Mad Money 08/17/26 | 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, my friends. I'm just trying to save you a little bit of money. My job is not just to entertain, but to explain things. So, call me at 1800 743 CBC. Tweet me at Jim Kramer. This market astounds me pretty much every day. This weekend, in my regular think piece that I sent out to CBC Investing Club members, I marveled that the same memory stocks keep going up and up and up. Many people have been left behind because they think they've already missed these moves. So, I have to ask, what if they haven't? So, in a day where the Dow lost 273 points, S&P declined.5%, NASDAQ dips 32%. It's actually kind of an ugly session, mostly because of a rise in oil and interest rates. I want to explain how some of these big moves can happen and why they actually might not be over. Front and center, the companies that make memory and data storage products that go into the data center, SanDisk, it's up 653% year to date. Seagate has Gallup 261%. Micron's up 254% and Western Digital's up 211%. These moves are all kind of incredible and definitely crazy. These memory names have become risky. They had been risky boom and bust stocks for decades. There'd be periods of spectacular growth followed by horrendous swoons that would wipe away all of your gains and then some. I always regarded the management teams in this business as financially suicidal because they'd overbuilt when times were good, sewing the seeds of their own destruction when things got bad. I was always reluctant to recommend them to you because of these wild boom bus cycles. Then along comes the data center and the world simply changed for them. The demand for memory ships has now become seemingly endless. These companies have all learned their collective lesson. They're not over building this time. They want the shortage to last. Memories in such short supply that Elon Musk has taken X to talk about how it's become the key bottleneck to data center growth. Meanwhile, the memory makers, they they've adopted this new business models uh with long-term agreements that lock in huge gross margins for multiple years out with their customers. They're basically building only a suit. They've raised prices to the point that Apple has complained that they are driving up the cost of your new phone. Can we trust these companies and their stocks? Now, three of them are buying back huge amounts of stock in their open market. Sanders has a $15.5 billion buyback. Seagate working it way through a $5 billion buyback announced last year. Western Digital put a $4 billion in repurchase authorization earlier this year. They're taking that money and sending to you the shareholder rather than investing in new capacity. Only Micron has no buyback. Quizzical. These used to be smaller capitalization stocks, but in the two years since the data center buildout started in earnest, everything has changed. I want you to listen to these spectacular gains. When Sandis was spun out of Western Digital 18 months ago, it was a $7 billion company. Now it's a $262 billion company. Seagate's market cap is going from $21 billion to 225 billion in the same period. >> House of Pleasure. >> Western Georgia was 17 billion. It's now at 185 billion. Only Micro was sizable at 106 billion, but now it's a trillionaire. >> That was easy. >> And you wonder why I think you should own some individual stocks side by side with your index funds. Now, you might think these memory stocks have all run too much. That's the consensus that I hear from. But their margins, which are immense, have largely been locked in for years out now with these agreements. Cate gross margin came in at 52% it latest quarter, a record. Last year it was 37%. Western Digital's gross margin was 54% up from 41% a year ago. This is incredible stuff, people. Sanders gross margin 26% to 85% ONE YEAR. Micron hit 85% up from 39%. These are monumental numbers. Eyepopping unheard. I remember when if Intel could ever get to 64 gross margin, that would be amazing. Now listen to what these guys are doing now. People have a hard time getting their heads around this endless demand for memory. They don't believe the agreements with customers will hold up. The biggest fear they think that Samsung will break ranks and put up factories to flood the market with supply. Sure, that could happen, but not anytime soon. Takes too long to build the factories. And look, that's why Micron sells for just seven times its fiscal year 2027 earnings uh estimates. Sandis trades at eight times. Now if you look at fiscal 2028, Western Digital is at 16, Seagate at 17. In general, these stocks are cheaper than the market because no one believes no one. Well, maybe some, but people are making a fortune. Last week, we bought a position in Micron for the travel trust because I truly believe this industry has changed for the better. That said, I admit to being uncomfortable buying a stock that's moved up this much. Fortunately, we bought it at a big discount as it was trading with the prices at that moment of the Koreans Samsung and SKH Highix, not Seagate West Digital and Sandis. Timing was exquisite. Club members have to be happy. Although at the time I thought it was taking my life into my hands and I did, you know, concern that it could keep going down, of course. See, I don't really know a soul who's really comfortable buying stocks this high. I consider Micron