Mad Money 10/08/26 | 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 America. My friends, I'm just trying to make a little bit of money here. My job is not just to teach, but also do some entertainment. So, call me at 1800 743 CBC. tweet me at Jim Kramer. So, I get this. I'm walking up to Pine Street about a block from here. Beautiful day. And who stops me? Morris. All right. He saw me with my new haircut. We share a barber. And he says he's seen me walk around this area before. Why don't you ask me something? I said, "Far away. I always stop when someone wants to talk about the show. You should know that if you're ever downtown New York." Morris looks me in the eye and he says, "Jip, do you remember Irwin from Brooklyn?" I said, "Of course I do. I was a winner." So he tells me he said that was my dad. He loved the show. We talk about Irwin 82 taking it too soon. And then he says can I ask you about a stock? I say of course and he asks what do I think about the stock of McDonald's for his boy here. Now I'm thinking the market's just looking okay, not great. Nothing to write home about. This is before we got the tech beat down and the big move up in a lot of these soft goods companies. Dow only finished up 52 points. S&B declined point47% and most importantly the NASDAQ tumbled 1.25%. >> The house of pain. >> So I tell them, look, I like the stock of McDonald's. We just did a piece on it, but I also worry about the execution of the new turnaround plan they just unveiled. Morris knew we'd been talking about whether the franchises would buy in. McDonald's is virtually all franchises, so you need them to on board on any attempt to change the store design or the direction of the company. I happened to have looked at McDonald's when I came to work this morning and I noticed it was still at around $131, basically where it was when trading when we ran that segment last week. But I knew that with PepsiCo, I thought to be up big. More on that later. This could be a good day for the stock of Mickey De's. I tell Morris that the best thing about McDonald's for a young kid valuation. Right now it's trading at 17.2 two times next year's earnings estimates, a huge discount from its historical valuation, which tends to be more like the mid20s. Like I pointed out last week, the stock hasn't been this cheap since 2014 when the business was falling apart. So I said, and this was before uh remember this was midday and not when McDonald's stock was ultimately up $6, but I said to a morsel, you want to buy something, let's say you want to buy 300 shares. Uh you buy a 100 shares right here, low 230s. Uh maybe 100 below 230 and then you wait maybe gives up the ghost you get maybe 100 uh at $200. If not, just go in and buy the last 100. You'll have a good average. I told him that Irwin from Brooklyn would have liked that analysis if you called in about his grandson. Win I thought Morris bought it, but then he said, "Wait a second, Jim. I got something else. I got too much tech. I think I have way too much data center. And I told him that I've got a lot too, but I'm diversified with the chapel trust. It is killing me to be diversified here. I said, but I can't afford to change my stripes. Diversification is the only free lunch in the business. So, I'm just going to uh I'm not going to get trapped in all tech. My message to to Morris, like we teach in the CNBC investing club, you got to diversify to stay in this game. Then we shake hands and go back to work and I discover that all hell is broken. Why? Because of a story that was in the Financial Times about Open AI, one of the two private big dogs in the AI game, that a open AI was coming up short on revenues, maybe $20 billion lower than people were looking for. And everything in the AI data complex just is getting crushed. Nvidia, Broadcom, Google, like it was a charal house. But it was also a perfect reminder that diversification can be a thing of beauty. one that bubbles up as fast as it takes to get a haircut. Well, I mean, as fast as it takes Eddie to do my hair. Uh, that's probably faster than yours. Now, I want to be clear about something. I did not get any confirmation from OpenAI that its revenues are well below what was asked, what was written about just a few weeks ago. I did not get anything other than that time story was known and there was nothing new. I cannot challenge the FT without a direct quote saying the story is wrong coming from the company. I could not get that. I do know that I bet the big declines we saw today in the complex can reverse. More important, everything on the diversification side of the ledger was flying. Take Home Depot. This one has just been killing us at the charable trust. But suddenly it is up $9, more than 3% today. Why? Well, we've been having these Treasury bond auctions. I've been talking about them with you. I know I've been putting you to sleep. I try not to do that. And how the new goal is to be able to sit on your hands, not buy anything until the auction is over. Well, the auction was over. We got a 30-year auction today, last round of auctions. And once it was over, it was as if interest rates breathe the sigh of relief. There was a sense of what could happen to the beaten down retailers if rates are going to go down or at least stop going higher. Home Depot is a classic diversification stock, people. It's been hurt by the higher price of oil. You put off your repair and remodeling because of the pump. People aren't buying houses anywhere near the pace we hope. Given that mortgage rates have gotten too high, you don't want