Mad Money 11/05/26 | 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 Kramer, my friends. I'm just trying to save you some money. My job is not just to entertain, but on days like today, I got to put it in context and I need to do some education. So call me at 1800743 CNBC or tweet me at Chip Kramer. We left here 24 hours ago feeling fabulous. The market was up huge yesterday. If you remembered, we were headed toward Nirvana as investors figured that the war would wind down. The tariffs, they'd be scrapped. So inflation would peak and there would be liberty and justice for all. Today though, we address the other side of this week's midterm results. The idea that the data center theme is falling apart and that could take the whole shebang down. You listen to the commentators as I did yesterday didn't occur and we are now in a vicious bare market of incredible proportions. And that's why the Dow fell 1,833 points. S&P tumbled 4.36%. The NASDAQ, the center of the blast zone, plummeted 5.52%. Not minimize it. That was terrible. We more than totally reversed yesterday's gains, which Dave was right though. yesterday's incredible rally or today's vicious selloff. Frankly, kind of both because we've had two stock markets happening at once for a very long time. We just don't talk about it. There were the stocks that occasionally had big moves, but for the most part were pretty humrum, kind of puttering along, not making much money, if at all. They were unattractive to most traders. And then we had the tech momentum stocks that knew no bounce. The traders were moss. Those stocks were flames. For months though, since June, we have seen money transferred from the red hot section, which increasingly became concentrated lucer data center trade to the humrum section in search of growth. It had been a drip drip drip tech selloff since the peak from momentum this summer as many traders pronounce it a lot a lot of tech just too risky to own while others seem to lust in the thrill and unbooked profits of it all. Now though, suddenly after the election results, we got a real glam on our hands, don't we? Seemingly out of nowhere, the electors seem to almost speak as one. They hate the data centers and don't want them built in their neighborhoods. >> The house of pain >> or their counties or even their states. The victory of a slew of data center restrictions on a whole host of states shocked those investors still in any of the stocks connected to data center and many people have them as well as any bonds connected to those smaller builders of data centers trying to put up these gigantic expensive buildings. They're difficult to do. If you didn't know any better for today's action, you would think that not another data center will be built in this country. Now, I don't think that's going to happen. Even as I know it'll be harder to build them going forward. Or you could say it's no longer a drip out of tech. It is now a torrent sell. >> That's the notion that caused a huge amount of fear today. And lots of people being drawn parallel say the dot collapse. Look, having traded through 2000 and having created a do that didn't collapse. Let me say at this moment is not like then when hundreds of worthless companies were bit up insanely. Here's why. With the exception of a small handful of semiconductor stocks and the neoclouds, those are companies that build the data centers, often using their knowledge of building Bitcoin factories, things have never really gotten out of control with the vast majority of the rest of the market. In fact, many of the stocks in this market haven't been doing much at all. Now, when the smoke clears, I think it's their chance to shine. Now we did have overexuberance in the spring when we saw frenzy buying of the memory stocks and other data center suppliers. Not to mention these neoclouds I keep talking about this core wave this Iran this nibbius among a small handful of others. We later found out that much of that rally was fueled by leverage both from illconceived two and three times ETFs from novice hedge fund managers out of hot hand and from Korean buying. Well also there was some firm called situational awareness. We also had the endless chatter about private companies, open AI and Anthropic, whose valuations seem to triple every few months or so on the way to IPOs that have not yet occurred. And we had a gigantic deal from Elon Musk and SpaceX, which brought out a ton of speculation. These are all part of the data center theme, and it is falling apart right before eyes. I'm not denying that. But there is some good news. With the exception of these neocloud companies, most of the businesses involved with the data center are good solid companies with lots of revenue and pretty plenty of earnings. The bad news is that their stocks were presuming an endless wave of data center building that may no longer be the case. Without that, these stocks might still be too high. I think there was there still will be a lot of data center building, especially in the next two years. But after that, I think there is real doubt about a lot of the speculative projects that that these neo cloud outputs are trying to build. their projects will most likely be delayed by new regulations in the wake of the election. I do worry about these companies and more specifically the billions of dollars in debt that they have accured a and all the different finance companies that have offered it to them. Not all these companies going to make it. Maybe they're maybe they're NGMI not going to make it as the kids say. I think the market's simply trying to price in these big changes. It's getting messy out there with rumors of more large hedge funds blowing up. Isn't that what they do all the time? Like we saw this summer in dramatic headlines about the trillions of dollars being lost. Hey, it's going to happen. Remember though, trillions of dollars have been made over the past few years. You just have to king them. It's all