Mad Money 09/01/26 | Audio Only

My mission is simple, to make you money. I'm here to level the [music] playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. [music] Mad money starts now. Hey, I'm Kramer. [music] Welcome to Mad Money. Welcome to Cray America. My friends, I'm just trying to save a little bit of money here. My job is not just to entertain on days like today, but also teach you. So, call me at 1800 743 CNBC. with Mitchum Kramer. Maybe we didn't deserve to rally from the lows in late July. Now that's how I'm really beginning to feel about negative days like this one. Dow lost 419 points. S&P dropped.1%. The Nasdaq fell 1.03%. Sour nasty. [screaming] I say that reluctantly because on any given day there are plenty of things to like some individual stock stories that are terrific. Novartis new drug for MS. Serra bounces back from negative news from the California legislature. Hal Met rallies after he realized Elon Musk can't hurt their base aircraft business. The health insurers are robust. The dollar stores stayed strong. New Apple CEO John Turners got a terrific welcome with the stock running up 2.6%. [music] But there is a simple fact about what happened today. We had that kind of episode that we're really getting used to these last 6 months. Tensions with Iran heat up overnight. The president lets loose missiles and tough postings to retaliate. The price of oil then rallies more than 5% causing interest rates to shoot up this time to levels we haven't seen in ages. [groaning] Sell sell and the stock market retreats regardless of how the [music] vast majority of companies are doing and they are doing very well. Oh sure there can be exceptions. Tonight Dell reported a quarter that's so strong it shouldn't change people's minds at least about Dell, maybe about tech. one of the best quarters I've ever seen, but it can't ignite the entire market and might not even ignite the AI trade because of the litany of woe that I just mentioned. Is the litany correct? Okay, there's a very compelling question because you have to ask yourself, can this happen over and over again? Can the president keep firing missiles towards Iran to try to stop the Iranians from mining or bombing the state of Ramuse, which will always raise the price of oil, which then always raises the price of money, also known as interest rates, and then causes a sell off in the stock market. The short answer is yes. Might be able to happen for days, I don't know, maybe weeks, months. It's a nasty chain. One the Treasury Secretary hoped to stem by buying back long-term bonds. The bond market doesn't take that seriously, though. In part because higher oil prices are incredibly inflationary, but also because this new Fed chief, Kevin Walsh, he seems eager to stamp out inflation, even if that means raising short-term rates. Yeah. Funny thing, when he spoke on Friday, this Fed chief sounded a little bit more like the much revered Paul Vulkar, the Fed chief who took rates up to 20% in the early 80s. Vulkar was willing to cause a ruinous recession as long as he could get inflation under control. That man meant business. He was a rigorous practitioner of the game. I sense that Wars wouldn't hesitate to do the same thing if necessary. Remember, at the time, Vulkar was the most hated man in America, but by the time he passed away, he was considered a hero. What matters though, as long as we're got this on again, off again war with Iran, it can derail a rally at any moment. Now, I [music] could argue that we deserve exactly what we got today. Oil's going almost all the way back to where it was at the beginning of the war. That makes sense, as the world's strategic petroleum reserves are now all running low after months of conflict. Refineries have been running full out for months, way past when they're supposed to be closed for downtime. Much of what we buy at stores is trucked in with very expensive diesel. Diesel, gasoline. Wow. Truckers, they have passroughs. Supermarket then passes the cost to you. Grocery stores have gotten real expensive. Hence why the dollar stores are thriving. Higher oil is like a tax on the entire system. It increases the price of your commute. It impacts vacations. It jacks up ticket prices. It infiltrates construction costs. It's insidious and omnipresent. And it's getting worse [groaning] and it matters. So, when you see a day that starts okay and then falls into the fire and brimstone trade, the cascade of red ink washes over pretty much the whole market, what can you do to protect yourself until this rinse and repeat cycle with Iran is over. All right, let me tell you what I'm doing for the investing club. Anyone who's a member knows this cuz it's pretty darn draconian. First, we've raised our cash position for the travel trust to more than 15%. Which over the 25 years of its existence is extremely high. We want it that high because without a true end of the war, you don't know when the Iranians will provoke the president by firing missiles at oil tankers or our allies in the region or maybe our bases there. We don't know when the Iranians are going to mine harbors. The Iranians want higher oil prices. They've gotten very good at that. At the same time, we don't know when our president will post something provocative, which is equal to about a 1% move in oil or a few basis points of interest points and a quarter of a percent decline in the market. When the president responds to bill entirely, you get about a 2% increase in oil, many more basis points for Treasury yields and a half a% decline in the majors, particularly the NASDAQ. We had a more than 5% move in oil today and rates rose all over the world. And our markets were clobbered. Oh, I wish it weren't this cut dried, but we simply aren't in an environment that's conducive to big capital gains, especially during September, which is historically the