to give up your 3% mortgage for an 8%, right? Uh Morris even talked about it. He said he's in real estate. He says people with that 3% mortgage they got during COVID, they don't want to swap out of it for these new high ones. Even if they see they like it's like a giant penalty. But then you have to think Home Depot selling at less than 19 times next year's earnings. It yields 3.15%. It's historically low like McDonald's. You have to buy Home Depot when it's out of favor because you're just going to end up chasing it much higher, maybe to 400 once rates start coming down. Today was a sneak preview of what will happen to this stock when the bond market calms down and perhaps oil one day goes lower. Now, we know that oil with oil up big and inflation spreading throughout the whole system, you're not going to see rates down big anytime soon. We heard from last time from a governor, Fed, real smart, Christopher Waller, that he's signaling that we could have two more rate hikes. That's not a shock, but it was tough to read speech. Unless the president or Congress finds a way to subsidize new mortgages like they're doing right now, the people's republican China just started doing that. There's no real reason to buy the stock of Home Depot now. But see, that's the point. Although parts of my uh trust portfolio have been getting hurt by high interest rates, it's been made up for by the artificial intelligence trade and are much higher than usual cash position, which brings me to the real point of diversification. If you had nothing but artificial intelligence stocks today, you know what would have happened? It would have been a nightmare, especially if it bought them at the high. If you own nothing but data center companies, there's a very good chance, and I've seen this time and again, that you might just say, you know what, I can't take this pain. I can't take these losses. I'm going to sell everything. I have to go into cash. Just like so many did in 2001 never came back. 2009 never came back. 2021 never came back. These people missed the moves of a lifetime because they were in one sector and it got obliterated and they got left behind when millions and trillions of dollars were being made. My goal when we started this show 22 years ago was and is simple. I want you to stay in the game. The only real way to make that happen is to be diversified. You can't stay in the game without it. You will indeed get blown out. Here's the bottom line. Do you know how much I hated owning the stock of Home Depot? The answer is about as much as I loved it today because it's keeping me in the game on days like this one. Oh, and as far as Open AI, I'm sure in a couple days we'll find out that the accounting and the AI story isn't apples to apples. The AI trade will be back in action. In the meantime, as I tell club members, cash and stocks not impacted by the data center will tide you over and keep you in the stock market. The only way to make really big money, don't trade, own. Ty in Arizona. Ty, >> Mr. Kramer, how you doing? >> I'm doing well, Ty. How you doing? >> Doing good. I admire many things about you. Your energy. I love the book, How to Make Money in Any Market. Uh your willingness to teach and how easy it is to follow you, uh and what you're teaching. And lastly, I I really admire your accountability. So, uh, I called you about six months ago and we we talked about AMX and you've consistently praised Squiry and his team as top tier managers, but when a company maintains its fullear earnings guidance while repeatedly missing topline revenue expectations and insiders are offloading tens and millions in stock, that usually points to some underlying structural pressure. I look at Jane Frasier at City, Vlad Tennov at Robin Hood. They're holding up their end of the bargain and the stocks are are holding up theirs as well. At what point are we going to stop giving American Express management a free pass for a market overreaction and start holding them accountable for overpromising on growth? >> Well, I know there was some um some difficult news tonight about American Express uh that I think did contribute to to uh uh some after hours trading. It's not possible. Let me say they were fined for $350 million for lapses in a money laundering situation. But let me just say this. I want to make this point. First of all, you're absolutely right. It's down 16%. So you could say if you if I listen to Jim, I'm down 16% American Buffett liked it, which is kind of forever. I think that it's a premium card. I like the situation. Younger people are getting it. It is not necessarily the right time. As you said yourself, I know that if I bought if if you bought America's Best when I said I bought uh to buy it, you would have gotten it much lower, but you might have gotten it higher, too. So here's my case. It is underperforming right now, but we must make allowances for great brands and CEOs that underperform or else we're never going to be in great stocks. There are moments of underperformance of for all of the best stocks and this is one of them for American Express. But thank you and yes, hold me accountable. Hold me accountable cuz that's why I do this show. Be able to come to you and tell you I got it right or I got it wrong. And here's why. I need you to stay diversified. That's the only way you can stay afloat on a day like today where it really was horrible if you just own the stocks that are the hottest ones in the last few months. On May money tonight, gold prices are down strong on a stronger dollar today. So what's the path forward for this precious metal for the rest of the year? We know it's supposed to be the right time to buy. You know what? I'm going to get some color from the CEO of Agniko Eagle. Then PepsiCo just cut its forecast, but the stock went higher. Why are people taking a soda bottle half full outlook for this company? I'm going to explain. And Everpur is up like crazy as the storage stocks boom or at least today. Is it too late to get in on the company? I'm sitting down with the CEO. So stay with Kramer. Don't miss a second of mad money. 