Mad Money w/ Jim Cramer 11/6/26

0:00The perpetual pen tapper. The arbitrary fridge reorganizer. The holiday party planner that starts in May. Principal knows your star employees have their work quirks. Principal also knows how much these employees mean to your business. You need them. They need benefits. Work with principals so they can help you help your team with a retirement and benefits plan that's right for them. Principal Life Insurance Company, Des Moines, Iowa. If you're a small business, the right hire can be make or break. Indeed Sponsored Jobs gets you quality candidates when you need them most. Join the 3.3 million employers worldwide that use Indeed to connect with quality talent that fits their needs.

0:40Listeners of this show will get a$75 sponsored job credit to help get your job the premium status it deserves at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs. My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a home market somewhere, and I promise to help you find it. Mad Money starts now.

1:13Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramer. Other people are my friends. I'm just trying to make a little bit of money. Although I happen to have some friends with me here today.

1:33My job is not just to entertain you, but also do some teaching. So call me at 1-800-743-CBC. Tweet me at Jim Kramer. Look, I'm still reeling for whatever the heck hit us this week. It was the thrill of victory and the agony of defeat. Well, it's actually more like the stench of defeat, if you want to know the truth. if you had too much of the two new curse words that are data and center.

2:01I, for one, can't wait for the weekend because I really need to process off the desk what the heck happened here this week. I told CBC Investing Club members at our annual meeting today that we are not done with the volatility, which happens to be Wall Street gibberish for stocks going down. And by the way, I just have a total honor to be surrounded by some VIP club members here for the show. Today's session with the Dow fell another 237 points. SB Game Point with 31 % Nasdaq tacked on 1.09%. It really didn't change anything for me. I didn't hear anything positive about the data center that would make me feel the public rebuke on Tuesday doesn't still stain.

2:46I didn't feel that any numbers in tech were too low. I felt like it was a dead cat bounce. Now, I know we are never going to get an all clear. No bell ever goes off. But it still feels like there are plenty of sellers lurking, just waiting for the bedraggled data center stocks to make a bigger recovery so they can get out now. Sell, sell, sell, sell, sell, sell, sell. The non-farm payroll support this morning was very strong, which leaves no doubt the economy's humming. but it didn't mean much to bonds or the stock market. I'm glad personally that it's out of the way. The fewer variables, the better.

3:21But let's take a look at our game plan to see if there's anything ahead that can make us more positive about the nasty decline that I don't think has yet to run its course. On Monday morning, we hear from a company called Constellation Energy. That's an independent power producer with a big nuclear fleet. The big hyperscalers, the Microsofts, the Amazons, They love that Constellation can offer emissions-free power. We want to listen to what they have to say about the election and wonder if Tuesday's results mean they'll slow down plans to build new power stations. If they say that, the data center stocks could see a fresh wave of selling.

4:02Tuesday, on-holding reports, and there are plenty of people thinking that athletic footwear and apparel companies ready to bounce back. Wait a second. Look, anything's possible. And the stock has come down to a market multiple. But really, my problem is the whole category, starting with Nike, just feels real crowded. I'm going to take a pass on this one. We also get the October CPI report Tuesday, and we need to see some cooling here, as inflation must come down if we don't want more rate hikes from Fed share. Warsh. I like the way rates have retreated recently, but I think it reflects the potential for lower oil prices from a war that might wind down and not a lower CPI.

4:39We need a surprise number, one that's dramatically lower than expected. Although, I don't think that's likely. After the close, one of the most important companies in the world reports, and that company is a company you probably never even heard of, Cornweave. This is one of those neocloud companies that are building data centers and borrowing a lot of money to do so. The cost of their debt is now sky high, too high. Can they explain how they can pay it off? Can they tell us what their game plan is going forward if they can't issue any more debt because it's just gotten too darn expensive? Can they give us a reason not to worry about the mid-teens interest rates for their public bonds?

5:13Michael Entrader, the often very sure of himself CEO, has to have something up his sleeve besides his arm for this one to go higher than this 6 % rally his stock experienced today. I should have said relief rally. Wednesday, quiet day actually. Other than the earnings report from a company called Herteba, which is now a crop protection pure play after a breakup that was completed last month. Now, I don't know if you remember, but we like the company called Vylor, which is the spun out seed genetics business much more. Maybe Cortevic can benefit from the new focus. Stock's cheap. Oh, boy, here we go.

5:47One of the toughest ones. You know, I gave you Iran and I talked about Corweave, but welcome to Nebius. Yes, this one reports Thursday morning. This will be the third of the three big neoclouds to report. The Iran and Corweave are very important, but this one might be the most important. I got to tell you, I'm not even sure what I want to hear from this company anymore. I mean, I want to hear a lot. I want to hear robust new orders. I want to hear finished data centers. I want to hear sighted areas out two or even three years. Even international business, that'd be a godsend. But what I don't want to hear is that the sites they are building are coming in late and over budget or could be blocked by politicians fulfilling new mandates from the election.

