about the NASDAQ 100, which finished up 2.47%. The gains here don't offer much insight sadly. Bitcoin finally rallied and took that and that took strategy. Remember you used to be micro strategy. A lever Bitcoin repository up 76%. Now look if you like Bitcoin I got an idea. Buy Bitcoin. I already covered Palunteer. Workday rallied 56%. Cloud software cohort came Rory back and we got some takeover chatter. We know that cyber security is incredibly important. We own crowd strike for the chapel trust. Now I'm feeling real good about it cuz it rallied 39%. Losers. All right. There's that app loving again down 44%. But here's another one. One that I buy KA Corp, semuctor capital equipment maker. We have a widespread chip shortage that can't be solved without KLA. Hence what we sold today with Micron. Crazy that the stock's down 35%. Then there's Rocket Lab off 31%. Some delays, some dilution, lower martens can even bring down rocket stocks. You want rockets, SpaceX. In the end, I think the best lessons from the third quarter came from the 30 stocks in the Dow Jones Industrial Average, which finished down 2.7%. The winner was Salesforce up 46.5%. This is another SAS apocalypse survivor. Still one more stock that was leaned on by that situational awareness outfit, giving Salesforce a chance to buy back a lot stock, a lot of stock much lower. And it reported a great quarter along with a big partnership with Anthropic. We're sticking with it for the Travel Trust. Microsoft's rally is just beginning. The stock jumped 37.5% in the quarter as the market fell in love with enterprise software again. I think Microsoft has a lot more room to run because it's only up about 6% for the year with Copilot their AI product on fire and some genuine acceleration to their Azure web services business as well as a hint of profitability from its data center built out. I really like this one. Chevron, the Iranian war raised prices. Venezuela beckoning. I still think it's number one stock because they feel like the fossil fuel gang. And there's Amgen catch-up trade uh plus 16%. You know what I like J&J which just got absolutely blasted today. I buy that one. Dallas losers worst for last Caterpillar stock. That one's like Corning. It had a monster run. Then it got hit with 24% profit taking in third quarter just like Corning given that its engines have had become a very good source of data center power. This might be a buying opportunity even though the stocks run huge. IBM missed its quarter and fell 22%. You know my rules. You miss a quarter, you got to wait a quarter. I like IBM, but rules the rules. Then there's two that are such name brand companies, I just can't bring myself to throw them away. Home Depot down 19%, a bad pick for my charitable trust. And McDonald's off 15%. Now Home Depot's hostage to interest rates, which had one of the most vicious increases in a quarter that I can ever recall. No relief to the death spot until rates go down. McDonald's, they can't seem to get out of their own way, but history says that when it gets this cheap on a price earnings basis, well, why don't you stay tuned? Here's the bottom line. Ultimately, I think we'll remember the third quarter as the moment when software bounced back and some amazing data center plays to come to profit taking. But my big fear right now is the impact of higher interest rates on the stock market. We'll see how that plays out when earning season comes around in a couple of weeks. Right now, it's not looking like a positive. Why don't we go to Mike in Michigan? Mike, my bike. >> Hello, Mr. Kramer. Thank you so much for taking my call. I greatly appreciate it. I've been listening to you for 20 plus years. >> Oh, thank you, Mike. That's good, man. You stick well with this. You're cadre. What's up? >> All right. I appreciate it. You actually uh motivate me to get my bachelor's degree in finance because I read your books and it intrigued me. Um within finance, I was wondering if we should pull the trigger on Morgan Stanley with the buyback authorization. >> The answer is yes. I mean, I think look, Ted Pick's company's been brought down along with the rest of them and his is doing better. I think you want to buy the stock of Ted Pick. You want to buy the stock of Morgan Stanley. I want to go to Tim in Maryland. Tim, >> booyah, Jim, I'm about Near Energy. Is it electric or what? >> Uh, it's electric, but no, I would I don't want to own that stock. As a matter of fact, I've been right to avoid that stock. And so, I'm going to double down and say I really want to avoid it. Let's go to Rober. Robert in Ohio. Robert, >> hello Jim. >> Hello Robert. What's up? >> The stock I was wondering about is Medronic TLC MDT. >> Okay. Now, you know, I am so glad you brought this stock up. I'm going to tell you what this is. This is why my job's hard. Medronic had a great quarter. Uh Jeff Martha is doing a fantastic job. I thought they put everything together. They're even getting rid of the commodity stuff. And what happens? stock