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. On Monday, we ran off the charts segment featuring work from Carly Garner, who for the first time in a long time had turned bullish on gold. Very bullish. So tonight, I want to dig deep with my favorite gold miner. That's Agniko Eagle Mines. For most of the past few years, gold prices have levitated some of the worst inflation in decades. Especially metals been pulling back recently. Agniko Eagle remains one of the lowest cost producers. Meaning if we had a rebound in the precious metal list was going to roar. So, let's check in with Amomar Aljundi. He's the president CEO of Nico Eagle Mines. Get a better sense of how the gold business is doing. Mr. Aljundi, welcome back to Man Money. >> Yeah, it is always a pleasure. You know, I've been a longtime fan and I always enjoy these talks. >> Well, I thank you and the same about you and your predecessor. I do want to ask you, I know you're not a person who recommends trading in and out and I don't blame it because that's not the way people make big money. But it there are people who have never thought about buying a gold stock before who are watching or others who don't understand the idea that it can be great business. Historically, this has actually been a a decent time to buy to actually start a position at Nikico Eagle. Correct. >> Abs. Absolutely it is. Yes. >> There's are different forces at work, right? I mean, we've got Indian wedding, we've got uh Chinese buying there. It tends to be a low point. Correct. It it is a low point this time of the year and and Jim as you know all the factors that have pushed gold up for the last 20 years and I think the I think the average audience member doesn't know how much gold has moved you know gold has moved from $250 an ounce in and around 2000 the year 2000 to about $4,200 today. All of those factors that have pushed gold, you know, governments printing a lot of money, uh, concern, uh, these days, uh, central banks around the world, the biggest buyers right now are central banks around the world. They're not dummies. Uh, they're looking at what's happening around the world. They're worried about access to their US dollars in their reserves. So, they're moving towards gold. So, you know, gold is uh it's really it's a good time, frankly, in my view, and I'm biased naturally. It's a great time to be in gold. >> Well, I also want to point out, as you know, that I you can be diversified, you can own a lot of gold, and it is your quiet period. I'm not going to talk to you about earnings, but you have a different philosophy. You spoke at an industry event last week, the mining forum Americas, and you spoke about how Agniko Eagle strategy is a bit different because you focus on regions that have the most geological potential for multiple mines over multiple decades and the political stability to allow us to operate multiple mines over multiple decades. I think people would say, of course, but the truth is no. You're the only one that has that philosophy written in stone. Well, you know, it's it's a strategy uh Jim that's worked for us for 70 years and you've been following us uh longer than most and and it's really if you if you bear with me, this is this is the crux of it. Uh there's nothing wrong with going all over the world to find resources. I get that. But our view is that uh if you can have a dominant position in some of the best uh gold uh uh resources and potential in the world, if you can have a dominant position, now what makes you good? That's the right qu you you can't say I'm smarter than somebody. I'm harder working. But what you can say is I know every single junior, I know the suppliers, I know the contractors, I know the community. uh I have half to onethird the turnover rate of my peers and you get that Jim from going into places where you know there's a lot of gold and you know you can operate and you know you can create a competitive advantage. >> I think that is eloquent and I want to add something else that you've taught me. Instead of just looking at how many mines you have, whatever, you want to look at what the equivalent of same store sales for retail is. You want to look at production per share, which is a brilliant way to to figure out organic growth. Correct. >> What? 100%. You know, we my job is to make our investors money and our investors invest per share. So, by definition, that's my job. And you know, it's easy when you're a big company, Jim. It's easy to go out and buy other companies. What's hard is to do it so that you're actually making money accreatively on a per share basis. And that's all we focus on. >> I think that's right. Now, I do want to ask you because I'm not allowed to own stocks. Uh we buy gold, okay? We put the deposit box. Don't put it in the back, you know, in the backyard or anything. I often feel why am I stuck with gold when I could buy Agniko? But I got to be true to my contracts. can't buy. But which do you advise? Do you ever just say to people, look, you can own our stock or you