happening. The basic premise of the data center is not something that's a gigantic joke, though. These companies make a product called compute, and it's worth a ton of money in a world where artificial intelligence is a real part of business. I could even argue it's worth more if fewer new data centers will be built in a couple years time. That to me is the big difference between now and 2000. Back then we had huge companies that were making products that no one needed. We had gigantic telco products that no one wanted. We had companies that were claiming they make products that they weren't. We had companies that were buying products that really weren't. We had dark fiber static bogus websites. Hundreds of companies with no reason for being. We had those things. These days compute the very being the the product is being made right now is very valuable. Although I will concede the compute is hard to understand but just because you don't understand it doesn't mean it's a joke or worthless or a con game. In the new world we are in we can't get enough of the stuff and people are paying fortunes for it. We're going to talk to a company later on real good solid company. Stocks going up. They bought a ton of it. At the end of the food chain are two private companies that I just mentioned. Anthropic and OpenAI. And it's not clear how profitable they are because they're private. Anthropic is supposed to come public this month, but now it seems fair to wonder if that's even possible. That would be bad. Even if it does make it to the market, will the company really be worth the two trillion rumored that it was or one and a half trillion or trillion? I mean, what happens if it's less? Until we know that, it's tough to say what everything else in the space is worth. And that's weighing on everything. Lurking behind the scenes, as I mentioned, is a huge amount of debt being raised to finance the brickandmortar part of the data center. That's what I am chiefly worried about. That's the real problem. And what that's what could really hurt the stock market, the debt side. Some of the biggest debt is tr is indeed trouble. I have to redouble my efforts to focus on this worry factor above all others to help you make the right decisions. Right now, no one wants no one of significance is defaulting on their debt. And I don't mean to scare you. The only issue with the debt is that it's connected to these neo cloud companies. Corewave, NBS, Iran, and a couple others that I mentioned. But that's not enough to sink us. So to sum up, we have some very valuable companies that were bid up above where they should have gone because business was so redhot great. We're gradually working we were gradually working off those excesses, but with this week's election, that gradual process has now turned violent. That's uncomfortable, but it's not existential. The more worrisome part again is that is the debt that's out there with the buildout. Will it be money good? I sure would feel better if anthropica opened out public so we could see that what you when you spend money on comput you can make a real return. Right now, it seems like only a handful of semiconductor companies are doing that. Nvidia, AMD, memory companies, as well as a few other one-offs like Dell. Those stocks had been holding up better than most, but they haven't lately. Nvidia collapsed into the red today, dropped nine points, now negative for the year. I know the percentage losses seem gigantic, but the money coming out of the hot sectors is indeed going into other sectors. Uh, the interest rates are actually going down. It's not going to bonds. What should you be doing? All right. Tomorrow I have a big CNBC Investing Club annual meeting and I'm going to lay out a course of action. Suffice it to say that we all know the market's gotten real nasty, but we also know that interest rates are well off their highs and going lower. We have a sense that the world might end soon because of the election. We have a sense that inflation may be getting more tame. So be sure you have some cash. Unlike when I say that you should just wait and see. Uh-uh. It's not like that. If you don't have some cash, I want you to raise some tomorrow. take some losses in those data center related companies if you don't have enough cash and accept that we are accelerating what was going on for months. Something that lots of funds with borrow money weren't expecting to happen and are now blowing up. I wish I could say that today's flush was the bottom, but I look at the charts and there still seems like there's no support for so many tech stocks, especially the semis because they ran up so much on the way up. But however, it might feel it's actually an orderly decline because unlike 2000 which was a route, these are mostly lucrative companies with stocks that just went too high. The bottom line, I for one am actually glad that they're ripping off the darn band-aid from this market rather than slowly trying to take it off a little bit each day. I wish we didn't have yesterday's big increase and I wish we didn't have today's big losses, but they are two sides of the same coin. People, if you have cash, you will not panic. You won't be complacent either. You'll be clear-headed and that will help you lose less money until things get better because they always do. Let's go to Rich in Texas. Rich, >> hey Jim, uh I watched you lament the other day how your investment club lost 25% on a stock. I believe it was Intel. and how upset you were. Yet, I didn't hear a word about how another stock you recommended four times last year has it fell 45% in just 12 days after recommending that stock last month at $160. Now that it's plummeted to $90 and wiped out our savings, what are your new thoughts about Reddit? >> Okay. Well, let's talk about those things. First of all, I talked about Intel pretty much every night because I was worried about how it did. Uh, did I talk about Reddit? Yes, I did. I said that Google had changed