Mad Money w/ Jim Cramer 10/29/26

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1:19Welcome to Kramer. I'm doing friends. Hey, I'm just trying to save a little bit of money here. My job is not just to entertain, but I'm trying to put it all together, too. So call me at 1-800-743-CMEC. Tweet me, Jim Cramer. Sometimes it's just a question of figuring out not what a company may be doing, but what the market wants from a company. What's loved isn't all that predictable. And what's hated can blow your mind. So in a day when the Dow was down 133 points, S &P 500, 7.3%. and the Nasdaq tumbled 1.38%. It is worth it to judge how fickle this market can be and how punishing it can be when it changes its mind.

2:04Last night, two of the biggest and most consequential companies on earth, the multi-trillion dollar Alphabet and Microsoft, reported, and the reaction to these two companies, well, they're wildly different. And more important, radically changed from just a few months ago. Alphabet, with its core search, YouTube, and cloud businesses belly flopped, While Microsoft, with its enterprise software, LinkedIn, video games, and Azure cloud business, excelled and hung in there like a champ. Alphabet's stock got crushed while the stock of Microsoft initially soared before getting dragged down by the NASX decline.

2:36It was an ugly day for the NAS. As recently as five months ago, these two companies' earnings could have produced the exact opposite results for their stocks. That's because back then, Microsoft showed what many thought was a lack of enthusiasm for AI, backing a suspect co-pilot product while restraining spending from new data centers. That meant it was willing to jeopardize a first-mover advantage. I heard WAG say, here we go again, they'd rather be a second-place bing than the huge search winner that is Google. Microsoft didn't want to break the bank, though. It wanted to remain cash flow positive, even if that meant it might not be the first or the largest in the field.

3:12The stock got pulverized for its conservative style. Sell, sell, sell, sell, sell, sell, sell, sell. Alphabet, on the other hand, went all in. The company spent$91 billion in capital expenditures in 2025, and then initially forecasted between$175 to$185 billion in CapEx for this year. Of course, that's been raised to between$195 and$205 billion. The numbers show that Alphabet, though, meant business, at least to the market back then. to help pay for it and announce an$85 billion stock offering this summer. Almost$45 billion was sold in underwriting offered in June. Berkshire Hathaway taking down$10 billion worth.

3:51Ooh, Ethereum, I want to be in. But another$40 billion was to follow on in an at-the-market program to start in the third quarter. Initially, though, I liked it. The stock soared because Alphabet meant business. It developed its own chips to compete with NVIDIA. It's building data centers all across the world and turning to SpaceX for even more compute, a spare no expense strategy that the market loved at the time. There was so much enthusiasm that the stock actually soared after the secondary placement, especially when the company reported strong second quarter results back in July. What a lifetime ago that was.

4:25But it must be one of the ultimate turns of fate. Last night, both companies reported it and the wise tortoise of Microsoft trows the hair that is goofy. Microsoft, it turns out, spent within its means. and still put up a terrific quarter led by its Azure cloud business with an unheard of 48 % growth, much better than expected 45. Copilot started slow, but it's becoming a screaming success. One of the fastest growing AI products in the enterprise, which is incredibly sticky and not like the fickle consumer business. Most important, Microsoft is still cash flow positive. And indicated that it will remain that case for the rest of the year.

5:04The discipline that this company had when so many companies were breaking the bank is now being viewed with envy and kudos. The combination of a shrewd CEO and Satya Nadella and a tight-fisted, canny CFO and Amy Hood resulted in a quarter that will have put Microsoft away from the crowd in first place in the big companies in this country. Alphabet? Disastrous.

5:33Search, choose, or something lost its luster. Treadroom growth is slowing. Something that hasn't happened in ages. YouTube, which had been a constant earner, saw its growth rates low too. Only the cloud business run, but the whiz of the joint, he was on the show, Thomas Curran starred. It wasn't enough, especially in Alphabet, when cash flow negative for the second straight quarter and could spend even more next year. Plus, they didn't finish that stupid ATM program. They had the market. There's still$27.6 billion more of stock to sell. That's just a little in the stock. They may not think so, but I never liked to buy companies that have these kinds of ATM offerings going.

6:07They just weigh you down. Better just to get it done. Let the stock lift. I wish they would let me handle the selling. My trust wouldn't have been hurt so badly. And I sure know how to trade better than they are. I think the stock of Microsoft, with all of its discipline, is now set to soar, while the stock of Alphabet won't rally. That's right. Microsoft is going to be number one. Too much baggage for Alphabet. No discipline. No sense of what it's supposed to be doing. Plus, they don't even have enough chips, so they're paying$920 million per month to Elon Musk's SpaceX for compute. Maybe they should have taken down more than NVIDIA chips.