6:28I don't think they'll talk about that, but I think the analysts will ask about it. Cisco reports Thursday. I have to tell you that this company reported back in May the stock gow from$102 to$130 in a matter of weeks thanks to great AI orders. But you live by the sword, you die by the sword. The stock has been caught up in the incredible tsunami of AI selling, and it's fallen all the way back to the 90s. Now, I think Cisco has gotten oversold. I think Chuck Robbins is going to deliver. I think the stock's actually cheap. I think it might be worth buying some if we can get through the core-weaved Nebius gauntlet.

7:02Not be a big buyer, but a small buyer. Or how about a plot material? This stock that ran to just under$740 this summer during the great short squeeze caused by the aggressive buy by the situational awareness hedge fund right before the manager blew up. Now it's down to$330. So normally, I would think that it has to be a buy, right? Because it's gotten so low. But perhaps it should never have been up so high to begin with. Remember, on Mad Money, we do not care where our stock comes from. We just care about where it is going to. So you can't say, ah, it's been cut in half, let's buy. Not if the earnings aren't stellar, and not if it should never have been where it was.

7:39Kraft Times has an Investor Day this Thursday, and I bet CEO Steve Kaelin has something going to propel the stock to the next level. We like how much money he made for us in Kellogg, didn't we? Can he repeat? I think he can. He already just sold a majority stake in Kraft. There are coffee instances, which includes Maxwell House, for nearly$500 million to help pay down the debt. They got way too much debt. I think this man is a moneymaker. I think he has a plan to bring out value. Finally, on Friday, we have the PPI reading again. We are just looking for any sign that there is a waning of inflation.

8:10Never forget that while rates are indeed lower, the move is slight, and people are still expecting more rate increases if we don't get oil down and if we still have lots of things in the pipeline, like rent that's going higher. We know food is way too high. We don't want to give the Fed chief any ammo to stay tight. So the bottom line, you know what? It was a brutal week. One that tribes men's and women's souls as we were exuberant about the election and then despondent by the consequences to the greatest story ever told, the data center. Can the fire be reignited? We'll know real soon. I wouldn't get my hopes up.

8:53All I heard today were bulls coming on TV telling us not to worry. False confidence? I saw nothing to hang my hat on, let alone any of my trust's money. Now, let's take some calls for some of our audience members. Yes, we have an audience. Let's go to Nick from Texas. Nick. Ba-ba-boo-yah, Jimmy Till. I like that quote. I got to get one of those myself. I watch you every day on Post 9 Mad Money. Appreciate us being here. I appreciate you being here. Thank you. With beef prices high and the cattle still low, the stock's up over 10 percent in the last month. Is it time to get back into Texas Roadhouse?

9:31You know, I often think about because I like Texas Roadhouse. We've had the management a bunch of times. The reason why I backed away from it, you know, we had it. It's just it's too crazy. It is so much related to beef and not much related to their great service and how terrific the meals are that I said, you know what? I got to find something else. And that's why I went to Starbucks, which has been a big winner. But thank you very much for the question. All right. Now we're going to go to Brian in South Carolina. Brian. Booyah, Jim. Booyah, Brian. Thanks for hosting us. Great to be here. Thank you.

10:03Long-time fan. Read your books. Thank you very much. Thank you. I mean it. Thank you. Long weekend. It makes the week better. Jim, with the emergence of SpaceX and all the new technology out there, what is your take on AT &T as a current and forward investment? I have to tell you, I have Starlink in Europe. and I replaced the system for$150 with a$50, much better, much faster system. I think that Elon Musk is a vicious competitor. I think ATT represents old and he represents new. So I am going to say you should not own ATT. Tough call, but I say that. All right, now we're going to go to John in Texas.

10:42John. Booyah, Jim. Booyah, John. I always wanted to say that. Oh, well, you just did it. For posterity. I start my day listening to you on Squawk, and I end my day listening to you on Mad Money. Well, you've got to be sick of me. My wife doesn't watch Jesus' show. I've learned a lot. All right. Thank you. My question is about Broadcom. You recently took it out of the portfolio. Yes, we did. It's a pretty good company. No, a great company. Almost hit a 52-week low again today. Is it a good time to get into it? Well, you see, I think I'm trying to cut where I can exposure to the data center, particularly where I had very big gains like Broadcom.

11:17I wish I didn't have to do it. I think Brocom is great. If you want to have a position in Brocom, that is fine. But you cannot be what we call overweight these companies that are involved with the data center, because we could have another downdraft, fancy Wall Street trippers for stocks to go down, and I'm afraid you'll lose money. But Brocom is a great company. Please do not make, this is one of the toughest moments when it comes to the trust. I'm selling a stock of a company I really like, but I can't have that much data center. And I thank you and booyah, and thank you for watching me all that time.

11:46I really appreciate it. All right, on Mad Money tonight, viewers keep asking me why I haven't pulled the trigger on SpaceX yet. Tonight, I'm giving you my analysis of the company and telling you where I come down. Then, what the heck is going on with Papa John's? I'm sitting down with the CEO of the pizza chain after what I have to admit was a bit of a disappointing quarter. And as the market digests the blue wave, what sectors stand to benefit going forward? Don't miss my analysis and stay with Kramer. Don't miss a second of Mad Money. Follow at Jim Cramer on X. Have a question? Tweet Cramer.