it algorithm and hurt Reddit, but I think it's a valuable company. Am I perfect? Hardly. Have I tried my best in the last 45 years? I sure as hell hope so. Are you disappointed in me? Well, if you are, all I can tell you is I did my best. Let's go to Joe in New Jersey, please. Joe, >> hello, Mr. Kramer. And uh thank you for taking my call. >> I am thrilled that you called, Joe. Good to have you. Oh, and I just want to say uh when I called on the my diversified segment of your show and you said I had too much tech and I sold some and I held up and had some gains between yesterday and today. Thank you for that. >> Well, that's great, Joe. I mean, some people think I don't have a brain in my body. Other people think I got big brain. You know what? I think it's a bit of a mix of both. >> How can I question my questions on Paulo Alto Networks? They took a hit today. Now, they're supposed to be maybe acquiring Clutch Security, the Israeli cyber security company. I just want to know if I should add to my position. >> Well, look, I don't think we need to add Danny Tech right now. Both PaloAlto and Crowd Strike got very, very hurt today. And I'm mindful of the fact that these are what are known as high price journeys multiple stocks. And so, therefore, we're going to have to give them some birth because right now the market's in a bearish mode. Some people would say we're in a bare market that started literally, I don't know, a few weeks ago. I look at Palo Alto and say it's made us a lot of money and sometimes we have to give back some money in order to be able to make big money. That's been my philosophy since 1981. You know what? I'm going to stick by it. It works. Even for our first caller, if you had given me the chance to be able to help you on Money today, the averages got hammered today with the data center stocks taking a beating. But it by opportunity could these names have further to fall. Well, we have to talk about what is going to happen and play out tomorrow. Then as tech stocks slide, I'm going to check in with the state of the buy now pay later space with the firm threshold for earnings. Plus, with travel stocks in the red, I'm going to catch up with Airbnb to see what the road ahead may look like for the sector. So stay with Premium. 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. We don't know what to pay for any of the stocks connected to the data center anymore. And that's why this moment is just so darn fraud. I mean, that is the real issue because if the election results aren't met with a slew of new regulations, you probably should start buying these stocks pretty soon. But if tight regulations and bans are now going to surface throughout the country, you have to avoid them. Unless, of course, the regulations don't cover any of the near-term developments planned and approved. Phew. Tomorrow, I'm hosting our CNBC Investing Club annual meeting. Always a lot of fun, although this year's meeting might be a tad tougher. And I am totally conscious that no one really knows how to value stocks in a world where things might be good next year, but not the following year or maybe the year after that. If you think, for example, that Nvidia is going to have a good year in 2027 and just meet the current estimates that set out for the company, then you'd have a stock with a growth rate of 70% that's selling for less than 12 times next year's earnings. I mean, that's an incredible, ridiculous bargain. And now it's down for the year. But it is not a bargain if the following year it can't grow any further because the US won't permit new data centers as fast as they do now. How fast will they permit them? Will it be like the oil and gas pipelines which companies struggled to get approvals for from the fossil fuel hating Biden administration? Will they be like the nuclear power plants in the early mid70s when the country turned on that fuel? Or will the whole thing just be delayed a little bit and the buildout still occur just at a more leisurely pace than the frenzy weight is having now? See, we don't know. The data center stocks have gone up so much over the last few years that it's difficult to tell how much they can fall. If Nvidia had a clear line of sight to its own destiny, and that line of sight is positive, it should be buying back billions of dollars of shares right here as part of its $235 billion buyback that it's already committed to. Remember, companies have been throwing money in Nvidia. And while it's been a big spender itself, buying stakes in many companies, it is not that they've gone all in when it comes to owning its own stock. Why not buy it? Of course, maybe they're gunshy, too. Perhaps the read is that there won't be nearly as much demand in the next few years as there is right now, which means the stock has some downside. Or maybe they bought a ton today and they don't have to disclose. See, that's not that's not how I would do it, though. When I ran buybacks, I waited for days like today to stand there at each level and buy until the sellers were sated. Sure, that may be too hard today, but I think Nvidia at under 12 times next year's earnings is going to prove to be a bargain. You know, they have to take some pain first. It's tougher to get to the more commodity oriented companies though. For example, Micron has many strategic customer agreements that are known as take or pay contracts, meaning companies will have to pay them even if they don't take delivery of the chips. Now though, you might have to ask, will they be around to pay them? I know that sounds dire, but what if companies like I've been talking about these Neil clouds, smaller Neil cloud builders with no other businesses to fall back on, sign checker pay contracts? Could they possibly default to them? Anything's possible. Still, Micron has some ability to forecast based on those strategic customer agreements. It is free to do a gigantic buyback if its wishes starting December 9th. That's a date imposed by the company's deal with the federal government as part of its chip acts funding. Perhaps the toughest to analyze is the stock of AMD. They just reported Tuesday night and it was spectacular by one of the best quarters I have ever seen. When I interviewed CEO Lisa Sue yesterday, she reiterated that she sees a trillion dollar total addressable market for the data centers and its accuchim coming up. If that's the case, then you can and should be buying her stock right now. Do you want to? The stock was at $188 in March. 