goes up and then goes back down. That's why this market is so daunting. I like Metronic, but I got to tell you, at 14 times earnings, I don't know what supports it. I buy a little and then wait a little more till it goes down. Darn. I It should be higher, but I can't make it go higher. In the third quarter, software finally bounce back. I'm curious to see what happens this quarter when we see what companies are saying about higher rates. Well, mail money tonight. Can McDonald's finally deliver the turnaround it desperately needs? I'm going to take a closer look at the stock. Then as the AI trade shifts, we've seen a quiet rally in one key area of the market. Don't miss my deep dive on the stocks that go that keep the internet going. And when Fermy came public, I said this nuclear power plant was kind of more of like a business plan than a business. One year later, I'm checking to see how the business plan's turning out. 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. What the heck is wrong with the stock of McDonald's? Now look, I've been rolling this one over for weeks, even when I was in Italy. But I wanted to give them a chance to explain themselves at their investor day last week before I chimed in. Unfortunately, that much Bihood September 23rd investor meeting sent the stock down another 4.8%. At this point, Mickey De's is off 24% for the year. A highly unusual decline for this gold standard of the fast food industry. What happened? Pretty simple. Management came in with a big plan to transform the business and the street shot it down. So, is McDonald's a lost cause? Are we just simply getting a buying opportunity here? Long-term, this is a great franchise, and I find the stock tempting here. But I want to go over the negatives first because there are a lot of them. And let me say from the outset, this is a real hard one to decide on. even as I am a Big Mac fries and diet coke guy from way back when. Let's start with the turnaround plan that didn't get much love last week. The idea is to give investors I'm sorry, give customers better food and a better experience while making the location simpler and more productive so they can improve throughput. From my perspective, that's exactly what McDonald's needs to do because, you know, investors bulked at the cost. See, for a typical drive-thru location, the full package takes $800,000 of incremental investment above its normal remodeling requirements. To help cover the cost for franchises, McDonald's planning $8.5 billion of capital support and rent through 2036, including about $5 billion by 2030. That's it's not going to be cheap for the share shareholders, but it's a good thing. Is it fast, though? Management indicated that roughly 70% of US restaurants could come through that cycle over the next four years. The updated design became st become standard for new restaurants in the first quarter of 2028. Look, for such a sprawling operation, I I think it's pretty good. The problem is McDonald's is all about the franchises, which means they need to wrangle thousands of individual owners before they can make big changes. And the franchises won't get on board if they don't think the potential returns justify the near-term disruption. At this point, it might be an uphill battle. Not sure if they got everybody's buy in. The sellside research certainly didn't make it feel like anything revolutionary was going on. something that could shake the slumber and uh that hurt too. But if you want to know what's really weighing on this stock, you know what? It's like so many others. I think it's the darn bond market. With 10-year treasuries yielding 5.24% risk-free, McDonald's non-risisk-free 3.3% dividend yield becomes much less of a draw. You've also got a stretch consumer with rampant inflation, especially higher beef costs. Customers want cheaper meals that are better for you, while franchises need to protect their profits. headquarters can come up with a national value campaign, but getting thousands of independent operators to execute it. Well, that's a different story. So, why not just throw in the towel in the golden arches? For starters, there's the low PE multiple, what I call the secret sauce in how to make money in any market. The secret sauce is going in a direction. It's traded just 18 times next year's earnings estimates. Historically, McDonald's tends to trade in the mid20s, meaning we're now getting a substantial discount from its historical value. In fact, McDonald's hasn't been this cheap since 2014 when the business was falling apart. But then they brought in a new CEO who turned things around really quickly and the stock was hitting record highs again by the end of 2015. We saw a similar dynamic during the pandemic. Different problems, different periods, but the same reason to keep an open mind here. McDonald's has come through difficult stretches before. It's in their DNA. I don't doubt its ability to do it again. In neither case did anyone see anything good happening on the