12:23Hashtag 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.

12:41Host Thanksgiving with industry-leading quality standards from Whole Foods Market. There are no antibiotics in their meat department ever, so carve up turkey and spiral-cut ham with peace of mind. Shop organic sides like stuffing mix and cranberry sauce from 365 brand. And guess what? All their delectable pies are made with no high-fructose corn syrup. Gourmet Thanksgiving flavors with the quality you want. Only at Whole Foods Market. With the Discover Cashback Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5 % cash back at different categories each quarter on up to$1 ,500 in purchases.

13:23That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to Discover. Terms apply. See discovery.com slash five for details.

14:13With all of the madness of the past few weeks, I haven't had the chance to sink my teeth into one big story that I've just been itching to cover, because I know it's one that many of you are interested in, and that is the stock of SpaceX. Now, if you're a CBC Investing Club member or a Mad Money viewer, You've probably heard me say by now that I want to own shares of SpaceX. I've been tempted by the stock for a while now, and the company's third quarter earnings report last month only made me more interested. Buy, buy, buy! But Investing Club members also know that I haven't yet bought this one for the Travel Trust.

14:49Okay, we've debated behind the scenes, had some pretty spirited discussions. In fact, we haven't pulled the trigger yet, maybe because I think we're a little gun shy. Tonight with our Investing Cup members in the audience, thank you, everybody. I thought it might be a good opportunity to explain my thinking. The bull case for SpaceX was on full display when the cup reported third quarter earnings just over two weeks ago. It's tough to remember now, though it's happened. It's been incredible how hard it's been. But this report was, at least initially, a huge positive catalyst for SpaceX shares, which jumped nearly 8 % the next day.

15:25It's easy to see why. SpaceX's revenue surged to$14.6 billion. That's up 161 % year-over-year and nearly$2 billion above expectations. The company's revenue growth has accelerated from 15 % in the first quarter to 92 % in the second quarter to 161 % in the third quarter. Earnings have exploded, too. SpaceX's adjusted earnings for interest, taxes, depreciation, and amortization, or EBITDA, was up 306 % year-over-year to$8.8 billion. The stream was just expecting$6.4 billion. And SpaceX reported a GAAP profit for the first time as a public company, earning$0.35 per share, nearly triple a consensus estimate of$0.13.

16:08That GAAP profit is important because sustained GAAP profitability is a requirement for admission to the S &P 500 index. We know how good that is for a company. As if those third quarter numbers weren't enough, the company offered very bullish guidance. SpaceX expects to exit this year with$100 billion in annual recurring revenue, and it guided for$33 to$37 billion of revenue in the first quarter of next year. Now, that was well above Wall Street's estimate of just over$22 billion at the time of the report. Each of SpaceX's three segments, space, connectivity, and then the newly renamed super intelligence, which is the AI business, outperform with better than expected results for both sales and adjusted EBITDA.

16:51Now, the space segment, which houses SpaceX's original launch for higher business, is it's a small segment now. So revenue jumped 84 percent just from the second quarter. And it reported a surprise EBITDA profit in the period. But the success of the space segment hinges on the development of SpaceX's Starship program. Those are its massive new rockets that can haul substantially more cargo to space. SpaceX's 15th test flight is scheduled for next week, and they will attempt to catch both the booster and the ship after that launch. That's a key functionality. That will enable much more frequent Starship launches in the future.

17:28Now, in the earnings call, CEO Elon Musk said that he expects, I'm going to quote it, Starship to fly weekly at some point in the first half of next year, end quote. And then twice weekly or more by the end of next year. That would be something. Next, the Starlink satellite internet segment grew really nicely. Revenue was up 69 % year over year, and EBITDA was up 82%. In the third quarter, that's amazing. Both easily beat expectations, and SpaceX reported lots of success with Enterprise customers in the quarter. though I should note that a small miss for individual Starlink subscribers was basically the only blemish for the SpaceX quarter.

18:04Wall Street wanted 14.23 million subscribers. We got 13.6 million. But the more significant recent news for Starlink has been a series of headlines over the past month, which show SpaceX plans to move aggressively into the wireless market, our wireless market. The company announced the acquisition of a Spectrum lease portfolio for$8 billion in October, and there have been reports that it might lease cell towers from Crown Castle. or even acquire the low-cost carrier Boost Mobile, which is owned by Echostar. The point is that SpaceX clearly wants Starlink to be competitive. It wants it to be the fourth national wireless carrier.

18:39It wants it to be more than just a satellite internet provider for rural areas. And if they are successful in these efforts, then the total addressable market for Starlink should be much larger than it currently thought to be. Finally, let's talk about superintelligence. If there's one thing that I want you to take away from this SpaceX update tonight, Right. It's now it's that the company right now, primarily a hyperscaler. SpaceX main business at this point is renting out computing power. That's what that's what it makes its money on. When I covered SpaceX's IPO this summer, the AI segment was only 17 percent of revenue based on the first quarter numbers.