188. Hm. By that token, 404 went out. Seems awfully high to me. Maybe that's the real problem. Here's the bottom line. These dramatic moves you're seeing reflect the market trying to figure out in real time how much to pay for stocks, where the next year still looks great. But it's absolutely true that the future for tech is now darker than it was before this week's election. To be sure, it's a messy process that we're watching. You need to be careful when the swings are this violent. But if you keep your head, have some cash. Like I said before, you know what we're going to do? We're going to get through this together. May Bunny's back after the break. Coming up, is buy now pay later platform a firm a buy now? Kramer is checking in with the top brass next. After the bell, a firm, the buy now pay later company that we prefer on this show delivered a strong fiscal first quarter. Uh revenue jumped 35% to 1.26 billion beating expectations while earnings came in at 47 cents a share again versus the 38 estimate. Firm also raised its fullear outlook for purchase volume and for profit margins. Now, shares came under pressure in today's miserable sell-off ahead of the report. They're down a little more than after hours. I do not think you should look upon what's happening right now in the market as a referendum on this excellent company. Do these results give investors a reason to take another look? Let's check in with Max Lechin. He's a firm founder and CEO. Mr. Lechin, welcome back to Mad Money. >> Thank you. Great to be here. >> All right, Max. 12 straight consecutive quarters of 30% plus gross merchandise volume uh and also becoming more profitable. Does anyone have anywhere near that record from the time that they started? Anyone? I >> can't say I track the entirety of the stock market, but uh I do think we're fairly unique in this one. Also, eight straight quarters of being gap profitable. I just want to mention that too. >> Gap profitable. That means not made up profitable means gap profitable. Uh a firm card active card holders doubled over the past year. Now, card holders, they you make uh they tend to make a lot more purchases than non-card holders. Correct. >> Exactly right. They're the most engaged customers. We have just under 29 million active consumers, but the 6 million that have a card make a huge commitment to a firm and use it a lot more often. >> Let me ask you, I signed up to before the interview. I got the card in 90 seconds. I just checked the box at the top. Why doesn't everyone check the boxes? This sure was a heck of a lot easier than anything else. And it sent me right to Amazon. I mean, what's the problem here? >> Well, we're known for our proconsumer stands. We don't charge late fees. We don't compound interest. We do a lot of things different from the rest of the industry. We don't push our products into your hands. If you wanted one, we'll be there 90 seconds flat. If you wanted, we're there for you. We're not going to push you into anything you don't like. And so, we are very happy to take on the 6 million and growing very quickly, doubling year-over-year. We'll be here when they're ready for it. >> Now, you have Sam's Club, a place I like very much. I know that Walmart's not necessarily yours. Doesn't mean you don't do business with them, but Sam's Club's got to be one of the marquee accounts that's still left, right? Yeah, we we were extremely extremely excited to uh to have Sam's as part of our merchant ecosystem. Super exciting. Just went live a little while ago. Great company, great experience. Can't be happier about that. >> At the same time, I I don't mean to minimize the fact that there are I don't know what percentage of the world does not have an affirm card right now. >> You know, there's a lot more to go. So, uh we have underritten about 40 50 million US consumers. vast majority of whom by the way transacted with us and paid us back on time every time. Very proud of that stat as well. Uh but uh there's you know couple hundred million more left in the US. We're live in UK in Australia in Canada. We're going to uh to uh Europe now. So uh so we we have a lot of growth left to do. So there's plenty of cards to distribute. >> All right. Now you mentioned about uh the vast majority pay on page nine of your deck. you say credit quality 30 plus day delinquencies of course excluding uh Pelaton and pay and X loans increase nine basis points year-over-year and increased 35 basis points uh quarter over quarter to 2.9 is 35 basis point increase something that we should be concerned about if we're going to buy the stock of a firm no uh that is a seasonal change so if you compare the comparison is year-over-year and you can see nine bips tells you everything you want to know the quarteron quarter you expect a rise and then as the tax season rolls along you expect the fall happens every year. You can and we provide data going back many many years. You can see it's an annual change, >> right? I'm glad you brought it out. There are charts that would have indicated that, but I have to be sure because I'm looking look like Max. You know this the stock stat I want everyone to have any objectives that anything that they think might be wrong to be brought up in the interview because you're here and you're the most forthright guy in your business. On a loan product basis, GMV mix shifted slightly to interestbearing loans which increased 34%. So a firm uh card GMV which grew 170% in the quarter