6:40I don't know. I don't know if they do. How did this change in fortunes happen? First, give Microsoft its due. It has software and a cloud that are loved by business. It's still building data centers, but it is an asset light. It needs more compute. But by spending within its means, it knows that they know how to run data centers. They just seem a lot better, a lot savvier than everybody else. They run it like a business, not a science project. Now, tonight, after the close, we got numbers from Amazon. And with the stock trading sharply lower, it looks like the results were more like Alphabets than Microsoft, although I beg to differ.

7:12Now, Amazon reported a top and bottom line miss for the period, with misses for both the domestic and international retail units, negating another strong quarter for the Amazon Web Services cloud business. I know that doesn't sound too positive. Hey, but look, I got to tell you, I care much more about AWS,$180 billion run rate business, growing an astounding 39 % than I care about the low margin retail business at this point. A top and bottom line business for them simply won't be tolerated in this environment. Amazon famously conservative with its guidance, also disappointed with its fourth quarter outlook.

7:42And that was all she wrote. I want to wait for the earnings call before I give my final judgment. But I do think that this Amazon quarter was stronger than the headline numbers or stronger than what the sellers are thinking, while earnings per share was a few cents below expectations, largely because of elevated interest expense for Amazon's debt issuance binge this year, the company's operating income was very strong, nearly$2 billion above the consensus estimate. In fact, Amazon's 13.9 % operating margin was the highest in the company's history. Its web services retail businesses are extraordinary.

8:11As CEO Andy Jassy said, there has never been a trillion-dollar revenue business, and we may have two of them in the next five to 10 years. But this is a market that isn't interested in the longer term. For right now, a miss is a miss, even though I think that Amazon's a buy. Bottom line, we own Alphabet, Microsoft, and Amazon for the Chapel Trust. I write about them constantly. I don't want to buy more Alphabet. Yes, today was the worst day the stock ever had, but I got to wait a little bit. Let the analysts cut the darn numbers, see where it trades, see what price earnings mobile have. Microsoft, though, it's a buy right here.

8:42And Amazon, give me a break. When the smoke clears, buy, buy, buy. Dan in California, Dan. Mr. Kramer, thank you very much for helping us little guys. I'll make my question really quick. About three to four years ago, you had the CEO of Elf on your program, and I watched it on TV. He was so convincing to me, and you liked him. I bought the stock. I still own it. I'm up about 475%. But the question I have now is the P.E. ratio is like 150. And I know that's a red flag, but I want your opinion. Yeah. You know, look, this has been this was one that I backed at 15 to 17. I just liked him. I thought he said everything right.

9:31I went and boy, recommend it, recommend it, recommend it. And now it's expensive. Just like you said, I want you to cut the position by a third. Let the rest run. OK, let's go to that. We'll take out your call space. I like that. Let's go to Robert, New York. Robert. Jim, I hope all is well. And it's such a pleasure to speak to the number one guy on Wall Street. Oh, you're very, you know, you're a good man. Thank you. These are long days to hear your voice is terrific. Jim, I got to tell you, you're going to have a better day right now when I give you this next one. Okay. Cause you and I can do one thing.

10:02We can always back it up with our facts on how great you are now, July 29th, this next stock, I was on your show. The stock was at $361 a share. Are you talking Microsoft? No, no. You said to me, can you hear me, Jim? Yeah, sure. I'm listening to you, Robert. Okay. Okay. So you said to me, Robert, this stock has gotten beaten down. I don't like it as much as you do, but I think it's an excellent company. And I think we're going to get a bounce here. Well, not only did we get a bounce, baby, you made me$86 a share. and everybody in America can look at what Kramer did on July 29th when we talked about a stock that I was so hyped up on.

10:47You brought me down. I own it and I don't know what to do because I made 46 G's on this at 500 shares up$86 a share. Do the video. Intuitive Surgical. Yeah, absolutely. We saw the change coming. We saw the change coming. We saw that technology was gravitating toward health and medical and leaving the data center. And you caught it, and you are tuned to things, and I tell you when I hear that kind of money that's being made, I say, are you making that money at the movies? Are you making that money at the racetrack? Are you making that money at your job? Are you making that money, period? And the answer is no.

11:23And that's why I salute Robert for coming on the show. I think after this unnecessary dip, Microsoft and Amazon are buys here. Alphabet, you've got to wait before you pull the trigger. Holy cow, they got to fix things. If they think they're doing as well as they did in the call, then I got to tell you something. I'm going to send them some high-class pharmaceuticals. Well, man, buddy, tonight, Brinkler just reported earnings, and Chili's sure is back. I'm thinking of the numbers with the CEO and that big crispy chicken sandwich. Then during times like these, sometimes over-liable stocks like P &C insurance companies, they're not bad.