19:12By the second quarter, it was 33 percent. And in the third quarter, the AI business was 52 percent of revenue and 56 percent of EBITDA. At$7.6 billion, the AI segment's revenue was up over 800 % year-over-year, nearly 200 % just sequentially. This comes as the company's deals to rent computing power to Google and Anthropic, which were announced in the weeks before the June IPO, have now finally kicked in. Google is paying$920 million per month for access to SpaceX's NVIDIA GPUs. Anthropic originally agreed to pay$1.25 billion per month to rent SpaceX compute last spring. But in its recent IPO's prospectus, we learned that that number is rising.

19:54It's going to reach$3.1 billion per month by December. With this massive deal, Anthropic passed the U.S. government as SpaceX's largest customer in the third quarter. Incredible. SpaceX is able to deliver on these gigantically lucrative contracts because it's quickly growing its compute power. The company's nameplate compute, meaning the amount of computing power they own and operate, has gone from 1.0 gigawatts at the end of March to 1.4 gigawatts by the end of June to 1.7 gigawatts by the end of September. But here's what's really exciting. Elon Musk said on the company's earnings call that this number should grow substantially over the next five quarters.

20:36He said they're bringing roughly 200 ,000 NVIDIA GB300 racks online per month as we end 2026. Those are expensive. And pace should continue in 2027. All told, Musk said he expects SpaceX to have 3 gigawatts of compute online by the end of the year. And he expects to reach 13 gigawatts by the end of next year. That's a huge amount of gigawatts. I hope he can pull it off. Now, we've seen how quickly SpaceX's AI segment revenue has ramped. with even the more modest compute additions over the past few quarters. Sebo, Brett Johnson said, quote, there are many customers asking for compute and that, quote, what we're seeing in the market is extraordinary, unquote, with spot pricing tracking above the high end of the 30 to 50 per watt range that SpaceX completely told investors.

21:24Johnson said that at average current pricing, new compute deployments are generating a payback period of less than a year. Musk said later in the call, quote, it's not impossible that we will have a six month payback period for compute next year. If that that is just amazing, it's extraordinary. And if SpaceX can add compute at the rate that it says it can, then maybe Elon Musk's assertion that SpaceX should exit 2027 with between 500 billion and one trillion dollars of annual recurring revenue from 100 billion at the end of 2026. It's not as crazy as it sounds. That brings me to the last point for the SpaceX bull case, which is that if you believe the estimates in this stock is actually very cheap, trading it over 16 times the consensus 2028 EPS estimate of$8 and change.

22:11But bottom line, there's an incredibly compelling bull case for SpaceX. And you can see why I've been itching to own this stock for the trust. But with so much going for it, why haven't I taken the plunge? Why haven't I bought the stock yet? After the break, I'll explain what's keeping me on the sidelines. Bit Money's back after the break. Coming up, Kramer's putting SpaceX under the microscope to see why not to buy the stock yet. Next.

22:47Who's ready for a bike ride? Peppa Pig is learning to ride her bike. First, pop on her helmet. Safety first. Then attach the push stick and give her bike a push. And watch Peppa paddle. Her legs go round and round as the wheels turn. With more than 75 sounds and phrases, every ride is a big adventure. Peppa Pig Ready Paddle Go. Available at all major retailers now. Host Thanksgiving with industry-leading quality standards from Whole Foods Market. There are no antibiotics in their meat department ever, so carve up turkey and spiral cut ham with peace of mind. Shop organic sides like stuffing mix and cranberry sauce from 365 brand.

23:33And guess what? All their delectable pies are made with no high fructose corn syrup. Gourmet Thanksgiving flavors with the quality you want. Only at Whole Foods Market. With the Discover Cashback Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5 % cash back at different categories each quarter on up to$1 ,500 in purchases. That's 5 % cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to Discover. Terms apply. See discover.com slash 5 for details.

24:21Before the break, I told you about all the positive aspects of the SpaceX story, which do practically have me salivating. It's in a buy-the-one for the travel trust, hold it for the foreseeable future. But I haven't bought it yet. So let's get into why I've held off. First, there's the issue of cost. Almost immediately after SpaceX's last report, investors began to balk at the potential cost of SpaceX's growth plans, Just as we've seen with other hyperscalers like Meta, Alphabet, Amazon in recent weeks. I told you that SpaceX's revenue guidance was far higher than expected. You know what I didn't tell you?

24:57I didn't tell you that the company also guided for$35 to$40 billion in CapEx in the fourth quarter. Nearly doubly expected$20.1 billion. Looking out further, let's take Musk at his word that SpaceX will add 10 gigawatts of compute next year. Well, Jensen Wong says the cost of a gigawatt all in is about$50 billion these days. So you can do the math of this. And that doesn't even include what the company needs to spend for its space and connectivity segments, which are not exactly capital-like businesses. And then we get to SpaceX reported the company entered into a$40 billion debt financing deal with private equity from Apollo.