weakest month of the year. Second, we want to slim down our data center exposure and replace it with more healthcare. The data centers become a major battleground and we will, you know, it's going to stay that way until the election is over. Rightly or wrongly, these things are very unpopular. If the anti-data center cohort wins in November, we'll be glad we lightened up. We can always buy them back in November, but for now, we don't want to give back our gains. That would be sinful. We're also anxious to see if there's a positive reaction to Dell that lasts throughout the day. What a good quarter they had. But if we get another presidential smackdown, it might not last. We sold one of our absolute favorite AI infrastructure stocks today because I suspect we'll be able to buy it back lower and I will not let a gain turn into a loss. We still have some semis and we we own and not trade Nvidia and Apple. But we're not fools. We can read a screen. These stocks are all heavy meaning there are sellers every step of the way. The semis especially versus say healthcare which seems to levitate regardless of what happens. AI trade is very rough because of the macro backdrop. Not the micro meaning anything company specific. Micro is still strong but now it doesn't matter. Third, we understand that we have to be more nimble. When we sense that everyone feels like us and there are many more negative people out there than there are right now, we'll be happy to put some of that trust cash to work. But the bottom line, when you have a volatile situation with oil and a president who's volatile himself, along with volatile interest rates, you need to be a little more concerned about the volatility. As this market gravitates from exuberant to negativity and the dip buyers, especially those involved with artificial intelligence, now go unrewarded. Let's go to Gary in Illinois, please. Barry. >> Hey, Jimbo. Calling you from Bloomington, Illinois. But I grew up in Philly. You a go Birds instead of a booya. You okay? >> I like your Go Birds. Yeah. Actually, I we play the Commanders at first. That's going to be like a pre Yeah. It's like a preseason game. What's going on? >> Yeah. Yeah. Hey, just real quick, me and my dad grew up watching you all the way back in your Cuddlo and Kramer days. Say thank you. >> And my question's on Caterpillar. don't really know how to value it with all the AI stuff bumping around and want some information. >> Well, Gary, it's funny you say that because isn't it, if you repeat what you just said, isn't that the problem? Since you don't know what to value it, what do money managers do? They sell. And that's what's going on. They're looking and say, "Oh, it's 28 times earnings. I'm used to catch trading at 16 times earnings. I don't know if that's right. Why don't we sell it? We can buy it back." And that is what you're running into. I want to go to Jim in my home state of Pennsylvania. Jim >> YouTube. >> Hello. How Hello, Jim. How you doing? >> I'm doing fine, Jim. How are you doing? >> I'm great. Thank you for taking my call and thanks for you and your team and all you do. >> The team is so good. I I I love the team. Let's go to work. >> Jim, I want to ask you about Marville Technology. Is it a buy now? >> Okay, this is another one that is that is proves my point. Marll reported an amazing quarter that and what they then said was look listen maybe our big win won't be till 2029 or it's going to be pushed back. They have an October meeting at the beginning of the beginning of October that well their analyst meeting that's going to tell us what's going to happen. I don't feel comfortable until I see what they say before I say just pull the trigger. All right. In a situation with this much volatility [music] on all sides, you have to keep expectations low. Those who buy the dip are no longer being as rewarded as they used to. It's just that's okay, man. Tonight, Palo Alto in the movie after earnings. I'm [music] sitting down with the CEO to find out what the quarter says about the state of cyber security. Then Dell just delivered the latest results. Holy cow, can the AI server boom keep power in that stock higher? I got the exclusive. [music] Plus Crowdstrike Nvidia Intel OpenAI. What do they all have in common? Their top executives all took the stage at Crowd [music] Strike's Falcon Conference today. I'm going straight to the conference floor to get the latest from Crowd Strike CEO George Kurtz. Mad [music] Money is back after the break. [music] Don't miss a second of MadMoney. Follow Jim Kramer on X. Have [music] a question? Tweet Kramer #madmentions. Send Jim an email to madmoney@cnbc.com [music] or give us a call at 1800743CNBC. Miss [music] something? Head to madmoney.cnbc.com. [music] The cyber security stocks have been climbing steadily higher for months now. Ever since Wall Street figured out that this industry wouldn't be made obsolete by artificial intelligence, take Palo Alto Networks, a longtime holding of my travel trust. Here's a stock that's more than doubled from its April lows to its highs a few weeks ago. That's why it's been pulling back. It's going into earnings. When Palo Alto reported after the close, they delivered a much better than expected result on almost every key line. Plus, their guidance for the current quarter and the full year were both very strong. Now, is it enough to get the stock running? Let's dig deeper with Nikesh Aurora, the chairman and CEO of PaloAlto Networks. Fresh from his conference school. Mr. Aurora, welcome back to Mad Money. >> Nice to see you again, Jim. >> Yeah, I miss you, Nikesh. You had some quarter. I mean, I was just looking at some of the facts. This stat roughly 220 new net new platformizations the fourth quarter, double the 110 from the last quarter, not year-over-year, but the last quarter. What's going on? >> It's Q4. It's party