11:57I'm going to learn about the heart for its latest quarter with the company's top brass. And how is the data center build-out team holding up right now? I know you don't care, but I do because money can be made. I'm finding out with the CEO of Verdant. So stay with Kramer. Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. Hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something? head to madmoney.cnbc.com.

13:01Trial eligibility varies. Terms apply. Cancel anytime. That's a mouthful. Get The Daily Show's ongoing coverage in Decision 2026 daily. What else are you going to do? Watch football? Oh, you will? Okay, bad example. It's the most trusted fake news in America. Comedy Central's The Daily Show. New weeknights at 11. If your workday happens in two languages, this one's for you. Whisperflow is a voice-to-text app. You talk, it types in any app in more than 100 languages. The email in English, the text to your mom in Spanish, the client note in Portuguese, and it switches languages as you do with the ums and typos gone four times faster than typing.

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13:59All throughout this summer, shares of Kramer-famed Brinker International, the restaurant company that owns Chili's Grill and Bar, and Maggiano's Little Italy, they were surging. But with oil prices and interest rates climbing this fall, investors got nervous about consumer stocks and did some of them took profits in Brinker. That was a big mistake. Yesterday morning, Brinker reported its latest quarter and shot the lights out. Excellent quarter, driven by another remarkable result from Chili's, which had 10 % comps in the period, very easily clearing even the highest bar of Wall Street has set.

14:28With this quarter, Brinker also raises full-year outlook for sales and earnings. Each shares then immediately jump more than 12 % on Wednesday in response to the quarter, as they should. So, how'd they do it? Let's take that question directly to Kevin Hockman. He's the president and CEO of Brinker International. He joins us now. Mr. Hockman, welcome back to Bad Money. Hey, thanks for having me on the show, Jim. Okay, so Kevin, I've got to put this in context. A lot of people were trying to get 2 % to 3 % comps or sales numbers and we're thrilled. You did 10, but more importantly, you did 10 on top of some really big numbers the last couple of years.

15:00How are you able to continue to do this? Well, we have a very powerful flywheel where we're growing traffic the right way. That's growing sales. That's expanding margins, which allows us to plow an investment back in the business to grow traffic again. And so we were a plus 10 this quarter, Jim, but that was rolling last year of a plus 22, which was rolling a two-year number, a plus 14 for a three-year cumulative comp of plus 52. This business is absolutely on fire. And even in a tough macro, we are not using that as an excuse of why we're not winning. We just continue to grow market share by doing right by the American consumer, and they are rewarding us with their business.

15:43Well, this is important. I want to do it before we get into the menu, which is so meaningful. I do a little teaching here. I've been trying to explain to people that traffic is what you're trying to accomplish, not higher prices. You are generating the traffic. Where are these people coming from and how are they finding you? Well, they're coming from everywhere because they're looking for value. Whether you're a low income household or a high income household, value speaks to everybody. And when you offer$6 everyday margaritas and you offer 1099 full meals with almost a half pound burger, fries and a drink or a giant chicken sandwich, fries and a drink and unlimited chips and salsa, you're going to win every time.

16:25You know, the American consumer is showing up where value shows up. And it's not just about a low price point. It's about having great food service and atmosphere for that discerning American guest. And we are winning. Well, I think it's also about new. New does matter. I want to talk about the Big Crispy because this is something that others have tried to do and have done on limited time only and worked once. But you're offering a bargain Big Crispy. Yeah, so this is a gigantic chicken sandwich. It's over 80 % bigger than a leading fast food chicken sandwich. You know, we hand breaded in restaurant.

17:00This is not made in a factory and then frozen and then driven miles and then refried. These are freshly cooked and breaded sandwiches. The consumer is showing up for that sandwich. We are now selling every 1.4 seconds, Jim, we are selling another Big Crispy. People are loving this sandwich. And, you know, I read quotes all the time and, you know, in social comments. And, you know, I'm hearing things like, hey, it's affordable to go out to eat again. And boy, that chicken sandwich is humongous and delicious. And that's what's growing traffic for us right now. Well, I think it's important. This is something people are hearing about in great cities like Florence, Rome, and Venice, aren't they well we had a little bit of a of a of a new sandwich that we put as a secret menu item you know hopefully it'll be successful go to the everyday menu item but so it's called the big crispy chicken parm and it's the only way chilies can do chicken parm which is with uh marinara sauce but we also have one of our fried mozzarella planks on it and literally you can bite the sandwich and get a cheese pull you know we launched that in vaguely italian cities naples I think it was in Florence and in Rome, but it was Rome, Georgia, Florence, Kentucky and Naples, Florida.

18:13So these were distinctly American Italian cities. And we've had some pretty good success online. We're looking forward to selling a whole lot more than this November. I will point out that my wife for a very long time liked the Baconator, but she prefers the fried mozzarella sticks. You're famous for these. These are fantastic. Yeah, they're pretty amazing. So I think when people think about mozzarella sticks, they think about little skinny mozzarella sticks. But Chili's always does things in abundant proportions. We have generous, generous portions. And so these are literally more like planks.