can go buy gold? >> Well, the first thing I would say is um are you constructive on gold? Because if you're not constructive on gold, don't buy either. But if you are constructive on gold, the only reason, Jim, you should buy an equity instead of an ETF because let's face it, equities have more risk than an ETF. you know, an ETF, you buy it, somebody's got it in a vault somewhere. That's safe. But what I would say is in the last 20 years, if you bought an AO share, the amount of gold you own has gone up by a factor of three. And this gets to your point about production per share. We've grown production per share by a factor of three. So, not only do we give you more leverage when the gold price goes up because we have a cost base, not only do we control costs, uh, but we actually give you more production per share and actually we've got a plan to continue to do that for the next 10 years. >> Now, at the same time, and I listen to that and I I'm all in on that view. I know there were people who told me, Jim, you didn't get us into Bitcoin. actually did recommend Bitcoin for a while and do own some Bitcoin because I like to be diversified where I'm allowed to be. But the fact is gold's b uh over the past year gold has basically flat out just 2%. Bitcoin is down 34%. Uh I know that Shawn Boyd told me one day this could happen and it maybe it's going to be more than just shortterm. Uh when you look at the two or when people ask you, they say, "Look, you know, I'm getting hurt in Bitcoin. What do you think?" What do you say to people? Well, look, I I I I don't like to knock anything else, but I just look at this, >> you know, I I just look at this very fundamentally, uh, which is that, you know, gold's been around a long time. Look, let's face it, governments do not want alternate currencies. They don't. And anybody who tells you they do is misleading you. It's important for governments to control their own c currencies. And so they uh they can control Bitcoin uh but they can't control gold. And so I mean if if you're the uh if you're the central bank of China and you want diversification, there's a reason you're buying gold. If you're other countries, there's a reason you're buying gold because it cannot be controlled by somebody else. And that that sovereignty of currency, Jim, is critical. And frankly, I'm not convinced that Bitcoin has that same sovereignty because, you know, I could be wrong, but I think it can be controlled by governments if they really wanted to. >> Well, look, I think that that's a valuable input. I remember I I'm I'm agnostic on this. Uh, and I do wish I could own Agnico Eagle because I would that I wouldn't have retired because I'm not retired, but you've run you and and Sean have run a fantastic operation, the best in show. That's why I'm always thrilled to have you on the show. That's Amar Aljundi, CEO of Agneo Eco Mines AM and it is the best. Thank you, sir. >> Thank you. It's always a pleasure. >> May Bunny's back in for the break. >> Coming up as PepsiCo pops the top on another quarter. Kramer's taking a bite out of the company's numbers next. All right. Well, what in the world is happening to the stock of Pepsco here? This morning, a beverage and package food giant reported a solid set of results, but did something that Wall Street absolutely hates to see. They cut this four year earnings forecast. And what happens? The stock actually rallies 3.7% today. Yes, PepsiCo stock rallied on a number cut. So, if you're scratching your head wondering how a stock rallies in response to lowered guidance, let me walk you through what happened here, because it is quite rare. See, PepsiCo's lowered forecast was widely expected. They didn't take anyone by surprise. And on top of that, we did get a bunch of unexpected positives in the quarter. Plus, it's not like Pep was priced for perfection going in. I mean, the stock peaked at just under $197 in May of 2023. That was just before the GOP just won weight loss drugs took the world by storm. Like most of the snack food plays, the company never really recovered and the stock closed at 123 and change yesterday. That was its lowest level since April of 2020. Now, back in early February, it seemed like PepsiCo had finally found its footing. Cub reported a solid quarter with great guidance. So, the stock ran from $153 at the end of January to $171 at its peak on February 12th. At the time they were talking about 2 to 4% organic revenue growth this year and 4 to 6% core earnings growth on a constant currency basis. 4 to six are the numbers you got to remember. While that's nothing earthshattering, it's pretty good for a slow and steady food and beverage play. But that was right before the Iran war got rolling, causing a spike in oil prices, which translated into higher inflation across the board and worst of all higher interest rates. Competition to PepsiCo's bountiful dividend. PepsiCo has significant shipping costs and they also have tons of plastic packaging which is made from oil and natural gas. So the stock drifted lower through the spring and summer even as the company kept reporting strong quarters because they never raised the guidance though. Remember when you beat the earnings estimates but leave your fullear forecast untouched. Wall Street senses that it's an implicit guide down for the rest of the year. Now, as the price of oil stayed high and the Fed started raising short-term rates, PepsiCo stock kept drifting lower along with the vast majority of consumerf facing stocks. You know that even though Pep has that bountiful dividend I just mentioned, it's 4.6% dividend yield. That doesn't offer much protection against a tenure that's kind of like a moving target. Treasury is paying 5.23%. By the time we got to last night's close, the stock was already down 28% from its February low. I'm sorry, February high. 28% PepsiCo. Wow. All right. Then this morning's report comes out once again. PepsiCo posted a robust top and bottom line beat. Organic revenue growth was 3.1% when the analyst only anticipating 2.7%. Net revenue grew close to 6% year-over-year. Again, beating expectations. And the company earned $2.34 per share. 