time. Jim, look, you know, 9 months ago, I said we were guilty and convicted of near death because AI was going to eat our lunch, breakfast, and dinner. Uh, it seems like that's not the case. Seems like we're going to have to have the feast with them. And, uh, you know, the mythos moment has just become a net new beginning for the cyber security industry because the world has realized that we have to pay attention to cyber because AI is going to be weaponized by bad actors and they will need the large players in the cyber security space to help protect them. So, I think that's what we're seeing. We're seeing the early signs of customers wanting to adopt platforms. We're seeing the early signs of customers wanting to get a head start on what is coming with AI getting better and better at at cyber attacks. >> Well, you're talking about uh the need for accelerating the urgency to modernize $1 trillion of legacy security. That just means hackable security. A trillion dollars worth. >> Well, think about it. If the average life is 7 years and you're spending $2300 billion a year, you got a trillion dollars of security infrastructure that's out there. Nothing that was deployed 7 or 10 years ago is prepared or ready to handle AI at machine speed. So you have to make sure that you have to rethink your cyber architecture. You have to make sure that you are ready for what's coming down the pike from a bad actor perspective. And that's where the $1 trillion and need the need for modernization comes from. Not to miss the fact that on top of that, you're going to see $5 trillion of capex spend in the next 5 years with people building AI data centers and having tons and tons of agents running around. You also have to build a net new security stack for that. Nesh, how worried are you? I mean, there are too many companies that are not protected. And if there are that many companies that are not protected, we've got all these agents running around. How can we stop them? What is Palo Alto doing to stop them? Well, the good news is Jim that you know we have been very consistent in our approach of making sure that we build an AI first product. You and I have talked about this over the last few years. We built a brand new product called XIM. We bought a company called Chronosphere which focuses on AIdriven observability. We are focusing the AI security operations and IT operations space. We've always had this ethos that AI was going to be big and that's the one thing I brought with me from Google when I worked there 10 years ago that AI was going to be big. not wasn't quite sure when and how big but that's where the ethos of Palatoto is that we have to build something that is able to work at machine speed and resolve security incident machine speed we've been able to get ourselves to 1 minute of resolution we think we can get our customers there the good news is not all customers are unprepared many of our customers have taken that bet have worked with us to go deploy X IM as a capability many of the customers are having immense conversations and I'll tell you finally Jim I've been trying for 8 years to tell customers they're not ready And Daario did it in one event just by launching Mythos. He made every CEO aware that AI has capabilities which we have not all ever thought about. And that's been an amazing tailwind where CEOs want to reach out and talk about how do they modernize their infrastructure? How do they get ready for what's coming from a vulnerability discovery perspective? That's been great. >> Are governments ready, Mikesh? Well, governments have a phenomenal property because a lot of them are not cloud first because they've been very particular about air gap systems about sovereign systems to be fair. They actually have done a much better job you know and not a well-known fact but governments spend 78% of their budgets of it on cyber enterprises spend four to 5% of their budgets on it on cyber. So I have to tell you that many of the governments are wellprepared and they have very very qualified people historically like our NSA or people of equivalent ilk around the world they have a lot of capability from a knowledge security and offense perspective and they've seen the worst attacks or worst attempts in the world. So I think they are they are aware they are prepared and whether or not they're making sure they're going to be prepared. Well, what kinds of companies are calling to find out about your AI critical defense program that you announced, >> Jim? We've had about 2,000 companies that we've had a conversation with. So, what we've been able to do is thanks to our friends in the frontier LLM space, we actually are the first certified commercial partner for Mythos. So, we can actually bring MythOS with our people and train uh test our customers to see how vulnerable they are. Not just on Mythos, we can also do that with OpenAI's 5.6 cyber. So we actually come with multiple models, test our customers, work on a plan to fix what we find with them and also work on a plan how to modernize their infrastructure going forward. So that's 2,000 conversations. Not everything's going to happen next quarter, but all I say is this changes the long-term growth rate and duration of cyber security not just for Palato but as an industry because suddenly people are paying attention that you cannot deploy AI successfully if you don't get cyber security right. Now at one point there was actually a question about platformization from uh some some cat calling analysts. I I think in retrospect it was probably the single best thing that Palo Alto has done. Well, three years ago, uh, we took a few punches because we said we're going to go towards this notion of platformization. And it's kind of historical if you think it's happened in with our friend Mark at in CRM. It's happened with workday. It's happened with ERP. It has to