more of a growth stock than the others. So, I console myself with the idea that maybe it's just not just restricting output that has made this thing go higher. But at some point, we all know this memory shortage has to end, doesn't it? I don't deny that. However, I do question the timing of any downturn. I think Micron can double again before the boom comes to an end, assuming there's no data center slowdown. I know that's a risky statement, but these long-term agreements are spectacular for Micron's margins. Hey, and by the way, get this. We're going out to visit Micron later this week to interview CEO Sandre Marocha from their Idaho R&D fab. Fabul for fabulous. Not really, but I like that. I think it'll be revealing. Don't miss it. I can't wait. Should be it'll be incredible. Of course, we know I got to get steel to boots. I think I have them. Of course, we know that there's now a lot of push back to building sites. Uh there could be some crimping memory stocks. I think there are plenty of towns that want them, though. Those stories are too positive. They don't fit the negative narrative. Believe me, the media loves reporting negativity because that's what attracts eyeballs or at least they think it does. When I see their numbers, I have to question it, but I'm an outlier. I am also concerned about this about something that uh Michael Intrader, CEO of Core Wee said when I interviewed him last week that there was just no way we wouldn't overbuild. Double negative, sorry. How would we know when to stop when the demand is so great? Why should we even think about that right now? Again, though, I can't see the overbuild happening anytime soon. So why not own one of the memory stocks? As I said at our investing club meeting last Thursday, you had to go play the uh replay. The gray boards always tell you this time is different is the most dangerous statement because nothing ever really changes. And that's why seek digital sanders and micro won't be able to change your strength. Yet that attitude has scared you away from some of the most incredible gains I've seen in my career. These are the same people who would never buy Caterpillar. They would say I told you so when Cisco reported and give that weaker guidance rather than thinking about what a buying opportunity, which is how I feel. I would buy Cisco right here because of their negativity and I don't think Caterpillar cyclicals at all these days. Now their takeaway by the way this is again these graveyards of situational awareness crash you know that one with the crazy hedge fun not crazy over lever hedge fun manager that they say he was not over lever they just said he was in the wrong stocks. I say that you have to free yourself of these constraints and understand that sometimes it really is different. Sometimes the opportunity is too great and you can't afford not to take it. No, it's not as stupid as something like, oh, he's selling May and go away. That's real clever. But this whole data center move has created a gold rush that will turn many formerly cyclical stocks into secular growth winners. That's a very rare metamorphosis. But it's happening. The data centers, as we know from Amazon, can be huge profit centers. The opportunities for these companies are too stupendous to even think about holding their expansion. Too too much money on the line, and that means they need these components. Ask anthropic about that. Best of all, with the exception of Nvidia and perhaps maybe AMD, these memory chips makers are perhaps the most indispensable of the entire buildout. Musk is right. Memory has become the bottleneck in these four companies. Well, you know what? It's pretty good if it stays that way. Certainly not their fault that the product's in such demand. The bottom line, I say own. We pick Micron for the travel trust because of its growth. But the others have less risk because they just keep returning that money to shareholders through buybacks. In the end though, these moves are real. And while I acknowledge that I'm not early, I actually don't think I'm that late either. Hey, why don't we go to Tony, my home state of New Jersey. Tony, >> Jim, what's your thoughts on Honeywell? >> Okay, Honeywell, I I feel like I I I've been beaten to a pulp here on this thing. I felt that the split would be good. Honeywell Aerospace was a complete disaster. And I don't blame me. I blame management. Uh I don't know why I should have trusted him, though. But Honeywell, the regular Honey Well, look, that's Vimma is doing a good job. I say when it hits when another guy downgrades it and hits 220, that's when I'm going to tell you to buy it. I own it though. Bill of Massachusetts. Bill >> Jim, a quick shout out to Sean. Even when I have phone problems, he makes sure I get on. I'm a club member and I'm really digging it, brother. >> Man, I love to hear that, Sean. Also, congratulations the club. We We had a pretty good meeting last week and uh I'm glad you're a member. I wish others would join. All right. What's up, >> Jim? It's a pleasure being a club member. I just wanted to uh thank you for Verdub Holdings and I was wanted to pick up some more. What do you think, bro? >> Um I think that Verdub is going to have a very very strong year and I'm not going to fight you on that. I think the order book is incredibly solid. Let's go to Andrew in Ohio. Andrew, >> how you doing? Booya. Jim. >> Booya. Andrew, what's going