18:46You can get them three or six, or you can get a twofer in our triple dipper, which obviously does incredibly well for us. It's about 16 % of our business now. There's lots of ways to experience that mozzarella, but there's a new way, which is the big crispy chicken parm. So any way you get it, you're going to get a superior mozzarella stick that I quite frankly, I think, is unbeatable in the market. OK, now I did hear a term. I learned a term, frankly, as I always do when I listen to your calls. We have to start worrying a little bit about check management. What is that? Yeah. So what's going on right now is customers are pulling back a little bit on all the things that they purchased, whether it's alcohol or dessert.

19:23You know, they're literally saying, I still want to go out to eat. I'm going to go out to those with great value. but maybe I'm going to buy more of the three for me, or maybe I'm going to skip that dessert. And so the reality is we just need to be there for the guest right now. And so when you have complete meals at$10.99 and margaritas at$6 and you don't need a coupon, you don't need an app to get that, you don't need to be to go, you know you have price certainty when you go to Chili's. It's that kind of everyday low price strategy is winning the day. And that's why we're growing market share right now.

19:53You did mention that it was a little bit boilerplate, but look, you have to worry about inflation. You have to worry about food inflation, but it does not seem to change your menu prices. So I think people will be asking, well, are they just getting hurt really badly and we don't know it? Or is it just the way you do things that it's not going to hurt your shareholders? Yeah, I get to ask this all the time, Jim. You know, we've grown restaurant level margins over 600 basis, over 700 basis points since I started. We are growing profitability the old fashioned way. Number one, we're doing it with traffic, right?

20:27So as we bring more and more guests in, we can spread more of our fixed costs over more of the building. And quite frankly, that's why we're growing profitability, not just sales. You know, the second thing is we are all things to all people. You know, casual dining and Chili's is one of the few retail outlets that all walks of life come to. And so not everybody buys the 1099. Sometimes people want something a little bit more premium, whether it's in whole meals or in, you know, margaritas is a great example. We sell margaritas from$6 all the way up to 12 or 13, depending on the type of things that you want and the quality of tequila that you want.

20:57So quite frankly, as long as we meet every guest need and continue to grow traffic, we'll be able to expand margins even in an inflationary environment. All right, and Maggiano's, we're just still trying to figure it out, huh? Yeah, we've had a little bit of progress there. So I talked about the progress we made in banquets. Banquets is about 15 % of our business. We put a cross-functional team against it. We grew double digits in sales this quarter. So that is a good small win that we have for the business. That's our number one marketing tool is most people that come to Amagiano's Banquet have never been to Amagiano's.

21:29Great way to introduce people to the brand. And now we're working on throughput and speed. We've got a whole new kitchen display system that's going in right now. Hopefully it'll be done in the next 90 days. And so hopefully we'll get that speed of service ramped up. And, you know, the food's still great there. It's all about how do we get that service to a higher level like we've done at Chili's. Understood. Well, I've got to tell you once again, you're amazed. You're just amazed. I don't know how you can continue to put up these numbers when others just falter. And I want to congratulate you, Kevin Hockman, CEO of Brinker International EAT.

21:59And I always love you. Love it when you come on the show. Hey, love coming on the show, Jim. Thanks for all your support. Thank you. Coming up, Kramer's getting a read on the state of the insurance stocks with the top brass of the Hartford. Next. If you like YouTube, you'll love YouTube Premium. Hi, I'm Sean Evans from Hot Ones, and I want to tell you about YouTube Premium. It has offline downloads, so you can watch without Wi-Fi. Background play, so you can lock your phone, and it still plays, baby. Oh, and it is completely ad-free. Yes, I said it, ad-free. Try YouTube Premium for two months free at youtube.com slash premium.

22:41Trial eligibility varies, terms apply, cancel anytime. Get The Daily Show's ongoing coverage in Decision 2026 Daily. What else are you going to do? Watch football? Oh, you will? Okay, bad example. It's the most trusted fake news in America. Comedy Central's The Daily Show. New weeknights at 11. If your workday happens in two languages, this one's for you. Whisperflow is a voice-to-text app. You talk, it types in any app in more than 100 languages. the email in English, the text to your mom in Spanish, the client note in Portuguese, and it switches languages as you do with the ums and typos gone four times faster than typing.

23:24Whisperflow is free. Get it at whisperflow.ai. That's W-I-S-P-R-flow.ai.