continues to skew heavily toward interestbearing loans. Are we okay with that? >> Uh we are if you look at the zeros. So we do lots of lending with interest. We also do lots of lending without interest both in billions. The growth of the 0% loans I think from memory 33% interest bearing 34%. The entire business is growing about 34% rapidly. I that that's not a concern. We're very excited. The reason, by the way, it changed is because merchants are saving up. So merchants are paying for that interest subsidy. So when you get a 0% loan from us, that means the merchant is basically paying your interest. A lot of those deals are going to come right into the holiday shopping season. They're saving their dry powder to entice you to shop during Black Friday, Cyber Monday. >> You just brought up the thing that I wanted to know most. I mean, there's a lot of people I think the election seemed to be a referendum. too much inflation, perhaps not enough uh too much money being spent on health care versus your the dollars that you take home. And yet, I don't hear anything that make me think from what I see here that it couldn't be a great holiday season. >> You know, I'm going to knock on wood here, but I don't see anything either. If you look at the demand that we're seeing, if you look at the last few weeks of the quarter we're reporting, if just the demand is building, I expect a healthy holiday season for our retail partners. will be there to serve them. Of course, that's a huge that that is our Super Bowl, Black Friday. And so, >> I don't have a reason to believe there's going to be weakness in the economy. And by the way, the economy is fully employed. That is the alpha and omega of what we care about as a lender. And that's what the retailers care about as those who shop. They feel good about their ability to earn. They buy things for their loved ones in the Christmas. You mentioned something in the zeitgeist that is a kind of a sce of thought which is that while people are very excited about agentics and shopping we actually like shopping. Do you think that agentics could be capped and if it's capped is that good or bad for a firm? >> I am personally very excited about agentic shopping for a slightly different reason. One of the core values of my company is no fine print. You know, I started the business 15 years ago now because I think traditional financial service providers hide their business model in the tiny print on the back of the statement saying, "By the way, when you least expect it, we charge you fees and compound interest." And so, said, "No fine print. We're going to tell you exactly what the costs are going to be. You'll know up front. It'll never change." Agents are really, really smart. They're going to read all the fine print. They're going to pick a firm even more because we don't charge any of those fees. So, on that front, I think agent can't come soon enough. But, you're totally right. Shopping is a form of entertainment. I love looking at things that I may or may not take home eventually. And so, it's still evolving. We will figure out how to use AI for research, how to get the best deal, how to get the best financial deal. A firm will be there, of course, but we're not going to outsource the selection of our wedding dresses or bicycles to ride to an AI. Like, that is a personal decision that has to do with taste and it's a form of entertainment. >> All right, let's leave it there. Uh, Max, again, an excellent quarter. I wish other people had that kind of growth and that kind of transparency because it would make everybody's job would put me out of business but it make everybody else's job very easy. That's Max Leon, founder and CEO of a firm AFRM. Thank you, Max. Great to have you on the show. >> Thank you very back. >> Coming up, the top brass of Airbnb is checking in with Kramer after the company's latest report next. As we try to figure out where to turn after this brutal day for stocks, one group we always like to look at first, the companies that we know are doing well because they just reported. Take Airbnb, the company that let you book whole home rentals and hotels. Airbnb reported a really unbelievable quarter tonight. Really beat and race quarter after the close. as revenue continue to accelerate and the business gets increasingly profitable too. Earlier tonight, we had a chance to check in with Airbnb co-founder and CEO Brian Chesy about these excellent results. So, take a look. >> Mr. Chesy, welcome back to Bad Money. >> Oh, thank you. Good to see you again. >> I miss you, Brian. I got to tell you, we have some bad days in the market. Everybody says, "Well, look, everything's bad." I'm looking at your business. I am seeing accelerated revenue, topline growth, unbelievable growth rates, need for nights, seats booked, gross booking volumes, revenue. What is driving the acceleration from air for Airbnb's top lines? >> I think it's two things, execution and AI. Um, let's start with execution. You know, five four years ago, we rebuilt the entire foundation of our tech platform. We rebuilt our app. We really like built out entirely new leadership team. And it was almost like renovating a house. It was a lot of thankless work to set ourselves up now. But we really started operating like a startup again. Um I basically took these really small teams. I trained them about how we innovate in the early days and they started shipping and shipping and shipping. I went into I guess you could call it founder mode. This thing that Paul Graham wrote about where you just have this sense of urgency every day. You're in the details. You drive everyone in the same direction and you're just really driving the the business every single day. The other thing is AI. I think AI is the best thing that ever happened to Airbnb. You know, I think a lot of people are asking who's a winner of AI, who's a loser of AI. There's a lot of reasons why AI really helps Airbnb. It is really hard to find homes and