5 cents better than expected and up 2% year-over-year. North America, PepsiCo, savory snack food volumes are on the rebound thanks to price cuts. The North American beverage business uh was up 5% primarily because of acquisitions made last year like Poppy, the prebiotic soda brand. These be a billion dollar brand. The company's smaller international segment continues to do well too with its growth in every major region. Now, their core operating margin did shrink by 35 basis points thanks to higher fuel impaction costs, even as they mitigated that damage with productivity savings and tariff refunds. But the real story here is not the quarter, which was solid. It's the outlook. On the top line, PepsiCo codified its organic revenue growth guidance at 3%. Previously, they've been using it 2 to 4% range. That's okay. If you throw in currency fluctuations and acquisitions, their net revenue growth outlook is now 6%. That's the high end of the previous range. Not too shabby. Still on target, but here we go. Unfortunately, Pesco also cut its core earnings growth, and it cut it in half. Previously, they've been talking about 5 to 7% growth. Now, it's 2.5 to 3.5%. And they cut it even harder on constant currency basis from 4 to 6% down to just 1 to 4%. So, why did they cut that earnings forecast? And more important, why did Wall Street react with relief rather than panic? Okay, let's consider the guidance changes. In total, there's nothing wrong with Pepsico sales. They just reported their best organic growth number since the fourth quarter of 2023. mattress seems confident they can keep growing at a 3% clip for the full year. I like that. Basically turned the core business around. Some of that it's by cutting price. That's right. People once they sold prices lower, they started buying. Some of that's offering smaller size snacks. A lot of that's for the GOP-1 crowd. Uh some of it's more aggressive marketing. Some of it's innovation. Lays made with olive oil. But the point is Ramon Laguarda is doing many things that are now working. Now the problem is all all these things cost money. And PepsiCo wants to keep up the spending to prevent any backsliding. At the same time, they also getting squeezed by the war with Iran thanks to higher fuel and packaging costs. Pepco has been cutting costs where it can mitigate where uh the impact, but they can only do so much. Although they tell me, they told me they can still do more. Still, the main reason for the lower orderings forecast is that the company's chosen to take on a bunch of additional costs in order to promote their products and take market share. Given that those investments have been paying off, why in the world should they stop them just to please Wall Street? Most importantly, Wall Street didn't care about the lower earnings forecast because everyone knew this was inevitable. It's why Pepsco's been selling off so aggressively over the past eight months. And look, the new guidance could have been a lot worse. A lot of people thought they'd hear the company was being eaten alive by higher costs. Instead, we got a nice story about how Pep's investing to maintain its revenue growth. Is the stock a buyer? Now, this is really important. Like last night when I talked about constellation brands, Medel, Corona, it's far too big a leap to say that PepsiCo is fully out of the woods here. Not when there are so many secular challenges they're facing. But the bottom line between the sequence of events today which derisk PepsiCo's earnings outlook for the year and restore confidence in the revenue growth and the fact that PEP trades at just 15 times the midpoint of new earnings forecast down from the high 20s by the way 3 or four years ago. I'm feeling a lot better about this story. You could do a lot worse than buying the stock of PepsiCo down here. Especially if one day the war with Iran ends and oil plummets. And hey, even though that 4.61% dividend doesn't or the yield doesn't offer much protection, the high interest rate environment still gives you real income and you can take that real income to the bank. Let's go to Bal in New York, please. Bal. >> Oh, yeah. Jim. Hey, what's up? Before I jump into the stock, before I jump to the stock, I got to ask you something. He's on my fantasy team. The guy's a stud. But when are we finally getting a Saquon touchdown? >> Well, which guy? >> Saquon. Did he say >> Saquon? >> No, Sean's not going. He's not going to London. >> No, >> I don't think I If he goes, he's going to be silent. >> J. >> Well, no, he's not playing. I mean, you can't play Saquon. >> He said when's he going to count get a touchdown? Well, we I mean, you know, look, look, it's it's about as I mean, I'm not I'm not sher, but I mean, the the guy's hurt and and and the line's bad and the offense is a little bit of a shambles right now. So, I think you got to look elsewhere. I also, by the way, I'm I'm trying to figure out whether they play Dantavian Wixs or or or even, you know, Car