happen with cyber security. That is the right answer. When multiple systems are fragmented, they cannot talk to each other at machine speed. You have to have systems talk to each other. You have to have them be together. You have to have them be integrated. And I think AI is just going to make it more sort of important for get for us to get it right. >> How many uh companies are ready with a kill switch to stop the agents? >> I think the agent security space is going to be a net new amazing space. Jim, I think there's a lot of uh innovation that's happening on the AI front. Every three few months we see net new innovation. We had the open claw moment, the mythos moment. We're having an open weight moment in AI. I think that's going to keep evolving but customers are not fully ready to deploy the kill switch and we all read about things like open AI models escaping and hacking hugging phase that puts a bit of a fear in the minds of our customers saying I don't want rogue agents in my infrastructure I want to make sure that these agents can be identified can govern and can be stopped midstream if required so even if you don't have a kill switch you definitely need the ability to intercept agents and stop their activity and that's some stuff that we're working on with our customer >> and what will console soul do to help your suite? >> You know, one of the things, Jim, in addition to building security for our customers around AI, we also have to become an AI native business. We have to have our products be AI first and console is a phenomenal team that has been working as an AI first capability around security and IT operations. So, all the work we're doing with large amounts of data for our customers needs to become AI native. This team is going to help us get there. This team is going to work especially on the uh IT space but also help us identify our entire security operations space. Very excited about these team. >> Okay. So the mythos moment uh since then what has your life been like? >> My life has been great. You know it's much better when customers call you than you have to go chasing them. So you know once in a while it's good to be sitting at the other side of the phone call as opposed to constantly begging for attention from a cyber security perspective. But I think it has fundamentally changed the awareness levels of boards, the awareness levels of CEOs, the aware a awareness level also it's coupled with the whole desire for you know CEOs are paranoid they don't want to get sort of loose in this AI race and remember the 1999 get the internet race and a lot of companies were left behind because the internet created a whole new categories of companies. I think this time we're all resolute not to become the hasbins and that's causing CEOs to get more assertive understand AI deploy AI and the moment to think about that the first thing they want to know about is well how do I know this is going to be secure because there's so much uncertainty around it so it's been great >> all right my trust is a happy shareholder because we got a happy nesh because this is a monster quarter I want to thank the cash roar chairman CEO of pal networks who's been in this the whole way understood that this could happen thank you so much cash [music] >> thank you Jim thanks again >> excellent >> thank you Jim thanks Excellent. May's back after the break. >> Coming up on the heels of a quarter for the ages, Kramer's talking to Dell's CFO to see if the company can still [music] power higher. Next, [music] dude, you're getting a Dell. Specifically, a blowout quarter from Dell Technologies. After the close, this iconic maker of tech hardware reported one of the best quarters I've ever seen. Thanks to the incredible strength of their AI server business, Dell's revenue growth 58% year-over-year. A2 billion dollar beat company earned $74 per share. That's more than $2 above what Wall Street was looking for and more than triple what they made the year before. And the guidance was even better. They took their fullear earnings for per share forecast from just under 18 bucks all the way up to 2550. Stunning definition of blowout. Let's check in with David Kenny. He's the CFO of Dell Technologies. Get a better sense of the quarter and what comes next. Mr. Kennedy, welcome to Mad Money. >> Good to see you, Jim. >> Okay. A wise man, Michael Dell, uh, once said, there's an old Texas saying I might have just made up. If you keep growing earnings per share 200% plus, year-over-year, something good will happen. And what good is happening there? >> Yeah, an outstanding quarter for sure. record revenue of 58% growth. Our EPS is $74 in Q2, up over 200%. And obviously a shareholder return record also of $4.3 billion. Look, what we're seeing is this acceleration and appetite for infrastructure. It's more broad-based. It's across the portfolio. And our job is to serve as many customers as we can as we envision and see it come working through. Look at AI server. $61 billion of demand in Q2. If we're keeping count, that's $132 billion and a 12-mon uh trailing uh assessment. And we're now shipping $1.5 billion of AI every single week. >> It's this acceleration, it gives us the confidence to take up our guy to 192 billion for the year, up 25 billion. And like you said that EPS number 2550 which is almost equal to the last three years combined. >> It's incredible. Incredible. Now David uh traditional server demand which I probably I didn't really think would be that great was incredibly strong. That's on premises demand. How's that possible? Yeah. Look, I think it's undeniable now that the appetite for infrastructure has gone beyond the GPU. I think the inferencing workload, the agentic activity. You look at the traditional modernization of the data center, the introduction of this cyber and security activities as well. All of that's driving CPU