23:39At an uncertain time like this, one group that you might want to consider is the steady-eddy property and casualty insurance companies. Take the Hartford, a Connecticut-based P &C insurance company employee benefits manager that's been a leader in this space, forget this, for over two centuries. And in just a few months' time, the Hartford will be under new management. Chairman and CEO Chris Swift, who has held the CEO role for nearly 13 years, he's going to be transitioning to the role of executive chairman March 1st next year. Now, Swift is wildly credited with stabilizing the Hartford in the wake of the financial crisis and helping transform the company.

24:11I'm actually real sorry to see him go. I mean, he got to unbelievable, but he'll be executive chair for a little bit. So let's get a fresh look at the company, which just reported solid results on Monday evening. Joining us now is Chris Swift, the chairman and CEO of the Hartford. Mr. Swift, congratulations on what you did for this story company. Well, you're kind to say that, but you of all people know it was a complete team effort over the last 10 to 12 years to put us in the position where we are today. So it's gratifying from that perspective. But I do want people to know, I mean, Babe Ruth came to you guys for policy when you're building the Golden Gate Bridge.

24:46You guys are the one people know to go to. And some of it I honestly believe in. You kept it. You kept it. Is this image. It's it's iconic. It's it speaks to really trust, strength, endurance, many, many different adjectives that describe someone you want to be with. And yet at the same time, you've always been very a democratizer. Small business loves you. I mean, you are if you're going to open a small business, you should go to the Hartford. We think so. I mean, we insured two million small businesses today. We've been growing rapidly. But I think the real secret sauce that we've uncovered over the years is technology.

25:28If you make it easier, if you make it smooth, intuitive, whether it be for agents and brokers or directly, customers could come to us. If you have sort of a easy to use, easy to understand platform, you'll win more times than not. And it's evidenced by our growth rates. We're growing twice as fast as the market. That's incredible. Now, I also know in your industry, there's there are these drafts that have you written, written, written, apparently uniquely done by A.I. But maybe the industry that has the most upside is what I keep hearing. Well, I think A.I. will be transformative to many different industries.

26:10But I think you're referring to policy forms. Yes, I mean, it must take forever unless you can just piss off. Some are bespoke, but most in our small business are all the same. So it just depends. But I think your broader thesis on AI helping transform this industry is right on. OK, now we often hear I'm going to say that I don't agree with this before I say it. We often hear that insurance is one of the big problems in inflation. Now, that true or false? it's false you know we we react i mean our cost of goods sold or the cost of our product is a reflection of the economy in general and when there's inflation in the economy whether it be for lumber or bricks or labor or if you have litigation you know that is sort of out of control these days in my judgment yes all that is reflected in the price of our product and oh by the way there's been more storm activity, except for this year in the Atlantic Basin.

27:13But there's more severe convective storms across most parts of the country. Now, another thing people say is that when the when the Fed raises interest rates, you guys make much more money than everybody else. Again, I don't think that's true. But we do make increased investment, you know, income. But I guess it's just proportional to what we're investing in. We're a fixed income investor. We don't take a lot of risk. We are. Our duration is probably five years or four and a half. So, yeah, all all boats would rise in a rising rate environment where you're acting as an intermediary. Now, tell me when I looked at this last quarter, it just seemed like a very straightforward quarter.

27:57And I don't want to lower catastrophe losses. I don't want to paint your businesses that there's no ups and downs. But this has been about a steady of businesses I've seen in the last, say, half dozen years. Well, again, requires good execution, requires discipline. You know, I would say I was very pleased with the quarter, both from a growth side and overall margin. But to be fair, I mean, there was a couple of soft spots. Workers comp losses were a little elevated. Our disability losses were a little elevated. But I think that's all within a normal expected outcome with some variability. And we know what to do and how to manage through different cycles.

28:37Well, you mentioned something I wanted to get into, which is the so-called bespoke policies. How do you know how to write? And I know you do because I've used you. How do you know how to write kind of one-of-a-kind policies where people come to you and they have some sort of one event and they need it insured? Or they need a camp that they're starting to be insured. How do you know how to do these things? Well, I would say Lloyd's got sort of the market cornered on that. And we participate in Lloyd's, so we might write some of those topics. But I would say, or, you know, coverages, I would say here in the U.S., I mean, everything we have is pretty stock in vanilla.

29:16There isn't any exotic stuff in our book today, at least in my judgment. But Lloyd's, you could get some more exotic type coverages. liability, political risk, war risk. So there's some unique stuff that people could choose to do. Absolutely. Okay. So now tell us about your success. Mo Tooker. He's a great guy. And I would say it's been a thoughtful process. The board is obviously fully engaged. Mo is an underwriter. He's very strategic. He's got a penchant and a flavor for technology, you know, just like I do. So I think it's going to be seamless. I think there's great continuity in our strategic orientation.