pick another offense. Let's do a stock. >> Got it, Jen. So, okay. So, I want to talk to you about Celsius again. I called you if you remember a few months ago before earnings and you told me to wait and you nailed it. Um and since Benjen Field has admitted that they cut too many SKs or Celsius volume is down about 20%. Alani is growing at 74%. And after the Q2 blow up the CEO and the director has bought nearly 2 million of stock and as of today even President Trump purchased a small stake. So me and my boys in the GS want to know is Celsius broken or is this an execution problem worth buying into? >> I think it's an execution problem but I have debated this and debated this. I like that the you know below I love that last acquisition. I thought it was really terrific but the fact is they are not executing at the level that they used to execute and I am in the same way that I'm saying right now don't take the Eagles offense. I would not take Celsius. But thank you for the question. All right. Surprisingly, Pepsi's guidance cut made me feel actually better about the story. I've been debating about buying it for the trust, but how many of these can you really own? These levels though, I do think it's worth taking a look at. Now, much more money ahead, including my exclusive with data storage company, Everpure. That's the old pure storage. They someone stumped me on earlier this week. Then, lately, companies aren't quite aligning with their stock valuations. I'm explaining what to do about it and how to adjust your portfolio accordingly. And of course, all your calls rapid fire tonight's edition of the lightning round. So, stay with Kramer. At this point, everybody knows there's not enough data storage to go around. Hence the incredible games in the classic memory and storage names. You know, I talk about them all the time. Samsung, Micron, Sadis, SK, Heinix. But they're not the only players in this game. Take Ever Pure. That's the company formerly known as Pure Storage. They build storage systems and software for businesses and data centers. a different part of the food chain. They have a substantial AI business because their technology stores more information in less space while using less electricity. You know how important that is. Also operating with more consistency. This is a stock that's up 125% year to date, including a 66% rally in the third quarter alone. In late August, Everpure reported a big top and bottom line beat strong guidance for the quarter. Some people felt their gross margin came in light because of high component cost. No kidding. But so the stock dropped 9%. But in the next day, you know what happened? though management then later on held an analyst day September 23rd and there they laid out some very bullish targets for 2028 and then the stock of course came roaring right back jumping more than 11% the next day so can this thing keep running let's check in with Charles Gian Carlo the chairman CEO of Ever to find out Mr. Gian Carlo, WELCOME TO MAD MONEY. >> UH, thank you, Jim. It's a pleasure to be with you. >> Okay, so Charles, let me tell you, there's been a lot of controversy today. A lot of it about open AI and how much annualized revenue they really have. I'm not even sure that's a real story. I look to you to be able to tell me there must have been some inflection because the numbers that you talked about at your analyst meeting are extraordinary and it seems to be coming from every direction, not just enterprise, but but also hyperscaler. >> No, that's right. I first of all we've been picking up market share in the enterprise now for 14 years very steady you know whether it's been an inflationary market deflationary market we just picking up market share all the time and we continue to do so but I think what took the analyst by surprise was you know for the first time we sort of laid out the next several years and our hypers scale business is really exploding so we're selling into two hyperscalers today of course we hope to to sell into more but in the meantime just even those two hyperscalers gives us v visibility out through uh FY28, FY29 and the growth uh you know of that business along with our core business is driving a you know a huge uh upside not just in topline but in profitability as well >> right why don't do this would really be helpful can you provide I mean you do talk publicly about meta that why meta turns to you and and couldn't build itself uh using the components from a company like Sandis put together something that would obiate Everpure >> well and and by the way. This is what they do today, right? They use a combination of hard disks, right? They're uh that is to say, the hyperscalers are the number one um purchaser of hard disks today as well as SSDs. And SSDs are flash technology that looks like a hard disk. We're really the only vendor in the world that uses raw flash. And by using raw flash, we get all the benefits that you just described, right? Lower space power and cooling, which is fantastic. But we also drive much better performance, much better reliability and much better scalability for those uh those vendors. Uh and so they're coming to us because we provide them less expensive uh uh storage capability but with better performance overall and easier for them to manage. So it's all positive. >> Well, I think we should point out that you the component costs went up a lot, but you did not pass all those costs on. You were you ate some in order to be able to do a great job for your customers. you know, we are very very customer focused and with us