demand and in in in turn is driving networking demand and storage demand. If you look at our $25 billion increase in guide today, 11 billion is beyond the GPU. It's traditional server. We grew 122% in Q2 and we're guiding for the full second half of the year triple digit growth. And then storage, which was my personal highlight for the for the quarter, growing 26%. >> Well, David, what about the push back from the the higher DRAM prices that everyone felt? Is there any price sensitivity for your for your equipment? >> Look, I think it's important to kind of call out demand was greater than supply in the server side. So, as much as we celebrate the 122% growth, demand is higher. We continue to look for supply. That's that's tightened this environment obviously as you know. Uh but it just proves out the broadness uh and the durability of the growth that we're seeing whether that's by geography by customer vertical uh by customer segment all boats are rising. We're seeing it across the board and it's giving us a lot of optimism as we move forward. >> Now are you taking share as well as having terrific organic growth? >> Oh yeah for sure. If you look at our traditional server space almost 10 points a share in the first half of the year. So we're really differentiating in terms of execution. Uh that's something that's very important to us. That's leveraged on the expertise of our supply chain. We obviously layer on that in terms of relationship with our product teams and our sales teams. So that triangle of execution that discipline whether it's operationally or pricing wise is a big anchor in terms of the performance. So David, I look, I was prepared to hear a great AI story, but obviously this is much bigger than just artificial intelligence you're talking about. >> Oh, for sure. Look, there's no undoubted the demand is there and it's across the entire portfolio. If you look at take storage as an example, we're now six quarters in a row of demand growth, faster than the market. It's our Dell IP storage. So we're delighted with the portfolio performing at such a high level. the traditional server market. Again, this inferencing and AI workloads, it's almost a brand new TAM that's out there. It's going to continue to evolve and be durable for us as we move forward. More and more customers are looking for us to solve those problems. Uh, and we're there to help them along that journey. >> You must have monumental supply chain issues. How are you able to handle this? I think we have the best supply chain in the industry and I think they're doing a great job as we as we go through a broad portfolio and that's what the opportunity is for us as we go across the scale from the PC up to the most uh complex designs from a data center perspective. One example Jim uh to take you through would be at the start of the year maybe three or four months ago seeing the slight pressure on the PC side we did shift some of our supply that's not easy to do to kind of course correct it into the server space that's a big part of our guide as we went into the second half of the year that fungeability of scale of supply and durability and broadness of our portfolio that's a real asset in times like this for us >> it is incredible if anyone else did this it would just be it's just it's just the monumental beat. Now Jeff Jeff Clark whom I love something really interesting in the call. Customers no longer see IT environments simply as cost centers but as value drivers that enable growth, productivity and competitive advantage. This is a big change. You've been in the business forever. This has not happened for sure. And you you you see this trend, right? Where it's from an AI and agent perspective doing useful work, meaningful work, productive work that's driving more tokens. Tokens are driving more data. Data needs compute and ultimately the data needs to go somewhere from a storage perspective. And we're operating along that scale. I think our latest intelligence shows almost 3,600 quadrillion uh tokens by 2030. That's a humongous number in anyone's book. I think we're well positioned across all the ecosystem as we drive that as part of the ecosystem. And then folks see, like you said, they can add productivity, multiples of productivity as you move forward, and we're here to help them. >> Well, David, you as a CFO might be able to help with this. I think that the era where companies that are buying are losing money is over. The companies that are committed to AI, the companies that are buying equipment from you are doing so because they expect to make big profits in 2028. maybe even before then 2027. >> Yeah, look, if you look at our Q2 performance, we saw 6,500 customers launched their AI factories with us. That's up almost 60% in the last 6 months. That's not original customers. This is brand new customers buying into this productivity curve that's happening. We're doing it ourselves from a modernization perspective. Those that are are going to see the productivity benefits and scale as they go AI native in their decision- making, their agility, their speed of thought. All of that plays into the the growth that we're seeing, Jim. >> Okay. So, David, a data center that opened last year, is it conceivable that that is already making a huge amount of money for whoever opened it? >> I think the key here is getting to that first token, getting that monetization that's there and driving the activities. you drive scale and activity in relation to the agentic workloads we're seeing productivity drivers across the ecosystem even in finance for my own uh function across peers that I talk to in the industry they can see the benefits and the scale that's coming I think it's broad bases across all functions all industries all verticals I think it's undeniable that that the progress that's been made >> but do we have to necessarily presume