horizon when it bottomed. You needed faith in the company to take the leap and that faith was in short supply even though the stock was super cheap. That's why even though the stock's going out of style, I want to remind you that this company still has a lot going for it. Yeah, I'm taking a pretty contrarian view here. Let's start with a scale, okay? More than 46,000 restaurants, roughly 70 million customers a day, nearly 220 million active loyalty customers, international accounts for more than half the business. This is not some pitiful helpless giant. Then there's value, an important area where management admits that they've been slow to adapt. US store sales rose just8% in the second quarter with higher checks offsetting declining traffic. At the investors day, management said they still expect slightly negative US same store sales for the quarter. I don't know. But now they've gotten religion on giving customers better deals. Now some of the fixes are straightforward. McDonald's pulled back digital offers and removed its buy one add one for a dollar deal. Ouch. Only 60% to 65% of the US systems followed the recommended pricing structure for their under $3 menu. Management attributed roughly twothirds of its traffic shortfall versus internal expectations to those value missteps. Now they advertised affordability while taking away deals that we thought were affordable, the ones the customers liked. Now management is bringing back digital offerings by uh putting more marketing behind proven meal bundles and simplifying execution. They're also testing new value offers, but they really need to get the franchises on board to make this work. You see this theme? McDonald's is also using AI to help them determine when and where to lower prices that they should have been all along, right? I mean, their AI operating system helps handle voice ordering, ultimately could free up at least 50 labor hours a week at each location. Automated inventory expected to save about five hours weekly and reduce food waste by 15%. These changes flow through right to the franchises bottom line. They should like it. McDonald's can spread its technology across tens of thousands of restaurants. JP Morgan pointed to its data a and AI foundation as an advantage competitors would struggle to replicate. There's also room to improve the financial model. McDonald's plans to move from roughly 95% franchise restaurants to 98% by the end of 2028 while reducing corporate overhead. That's good news for margins. Now, let's talk about the much much uh panned turnaround plan from last week because this is what's sticking to my crawer. See, management is adamant that this plan is bigger than investors appreciate. I think I side with management. Morgan Stanley argues that it's broader than a remodel strategy. The physical restaurant is one expression of changes to food, hospitality loyalty technology and operations. I like that argument. Open kitchens, refreshed play areas, better beverage and delivery layouts are a part of that. So are the tools that make the restaurants easier to run. Management is targeting roughly $100,000 in gross annual cash flow benefits for the average US location. After corporate support, the targeted payback period for the $800,000 investment is about four years for franchises and five to six years for McDonald's itself. If they can hit those numbers, I I it's a great plan. The challenge is execution. Management already admitted that overlapping promotions and rollouts overwhelm restaurants in the latest quarter. The next round of changes needs to make the operation simpler and again they need to get the franchises under control. Bottom line of this very complex story, McDonald's remains a show me stock. Investor day did indeed disappoint. The macro is difficult and a cheap valuation alone won't bring customers back. But at this level, I am tempted to be a buyer, not a seller. This is a great business that's fall on hard times. They just need to demonstrate that they can get their house in order. At the end of the day, it's still McDonald's, not Wendy's. Thank heavens. Sure, the stock's gotten hit. But if it's bounced off at this price earnings level before, I think now the odds favor that a bottom could be at hand. Midnight's pack. >> Coming up with AI sparking massive traffic on the internet. Kramer's analyzing which stocks stand to go green next. Lately, we've seen a quiet rally in the internet infrastructure stocks that are known as content delivery networks. Cloudflare, Acei Technologies, and Fastly. Cloudfare stocks up 121% from its February low. AI is up 51% from its lows last November. And Fastley has been kind of a roller coaster, but one that's finished very strong now up 159% for the year. These guys operate in a pretty straightforward industry. to build hub they they build hubs of servers all over the world and then help manage digital traffic so that everything operates faster and more reliably but this is not a new business I used to recommend Amy all