25:36The proceeds will be used to buy NVIDIA GPUs. And let's just say that the company will need to do several more of those deals or it will need to sell additional shares. And that's a concern for us. Second, there is the potential of a mega merger between SpaceX and Tesla. Now, I talked about the stunning third quarter results from SpaceX before the break, but those numbers were almost a side plot after the company's report. The big story from the third quarter earnings call was that Musk announced both companies had formed special committees to discuss the idea of a merger. Now, I've long thought that that merger would happen here, but a merger between the$1.8 trillion SpaceX and the$1.4 trillion Tesla, almost certainly, by the way, in an all-stock deal, would still be extremely complicated and introduce a lot of noise to the story that I'm not sure I want to ride out.

26:24These deal stocks have not been working. Also, a deal for Tesla would likely undercut the valuation argument I already made for SpaceX. While the latter trades for more than 16 times 2028 earnings per share, Tesla trades for around 125 times its 2028 estimate.

26:43Next is what I'm going to call political risk. OK, in the week before SpaceX's earnings report, the biggest story for the company involved questions about whether it was Musk or President Trump that ordered the slowdown of the company's Starshield service, basically Starlink for governments and militaries in Ukraine. Full service has been restored, but the episode highlights how hot button this business can be. And of course, that was before this week's election results. Now we have to worry about what the blue wave in Congress and Texas means for SpaceX. Who knows where this goes from here? Will must be dragged before Congress?

27:18Will that impact the stock? Can the company move forward with its aggressive growth plans for both data centers and launch sites in Texas now? All open questions. You know what, though? with all the positives that I mentioned before the break and the scale of the opportunity here, I can honestly get over a lot of the things I've just mentioned. But the real reason that I've held off buying SpaceX to date is the fact that there is still so much supply of SpaceX shares that haven't even begun to trade yet. I think that supply short term could overwhelm demand. I've talked about this from time to time that I started covering SpaceX last spring.

27:54One of the reasons I thought you could be patient with the stock was the fact that SpaceX's float, or the percent of company's shares that trade freely, was less than 5 % of the IPO. The company had a complex, staggered lockup release schedule and we've now passed several points where more shares could begin to trade. I don't know if the stock's ready for that, but by my math, only about a third of the company's shares outstanding are free to trade currently. A lot more behind it. The rest of the shares will become free to trade gradually over the next eight months or so. The final lockup release from Musk and some other core insiders comes after the company's second quarter 2027 range report, which would likely be in July of 2027.

28:33And with each additional release, that means more supply of SpaceX shares against the same amount of demand for the stock. At the end of the day, I simply think that I'll be able to get a better price for SpaceX as all that supply hits the market. And you know I like to get the best price. So that's why I've kept the bat on my shoulder so far when it comes to buying SpaceX. And I'll note that's been the right call. After a nice bounce today, admittedly, the stock is still down less than a dollar from its IPO price, but it's also down almost 30 percent from its first day close of$161. If I bought the stock after its post third quarter rally on October 21st, I'd be down almost 16 percent in just two and a half weeks.

29:12Now, you could say, if I am thinking of this as a 10, 20, or 30-year holding, who the heck cares if I buy it at$150 versus$130 versus$100? And I am sympathetic to that argument. I really am. But I also know that if I bought it for the trust at$159 at that last quarter, and I have to come out here today and explain to club members why I just gave them a quick 16 % loss, and with so much supply still to come, I don't know. I just want to put people in front of— I'm not putting people in front of a freight train. Put it that way. But you know what we can do in the interim? We can follow SpaceX's progress.

29:50We've made this tracker, which we plan to refer back to often. It lists either specific guidance that's been given by Musk directly or just expectations for the company that are currently embedded in the stock. As I wait for a good opportunity to get into SpaceX—and I'm waiting— I can check this regularly to make sure the story remains as good as it seems right now, as club members can do. For the space segment that starts next week, with a successful Starship 15 test flight, I'm really eager to see if the company can meet the goal of weekly flights in the first half of next year and then twice weekly flights in late 2027.

30:23For the connectivity segment, the Starlink business, Musk hasn't made as many specific promises. But given the missed last quarter, I want to be sure that Starlink subscribers are trending as expected. it. I'd also like to see these rumors of a big push into wireless translate into an actual service that people want to use. For the AI business, it's simple. Can they get to 3 gigawatts by the end of the year? Can they really add another 10 next year? And overall, this must ambitious goal of$500 billion to$1 trillion of annual recurring revenue? Legitimate? These are the things that I'll be watching as I wait for the right time to buy the stock.

30:58I'll do my best to update you regularly on the company's progress against these goals and targets. But the bottom line overall is that as good as the SpaceX story seems to be, I'm not ready yet to take the plunge and buy the stock. The company's projected costs are astronomical. A merger with Tesla could complicate the story, and the political risks increased significantly this week. Most of all, we're going to see a steady supply of new shares over the next several months at a time when there's so much supply of stock and bonds already. So I'll watch, I'll wait, and I'll monitor the company's progress.