find travel. Most people don't want to offload it to an agent. They want to really be able to discover, look at photos, they want to be able to message. And so AI really helps us. We also now ship 70% more software than a year ago. So we really became much more of an AI native company. We now handle 40% of our tickets are now handled by AI. So we have a 17% reduction in our cost of customer service. So, it's really been execution and AI. And I guess the thing I would say, Jim, is we are now back in growth mode. You know, we were growing really fast when we went public. We had some deceleration. Now, we're back. >> All right. So, Brian, when you talk about AI, I think people are listening, they're saying, look, AI, everybody talks about it. Uh, everyone's got a wrap on it. The fact is AI does cost you money, right? You have to pay something in order to get How do you measure the return on what you pay for AI? >> Yeah. Yeah, I mean we basically pay for tokens and we look at the incremental revenue growth from the software incrementality. So for example, we'll look at what we spend on cloud code and codeex every year. Those are the main two models we're using to ship and then we look at how much revenue we're generating from the features we're delivering. Now for example, we ship 75% more software. The AI um that we develops of incremental revenue this year. So, it's been so far very very ROI positive and our headcount has been pretty flat this year. So, we're able to ship 70% more features without more people. >> All right. So, let me play devil's advocate. I never knew that things were bad. I've been using it the whole way. I've always felt things were good. As a customer, I don't see necessarily uh that something is so much better because I thought it was good to begin with. a customer like me, maybe not as techsavvy as you. What do what would I be seeing that I should be noticing that is so much better than what I've seen all along? >> Well, thank you for saying that. I think it's always been a pretty solid service, but we're always trying to make it a lot better. So, uh, prices on Airbnb are much lower relative to hotels three years ago. We got rid of cleaning fees. We got rid of house chores that people were complaining about. Really streamlined the service. We now have AI search. You can type in entire sentences, filter. You can essentially we have AI generated highlights to make it much easier to read the reviews, to read the listings. So really there's been hundreds and hundreds of small improvements. Not really one thing, but there's just a lot of little things. It's easier to find a home. The homes are more affordable. See, there's some of the things we're doing. >> That's I definitely I definitely see that. Uh I have to tell you that it's been a pretty seamless process the whole way. But I like this. The thing I got to tell you that I like the most, we're big points users. We're AMX points users, but I've always felt that was separate. now for hotels. But you announced at the end of October this what I think is kind of a dream partnership over 1 million listings to American Express travel. I look at the other way. Bring American Express travel to over 1 million listings. How is the points program working? Because that's how every my look my daughters don't go anywhere unless it's on points. That's just the way that's society. I don't have that. But that again is something that you recognize is more important than many other things when it comes to travel. Well, this is the biggest partnership we've ever done in our 19 in our 19 year history. And we now have a million uh listings available. You can earn points on AMX and AMX. People obviously spend a lot more on Airbnb. We're seeing a huge increase in people booking luxury and higherend properties on Airbnb. We're getting like thousands and thousands of bookings on it. So, these are extremely high value, high ADR, average dealer rate bookings. And I think it's going to bring a whole new audience to Airbnb. You know, we really started with younger audiences, more affordable uh travelers. Then we moved up market to family travel. This is really the final frontier moving up to the lux segment. It's very, very high-end. And actually, this is a weird thing that's kind of counterintuitive. Airbnb is both, you know, kind of cheaper than hotels, but we also have homes that are much higherend than hotels. So, we kind of have the full economic range. There's almost no marketplace in the internet where you can do budget and you can do ultra luxury, but Airbnb does the gamut. >> All right. So, where are people going? Tell me where. What are the hot places? >> Um there I mean we're in a 100,000 cities so they're kind of going everywhere. There's a lot of people traveling domestically. Um you know Brazil for example, a lot of people are going to uh traveling within Brazil. Uh United States people are going to national parks. They're going to urban areas but they're also going off the beaten path. Um you know France is our number two country in the world. So a lot of people are traveling to France. People in France are traveling domestically. Um we're starting to see a lot more travel to Mexico. Mexico City is booming. So, there's a lot of different places that are going really well. >> All right. So, just tell me I can't believe France because they're rioting in the streets in Paris, but obviously there's two there's there's people like to go to >> in outside of Paris especially. >> Yes, exactly. Now, uh dynamic pricing uh it's a tool for hosts. It's optional dynamic pricing sometimes controversial. What do you think? >> You know, hosts basically say like, "Hey, Airb, you have all this data. We're trying to price our property. So what we basically say is we have billions of data points to help you price your property. And so we think we're able to help them price their property better than they do because we can compare what hotels are dynamically pricing. If