THE TIME IN 2005 when the show started and it was a great performer until the financial crisis hit lately they've become more about cyber security and collecting data which is one reason I keep recommending Cloudflare in general the thesis for the content delivery networks is that these companies thrive when the internet traffic's on the rise and the rise of AI agents has boosted that traffic dramatically. I think that's the key reason for these stocks. That's why they're on fire. But each of the stories is very different. Let's start with Cloudflare Net, which is by far the largest of the content delivery networks with a stock that's now up over 2,200% since it came public in 2019. We've had CEO Matthew Prince on the show many, many times, and he's been very preient about what the arrival of AI means for the rest of the internet. Last time we spoke to him is in June. He said that traffic from AI agents had already surpassed traffic from humans. And what a great call that was. That's the point of agents. If you're comparison shopping for something, you might only check a few websites, but an AI agent will visit thousands of sites in order to find you the best deal. So, there's a heck of a lot more web traffic now and somebody like Cloudflare needs to help us handle it. That's one reason why the stock keeps putting up these fantastic numbers with steadily accelerating revenue growth or ARG over the past year or so. Next, there's AI. Now, late last year, they announced a new initiative, AI inference cloud, which is basically a network of many smaller data centers spread across the globe that help these AI models process data. Imagine figures that we we're moving from a period of training AI models to a world where we actually use these models at scale. And that requires a lot more infrastructure. Now, in early August, we had Akami CEO Dr. Tom Leighton on the show for the first time in over five years. I'm going to let him explain what his company's trying to do. We're unique in being able to support the AI infrastructure needs from core to edge. So that whatever task you have, whatever agent you're working with or model, if you need to train it, okay, maybe we do that in the core. But the real usage, the day-to-day uses is inference where that model is being queried. It's telling a robot to do something. And that you want to do close to the robot or close to the user so it's fast and scales and is efficient. >> Ever since that interview, I've been thinking a lot about this plan. First, it makes total sense you need distributed data centers, especially as we get into things like this physical AI because this requires a lot of bandwidth and you want the infrastructure as close to the user as possible that reduces latency, speed. Plus, lately we've seen massive central AI data centers become politically toxic. And it strikes me that Akami's idea of building smaller data centers, that could be an easier sale, don't you think? Now, this is an investment year for Akami. They have to spend a lot of a bit they got to acquire and build the infrastructure for their infra inference cloud which will translate into a meaningful earnings hit but magnet says there's a ton of customer interest here and they expect business to turn up in the fourth quarter for really booming in 2027. Hey by the way last Thursday a announced this big win with Anthropic for 11.6 billion contractual commitment over seven years. Clearly Anthropic needs this additional capacity and they're willing to pay for it. This works out by the way to 1.66 66 billion per year. Pretty impressive given that it's more than a third of what Akami is expected to bring in this year. Initially, the stock spiked in response as it should. But now it's given back all of those gains and then some. Well, that feels like a buying opportunity to me. Finally, let's talk a little bit about Fastly. This is not a company that I've spent much time on recently. I remember Fastly as a fleeting pandemic era darling. The stock caught fire at one point in large part because it was the content delivery network for Tik Tok which was exploding in popularity at the time but then Fastly lost most of the Tik Tok business and the stock imploded. For years it felt like a broken momentum stock that was losing money. They didn't start turning to profit till last year. Lately though stocks had incredible run up 159% for the year thanks to some spectacular earnings numbers. If that wasn't enough to catch Wall Street's attention fasting put itself on the radar again last week. First, last Tuesday, the company held an investor day where management explained how fastly trans transitioning from a simple content delivery network CDN turnaround story to a much more exciting edge cloud play fueled by booming web traffic from all these AI agents. Second, this came right as everybody was realizing the power of Meta's Muse platform. Something that really let a fire on the stock. In the end, the rise of Aentic AI has made all three of these