that's not just a line. Uh to give you a sense of that, if you're familiar and if your listeners are familiar with net promoter score, our net promoter score is 84. And Jim, I challenge you to get any other customer on on uh your on your program that has a net promoter score higher than 80. It is the highest net promoter score in the industry and we're very proud of it. I often talk about it's the most important number in the company. So when we saw higher costs coming in, Jim, we made a decision. We said, "Look, customers are not going to understand it. Uh they're going to go through five stages of grief as they look at these higher prices. We need to talk to them. We need to let them know we're in the game with them." And we made an early decision to operate at the lower end of our gross margin range in our core business, which we've been doing as long as these high prices uh continue to go up. >> Now, I think it's I follow a lot of companies in your industry. Uh I don't know anybody else, frankly, who who did that, Charlie. No, I you were the only one. >> Well, look, I've been through several crashes before and what I know for sure is customers have memory and uh you know, we're we're helping them now. They'll reward us later and uh you know, we're building the company for the long term. It's the right thing to do and u I have no doubt that it's going to serve us well in the future. >> Well, let's talk about AI agents and storage demand. To me, I'd be willing to eat some gross margins if I could get the AI agent business. that may be a greater storage uh category than any others ever existed. >> Well, certainly growing faster than anything else and uh you know, we're very excited by it. It it really uh demands a lot of performance, which is one of the things that we do as a company. We are the technology leader in this space. Uh we invest a huge amount of our um of our revenue in R&D 20%. I mean, that's a huge amount of revenue and that really characterizes us as a deep technology company. and we tend to compete against commodity players and that allows us to stay at at the forefront overall. AI is going to be you know a big impetus for us but you know Jim there's another thing that's going on in the customer base uh that AI is exposing but it's not specifically AI and that is the biggest problem that customers have is that their data is fragmented all over their business and so we're going into the data management business. What does that mean? It means enabling customers to get a better understanding of their different sources of data to correlate them to understand them better to be able to get more truth out of the data. Uh the problem is not so much that they don't have a single source of truth. The problem is that they have so many sources of truth that just don't agree. >> All right. Well, this question, you know, I know you guys pure storage. Was there a reason to go to the name Everpure? >> There was. You know, when I came to the business a little under 10 years ago, the second question I got from our employees or when are we going to change our name because they felt that storage was holding us uh holding us back. And I said we changed our name as soon as we did something other than storage. And now that we're going into data management uh you know we had we had we are going beyond data storage. We have other people to talk to in the industry and in our customer base. And so now we're ever pure. >> Still pure. >> I'm sorry. >> I like look I'm glad you came on. you know that the the viewer stumped me. That's why it was so great to have you on. Uh I like Pure Storage as you know from the from from for from for a decade and a half and I love what you're doing now and it's really terrific. Charles E and Carlo chairman CEO of Everure it's really great to see it's just great that you're on the show. >> Thank thank you Jim and it's great to be talking to another New Jersey. >> Oh excellent. Okay man's back after the break. Coming up, you've got questions, Kramer's got the answers. Get charged up for a fast fire lightning round. Next, it is time. It's time of course. And then the lightning round is over. Are you ready, Steve D? Scott puts me. Scott >> Jimmy Chill, what's up? How are you? >> Not much, man. You know, I was not going to I'm not going to the Igles in London this Sunday. I was going to go. How can I help you? >> Hey, I got a semiconductor equipment company I've been watching for quite some time. >> This year, it's up 100% year to date, and it's down 30% from an all-time high in July. It last earnings report beat expectations on the top and bottom line. Strong balance sheet, essentially no debt. Oh, and by the way, it's got a 20 cent quarterly dividend. Jim, do you think it's time to finally start a position in KIC? Well, cooking and sofa, I've liked it from when it was in Jentown. I think this company's terrific company does bonding inside of semis. It's a lot of it is nuts and bolts. The fact that it's off is a good opportunity, but remember, I still like Lamb Research was my number one and applied materials is number two. I need to go to Jennifer in New York. Jennifer, >> hi Jim. This is Jen from New York. Thanks for taking my call. Okay, >> I'm good. I've had a large long-term position in my IRA. It has been down significantly over the last year. I wanted to know if I should cut my losses here or write it out until the earnings come out in late October. The company has flagged our bank. Thank you. >> Okay, here's what's happening in Flash. A lot of people are saying this kind of bank is