you're not getting enough visitors, we can say if you if you list a little bit lower, you'll make more money. And what's not intuitive is should I charge $20 less or increase my prices. It's really hard. Well, if I charge $20 less, I may sell an extra night and actually make more money. So it's really hard for an individual to know how to price. We're able to do that for them. And what we're able to do with dynamic pricing is generally the average prices on me come down and hosts make more money. It's essentially just a supply and demand balance. >> Okay. Now, some people think it's a tough economy. Other people, if you got full employment, so it's hard to say it's really tough. But people seem to be traveling as much if not more than ever. Is this still postco or is it just outfits like Airbnb that makes it so there's price discovery and you feel pretty good about it? Well, actually, um, right now I would say people are probably not traveling that much more. Um, you know, uh, booking and Expedia, um, they've reported growth of between 1 and 3% and 3 and 5% year-over-year, whereas our growth we report is, um, a nice 16%. Our revenue is 19%. So, I think that they're tra they're still traveling, but right now the travel economy is kind of kind of stagnant or like stable, but Airbnb is definitely taking share. And part of the reason, Jim, is also family travel, lux travel, but also Gen Z. Our fastest growing segment are Gen Z young travelers. Young travelers want to travel. Why do they want to travel? They want to get out of the house. They are tired of social media. They want to meet people. They want to travel with their friends. And so, but they don't have a lot of money. So, obviously, Airbnb is a great source for them. >> And it's the Gen Z people who understand all the things that I don't that you had to add, right? No, they're the ones who say, "Why did they do this?" I mean the AI features. >> Yeah. A lot of the AI features we shipped are disproportionately used by younger travelers like Gen Z. So but but we try to keep the app so simple that you know I like to say designed for our parents you know and uh you know my parents in their 70s and I want to make sure they can use it as well as young people. >> Well it's the it's still Airbnb is still the only way after all the years I've known you. It's still the only way I even know how to do this. Congratulations for the ultimate franchise. Brian Chesy, great to see you. Good to see you again, Jim. >> All right, Brian Jesse's the co-founder and CEO of Airbnb. Remember, not all stocks are just pe companies that get beat up by AI. Some are actually helped by it. Buddy's back in for 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 the light center. >> And then the lightning round is over. Are you ready, Ski? Daddy time. The light. Let's go to Jack in Oregon. Jack >> Kramer, how you doing? >> I'm doing all right. How about you, Jack? >> Tough day in the market, right? >> I hear you. Yes. Completely tough day and everybody feels it. And we we're in this together. Even if it's tough. Let's go. >> We're in We're in together. Yeah. I was going to ask you, how uh how's the Harry and David? When you going to come to Ashlin, Oregon soon? >> Oh, man. You know, Medford, Ashley, I I wish my daughter still lived there. It was just greatest time of my life. All right. What What's happening? >> Hey, quick question for you. Um the stock that I want to purchase, I have held for about, you know, five, six years now. I want to add to it. There quite a bit down. Recently announced, setting today a $25 billion buyback. What do you think about land research? >> Great way to start the lighting around. So, here's a stock that is down down $36. So, you think it's a buy, right? Sells at 19 times earnings. It is down from8 down 438 all the way down to 185, but it was at 135 last year at this time. And that means to me that there's still some more downside. I hate to be that simplistic, but as much as I like that stock, if I had to buy 100 shares, I would only buy 25 of it tomorrow. And then I'd wait. Let's go to Paul in New Jersey. Paul, >> good evening, Jim. >> Good evening, Paul. >> I'm really looking forward Yeah, I'm really looking forward to tomorrow's meeting. Uh, >> I'm so glad. Thank you. It's a tough day, but we'll get it together. >> What's up? >> I have a position I have a position in Zyllem. I took some profits at its high, but now it's back near my basis. Should I buy more if it continues to drop? >> Uh, you know what? I think DuPont's better water purification. I really do. I think that that Zyllem is not as good as DuPont. DuPont just had a great quarter. Let's that wait for that one to come down. Let's go to to Rick in Mississippi. Rick. >> Booya. Jim. >> Booyah. >> Jim, with the new Congress uh going to convene in just a couple months, I think it's a safe bet that we're going to see some environmental or green initiative. Is First Solar the way to play it? >> No. Actually, first next Power is the way to play it. And the stock was down very badly today and that's a good opportunity. 