content delivery networks into big winners. So, have you missed it or can the stocks keep running? Tricky question. I love Cloudflare, but it's selling for 279 times this year's earnings. Then again, the stock's always been expensive, and if you let that scare you away, you've missed some huge gains. Still, if you want to buy Cloudflare here, I recommend waiting for a meaningful marketwide pullback. Between Iran and the Federal Reserve, I bet someone's going to give an opportunity. Fast has got a more reasonable valuation, trading at over 50 times this year's earnings, but that's still pretty rich, and the stock has a tendency to be insanely volatile. I I'll be honest, this is the one I have the least confidence in. So again, I urge you to wait for a lower entry point. But Aami, I think you can buy that stock right here, right now because it's cheap, selling for less than 16 times this year's earnings estimates, and you're basically getting the latest anthropic partnership, which I thought was gigantic for free. Sure, they're having a down year because of all that spending that I mentioned, but that's about to take a turn for the better real soon. Here's the bottom line. One side effect of the AI revolution is that it's already creating an insane amount of web traffic and somebody needs to help us keep the internet running smoothly. That's where Cloudflare, Fastly, and AI come in. Although for the moment, AI is the only one that's cheap enough for me to pound the table on. I want to take some calls and I want to start with Linda in Pennsylvania. Linda, >> hello Jim. God bless you and Lisa. I feel like you're part of my family. And when you're on vacation, all extra studies you give me, I love it. And I hope Norman the bull was good. Jim, the reason why I'm calling is about an IPO. I've been trading since uh since inception and uh I made money, but since April, it's down 26%. I know there's debt and you had CC on yesterday, Michael Trader. So, I'm wondering should I turn it into some cash and maybe hold to something better or hang in? Well, I'll tell you Linda, first of all, thank you for those kind words and thank you for what you said about Lisa. You know, she is the one who keeps me from take, you know, she says, "You got to take some time off, Jim. You really have to." So, that's a great insight. I happen to like Michael Intrader very much. The stock is still almost a double is a double from where it came public. I have tremendous faith in him. The stock does lose a lot of money. So, then the question is, do you have the stomach for it? If I were you, I would say, you know what, I want a small position in Corweave, not a big one, because it does have a balance sheet that I don't like. But that's part of the business. I sure do like in trader though. He's a straight shooting guy. Rob in Florida. Rob. >> Booyah. Jim. >> Booyah. Rob. >> Jim. What is your opinion of Ax? Thank you. >> Okay. I happen to like Rick Smith. Anyone who's watched the show for a couple decades knows that I think Rick Smith's great. I do think that there's actual te uh actual competition out Axon and they've got a good product, but I have to tell you when there's competition that means there's going to be gross margin pressure. When there's gross margin pressure, you can't have a stock sell for 54 times earnings. So, the answer is I'm taking a breather now on Axon. I feel terrific about uh about Core. I I was a little too negative. I think that Cororeweave has got uh it it's the one that Jensen Wong thinks is the best builder. Yeah, I'm not going against Jesus or at least in traders. Jensen says it's invisible. With AI creating all this web traffic, I think these content delivery players are worth taking a look at. I like that hackam. Much more manhead after a year since its IPO has firmly that's fi proved that it deserves to be a public company. I'm taking a look at the at the stock. Then Micron reported earnings last night and today the stock well it it didn't do much initially. I'm explaining why I stood behind the name during the period when it was real ugly today and your calls rapid fire tonight's edition of the lighting round. So stay with Kramer. Exactly one year ago today, a clown show of a company called Fermy came public with a bang. This business had been founded just a few months earlier and the plan was to create an AI data center campus in the Texas panhandle complete with nuclear plants. Although they'd start with natural gas plants to get things going, you know, the perspectives painted an incredibly rosy picture and at least at first people lapped it up. Fermy's IPO price 21, then finished the day at 32 and changed $19 billion valuation. I came out that very night and told you to stay the heck away when I see a company created out of whole cloth coming public a few months later. So I get a little I get a tad nervous. Either way, I want to steer clear of this one. Again, this is more of a business plan than a business. I like hope you know that. To be