31:32And if and when I'm ready to buy SpaceX, well, guess what? You'll be the first to know. Bye, bye, bye. Man Money's back after the break. Coming up, was Papa John's able to deliver a strong quarter? Kramer's sitting down with the CEO next.

32:02Yesterday before the bell, Papa John's, the pizza chain known for better ingredients, better pizza, reporting is a, you have to call it, tough third quarter. Sales fell short of expectations, while earnings came in at 16 cents a share. Now, that was right in line with estimates, but down 32 cents a year ago. And with North American same-store sales down more than 8%, Papa John's cut its full-year profit outlook. Stocks slipped half a percent yesterday and fell another 0.8 % today. Just over two years ago, Todd Penninger's tenure as CEO, So, well, the question is, what will it take to win back the families who used to make Papa John's their Friday night order?

32:34So let's check in with Todd Penninger, who is president and CEO of Papa John's. Mr. Penninger, welcome back to Bad Money. Thanks for having us on, Jim. Good to see you again. Good to see you again, Todd. Now, I've got in front of me an Unbox Better. Earn the right to be chosen again and again. Why do I want to be chosen by Papa John's? it really is our commitment to uh strengthen the brand and uh and strengthen our system and when you think about what we've been founded on better ingredients better pizza really a full circle moment for us not only to accentuate what makes us great all these years six simple ingredients fresh never frozen dough fresh vegetables real cheese but build upon that and really make sure that we elevate and continue to become even better as we move forward we know we got opportunities to amp up the flavoring of our cheese, make it a little more meltable and creamy.

33:24We've got opportunities to handle our dough even better in our restaurants. We know we can drive heat retention. This is really that commitment to come full circle, to get ready to go back and really fight and make better famous again and make better known from Papa John's. Well, I'm going to push back a little on that because I like Papa John's and I've always liked Papa John's. I didn't know Papa John's wasn't as good as it could be. I knew that Domino's wasn't when Pat Doyle came in. But what makes you think that a really good pizza is going to be able to get more people than a really good pizza that you had before?

34:01Well, what folks have told us is we're not delivering on our promise consistently enough. And our commitment is to really get back into our restaurants, recommit to retraining, recommit to reengaging with our employee base so we can deliver on our promise time and again. We've been a little too inconsistent, Jim. And we know that folks say, I love that Papa John's. We know what the answer is. I'll never go to that other one. So the opportunity is to get our team set up for success, drive up simplification, leverage technology. We're putting a new POS into our restaurants that will allow less consumer non-facing tasks to be done by our teams and really get them focused on being the best pizza makers in the business.

34:38And that work is rolling out through the course of 2026 and into 2027. Well, Todd, let me ask you what happened to this category. I mean, the category was always there were a couple of companies, big companies like yours that have money and they could go up against the mom and pops and they could do better. That was a Domino's thesis, too. And then one by one, I mean, the category became very difficult. Pizza Hut, they kind of gave away Pizza Hut, I felt, at Yum. Domino's numbers, just OK. This is a very good food that doesn't cost a lot. What happened to the category? Yeah, I mean, pizza is still great value for the money.

35:18And no matter what the trend is, folks continue to be fans of the pizza category. It's become a lot more competitive, Jim. You know, the competitive landscape's been such where there's been a lot of deep discounting. You know, folks have originally been able to get pizzas just on delivery and didn't have a lot of other food forms that could be delivered. Now you can get anything delivered through DoorDash or Uber Eats. So the competitive landscape has changed. So that's why we got to break out of that sea of sameness and really earn the right to have folks come to us time and again when they got so many choices that can be delivered.

35:50So they want high quality. They want value for the money. They want it made it right. They want it made it hot and they want it delivered quickly to them. And we got to recommit to delivering on that promise to stand out from the competitive. I totally agree with that, but it costs money to be great, doesn't it? well the good news is we start with a great spot we've got all the money baked into uh you know the foundation of our better ingredients better pizza we'll take some commitment to go in and retrain in our restaurants but what we've done is rolled back our commissary margin it was ready to increase to eight percent margin in 2027 we've rolled that back to four percent to really create 100 basis points of support for our system on four wall margin to be able to go out and compete We also got caught up on technology.

36:36So we have the opportunity to roll our tech feedback from 1.75 to 1.5. So another 25 basis point of support. So we're really creating the fuel to fight for our franchise system. And one of the big things we've done is taken our national ad fund down from 6 % to 5%, and we're reinstituting our co-ops and reinstituting our local spend at a 2 % level so we can go play this game nationally as a great piece of chain, but really win it locally and connect to the communities that we serve. That's the way the brand was created. That's the way it was up through 2023. It changed. We're going back to where we were in the past.

37:12And the places that you're doing it aggressively, are they working? Are you getting a turn in the places that you're putting through your Unbox Better? Yeah, so Unbox Better is just rolling out. We've been doing a lot of training. We've been doing a lot of work on the technology front. But where we've actually reestablished our co-ops, we're seeing a couple hundred basis points of margin and sales outperformance from the markets that don't have the co-ops. But importantly, what we do is if you look at our top quintile performers, those folks that are delivering on the promise versus our bottom quintile performers.