going to be hurt by Muse. You say to Muse, "Hey, take my money out of low uh earnings, whatever, and put it into a higher earning bank." And I think someone's going to say that's hurting flag, hurting all the regional banks. I my take is don't bite the trend. It's too powerful. It's time to move on. Let's go to Eric in Wisconsin. Eric, >> hey Jim, I was wondering if I should make some room in my portfolio for an industrial chip maker by the name of ST Micro Electronics. SD micro is good, but you know when we have a day where Intel is down gigantically off the story about GPUs and the price and how much uh OpenAI can spend because Intel is CPUs. I think you got to buy Intel all the way down here at 107. Buy some here and then buy somewhere 100 if they keep selling it because I'm talking about a 2028 story. And that, ladies and gentlemen, is the conclusion of the Lightning Round. >> The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer is underlining the importance of valuations in his investment decisionmaking. Next, lately, you've been hearing a lot from me about the growing disparity between companies and their stock market valuations. I'll say I like that company very much, but the stock is too high. Sorry. Before I get too deep in the weeds on this, companies get divorced from their stock prices all the time. It's something I explore thoroughly and how to make money in any market because it's crucial when you're trying to decide what to buy or sell. The fundamentals during short periods can deviate dramatically from what you're paying for the company. Sometimes a company undershoots its value. Like I mentioned earlier in the show, PepsiCo stock went way too low versus its company's true worth business, which is why it rallied today, even if cutting the earnings forecast. management's recognized what's wrong and with the business and they're working hard to change it. We saw something similar with Constellation Brands SCZ the other day when they reported a quarter with good earnings but failed to raise the fullear forecast. Wall Street sees that as an implicit estimate cut so sellers came in knocked the stock from 115 to 107. But when had their conference call the next morning we heard that September the first month of the quarter was strong and the stock was very cheap on a cash flow basis. most important constellation bought a company called Spike Date for $75 million up front and an earnout of 278 million over the next five years assuming they meet all their milestones and it really got people going. That's a very popular product. Now constellation stocks back up to 123. 107 wrong 123. Wow, what a difference. For the most part though, I'm going the other way with these dislocations. I keep saying lately on the show and answering your questions that I I like that company. Wow. But I don't like the stock because it's too high. Typically the company's losing money and has a stock that's very expensive on a price to sales basis. Have to use sales multiple, right? Because the earnings multiple is meaningless when there are no earnings. Well, what makes me even more bearish in these kinds of situations? The bond market. Remember, bond market much bigger than the stock market. If I can buy a bond that yields almost 6%, it's very compelling. In other words, risk-free. Too compelling versus the stock of a company that also loses money. Also, when you have higher interest rates, the future revenue streams of growth companies are simply worth less. In this business, any kind of future sales or cash flow or earnings is judged against the return you can get from bonds. So when rates are high, Wall Street simply pays less for those future earnings from four or five years down the road. It's just a fact. So what you do when I see a stock that's too high versus the underlying business and I like the business, I tell you that if the stock market takes a header and the stock goes lower more towards intrinsic value, then I think BY MY >> I GUESS I just want you to have a better entry point. For example, right now I really like SpaceX the company because I believe it'll become much more profitable faster than people think. It's not going to get enough credit for the ability to vacuum up Nvidia GPUs and rent out the resulting be AI labs and hyperscalers like it should. Or to put it another way, SpaceX the company love SpaceX's stock tad overvalued versus a business, but definitely worth eyeing and buying on any significant weakness. We know SpaceX also has terrific satellite internet product, Starlink and a very strong reusable rocket business. So, you know that tonight they just bought some low frequency spectrum that Elon Musk said on X travels far farther and can penetrate walls and buildings. That's been the big knock on Starling that it won't work in the cities. Looks like that knock could be over. The phone company stocks are just getting shredded right now. I want to buy that company, but right now that company's stock Starlink is a little too high versus the underlying business. At the moment, it feels very speculative. The lower the price goes, the less speculative it is. Yes, there are stocks I think are unsafe at any price, but SpaceX is not one of them. It is the perfect example of a stock that I want to own, just not up here. Or to put another way, SpaceX, the company love. SpaceX's stock overvalued versus a business, but definitely worth eyeing and buying on any substantial weakness. I like said there's always more part just for you radio man. I'm 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.