fair, Fermy seems like a it's got a pretty well thoughtout plan. And if it all works out over the next decade, then maybe you can justify the stock's current $19 billion market capitalization. In my view though, no business plan is worth 19 billion. I want more than that. I thought it was a very bad sign that people were willing to pay up for this thing. So one year later, hey, how's that call look? Well, this next day, in a pure insult to me, Fermy stock opened up and peaked just under $37, but it finished the session in the red big reversal and it never looked back. By the end of last year, the stock was in the single digits. As of today, it's at just over $4, down 89% from its peak on October 2nd of last year. What went wrong? How about everything? The initial customer announcements haven't materialized the way they were supposed to. In fact, some of the initial customers who made soft commitments pulled out of the project entirely. Fermy's losses have been wider than expected, too. The companies raised additional funds to a convertible node offering which will likely be diluted to shareholders. And that was all before Texas Governor Greg Abbott announced a pause on new data center approvals. A year ago, I warned you that the CEO Toby Nogabau had a bit of a checkered history. Predictably, things didn't go well with him. Remember the whole pitch for Fermy was that they were tight with the Trump administration because a former Secretary of Energy Rick Perry is one of the co-founders. But in March, Nogabau apparently had a loud and belligerent confrontation with commerce secretary Howard Ludnik at Nvidia's GTC event, no less. By April, Nogabau had been fired and then he went to war with the company. First to a failed proxy fight, then lawsuits all at the board of directors. We got a call in Firmeny the other night from John in Pennsylvania. I didn't mince words saying it never should have come public and it's lost people fortunes. Tonight I'm circling back because in retrospect, Fermy marked the top for all sorts of longshot nuclear energy companies. Do you remember Olo, OKL, the miniature nuclear reactor company backed by Sam Alton from OpenAI? That stock was on fire for most of 2025, but it peaked October 15th uh last year, two weeks after the Fermy IPO. Since then, Aqua's fallen over 80% from its high. New Scale Power, oh yeah, a company that's working on small modular reactors is another stock that seemed to go higher every day. levitating for most of last year. It peaked on on October 16th, 2025, a day after Ollo and since then it's fallen 86%. Same story with nano nuclear energy down nearly 75% from its peak last October. This year we've seen a bunch of nuclear related IPOs, but they haven't caught on. X Energy came public in late April. Rather than building reactors, they wanted to license the reactor designs and then sell nuclear fuel to their customers. I told you it was only worth buying with money that you were prepared to lose. And I should have been a lot more negative. X Energy is now down 55% since I talked first talked you about it. 62% from it initial high in June. A company called Deep Fishing which is that's F it should have been F I S H I N but it was F I S IO N you know like the Oenheimer thing which is working on underground nuclear reactors lasted on it listed on the NASDAQ but only after reducing it steel size by over 50% and slashing its offer price after debuting at 16 bucks. Deep Fish has now plummeted to just over $5. That's a 68% decline. It's barely large enough for me to mention on air. Standard Nuclear came public in July and again the deal had to be significantly downsized to make it to market. This one's actually held up well. Standard nuclear fell over 50% right out of the gate, but it's actually rebounded from its lows. Now it's only down 17% from where it came public. But Standard Oil, this is not. There's one other nuclear energy play that's become too small for me to even talk about on air. It came public via a spack. You know how much I hate those. A spa merger that closed late last month and over the past two weeks that stock has plummeted more than 80%. Man, that is just brutal. Whole nuclear was supposed to come public last month. They pulled that deal. This one's a real company with more than $500 million in revenues over the past year. But who the heck wants to buy even a legitimate nuclear IPO when data centers have become politically toxic in America? I think the market's had a muchneeded reality check over the past year or so when it uh when it comes to these longshot nuclear energy plays. I am actually a big believer in nuclear power, but it's a very difficult technology. It can take over a decade to build a nuclear plant and the upfront cost is insane and we haven't we're kind of rusty about how to build them. So what should you do about this? Look, if you're a believer in nuclear energy, I say stick with the triedand-true players in the space and even though they know that you're making a long-term