on? So, Microsoft has obviously priced in a ton of AI upside already at these levels. Is it a buy, hold, or maybe time to take some profits? >> Okay. Now, here short term, you could take profits because the stock's up on a spike, and I don't like parabolic moves. Longer term, I think I've made a mistake. And I'll tell you why. Because that quarter was so excellent that I really have had uh I've had to change my view of being a soft supporter to being a stronger supporter. And Sachi Nadella uh Amy Hood, superb. What can I say? Let's go to John in California. John, >> howdy. >> John, what's happening? >> 88. >> I love that. Thank you. Didn't even know I was alive then, but that's good. What's up? >> In April, you talked about Abbott Labs Labs. I thought you thought they were being punished. I did my research. They hit 81. I got it in at 84. What should I do with what I have now? Well, okay. Uh, people feel that this acquisition uh, uh, the, you know, well, the ex acquisition may not may not be a good one. I disagree. I said that Abbott was good. I wish we had bought for the Chapel Trust. We had a couple drug stocks. This didn't get in the queue. It's only 20 times earnings. That's still too cheap for Abbott. I would hold on. All right. This data center move has created a gold rush in stocks. And you know what? I don't think it's too late to get your steel tip toes on the boots and get right in there. Okay. Just do some research, choose wisely. Listen to the club. We have a pretty good analysis of it by Jeff Mars on Man Money Tonight. The stock of Airbnb has been on tear lately. So, what's behind the move higher? I'm going to take a close look at this travel name. Then, like I mentioned, we're seeing a strong rebound in stocks, but how sustainable is it? Well, I'm going to go off the charts to find out. And you've been calling in with some stocks that I promised to circle back on. Now, I'm keeping up my end of the bargain. How about yours? Don't miss my deep dive on some of the names that stump me as part of my homework. and stick with cramp. >> 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. cnbc.com. What the heck just happened to the stock of Airbnb? Oh man, this one's been incredibly frustrating to own since not long after it came public in December of 2020. We know Airbnb has a great product and great management and CEO Brian Chesy, but for years the stock I'm calling it dead money. I kept recommending it though, even highlighting it in how to make money in any market as one of my 10 recent greats. A group of newer companies with the management scale and staying power become real blue chip companies by >> and none of that seemed to matter at all until very recently. That is now Airbnb's up 23% over the past month, 35% over the past three months, and 44% over the past six months, dramatically outperforming the S&P 500. I love to see a neglected stock finally getting its due, but can this neglected stock keep running? Look, at a time when gasoline prices have risen, airline tickets are expensive, and Wall Street keeps worrying about discretionary spending. Not to mention potential competition from AI, Airbnb stock finally took off. Why? On August 6, Airbnb reported a stellar quarter. This was a big top and bottom line beat. 17% revenue growth, gross booking value up 16%. Nights and seats book jumped 10%. Basically, Airbnb's growth is accelerating again. Management had been been spending really heavily on new products and this year those investments really started paying off. First time bookers grew 11% the fastest pace in four years. Nights booked through Airbnb's app jumped 23% and now represented 64% of total nights book. North America and Europe both grew at high singledigit rates. Latin America grew around 20%. Asia Pacific in the high teens business is just plain good. Average daily rates increased 5%. And this wasn't just Airbnb jacking up prices. Bedroom nights, which multiply the number of nights booked by number of bedrooms in the property, increased 12%. Really cool metric. Faster than overall nets nights growth. That tells us customers are increasingly booking larger homes with more bedrooms, meaning more people going on vacation. Even better, that momentum continued into the current quarter. management gave very strong guidance for the third quarter and also raised their fullear forecast pretty substantially. Those of us who follow the stock for a long time know that typically doesn't happen with this company. So how much of this success represents a turnaround? How much came from an unusually strong summer? Right. The World Cup certainly helped, right? Airbnb hosted roughly 2 million guests around the around the tournament. But according to Mazouo, good research firm follow up with the company. The World Cup contributed less than 1 percentage point to grow. Imagine also said the core short-term rental business accelerated even excluding hotels and the benefit from reserve now pay later. So this was not one giant sporty event making the numbers look better. Still the analyst at Melius point out that the entire travel industry may have benefited from something close to a perfect storm this summer. You have the World Cup, America 250, and even the Knicks Championship run pushing up hotel demand in New York all layered on top of the normal summer travel season. The real test for Airbnb will come this fall when the broader travel industry faces a