that jobs are being lost or are people getting more productive so therefore you want more people because then you're is force multip multipliers. >> Yeah, I think it's a mix of all of the above, right? As you're growing, you have this opportunity to show scale. Uh we touched on it earlier ourselves. From a Dell perspective, we are the most scaled company in terms of decision-m and efficiency in our 42-year history this year. That's what our guide says as we move forward. And I think that's what everyone else should aspire to. Also, >> I we don't the stock is up. Obviously, you bought back a lot of stock. You you return more to shareholders than you ever have, but there's still a lot of firepower. Correct. >> Yeah, for sure. Look, ultimately, you accelerate the revenue profile in our cash conversion cycle. You're going to accelerate the cash flow from that. And ultimately, we want to stay committed to the shareholder return. >> It's up almost 2 and a halfx quarter and quarter. That shows our diligence and our commitment to that going forward. And you won't see any change in posture from us in that. >> All right. Dave, I really want to thank you for being with us for this remarkable quarter. David Kenny's CFO of Dell Technologies. Again, maybe the best quarter of 2026. [music] Thank you, David. >> Thank you, Jeff. Ny's back after the break. >> Coming up, Kramer's locked in on the future of AI security as he checks in with George Curts from Crowd [music] Strikes Falcon next. >> [music] >> Listen, this is really important. Today was brutal for all things tech because these stocks tend to sell off horrible hostilities with Iran resume causing the price of oil to spike which in turn pushes up bond yields. They have pretty high price during multiples and they're sensitive to rate. But there are a lot of positives from this group and I don't want you to miss them. Take Crowdstrike, the heavy hitter in the cyber security space. Today in Las Vegas, they're holding their annual FA.com conference, Falcon, and they're focused on securing AI everywhere. They're really hammering home the point that the rise of AI has made cyber security more essential than ever because hackers now have access to incredibly powerful AI agents. So, let's take a closer look with George Curts, the co-founder and CEO of CrowdStrike, who's coming to us from Falcon in Las Vegas. Mr. Curts, welcome back to Mad Money. Jim, great to be back and so excited to be broadcasting from Falcon live in Las Vegas. >> Well, I don't blame you, George, but I've got to tell you after discussion I have with David Faberj, I I will admit that for the first time, I am somewhat scared. These agents, without even being told to be malicious, have created so much mischief as we know that I'm starting to wonder whether anyone can stop them. Why can you give us some security please? >> Well, Jim, this is exactly what we did. We launched something we call Falcon Guardian, which is our AI detection and response technology. It's a brand new product that we just released today. And we worked with many design partners, one of them being our biggest, which is Amazon, to be able to understand where Shadow AI is, what an agent is doing, what tools it's calling, what network it connects to, and what data it actually touches, and to provide a complete timeline of those agents to make sure that these agents gone wild, which we've talked about many times, don't happen on our customers network. >> All right. So tell us also you you you had Jensen Wong there talking about safe mine uh robots factories digital twins. Can they be protected? >> They all can. So Jim, I'm so excited. I mean to have Jensen come to the conference to do a fireside chat with him. But more importantly, we actually delivered one of the first agentic defensive solutions called Safe Mine. We leveraged the Neotron models. These openweight open- source models. They were trained by us using coreweave technology. They were post-trained by us. But most importantly, Jim, they used our massive, massive data set. We talked about the data advantage we have. Finally, we're putting a defensive technology with Frontier Lab capabilities in the hands of Defenders and and Crowd Strike Falcon customers. Very exciting. >> Okay. Tell me about what what went wrong. What did everyone get wrong about Open AI and Hugging Face, which I know you understand and I have a solution to? >> Well, if we think about the OpenAI hugging face incident, and they've been very forthcoming and transparent about what happened, which is great for the security community. So, kudos to them. But if you look at what happened, these were agents being trained. They took the airbags off these agents. Essentially, they reduced the the guard rails and the agents basically broke out of the sandbox. I come at it a little bit differently. I say the agents actually broke free. And there is a difference because when you look at these agents, the 1200 of them reasoning and working on behalf of the collective. Think about Jim. The collective, they were actually able to break into another company called Hugging Face to try to pass the test. Now, this story could have ended really, really bad. But the goal of those agents was to pass the test, not actually destroy anything. And what we talked about today is when the models are in the hands of the adversaries without guard rails, it's not going to be a test. It's going to be a real world scenario where you're going to see destruction and havoc uh basically created by these agents. And that's why we created uh these technologies like Falcon AIDR. >> Okay. to George. Is the goal to have it so that the bad guys say, "Uh-oh, those guys have Falcon AI. I'm not going to go after anyone who has CrowdStrike, I'm going to go after the ones that don't have Crowd Strike, or is it the goal to get everybody on Crowd Strike?" Because