bet that will take multiple years to pay out. Not just a few years, but multiple years. Think Genova, that's a charitable trust name. You see that today work well, which is only established builder of nuclear power plants out there at this point with a full order book for both nuclear and gas power equipment. They just won a big nuclear uh deal from the US nuclear regulatory commission earlier this week. Or you could go with the nuclear power plant operators like Constellation Energy and Vistra. Just this morning, Constellation announced a 20-year agreement with Amazon to sell power from their nuclear power plant in southern Maryland. Constellation and Vistra have pulled back pretty hard from their highs. Uh down 37 36% respectively. Hey, at these levels, you know what? I think they're pretty cheap. Finally, there's a stock I talked about last night, BWX Technologies, more of a defense contractor focus on nuclear technology for the Navy. Think nuclear subs and aircraft carriers. But that's a steady base of business that can sustain the company as it branches into other commercial nuclear power situations. Stocks down 43% from its all-time high in April, dragged down by the market's broad aversion to nukes. Could be a buying opportunity. But here's the bottom line. We're one year removed from the disastrous Fermy IPO. And in retrospect, that was clearly the top for the entire nuclear energy mania. Nuclear is just an extraordinarily difficult technology, which is why you need to be careful before buying anything in this space. And money is 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. this over the light room cuz the same set by sell the course plan and then the lighting round is over. Are you ready? Let's start with Justin in Tennessee. Justin >> Jimbo. >> Yo yo what's happening? I don't know. Doing the show. How about you? >> I have a uh new stock for you. I think this is a stock I took one position today and one share. It's SFN, Sprouts Farmers Market. >> That stock has come down so much that it is cheap. I'd love to have them on. You don't get a quality company like that at 11 times earnings. I think Sprouts is a winner. >> Chicken dinner. Let's go to Jim in South Carolina. Jim, >> hello Jim. >> Hey Jim, what's >> South Carolina? >> Love it there. Good barbecue. Thank you. What's up? >> Thanks. >> It's good barbecue. Your your birds couldn't beat those bears last week, huh? >> What are you going to do? >> No. Well, you you you just take a lot of Xanax and clonopin and maybe some painkillers. >> That That's one thing. Not that I could fall asleep after I did that cocktail. What's up, >> Jim? I got a a a little chunk of cash that I uh I I need to put to work here um on a stock that I've owned for quite a while. I missed the last dip. Uh the stock I'm looking at is uh Taiwan Semi. Uh >> I like Taiwan Semi. Now look, obviously I'm an Invidia devote, but Taiwan Semi is such a great company. Now I will tell you if you really want to have fun, you get up for that 2:00 2 a.m. conference call. I like to not sleep that night. It only happens four times. Buy that. Mike in Illinois. Mike, my bike. >> Hey Jim, thanks for taking my call. Jim, I currently own Nova. I currently own Nova Nordisk and Eli Lilly and of course Lily has been the clear route performer while Nova struggled over the last year. >> Yeah. >> Looking out three to five years from today's prices, which stock do you believe offers the better upside? >> I still go with Lily. It's a high quality stock. Now, this new guy, uh, Mike Ducart, he is trying really well hard at Novo Nortis, but he's up against Dave Ricks, who's like one of the most competitive guys. I mean, I'm told even on the golf course, the guy's competitive. So, I want to stay with I want to stay with Lily. I am told that I can't say for certain. I I didn't look up to Sandicap or anything. Let's go to Melinda in Massachusetts. Melinda, >> hi Jim. Just finished reading your book and learned a lot. So, thank you. >> Thank you. It's about it's about how why a stock goes up a dollar, which probably 99% of the people that I taught at Goldman did not know. What's up? So, I've owned this stock for years, and it's done very little until recently when it went from a low of 96 in April to an all-time high yesterday of 216. What should I do with NetApp? Hold or sell? >> Oh, good. I I got to tell you, you want to you want to hold that one. I mean, I think you got a great situation. Just a situation. I wouldn't worry. I like that very much. Um, let's go with Scott in New York. Scott, >> Jim, Booyah. Oh yeah. >> Pen View is the world's largest pure play consumer health company by revenue. They used to be with Johnson Johnson. They were now being acquired by Kimberly Clark. Thing with Kimberly Clark is they're down like their 5-year chart is ugly, but they have a low P and high dividend. Do you think that and and their CEO is leaving to go for a CR spin-off? Um do you think that Kimberly Clark is a buy at this level? >> Okay. Now, okay. So, I'm