less favorable setup. That said, there's a much bigger company specific story here going on and I think it all starts with AI, artificial intelligence. Yeah. A year ago, a lot of people were worried that Airbnb would get bulldozed by AI competition. Think of it. Who needs these guys when Chat GPT can book and plan your entire vacation for you? Well, turns out AI might be the best thing, not the worst thing, but the best thing that ever happened to Airbnb. Management says AI has helped reduce the time from product concept to launch by as much as 60% 60. While the company shipped more than 80% more features and improvements in the first half of this year, than it did during the same period in 2025. Chest is also saying that uh AI now writes 60% of Airbnb's engineering code. Everybody talked about these guys as victims of artificial intelligence. But they've done an incredible job putting it to work for them. More and more we see this change occurring. It's very positive for the bottom line. Even as you've got to believe that it's pretty negative, say for uh job growth. Airbnb's AI customer service assistant now operates more than 50 languages in nearly 45% of issues that begin with the assistant are resolved without human intervention. Customer support cost per booking fell about 16% year-over-year. Man, that is tremendous savings right to the bottom line. Chesty also made an important point in the conference call. Airbnb is what we call asset light. Doesn't need to spend tens or hundreds of billions of dollars building data centers or buying GPUs to participate in AI. The company pays inference cost. Sure. Uh but an Airbnb reservation is a high dollar transaction so they can afford the tokens. In fact, AI is beginning to change the actual product. Airbnb is testing a new AI search experience that will allow customers to describe the trip they want in natural language. Instead of entering a location and dates, search results can become more personalized. Chesy says the company's entering a new phase where it's becomes a one-stop shop for travel. Eventually, you could tell Airbnb that you want to take your family somewhere in Europe for 2 weeks and have the platform help figure out where you should go, where you should stay, what you should do. That's why they've been adding more and more hotels to their network. Now, I used to think of Airbnb as the anti- hotel, but they're happy to put that business on their network, too. In fact, hotel nights are already growing roughly three times faster than the homeless business. Airbnb has enormous direct traffic, a younger customer base, and potentially more favorable commissions than some traditional online travel agencies. Management says the rollout's going significantly better than expected, and they plan to step up the gas. Everybody is also expanding beyond accommodations with car rentals, grocery delivery, airport pickups, luggage storage, resort passes. Long story short, there's no single silver bullet behind this breakout. Airbnb is making hundreds of improvements to the core business while simultaneously expanding into new areas. But as much as I like this company, you know what? I I I'm kind of hesitate I I got to hesitate to recommend this stock up here now because it's traded at 34 times earnings at 180. That's forward earnings. It's expensive. Competition hasn't disappeared either. Uh Booking Holdings and Expedia are formable rivals. Expedia compare Verbbo, that's VBO, within with the rewards programs from a much broader travel ecosystem. regulation remains a consistent and constant risk in many key cities around the around the globe. After a 23% move in a month, those negatives kind of make me feel like I don't want to chase the stock. Okay, now look, I am still a believer in Airbnb. Nothing has changed from what I wrote in this book. But finding a great company and making money in the stock are at times two different things. So here's the bottom line. As much as I am glad that Airbnb is finally getting the respect it deserves, I don't want to chase the stock when it's selling for 34 times earnings. If you don't already, how about do this? Maybe you take a little you maybe just buy a little and wait for a pullback. No matter what, it's definitely worth keeping an eye on. May money's back after the break. Coming up, reports on the bull's death may have been premature, and Kramer's got the charge to prove it. Next, now we're getting close to back to school season. It's time to frantically catch up on our summer reading. Whenever I got a question about a stock that I either don't recognize or maybe haven't been following, I promise to do some homework and circle back to you. But in the last month, things been piling up here. So, tonight I'm going to do uh let's say a round robin here, I don't know, a lightning round. Get through some of this homework blitz. Back on July 16th, Joanne in California asked me about Excel Services Holdings, EXLS. It's a business process outsourcing company. Mouthful there, that's attempting to reinvent itself as more of a data analytics and AI play. Originally, these guys were all about outsourcing and for a long time that was a great business, but Excel services holdings peaked in early 2025 thanks to AI displacement worries. And over the next 18 months, the stock got eviscerated. In late July though, they reported a strong quarter which allowed the stock to recover a bit and