37:47There's a 400 paces point delta on sales performance and profit performance. So we know if we deliver on the promise and deliver great pizza, the consumer will come back to us time and again. Oh, that's terrific. Now, I do want to ask you, you've got this UK division that's doing incredibly well. Have they instituted some of the things you're talking about? Or is it just frankly that it's always worked there and it will continue to work? No, they did all this heavy lifting over the course of the last two and a half years, Jim. They renovated the food. They refocused on operational excellence. They put more marketing into the market.

38:23They've simplified and shrank the number of franchisees that we've had in that market. And we were plus 7 % last quarter and plus 16 on a two-year and have a ton of momentum in that market right now. So the recipe and the turnaround that happened in the UK over the last two and a half years is a big part of the recipe for success that we can replicate here in the U.S. I think that's a great idea. I mean, the U.K. is very, very strong. Your stock is not expensive. The category hasn't been destroyed. It's still a very value-oriented category. So, Todd, I think you're doing a lot of things right.

38:56This could be it. It's great that you came back on Mad Money. Thanks, Jim. Really appreciate the time. Absolutely. That's Todd Penninger. He's the CEO of Papa John's. Stock's down, but I like that plan. They did it in the U.K. It's working well. Ed Money's back after the break. Coming up, you've got questions. Kramer's got the answers. Get charged up for a fast-fire lightning round next.

39:27It is time. It's time for a very special investing club edition of the lightning round. That's where I take the quote. I'm going to say, bye-bye. So, so, just good. On the course, I'm watching that. It's done. My staff prepares to prepare for some of the pie. We plan to hear the sound. And then the lightning round is over. Are you ready, Ski Dice? Another lightning round. Let's start with Adrian from Pennsylvania. Adrian! Booyah, Jim. Uncle Jimmy. Thank you. So tell me, how does Okta stand up compared to CrowdStrike and Palo Alto? Well, I've got to tell you, that's a very tough mission for me because I happen to think that Todd McKinnon does a terrific job.

40:00And certainly the people who run CrowdStrike and Palo Alto. Let's put them all three together. It's your choice. Now we're going to go to Todd in Louisiana. Todd. Booyah, Jim. Booyah. I've noticed people are wearing more Vans these days. So what's your opinion of VF Corp? It's good. I think this thought goes hard. I saw a recommendation at 24 goes to 28. I'm in order to be able to just go. I think it can be up six, seven points. Back in Dallas doing a terrific job. You've got a good one in VF Corp. Now we're going to go to Lisa from Kansas. Lisa. Hi, Tiffany. I am calling about Trinity Capital.

40:38And guess what? I'm here live. I'm not calling you. No, that's true. That's kind of a little flip of the switch there. All right. Now, this one's a hard one. How did you choose Trinity Capital? Well, it's my husband, so I've got to be. You know, when I see, first of all, when I see a yield of 11 and a half, I get nervous. Second, I don't know what they own, so I can't opine on it. I'm going to have to say take a pass. I'm sorry, but you are here live. All right. That is definitely. Oh, I am live. There you go. You're live. You're live. All right. Let's go to George from Texas. George. Jim, it's an honor.

41:11Same. Jim, Tina Turner had a wonderful song once, and the lyrics apply to you. You're simply the best. Better than all the rest. Well, so I'm better than all the rest? Wall Street has its legends. Big wheels keep turning with me, Chief. Wall Street has its legends. You're clearly one of them. It's an honor to be with you. You're kind. Thank you very much. Jim, give us your shot on JPMorgan Chase. What can I say? I think, look, it's just a great fact. Jamie Dimon is terrific. I love it. And I think if you wanted to own it right now, I think you'd make a lot of money. Fair enough? Thank you for those kind comments.

41:46Yes, sir. All right, let's go to James from Illinois. James! Jimmy Kramer, booyah. Thank you for all you do. You're going back. You're putting my name in the way that everyone calls me at home. Thank you so much. You are very welcome, sir. Nice to meet you. Nice to meet you. Jimmy, is this a good time to buy AMP Ameriprise Financial? You know, there's actually been no real bad time, though, in that stock. I've watched it go up and up and up, and I've always said to myself, when is it going to come down? We've got the opportunity. It's down for the year. I like your call. Let's do some buy. Now we're going to go to David from Florida.

42:17David! United States Navy, booyah! Oh, man, thank you very much, booyah. Thank you. Jimbo, you always say how to make money in any market, always take profit off the table. Tell me about Cardinal Health. Oh, my God, Jason Holler delivered. I mean, I know. The stock plummeted 60 points if you buy it. We bought it all the way down for the club, and then, boom, two good quarters in a row. We had to trim a little because it's so big. But you know what? I think he's going to tell a great story at the J.P. Morgan January Hightower Conference. Got to keep most of it. Cardinal else a winner. You got it, brother.