going to tell you, one, I think it's a buy. And two, when I talk about with Jeff Mars, I feel awful. I feel I started too soon. I did. It's become a bond play, but I am going to buy more because I think the combination with Ken View is unstoppable. So, I am willing to stick my neck out and say I'm not going to regret buying Kimberly Clark in the '9s, a few years from now. And that, ladies and gentlemen, conclusion of THE LIGHTNING ROUND. >> THE Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's got a chip on his shoulder over the dip in Micron. Now he's sounding off next. I've been thinking too many people let the action in a stock tell them the story, even if it's the wrong story. Last night, Micron, one of the largest semiconductor companies in the world, reported a phenomenal quarter. We honored for the travel trust and it was much, much better than what we were looking for. Jeff Marks wrote a terrific note last night for investing club members detailing the results. But what happened? The stock got hammered immediately. That was wrong. Let me break down the basics. Micron did 54.23 billion in revenue when Wall Street expected just a little more than $51 billion. They earned $3342 per share, up 1,02% year-over-year. And others were expected just 31.61. $31. That's a huge beat. Demand for the high bandwidth memory chips, the ones that belong in the data center, is insane. These chips are in such short supply. The customers have been trying to sign strategic consumer agreements with Micron that would last the next few years, lest they be shut out of the incredibly important components if the shortage continues. They can't afford to be without high bandwidth memory. It's an amazing statement for a company that used to live or die by the day-to-day vicissitudes of DRAM pricing. Now they can lock customers up for years because their best chips are so scarce. Cyclical to secular. My favorite kind of redo. So if everything's terrific, why in the world did Micron stock go down last night and then open down today and stay down for an hour? A lot of people saw that action and assumed that there was got to be a problem with the quarter. Even if there wasn't, the truth is the sellers didn't know what they were doing. Ostensibly, micron trades on gross margins. If the gross margins show any degradation, it's usually because there's too much competition and pricing is ABOUT TO COLLAPSE. BUT THIS TIME, the degradation came from a decision made by CEO Sandre Morotra to compensate his team a little bit higher than people expected. I thought it was a sound gesture. I saw it with my own eyes. We went out to Boise Micron headquarters in August in the sight of a that's a sight of a huge new fab to make chips. And some of the workers told me they were going six days a week, long days. And while they were genuinely cheerful about it, they definitely deserved a bonus. Still, the playbook says what you sell Micro Gross margin. So the playbook followers bold. Second issue, the buyback. Micron's earnings were huge and the price earnings multiple is shrinking. When that happens, a company can either say, "Darn it, I wish it were higher." or it can take its cash and put it to work buying its cheapest asset, the shares in the company itself. Because Micron took chips money from the federal government, it has to wait till December 9 before it can buy back stock handover fist. It can't frontr run that. I was one of several people who begged for details of the potential size of the buyback when I interviewed Sanjay this very morning on squawk in the street, but I had no luck. I think Micron, like Apple, like Nvidia knows that it owns its own stock isn't getting its due because people are so worried about a data center slowdown. Me, I know that when I was out there in August, Micron had 16 long-term contracts to provide Dams. Now, it has 26 one month. Every time there's a new contract, the company becomes less cyclical and more secular. Given its newfound consistency, it's nuts that the stock still sells for six times next year's earnings estimates. Weird. So, I like a huge buyback here. It could help Micron shareholders tremendously. But that's not why I stood there at our 1020 Morning Media and Toll Club members now. Buy it. Buy this dip. I did it because the story, as great as it was when we visited in August, had gotten even better, maybe much better. Just a few weeks later, as customers know, they'd better lock up chips as soon as possible or else. The end of Micron's relentless boom and bus cycle has arrived at last. That means the stock can still be bought. But maybe more important, it can't afford to be sold. If you want to short this thing knowing that Micron will be able to buy back its own stock aggressively come December, I think you're digging your own grave. Why don't I send you an invitation your funeral? I'd like to say there's always a market summer. I promise I find just for you right here on 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.