the numbers still look pretty good here with the company talking about 15% revenue growth, 17% earnings growth this year. Stocks also cheap, selling for just 15 times earnings. Company's now embracing AI to help its customers harness their data. But at the end of the day, however, Exel Service is fighting an uphill battle, at least in terms of the narrative. Even if their business keeps doing fine, these AI displacement worries, they're just not going to go away. The stock's up nearly 40% from its late June lows. So I think you're getting a terrific opportunity to sell sell this one and move on to something else next. On July 29th, Press Shan in Ohio called me with a question about Make My Trip. That's MMYT. That's basically the Expedia of India. After doing nothing for a decade after it came public in 2010, Make My Trip started a remarkable run from the low 20s in late 2023 to an all-time high of 123 at the end of 2024. Since then though, the stock's giving back most of those gains beaten down by AI displacement worries. Yes, it's a real common theme. Finally bottomed in the low30s this March before rebounding to about $60 of today. We've seen similar bounces in the big American online travel agents. Make my trip has been putting up pretty good numbers, but it's not exactly cheap anymore. Trading 33 times earnings. Expedia sells for roughly 15 times earnings. Booking for 20 times earnings. Now, if you want to bet on the online travel agents trampling the AI competition, I'd much rather go with those two, especially the latter, which is a very consistent company and just pretty good quarter. Next up on July 30th, I got a call from Quinton or Quentin in Georgia, and he's asking about Establishment Labs, ESTA, ESTA, which is a medical technology company that's all about breast augmentation procedures and related equipment. Some of these are minimally invasive, and the company says its platform is also much safer than the competition. After a few years lost in the wilderness, Establishment Labs started putting up some strong revenue growth last year. It's up 27% expected to do 28% growth this year, followed by 26% growth next year. Unfortunately though, Establishment Labs is still unprofitable 8 years after its IPO. It reported another money losing quarter earlier this month. The stock's now down more than 17% for the month of August. This could be interesting for speculation maybe, but I got to tell you, I have my reservations about this one. I don't like recommending unprofitable companies at this stage of the market where we're really high. What else have we got? Okay, two weeks ago, Sam Massachusetts called NVE Corporation. That's a very small technology company that calls itself a leader in the practical commercialization of Spintronics. If you're wondering what the heck that means, you're not alone. Apparently, spintronics is a nanotechnology that relies on natural spin of electrons to to store and transmit information. It has nothing to do with politics. Basically, it's a more energyefficient way to handle memory and data storage. It's kind of a tough story to follow, frankly, because NBE Corporation has no analyst coverage whatsoever. Company had just $25 million in revenue for its fiscal 2026, but surprisingly profitable. They had 15.2 million in net income during the same period. After years of non-remarkable performance, the stocks had a major breakout, more than doubling year to date thanks to a new product, a magnetic switch sensor that's selling surprisingly well. You think this would be a data center play, right? But actually, it's more of a robotic play. MVE also reported a great quarter last month with 81% revenue growth, 78% earnings growth. Now, I wish I had a firmer grasp on the science of spintronics, but when I see these numbers, it's hard not to be cautiously optimistic, if not just optimistic. Well, this is another speculative stock. It's one that's quite profitable given the earnings growth, it's not that expensive, selling for 38 times last year's numbers. Remember, given the earnings growth, just keep in mind it's a high-risisk, high reward situation. Finally, last week, Jim in California asked about Ubiquiti. That's a company that makes network equipment with a bit of a sorted history. Ubiquity stock had been roaring over the past couple years thanks to the data center boom, climbing from just over $100 in late 2023 to an all-time high of just under 1,100 in April of this year. That's the kind of run we're looking for. The last thing in these games came in the few months after Ubiquiti had once again come under fire when the investigative journalism/short seller outlet Hunterbrook Media claimed the company's products were being heavily used by the Russian military on the front lines in Ukraine. They won't sell their stuff directly to the Russians, but it's getting there anyway. Personally, it doesn't sit right with me, but buyers kept piling into ubiquity until reported as truly heinous quarter in early May. That sent the stock from over 1,000 to under 600 in just a matter of days. Since then, trading sideways. We don't know when they plan to report their next quarter. Hasn't been announced yet. Uh, but it's been more than 3 months, so it could happen very soon. Overall, I'm not going to stick my neck out for these guys. There are much easier ways to bet on network equipment than Ubiquiti. Companies that are a low drama with much