Mad Money w/ Jim Cramer 9/14/26

0:00If 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. Listeners 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.

0:56Or find Schwab Market Update wherever you get your podcasts. My mission is simple. To make you money. I'm here to level the playing field for all investors. There's always a low market somewhere. And I promise to help you find it. Mad Money starts now.

1:18Hey, I'm Kramer. Welcome to a special San Francisco edition of Mad Money. Welcome to Kramerica. I've been with your friends. I'm just trying to make a little bit of money. My job is not just to entertain, but also to teach you. So call me at 1-800-743-CNBC. Tweet me at Jim Kramer. At one point this morning, it looked like we were just going to crash.

1:38Oil had skyrocketed 4 % because of the Savior Saudi pipeline. The one that helped offset the losses from the closure of the Strait of Moose got shut down by a drone attack. There were no substantive talks to stop the war. Interest rates were shooting higher. They healed and the tender nearing 5%. Iran's allies in Yemen seemed poised to shut down the Red Sea. Most important, the biggest theme of our era, artificial intelligence, looked like it was going to be on the ropes because of a self-induced slowdown that could snap shut the biggest spigot of cash in history. Nothing was going right. But as is so often the case with this market, things changed.

2:12Oil somehow reversed hard. It had to be up 4 % and close up 5.5%. The 10-year Treasury hits 5%, and then something happened that's missing the whole time interest rates have been on rampage. Buyers, actual buyers came in and decided that 5 % was good yield for 10 years. That's right. Not everyone hates bonds at any price. And as we got our arms around the forced AI slowdown that the big guns, OpenAI and Anthropic, talked about now seemed to favor, we decided, hey, maybe it wasn't the end of the AI world. In fact, we left this session convinced that not much in the data center would actually change.

2:43Hence why stocks rallied nicely off the lows. Dow finishing off just 152 points. S &P only declined 0.48%. NASDAQ only down 0.56%. These were remarkable comebacks from these lows. I mean, it was. House of pleasure. I don't blame anyone for being confused. First, it's the greatest, AI is the greatest thing in the world, right? I mean, the thing that Dario Amadei, the exciting CEO of Anthropics has been saying, it could cure cancer and so many other diseases, made me feel great. Everybody was pitching as the next industrial revolution. Now, though, we're hearing all the Skynet jokes about how AI could kill us all.

3:16They weren't really jokes. They're genuinely worried inside these places about the possibility of total human annihilation. Kind of a schizophrenic beast when you think about it, huh? So, which is it going to be? How about both? I don't know about you, but when I read through the Amadei epistle urging the great AI slowdown, I began to wonder whether there could be something else at work here. Most important, I wanted to know whether there was a slowdown that he urged. It's kind of like, to me, like when you go to those Formula One races and they wave the yellow flag, meaning you can't overtake.

3:44Doesn't that mean Anthropic has to win because it's making so much money and it can't be overtaken? Hmm. I like anyone who's thoughtful about the wholesale murder of innocence by a swarm of angry AI agents. But I am a little jaundiced that if the majors are advocating a slowdown that could lock them into a position where they can put down$10 billion and make$30 billion per gigawatt, which might be possible for Anthropoc to open AI, well, they got the goods. That would put them well past all these hyperscalers we talk about all the time when we try to calculate profitability. Although I don't believe these AI risks are all a hoax, as President Trump assures us, I'm naturally skeptical when these leading AI labs are pushing policies that could make them a heck of a lot more profitable and leave everyone else behind.

4:25Now, there were real casualties today. Any company that actually makes your designs or constructs part of a data center got blown out. In an attack that lasted most of the session, MarketFloor was littered with the stocks of companies that make fiber for the innards of these warehouses full of servers. But there were also some spectacular advances led by cybersecurity stocks like Palo Alto Networks. Yes, and like CrowdStrike. Who's CEO? Be with us in a minute. They led us for a simple reason. When the heads of Anthropoc and OpenAI are warning about AI risk, every other company knows that they need better cybersecurity.

5:00I don't know how you can get insurance without hiring one of those two companies. I'm skeptical that AI agents will be able to wipe out the human race. Skeptical. But lots of business owners could certainly have their data held hostage by smart but rogue agents. Will we get an actual slowdown of AI expansion? We need to hear from Broadcom CEO Hawk Tan on later tonight. He's going to tell us. Are any of the slapdown stocks worth buying? I would love to tell you yes. But then tomorrow, oil could be back up, rates might fly higher, and we'll be on the verge of a Fed meeting where Fed Chief Warsh might raise rates, much to the chagrin of the president who appointed him to cut rates.

5:33and maybe we'll hear about some new AI hack that makes the hug and face incident look like child's play. Bottom line, we wait. We see if the existential threat is off the table and we remain grateful that despite a hideous setup this morning, the market didn't actually crash. In fact, it was barely down at all. Let's take calls. Let's go to Sonny in Massachusetts. Sonny. Hey, Jim, I just want to thank you, Regina, Jeff, and the entire crew for everything that you do in making me a better investor to the club. I have two questions for you. Thank you. OK, my first question is, when are you going to make some Kramer pasta sauce with all the vegetables that you make?