from what I can tell, if you don't have CrowdStrike, you're naked. Well, of course, the goal is to get everybody on Crowd Strike. And as I've said in the past, if you think about this, half the market is still using legacy AV technology, right? So, it's a massive market opportunity for us. And I think protecting agents can be a bigger market than protecting humans. When I started the company, it was protecting computers and humans. EDR, endpoint detection response. If each person on average is going to have 90 agents, we're going to be there to protect all those agents. And we see this almost as an unlimited opportunity in terms of the addressable market for protecting agents. They're going to keep growing and growing and growing. >> So when you hear people uh scare people now, when I listen, you scare people and say you can't be protected from this. What do I say? I just say listen, Crowdstrike has a solution. It's been tested. Intel's in on it. Uh Nvidia believes in it. There's no doubt about it that uh the Open AI checks off on it that there isn't anyone who doesn't think it'll work. Should I just off can I offer reassurance like that? I don't work at crowdsite, but I sure want to offer that reassurance. You can, Jim. And I think what's important to realize is AI is a transformational technology. We all use it. I see you use it every day. You've got your little cheat sheet in the morning, right? So, we use it. It does lots of work. You probably have it there. It does lots of work. Let's see. You got it. Um, there it is. But at the end of the day, like these are transformational technologies. We have to use them. They just have to be secure. So, we're not out there, and I'm personally not out there trying to scare people. Other people are. It's not us. >> It right. And we are coming to the market with the best partners like Nvidia and others to come up with a solution to be able to stop these adversaries cuz it's only going to get worse from here. Jim, >> well, look, I got to tell you, I'm glad that you're here doing it. I've known you for a long time. I like your confidence. I believe. And I'm just going to reiterate to everyone, stop scaring. Just get the product. Stop scaring people. That's George Kurts, founder and CEO of Crowd Strike CRWD, one of our largest position for our trust. George, thank you for coming to us from Falcon. >> Thank you, [music] Jim. See you soon. >> Mad Money's back after the break. >> Coming up, he's the fastest mind on Wall Street. So, we're putting him to the test with your help. Bring on the lightning round next. [music] It is time for the light round by the course and then the lightning round is over. Are you ready? Sky washer. Randy. [music] >> Hey Jim, thanks for taking my call. This is Randy in the small town of Reineer, Washington. I got a question on applied material. [music] >> Well, with I'm sorry, go ahead. >> I saw your interview with [music] uh the CEO back in June. Uh a lot of good comments in July. I [music] purchased at 540 right before earnings. Good earnings. And then it's been going down. I bought again at 490. >> But you know what? We don't we don't care where we bought it. [music] We care where it's going to. Now, this stock is now down 300 bucks from its high. I think if you did initiate a position now, I don't know when you're going to do it. You buy a little here. I know you already have some. Forget that. You already have some. Think about how to be able to make it so you have a better basis. I would put some on here and then wait till it's down 10%. It could happen. This is a volatile market. Let's go to Brian in Florida. Brian. [music] >> Hey Jim. Booyah. Huge fan. First time caller from Sunrise, Florida. >> Oh, I'm glad to have you on the show. Thank you very much. What's going on? >> With the rise in advanced manufacturing, this company just reported a massive 52% jump in year-over-year revenue and raise guidance. Management is projecting positive EBIDA in the second half of this year. [music] And with deep ties to SpaceX and major defense prime, is it finally time to buy 3D? [music] >> Okay. They got they have not had the revenue growth that I thought they should have and that's why I think it's at 11. I think [music] you got to wait till to a few more solid quarters because it has not been the right place to be. You can buy about a quarter position [music] because it is a good spec, but I don't want you to get bigger than that until we find out why the revenues aren't growing more. Let's go to Chris in Connecticut, please. Chris, [music] >> hey Jim, thanks for taking my call. Love your show. >> Oh, thank you. [music] >> Yeah. Hey, we've owned KLA Corporation for years. It's been on a tear. In June, it eclipsed $300, but recently it's come down [music] significantly. So, I wanted your opinion on the company and whether you think it's a buy, hold, or sell. [music] I think it's a great company. It is up 40% for the year. It price multiple is still too high. It does great intellectual property. [music] I think if you wanted to buy some here, it's fine. But again, I would not put a lot of it on. Why? Because these are all semiconductor capital equipment companies that I've been talking about this evening. They're extremely volatile. You can buy a quarter [music] point quarter and then you have to wait no more than that because we have to see what happens. I don't want you to put on too much money at one level in a stock [music] this volatile. Let's go to Mike in Rhode Island. Mikey by Mike. >> Hey Jim, between electric boats backlog and submarine and GFream Jet, what's your [music] take on General Dynamics? >> You're not going to go wrong with General Dynamics buying it here at 20 multiple. I think it's fine. I would put maybe I would start it [music] here. I wouldn't put it all at once because remember the budget deficit is going to