less headline risk. Cisco sure comes to mind. They pulled they had a great quarter and then they kind of were tepid and guides the stock came down. I like it. Here's the bottom line. Looking at our recent homework items, let's see. I think NVE Corporation interesting for speculation. Establishment labs could have something going for it, although I'm not an expert. Excel services holdings is one that I'd sell in the strength while make my trip and ubiquity just don't seem worth the risk to me when they're much better companies in both spaces. Bad 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. Now, we're getting close to back to school season. It's time to frantically catch up on our summer reading. Whenever I got a question about a stock that I either don't recognize or maybe haven't been following, I promise to do some homework and circle back to you. But in the last month, things been piling up here. So, tonight I'm going to do uh let's say a roundroin here, I don't know, a lightning round, get through some of this homework blitz. Back on July 16th, Joanne in California asked me about Excel Services Holdings, E Exlss. It's a business process outsourcing company, mouthful there, that's attempting to reinvent itself as more of a data analytics and AI play. Origally these guys were all about outsourcing and for a long time that was a great business but Excel services holdings peaked in early 2025 thanks to AI displacement worries and over the next 18 months the stock got eviscerated in late July though they reported a strong quarter which allowed the stock to recover a bit and the numbers still look pretty good here with the company talking about 15% revenue growth 17% earnings growth this year stocks also cheap selling for just 15 times earnings company's now embracing AI to help its customers harness their data. But at the end of the day, however, Exel Service is fighting an uphill battle, at least in terms of the narrative. Even if their business keeps doing fine, these AI displacement war, they're just not going to go away. The stock's up nearly 40% from its late June lows. So, I think you're getting a terrific opportunity to sell, sell, sell this one and move on to something else. Next, on July 29th, Press Shan in Ohio called me with a question about Make My Trip. That's MMYT. That's basically the Expedia of India. After doing nothing for a decade after it came public in 2010, Make My Trip started a remarkable run from the low 20s in late 2023 to an all-time high of 123 at the end of 2024. Since then though, the stocks given back most of those gains beaten down by AI displacement worries. Yes, it's a real common theme. Finally bottomed in the low30s this March before rebounding to about $60 of today. We've seen similar bounces in the big American online travel agents. Make my trip has been putting up pretty good numbers, but it's not exactly cheap anymore, trading at 33 times earnings. Expedia sells for roughly 15 times earnings, booking for 20 times earnings. Now, if you want to bet on the online travel agents trampling the AI competition, I'd much rather go with those two, especially the latter, which is a very consistent company and just pretty good quarter. Next up on July 30th, I got a call from Quinton or Quentin in Georgia, and he's asking about establishment labs, ESTA, ESTA, which is a medical technology company that's all about breast augmentation procedures and related equipment. Some of these are minimally invasive, and the company says its platform is also much safer than the competition. After a few years lost in the wilderness, establishment labs started putting up some strong revenue growth last year. It's up 27% expected to do 28% growth this year followed by 26% growth next year. Unfortunately though, Estasment Labs is still unprofitable 8 years after its IPO. It reported another money losing quarter earlier this month and the stock's now down more than 17% for the month of August. This could be interesting for speculation maybe, but I got to tell you, I have my reservations about this one. I don't like recommending unprofitable companies at this stage of the market where we're really high. What else have we got? Okay, two weeks ago, Sam Massachusetts called about NVE Corporation. That's a very small technology company that calls itself a leader in the practical commercialization of Spintronics. If you're wondering what the heck that means, you're not alone. Apparently, Spintronics is a nanotechnology that relies on natural spin of electrons to to store and transmit information. It has nothing to do with politics. Basically, it's a more energyefficient way to handle memory and data storage. It's kind of a tough story to follow, frankly, because NBE Corporation has no analyst coverage whatsoever. Company had just $25 million in revenue for its fiscal 226, but surprisingly profitable. They had 15.2 million in net income during the same period. After years of nonremarkable performance, the stocks had a major breakout, more than doubling year to date thanks to a new product, a magnetic switch sensor that's selling surprisingly well. You think this would be a data center play, right? But actually, it's more of a robotic play. MVE also reported a great quarter last month with 81% revenue growth, 78% earnings growth. Now, I wish I had a firmer grasp on the science of spintronics. But when I see these numbers, it's hard not to be