21 times earnings. Dan Schugar is right. I haven't won a couple times. I really like the way he thinks. Let's go to Danny again in my home state of New Jersey. Danny, >> hey Jim, Danny Cam from New Jersey. Thank you. It's a it's a privilege to be on your show. >> Oh, thank you. Thank you. >> This is uh this one I'm calling about is in the very unpopular sector AI and data center. Um this company designs and manufactures data centers. Um the the price point that it's at right now >> is beautiful to me and the company name is Verdive Holdings. >> Okay. Well, we had Vertive on last week, Mr. Albertazi. The problem is is that the stock's still up for the year. I don't want to buy a stock that's up for the year that's in the data center. I want it to come down a lot even though I know it's doing great because things have gotten very uncertain. And that, ladies and gentlemen, is conclusion of the LIGHTNING ROUND. THE Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's connecting with the CEO of Unity to find out where the electronics maker is headed next. Yesterday before the bell, Unity Electronics, that's a successful Dupont spin-off that we own for the Travel Trust, deliver a strong beaten race. Now, this company's a crucial link in the semiconductor supply chain, making specialty materials used to manufacture chips and advanced electronics. In other words, they don't make the semiconductors themselves. But the group has come under pressure following the midterm blue wave. Unity initially fell more than 5% yesterday morning, then recovered to finish essentially flat. Then today shares fell more than 7% as the AI selloff continues. Let's check in with John Kemp. He's the CEO of Unity Electronics to learn more about the Mr. Kemp, welcome back to Man Money. >> Hey Jim. >> Yeah, >> good afternoon. >> Good afternoon. You know, J, I got to tell you, it's tough to come on on a day like today because people want to know, well, really, you can't be that much exposed to the data center, even though 5 days ago, we hope you were maximally disposed, you know, been involved in the data center. And what I I don't I want to get away from this exposure data center non-exposure. You make a crucial form of materials that everybody has to use and will be used for major many many years. So can you explain where you are in the food chain and kind of divorce it about whether there's a data center that's going to be built or not? >> Yeah, Jim. Fundamentally, Unity is the largest pure play material solution provider to the semiconductor value chain. Look, and and semiconductor chips go everywhere in the modern economy. We use it to run everything and and literally every chip and system powering progress in the world today is made using materials. Our materials connect and protect, pattern and polish the semiconductors and advanced devices across a broad array of end markets. You know, whether that's data centers, satellites smartphones vehicles factories, wherever chips are going, that's where Unity will be. >> Now, for instance, I was on the Apple conference call. There are very few companies that are ever called out on an Apple conference call, but they mention yours because of your exposure to to cell phones. Now, that's a growing business when it comes to your B your your your book of business. Correct. >> It is, and we're thrilled to be a partner as as part of Apple's advanced American manufacturing program. It's a wonderful example of how materials innovation is moving from backstage to center stage. Um because what we do Jim is is we sat in a room with the our scientists and engineers side by side with the scientists and engineers at Apple and they identified what they wanted from a breakthrough technology and we worked collaboratively for months if not years to try and make that a reality and then we could scale it up at our US facilities here to be able to support them. And what I love about that example is it's it's the perfect way that we work not just with Apple but across the OEMs across the entire industry where we're co-inovating with the seat at the design table side by side and then we work with them to customize it and scale it to make tomorrow's technologies possible. >> All right. Now in your uh your excellent deck and in your conference call you talked about heat. Now, you're the first company I've heard that is not involved with thermal management that actually addresses the concept of heat. And you have proprietary technology that I think everyone's going to have to adopt. Correct. >> That's right. We've all felt the example of what heat feels like. We Everybody knows exactly where their battery is because it's the spot, the hot spot that gets hot in their hands on their phone. And you can imagine that everywhere compute is rising, that's where the hot spot is going to be. And what our portfolio, leading portfolio of thermal solutions is all about is about identifying where those localized hotspots are and then moving it out, right? And we do that at the chip level, at the package level, at the board level, and at the device level. And we sit side by side with our OEMs and their manufacturing partners. and we figure out how do we optimize the performance across that entire system so that there's never a dropped call, an interruption in signal, an interruption in power, and nothing shuts down. >> All right, last question I have to ask you is I I without mentioning your name, uh I only know one competitor of yours. I mean, are there a lot of companies in your business that are private and I just don't see them? >> No, there there's not a lot of competitors that can do what we do. I mean, there's there's kind of one major US competitor and and then there's a couple of of overseas competitors, whether that's Japan or in other pockets of Asia, but it speaks to the uniqueness of where we sit in the value chain is there not aren't a lot of people that can replicate the the performance, the quality, and the reliability that our customers need for their most advanced technologies. >> All right. Look, I got to tell you, John, I wish that you reported on a different day because I think people should have known that I think your stock would have been up 20 bucks in the old market and maybe this is new market and we're not going to make as much money owning Letter Q, but I find it hard to believe given that these numbers are just getting better and better since the spin-off. Thank you so much for coming on Mad Money. That's John Kemp. He's a CEO of Letter Q. And uh John, great to have you on the show. >> Thanks, Jim. Really appreciate it. >> Absolutely. I'd like to say there's always a market summer and prom just for you right here on Midmoney. I'm Jim Kramer. See you tomorrow. >> All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full MadMoney disclaimer, please visit cnbc.com/madmoney disclaimer.