29:59I think there's great momentum that we continue and great ability to execute and produce results for our shareholders. And I know that you're dedicated to team. It's the right concept. But there was once an article in 2009, which said, who would ever want to be to run the Hartford? Because it was in such trouble. and the answer is how about the person who saved it? I'm sorry. I'm giving you credit. I have to do it. Thank you. All right. That is Chris Swift. He's the chairman and CEO of the Hartford Insurance Group. That's HIG. And he'll be sticking around for a little bit more. And I happen to like the insurers.

30:31You know why? Because they don't go up and down crazy like so many of the stocks that you're watching your screen right now. Thank you. That might be back in.

30:48Yesterday before the bell, Vertiv delivered a big beat in raise, sending shares soaring more than 60%. They've tacked on another 1.2 % today on what I think was not such a great day for tech. This is the company that supplies the guts of the data center from power and cooling equipment, control and server racks. Now, revenue jumped 61%, including 55 % organic growth, which we were just looking for 35%. Adjusted earnings beat estimates by$0.39 to share management raised its full year outlook. Now, this was a welcome change after a tough stretch for the stock. Even after the rebound, Vertif shares are still down 35 % below their May high, although they're now up about 52 % for the year.

31:26So can you keep going? Let's take a close look with Gio Albertazzi. He's the CEO of Vertif. Gio, welcome back to May of Money. Thank you. Great to be with you. Okay, so Gio, these were fantastic numbers. So I'm trying to think, is the industry fantastic? Are you just taking a lot of business from other people, or is it a bit of both? Well, it's a bit of both. The industry definitely is very good. As I was vocally explaining to investors yesterday, we continue to see very strong pipelines, and we continue to see vibrancy in broad-based Americas and the rest of the world. But also, we're doing a very good job at growing more than market.

32:05Combine the two things and combine very disciplined and rigorous execution, I think that delivers the numbers that certainly we're very proud of. Well, let's talk about sentiment versus reality, Gio, because you're right in the heart of it. You know that a lot of people, when you mention data centers, they're incredibly unpopular. They probably don't know what they are to some degree. I don't want to say people are ignorant, but the stories read it negatively. And yet your business is as strong as ever, if not stronger. So it must mean that there's some places in the country that really welcome the data center, or perhaps once the election comes, maybe we're going to find out that there's not going to be as many data centers allowed as there are now.

32:43Well, certainly there is a big demand for compute capacity, be it AI, cloud, enterprise, and that certainly drives the demand as we're talking about. I'd say that there are sentiments out there about data centers that certainly need to be addressed. We see an industry that is increasingly doing an active job of making sure that the communities understand the good things that a data center brings. And, you know, when you think about where and how data centers are built, you know, we see a technology continues to evolve towards the better. And we see an industry that understands where to build data centers.

33:33That is true in the U.S. and globally. So we continue to be pretty bullish about the market, notwithstanding the concerns that are being addressed and need to be addressed. Is there ever a way that these data centers, which we're watching, these companies that are building them, and they're costing so much money, is there ever a way that these data centers can come down in price to build? You're right in the midst of everything. I'm sure you can tell me whether one day these will cost a fraction of what they do now. Well, think about an industry that is becoming increasingly more productive in the way the output and the productivity at chip level, the better and better use of electricity, a higher and higher level of efficiency.

34:21So we should look at a data center in terms of total cost of ownership, and the total cost of ownership is being improved constantly. We've, of course, a big actor in this improvement, but industry of the size continue to improve, continue to become more efficient. That's kind of a rule, an economic rule, if you will, and certainly applies here. Now, you guys have what I highly consider to be the best liquid cooling systems, but you also have the best service. How much is the service a differentiating factor for you versus others who do what you do? Sure. We also have a phenomenal power portfolio and prefabricated solutions, of course.

35:02I can avoid saying that. But services is phenomenally important. Services, for us, a clear competitive advantage. We like to call it our superpower. And gives us a chance not only to support during commissioning, something that in terms of scale and technical complexity is very challenging for everyone in the market, but also enables us to deliver through the entire life cycle of the asset, those 15, 20 years, making sure that in terms of resilience, in terms of performance, the asset stays at the level that it needs to perform to return the money that it needs to return. Wait, now, Gio, you've got all these jobs.

35:42The growth is incredible. Where are you finding the people to be able to do this? Our country doesn't have enough people who do these things. Well, you know, it's really about making sure that from a service point, Let's talk about services as an example, making sure that we have a very disciplined process of bringing new talent on board, training them, and making sure that they service our install base wherever it is, even sometimes in the community where the data center exists. So it is about being very deliberate and forward-looking in the way we build our talent population, be it field service or a factory, and of course, Vertiv as a whole.