cautiously optimistic, if not just optimistic. Well, this is another speculative stock. It's it's one that's quite profitable, and given the earnings growth, it's not that expensive, selling for 38 times last year's numbers. Remember, given the earnings growth, just keep in mind it's a high risk, high reward situation. Finally, last week, Jim in California asked about Ubiquiti. That's a company that makes network equipment with a bit of a sorted history. Ubiquity stock had been roaring over the past couple years thanks to the data center boom, climbing from just over $100 in late 2023 to an all-time high of just under 1,100 in April of this year. That's the kind of we're looking for. The last thing in these games came in the few months after Ubiquiti had once again come under fire when the investigative journalism/short seller outlet Hunterbrook Media claimed the company's products were being heavily used by the Russian military on the front lines in Ukraine. They won't sell their stuff directly to the Russians, but it's getting there anyway. Personally, it doesn't sit right with me, but buyers kept piling into ubiquity until reported as truly heinous quarter in early May. That sent the stock from over 1,000 to under 600 in just a matter of days. Since then, trading sideways. We don't know when they plan to report their next quarter. Hasn't been announced yet. Uh, but it's been more than 3 months, so it could happen very soon. Overall, I'm not going to stick my neck out for these guys. There are much easier ways to bet on network equipment than Ubiquiti. Companies that are a low drama with much less headline risk. Cisco sure comes to mind. They pulled they had a great quarter and then they kind of were tepid and guides the stock came down. I like it. Here's the bottom line. Looking at our recent homework items, let's see. I think NVE Corporation interesting for speculation. Establishment labs could have something going for it, although I'm not an expert. Excel services holdings is one that I'd sell in the strength. While make my trip and ubiquity just don't seem worth the risk to me when they're much better companies in both spaces. Bad 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. the light round by so just be clear I do not know the call or the stock ahead of time I stand prepar the sound and then the lightning round is over are you ready Steve D let's start with John in California John >> hi longtime listener club member hey I just want to know I'm a holder of Uber should I buy sell or hold >> all right first I'm glad you're a club member for a second in how to make money in any market. Uh I do say Uber is one great long-term stock. I am not backing away from that. I actually think the stock is actually having a turn here at 22 times earnings. So the answer is I am a buyer of Uber, not a holder, not a seller. Let's go to Jack in New Jersey. Jack, >> hello Jim. Booyah. >> Booyah. Jack, what's going on? >> And fan. I'm a retired teacher in my mid70s >> and I've got my portfolio in two sections. One growth stocks, all club numbers, club names. >> Excellent. Thank you. >> The other in income stocks and I'd like your opinion on Tanganger Outlets, symbol. >> I I think SK A is good. I saw a recommendation today of taking a a price target from 45 to 46 for this $38 stock. It yields three and a quarter. And I say bye. >> Now we're going to Carl in Indiana. Carl. >> Hi, Professor Kramer. Thanks for taking the call from Crossroads of America. >> All right. Thank you. What's going on? >> I need to sell some of my IRA. >> So, I have $25,000 to spread across three or four stocks. >> I'm trying to stay away from AI dependency. I'm looking at a stock that has an FPE of 30 down 10%. And I'm wondering if this stock would be a fit. It would be Rockwell Instrument Automation. Okay. Rockwell Automation is high, but you're right. It's more robotics than it is data setter and I think it's a great long-term situation. So I'm going to say it's a good idea but don't buy it all at once cuz the stock is one ugly chart. I'm not a charters but I see it. Let's go to Pash in California. Pash. >> Hi Jimmy. This is Praash from California. Uh I've been Yeah, I'm doing good. And you? >> I'm good. Thank you for asking. What's going on? Yeah, I'm a investing club member since long and I normally follow the investing club tips. Yeah, I normally follow investing club and I earned reasonably good money actually but like the I applied my knowledge and ventured into one stock and that is NBIX which is not investing club but I applied my knowledge and then I just bought 100 stock at age of 175. NBX rang the opening bell and then as that today now this is a neurological they have neurological formulations I because it's profitable I'm going to say fine although I know that neurological issues are very hard very tough most hospital most doctors hospitals medical companies don't want to touch it but I will say neurocrine does a good job let's go to Gregory in California Gregory >> uh listen I I don't know whether to call you professor Kramer anymore or should I recording Poseidon after last week's extraordinary catch um off the coast of Venezuela. Congratulations on that. >> Well, thank you, Gregor. 