have to be controlled at certain point and it's going to include military. It is not my favorite in the group. My favorite in the group remains Loheed Martin and Jim [music] Tlet. And that ladies and gentlemen is conclusion of the lightning round. [music] >> The lightning round is sponsored by Charles Schwab. Coming up, Nvidia may be the best company in Kramer's eyes, but he still sees one move that can vault them even higher. He'll reveal it next. Today, we learned of still one more gigantic data center deal. Anthropic inked a $35 billion contract with an Nvidia backed Neocloud play, Lambda. Nvidia owns the lease to the center. The complex is being developed by former Bitcoin miner Hut 8. Nvidia is backing Hut8's activities, too. Why does Nvidia have to make all these investments in back stops? Because the companies involved just couldn't go to a JP Morgan or Bank of America and ask for multi-billion dollar loans. They wouldn't get them. Many of the companies Nvidia backs are not investment grade. Nvidia is effectively serving as the banker for these kinds of companies. I like that. Nvidia knows this business better than anybody else. They know the chips retain their value. Worst case scenario, they repossess the GPUs, maybe even the for the same price they sold them. No bank could think like that, though. So, Nvidia's become the banker for the AI data center buildout. Now, the one thing I don't like is that no matter how viciferously I defend these deals, and I keep doing so, I know it's falling on deaf ears. The more complex these deals are, and this anthropic, the lambda, the hutate arrangement is real complicated and mind-numbing, the less Nvidia is going to get credit for it. As much as I believe in Jensen Monk's strategy, I know that the market's not going to be happy with it. Instead, Wall Street wants the ability to take its money and come in with the biggest buyback in history, something to rival what now former CEO Tim Cook did at Apple, where he shrank the share count by about 44%. See, Apple realized there was no better investment out there than Apple. Right now, I believe there's no better investment for Nvidia than Nvidia. It's not like Nvidia doesn't have a buyback. has been buying about $20 billion worth of stock a quarter and $99 billion remaining on share repurchase authorization at least at the end of the quarter but that's the last quarter but that's not a lot of money when you're dealing with a $5 trillion company that's practically printing money let me give you the cadence of why a much bigger buyback is needed on October 28th of last year when Jensen Monk spoke at GTCDC he said quote I think we're probably the first technology company in history to have a visibility into a half a trillion dollars of cumulative blackwell and early ramps of Reuben through 2026. End quote. Nvidia stock gained 5% that day, climbing from around 191 to 2011. On March 16th, 2026 at regular GTC, Jen said, quote, I'm here to tell you that right now where I stand a few short months after GTCDC, I see through 2027 at least 1 trillion. End quote. The stock gained 1.6% that day, moving from 180 to 183. Last Wednesday, August 26, after the market closed, CFO Colet Crest said revenues would be up 70% in fiscal year 2028, which is 2027 if you go by the normal calendar. And Nvidia would be on track to grow 100% if not for supply constraints. Stock rallied 8.7% in response last Thursday. Since then, it's given back more than half that gain. Overall, from the close on October 28th to today, Nvidia stock is up 8.2%. The S&P 500's up 10.7%. Yes, Nvidia's underperformed despite that gigantic unheard of leap in sales. Here we have a company that's dramatically ratcheted up revenue expectations for next year and its stock has barely moved. I think it's radically cheap. Whatever Nvidia is doing simply isn't being rewarded by Wall Street, just like Apple rarely used to get credit for its greatness. Apple took matters into its own hand with that gargantuan buyback and it worked. Work like a charm. Now look, there are reasons why Nvidia is getting no respect. Maybe it's because they're lending to dicey outfits. Maybe they're just popping up companies that shouldn't exist. Although, I personally, again, think that's dead wrong. In my view, Nvidia is simply extending credit against merchandise that can and does retain value. I think it's absurd that Nvidia has an amazing order book and huge profitability. Yet, it trades at just 23 times this year's earning estimate and a much lower PE on the sold out years. So, if I were Jensen, here's what I'd do. I'd quintuple quintuple the buyback authorization. Quintuple it. Announce a monster half trillion dollar buyback. Repurchase tenth of the company in a fairly aggressive fashion every day, clockwork. Get bigger on the down days. Take advantage of the selling. Reload when finished if the balance sheet allows it. Why not? The company's not getting any credit for its current strategies, which is wrong and creates the buying opportunity. And I think they could afford the level of buyback without scaling back their investments. I think they want a higher stock if they want it. Here's what happens. You pretty much need to do it my way. Even as it is a prosaic by road enterprise. My plan is not an indictment of the company. It's an indictment of the market. Wall Street is not valuing Nvidia correctly. That's why they should do like Apple, which also was valued incorrectly, and repurchase a spectacular amount of stock. Because I think from Nvidia's perspective, there's nothing more valuable in this market than Nvidia. Mean it, show it, do it. It might be the best investment this amazing company's ever made. I like to say there's always a market summary. I pumped it just for you right here on May. I'm Jim Kramer. See you tomorrow. 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