42:48Thank you, and thank you for your service. Let's go to Mark from North Carolina. Mark. Booyah, Jim. Booyah. Professor Jim, such an honor to be here. Oh, man, you're giving me tenure. I'll take it. Yeah, six months ago, quantum stocks, quantum computing stocks, were really skying high. They've come down. Is it time to dip back into B-Way? No, in this uncertain environment, we've got a bank on companies that have really, really good earnings. We're not going to go down that food chain. It's just too dangerous right now. But I appreciate that. I appreciate the insight, but it's not going to work for me.

43:21Narayan from Dubai. Narayan! Hey, Jim, thank you for having me here. Thank you for being here. My favorite sentence all the time is discipline, terms, conviction. I learned that from you. You bet it does every time. Anyway, what's the deal with Netflix? I mean, after the field acquisition. Look, it's a great question, but I think after the Warner Brothers discovery bid, people said maybe they're out of ideas, and then the last few quarters have just been ho-hum. I don't like ho-hum. I'm not a buyer. Thank you, though. Let's go to Mark from Ohio. Mark. Jim, awesome to be here and love your wife's tequila.

43:53Thank you. Awesome, awesome. TJX on the downswing. Ross Storrs, unbelievable. What about Burlington? Okay, Burlington's in the middle, and we don't know. Look, we're still sticking with the TJX for the club. We've got to wait one more quarter. Ross is the best in the street right now. I hate not earning the best. I hate it. But we've made our bed with TJX for a very long time. I think they can turn it for the quarter. But if not, see you later. Let's go to Thomas from Pennsylvania. Thomas. Hi, Jim. Good to meet you. Same. Really respect your work and your energy level. Thank you. You're awesome.

44:24Big fan. With the higher oil prices, what do you think of the stock of Chevron? Chevron's the number one oil company in the world. That's the one to buy. It's got the best buyback, got the best dividends, got the best CEO of Mike Worth. Good call. Let's go. Oh, no. And that, ladies and gentlemen, is the conclusion of the Lionel.

44:50We had an amazing annual meeting for CNBC Investing Club today. where Jeff Marks and I went over the portfolio of the Travel Trust, answered audience questions, and discussed what needs to happen to get this market back to its previous highs. I wasn't very encouraging. We are in a difficult moment where we still have so much money in the data center trade, investing in both company stocks and bonds, that too much has to go right from here to make the trade pay off. I know that Elon Musk is saying that the unpopularity of data centers is a fleeting problem. That would be incredible. And if he's right, you should be buying the stock of NVIDIA hand over fist.

45:29But I think that Musk hasn't been all that strong on reading the tea leaves lately with either the electorate or politicians. I told club members that the elected officials don't seem to be in a bargaining mood. I think it's going to be a slog to get new data center sites cited and that we won't be building as many of these as we thought. Bad for business. I spent a lot of time in today's meeting talking about the other impacts of the election, The ones that could be two years away if the GOP loses the White House. I worry that the Democrats will raise the corporate and capital gains taxes. In 2017, during President Trump's first term, the corporate tax rate was lower from 35 percent to 21 percent.

46:06But if that blew away on Tuesday, I think it's feasible to believe that the old rate could be reinstituted. Not now, but if a Democrat wins in 2028, that would be a 67 percent increase in the corporate tax rate. It would reduce after tax profits by 18 percent. So what does that what happens then? it will cut into the future price-to-earnings multiple for the entire market. Don't forget all the new regulations that could come back. The hobbling of oil and gas companies. A Senate Banking Committee chaired by Elizabeth Warren. That won't be good for banks. The long-term capital gains tax rate could go up to the ordinary income level.

46:38All negative for stocks. Those are out a couple years. The problem with the data centers is front and center now. We have to think that some new projects that were perceived as a given might no longer happen. That means something that people don't want to hear that you don't want to hear. Price target and estimate cuts for semiconductor stocks that haven't yet happened. Here's what I really worry about. So far, the analysts have been very good at defending all the stocks all week. But I think next week we could get some analysts who break ranks and start the knockdown. While many have come down substantially from their highs, the stocks aren't anywhere in your support.

47:18So I don't know how they can bounce. I regard the group as vulnerable. To me, it's reckless not to cut back on these stocks and diversify into other growth areas, medtech, fintech. I don't care. Just some stocks of companies provide need and service and do well. Nothing wrong with keeping some of the hyperscalers. But the accoutrements, I just can't see how they can snap back as if the election never happened. It did. I wish I could be more positive. You know that. But as I told members today, I don't think we're yet out of the woods. I like to say there's always a bull market somewhere, and I promise you I'll find it just for you right here on Mad Money.

47:58I'm Jim Cramer. I'll see you Monday.

48:08All 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 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 and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.

48:35To view the full Mad Money Disclaimer, please visit cnbc.com forward slash madmoneydisclaimer. When you partner with CDW, you get more from your devices with solutions that take modern work to the next level. CDW experts are delivering powerful productivity with Lenovo AI PCs, helping users block out distractions, access virtual support anytime, anywhere, and share content seamlessly between devices. Make amazing happen. Learn more at cdw.com slash Lenovo. you