100 pounder 95 Michael Slas from JP Morgan. He caught a 200 pounder. Put me to shame. How can I help? >> That's like the feeding of the 5,000. Jim, what a nasty way to start the week today. So, I'm looking for opportunities and my instinct of course is to buy the biggest losers for a bounce. But I want to take a leaf out of my mentor's latest book and take a closer look at a hero that was green today. So with a great Q2, more important perhaps they announced a $ 1.5 billion relationship with Nvidia. This company is the end all of actually making the chips work in the data center. How much longer will they fly under the radar? And is now the time to buy buy Amcore? Yeah, of course got a lot of different packaging parts of which you you've mentioned one. Gregory's always of course uh very proficient at what is an inexpensive stock at 10 times earnings. I'm never going to fight anyone 10 times earnings but remember they also have a kind of a nonfast growing part of their business and therefore there is uh issues but not a lot that can't be solved by that low PE and that ladies gentlemen conclusion of the lightning round. THE Lightning Round is sponsored by Charles Schwab. Coming up with more saber rattling coming from the White House, Kramer's digging deeper into what's really moving the markets next. >> Booyah. Jim Kramer. I'm a firsttime caller, a happy club member, and want to thank you for being the people's champion of investing. >> Thank you for helping me become a millionaire. We know what this market wants. Lower oil and lower interest rates. But neither can happen as long as there is a war on. We saw this play out in real time early this morning. At first, at 4:30 a.m., things look pretty tame. Oil was doing nothing. Rates were in retreat. It looked like we might be able to stabilize from a miserable Friday. Then the president spoke to Fox News and threatened to bomb Oman if they do anything to get in our way. He said it a little more emphatically, but this is a family-friendly show. Instantly, oil flies up and interest rates go higher. Much higher. Now, it didn't have to happen. Every time the president threatens, the Iranians test the threat. Every time he warns them about bombing, oil goes higher. Why bother? It's obviously not working. Then the stock futures go down after those statements and we have a foregone conclusion kind of day like today. It's painful and it's also totally unnecessary. I certainly don't expect the president to change his prosecution of the war. I know I wouldn't do it this way but then again nobody elected me president. But the bond market has a mind of its own and it's not differential to the White House. When it sees oil goes higher then axiomatically rates go higher. It's not able to distinguish the cause. It doesn't say, "Oh, that's just the president carrying on on Fox News. No big deal." Doesn't work like that. Bonds just plain go down and rates go higher because oil going higher is inflationary. Bond holders know they will be rocked if there is more inflation than expected. Plus, the bond market has no real memory. If the president sits close to the exact same thing tomorrow, then rates will go up again. Now, the president doesn't seem to care as much about rates as he does about the stock market. But if you want a healthy stock market, you need a well- behaved bond market. Of course, we could have a less irritable bond market if the government needed less financing. But the government's in a huge hole. It has to borrow a gigantic amount of money just to pay the interest on the current debt, let alone the titanic amount that comes from running a mammoth deficit. Last week, for example, the government borrowed $ 58 billion out three years on Tuesday, $42 billion in 10-year paper on Wednesday, and then 25 billion in 30-year bonds Thursday. As someone used to trade bonds, I can tell you that excess supply, and that's the definition of excessive I just gave you, can crush you. Then again, many bond investors plan to hold them to maturity, so they don't care how the bonds trade. They may not even notice, but bond traders, a lot of the buyers, can't sustain these kinds of losses that occur right after purchase and they hit the exits immediately. And that's how rates go up so swiftly. It's entirely possible that oil should just be higher and therefore rates should be higher, too. So stocks therefore should be lower. But given we've had weaker retail sales, softer inflation numbers, and softer employment, interest rates should naturally be going lower, not higher. We actually have to hope that rates are only going up because of oil. If it's because the government's borrowing too much money, then rates will keep rising regardless of what happens in the Middle East. But judging by the action, I still think it is oil. No matter what, we're now back in the world of 2007 when rates were too high both on the long end and the short end. That's the one that's controlled by the Fed. These higher bond yields are a recipe for the Fed to tighten. I think lower oil can still help the cause. But if the president feels we have to tolerate higher oil so that we can keep fighting Iran, there's nothing we can do about this. With this combination, just get used to the stock market going the wrong way far more often than it goes higher, especially when the Treasury can't stop raising money because the drunken sellers in Congress just won't let them. I like to say there's always a more market. I promise just for you here on Man, 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. 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