36:28So I think it's about being an attractive place to work and being very methodical in a way in which we grow our talent and recruit our talent. I may be too U.S.-centric. You're seeing really big growth in Asia-Pacific, some good growth in Europe, too. So these are places that you're comfortable? You have people going into them, doing a lot of business there? Yeah, we see the growth and the business pretty broad-based, and we're truly global in our footprint. Clearly, the Americas is our biggest market, biggest region. But we see that broad-based growth happen globally. And we are a global company with a global portfolio and a global presence.

37:15So we really benefit from a much, much more broad-based industry dynamics that, for example, a few years ago. So we're pretty pleased with all of this. And just this question, the order book, as I understand it, is very, very full. People who think that there are cancellations or people who think that they're not building as many, That just doesn't drive for the facts, correct? What we see in our order work, in our backlog, our dynamics that are not different from the dynamics we've seen in the industry historically. So we feel pretty good about the resilience and the longevity of our backlog.

37:53So we feel very good. Well, look, this market's gotten very mystifying to me. This whole group has gone out of favor and people want to buy anything. But and I listen to you and I think, well, this is just, Doc, is down so much from the high. Maybe people should reconsider. So I want to thank you for coming on the show. You always have a terrific and now right now, contrary view, which is wrong because you've got the facts. The other people don't. So I want to thank Gio Apertazzi, CEO of Vertiv. Gio, thank you for coming on the show. Thanks for having me. OK, man, Mike's back after the break.

38:32It's time for the lightning round. We're going to start with Marcus in my favorite state of Oregon. Marcus. Hey, Jim. Great talking to you. My favorite company, I consider the Porsche of the industry. They just hired 5 ,000 people. I got bookings for about the next two years. All our customers are in the red today. What do you think of Lamb Research? I think Lamb Research is the best in the game of capital equipment. Now, here's what you have to do. You got to listen to me, okay? If you want to buy 100 shares of Lamb, I don't want you to buy more than 25 right now. We have some bad numbers from Intel, really bad numbers, and I'm kind of bummed out about it.

39:22But that's going to bring that stock down. You buy 25 then, and then you wait another five days because right now, the stock is in free fall, and I don't want you to get hurt. Marcus. Let's go to Phillip in New York. Phillip! Hi, Wyatt. Jim, I'm Rob's brother who loves you and calls in and speaks nothing to the world about you. Hey, SPS Mobile. No, no, no. We're fighting the Fed with that. We're fighting with that fellow Warsh. I'm not fighting Warsh. Man, I'm bringing a water pistol to a gunfight with that guy. You don't want to go against him. He says no speculation. I say he's right. Let's go to...

39:56He didn't really say that, but that was the subtext. It was kind of like I saw it like a bubble over his head, you know, kind of thing. He called me parliamentarian. Let's go to Bijou. I have him in my fantasy league. Bijou in Georgia. No, I just wish I did. Bijou. Hey, Jim. What's up, buddy? All right. How about you? I'm good. Long time viewer. Thanks for all your guidance through the years. So my question is about one of America's favorite pastimes. What are your thoughts on AMC for the long term? long-term short-term doesn't matter i think that this stock is should be sold i know a three dollar track is very three dollar stock is very attractive they have a very bad debt position and i'm just not going to recommend a stock that has all that kind of debt i'm sorry i know i've been very sherry i'm not recommending everything let's go to jack in my home state of oregon Hey, Jim, how are you?

40:54Jack, I had some Harry and David the other day. Not bad. What's going on? I love Harry and David. Hey, first off, sorry for your loss. I just wanted to say that before jumping into it. Thank you. I'm not saying I'm trying to get past it. I am saying as I'm in the thick of it. But go ahead. Yeah, no, my thoughts are with you. But hey, looking at Netflix, wondering what your thoughts are, whether it's a buy-seller or a board. I tell you, I took, you know, my friend Dave's favorite, Dave's favorite down there in the morning. We joke, you know, the stock can't lift. I mean, it can't lift. I mean, I'm watching Netflix all the time.

41:29I saw that Ben Affleck movie. I mean, I guess that doesn't matter anymore, does it? You should be able to say, hey, you seen that movie? And yeah, I'm going to go buy Netflix. People don't do that anymore. But you know why? Because they don't even know if it's on Netflix. Maybe it's on Amazon. Maybe it's on HBO. Maybe it's on Apple. I mean, like, who even knows? And that's Netflix's biggest problem. I'm not done. I want to go to Bill in Massachusetts. Bill. Hey, Jimmy, I just wanted to say I'm sorry about your nephew, Cliff Mason. I'm sorry about what happened. He was something. 21 years, and he was only 41.

42:01But, you know, we go, we move. You know, we go, we go, we go. And he would be so bummed about it. He'd be like, Jim, Jim, stop talking about it. I can hear him in my ear. Stop talking about it. So go ahead. He'd be yelling at me. He always yelled at me. You know what? I said a prayer for him. Just wanted to let you know that. I appreciate it. And his mom. His mom. That's who we're working on. Yeah, give it to all family, my love. Listen, is Irene just a money tip for the next 24 months? We don't want Irene. I'll tell you what we don't want Irene. Because, you know, there's this thing called losing money.

42:31You know how there's a show called Mad Money? There's also a show called Losing Money. And Losing Money buys Irene and it buys Nebius. I am not the host of Losing Money. I'm the host of Mad Money. There are different programs. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab.

43:00Here's so much about guilt by association. Maybe we should be thinking innocence by association. Maybe that's a better buying opportunity. Last night, a cybersecurity company called Fortinet reported a ho-hum quarter. Typically, it was a beat and raise result, but it also showed slowing growth in what has to be the hottest industry in the world. Stopping the bad guys who use AI. It's supposed to be one of the biggest priorities for CEOs in the current business environment. We know from OpenAI and Anthropoc that there are many cracks in a company's cyber edifice, and the latest models from these companies seem to be discovering more and more of them every day.

43:34Enterprise customers are scrambling to keep up and prioritizing cybersecurity spending over most other IT priorities. But Fortinet's numbers didn't resonate. The stock fell$35 or 20 percent. But the weakness of Fortinet's quarter made many wonder whether the whole cybersecurity investing theme is done. I mean, there was tremendous guilt by association that even impacted the two companies that have been the biggest winners from this time, and that is CrowdStrike and Palo Alto Networks. Two stocks, they just got hammered. CloudStrike losing 5.2%, Palo Alto dropping$14, or 3.5%. Now, those declines are based on a faulty premise.

44:14Fortinet offers a very limited set of cyber defenses. It is primarily a legacy firewall business. Basically, it's an appliance. That's what Palo Alto Networks was when I first met it eight years ago. That was when Nikesh Arora took over as CEO. But he has systematically broadened the product line, both organically and through acquisitions, and created a platform that has a firewall, but much, much more, including the best defenses for companies' key people. So why buy a little firewall from Fortinet when you then have to put together a patchwork multi-vendor offerings for other cyber services?

44:46Why don't you just go to Palo Alto and get a one-stop shop? Or why not go with CrowdStrike, which offers a full suite of products and advice that make it a mainstay in the industry? And that's exactly what's happening in the real world. That's exactly what we're doing in the Channel of Trust. us. Not only are Palo Alto and CrowdStrike not guilty by association, but my work shows that Fortinet has been what we call a share donor to both of those two companies. Their stock should be bought, not sold, because Fortinet's weakness is not a tell about a slowdown in cybersecurity. It's just a sign that Fortinet itself isn't doing well.

45:18We see this all the time, especially in technology. Last night, we interviewed Bill McDermott, the CEO of ServiceNow and the enterprise software company. He had a slight earnings miss. I mean, the market's not going to tolerate a company that sells at over 30 times earnings, reporting a miss, however small it might be, especially when the stock had almost double going to the earnings. ServiceNow is known as a software as a service or SaaS company. Its weakness was viewed as a sign that all SaaS companies are in trouble. Even as these companies all have a particular kind of structure, they can do very different things, and some are even changing their models as the AI era arrives.

45:51For example, Workday, remember we had them on recently as a SaaS company, but for human resources corporate finance professionals. Man, are they smoking hot. And don't forget, Salesforce, Chattel Trust Holding has a seat-based model for a different marketing silo, but has introduced consumption-based models for its red-hot Age Enforce AI product. Now, I'm close to both Workday and Salesforce. I've covered them for two decades, frankly. And I can tell you that their declines today had more to do with weakness emitting from service now than anything having to do with the companies themselves. I have been itching to buy the stock of Workday for my Chattel Trust, talking to CEO Neil Bushby on this show, who told us that business is just great.

46:30He's money, by the way. Some of these guilty verdicts are downright absurd. Google's quarter was so weak that it pulled down Microsoft after Microsoft had an incredible quarter of its own. A conservative outlook by Samsung caused the stock of competitor Micron to drop today, even as Micron's book of high bandwidth memory is much stronger than Samsung's. And no, they're bi. Most, though, are more subtle, like Fortinet, where you have to know the nuance of what it does versus its competitors. Here's my motto. Do the homework. Know what the companies really do. That's the only way to profit from these short-term guilt-by-association moves, which tend to work themselves out.

47:06I wouldn't just go to say in the long run, but how about in the short-term, medium-term, too? I like to say there's always a bull market somewhere, and I promise I'll find it just for you right here on Mad Money. I'm Jim Cramer, and I'm going to see you tomorrow. All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Cramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion.

47:37Cramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit CNBC.com forward slash Mad Money Disclaimer.

48:16Get it at whisperflow.ai. That's W-I-S-P-R-flow.ai.