6:09And two, what are your thoughts on Tesla? Well, I made 120 jars this year, so that's spoken for. I'm sorry. Tesla, I wish I could make that do as well as the as the as the sauce. It's at three fifty eight. I don't know. I mean, I think that it got some approval in China. I thought it was going to bounce today. Right now. My only solution to it is, is that SpaceX has to buy it. Period. End of story. But maybe they will. I'm Mad Money tonight. I'm kicking off a big request with some of the most important voices in Silicon Valley. Broadcom's AI, their business is booming, but the stock isn't. I'm going straight to the source to get some answers from where we stand.

6:44Then, could self-driving cars be friend or foe to a company like Lyft? I'm sitting down with the CEO to get an update on the business. Plus, this weekend's Anthropics CEO issued a stark warning about the speed of AI development, as I've said. So I'm checking in with CrowdStrike's CEO. Find out if we have the capacity to defend against rogue AI agents. 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.

7:32We're an agent supposed to take things off your plate. Building another to handle the others is a bit much. Don't make more work out of work. Gemini is the one agent that knows all parts of your business and actually gets stuff done. You give it a project, close your laptop, and when you come back, the job's finished. No matter your industry or role, your agent has the skills to help every team stay in their flow. Seriously, make work less work with Gemini on Google Cloud. Check response, subscription required. Corpay was built on a simple idea. Give businesses more control over spending. Because managing spend today means managing a lot.

8:08Employee expenses, vendor payments, international payments. From fuel, tolls, lodging and travel to accounts payable and global payments. Corpay delivers solutions designed to simplify complexity. Corpay, control more of what your business spends. Visit Corpay.com to learn how better visibility can bring more clarity to every payment.

8:54schwab.com slash market update podcast or find Schwab Market Update wherever you get your podcasts.

9:08Well, it's a tough time to come out to San Francisco, a day when the whole AI complex is getting hammered because anthropic and open AI seem to be, I don't know, called pulling in their horns. Actually, I think there's some real bargains in this group. Take Broadcom, the maker of chips, network equipment, and tech infrastructure and software, with a stock that's down more than 10 % over the past month. At the beginning of this month, Broadcom reported a strong set of results. It showed a spectacular molding year forecast. But their guidance for the current quarter was, I don't know, viewed by some as in line.

9:35The stock got slammed. I think Broadcom's still on track to put up some incredible growth because they're at the heart of the AI ecosystem. Because the company's never let us down in all the years my charitable trust has owned it. And down here, roughly 150 points below its June high, stock may be too cheap to ignore. Don't take it from me. Let's check in with the legendary Hawk Tan, president and CEO of Broadcom to learn more. Mr. Tan, welcome back to VanBuddy. Good to be here, Jim. All right, so Hawk, you ate out a forecast that was so fantastic,$350 billion the next two years, and you sounded very certain.

10:06Is there anything that's happened in this whole debate about the AI slowdown that would give you pause to that prediction? No, not in the least. We see the demand for compute infrastructure for AI development or AI frontier models and inference for the products that they feed to the world as continuing to be very strong and I believe very durable. Okay. Now, you are also an expert in finance, and you've been able to get some really great companies to work with you to create a source of finance. Do you need, say, OpenAI or do you need Anthropoc to do an IPO soon? I know OpenAI is saying they're going to put it off.

10:53In order to have some perfect surety, because I know I'd be worried if they don't do an IPO or they have a hard time doing it, that I might not get paid. that's a fair question and we have six customers only six but they are all creating frontier models illms as we know it because my my view is the real value to be created out this phenomenon of generative ai and the compute that goes with it comes from the market the companies enterprises who are creating their own frontier models. Of the six, two, OpenAI and Tropic are ones that are what I consider cash flow poor, but they are valuation rich because they have great technology.

11:45And we are creating very good products for these guys to enable them to continue to improve their frontier model development. So what we've done, given their performance, and they have shown they have been very successful so far, particularly Entroping, even OpenAI. We are creating a platform by bringing in strong financial partners. Not your traditional finance partners, but partners who are willing to look at these companies and in a way like the credit and the potential these guys have, and are willing to extend them credit. We're just enabling them, creating a platform. And companies like Apollo, Blackstone, who loves this sort of opportunity, steps in because the rates are better than going to Treasury for sure.

12:37And they create some confidence. Even if, say, OpenAI goes out and says, listen, we're not going to do an IPO, those two companies, which, by the way, I know and are very hard-nosed, they are willing to lend. Absolutely. They are. We're finding out that it's not difficult at all to find this kind of financial partners willing to come in and fund the infrastructure of these guys, even as the demand from these two guys is just huge over the next few years. Perfect. Now, let's talk about that last quarter. You I cared a lot and we said it to club members. Look, what he's saying, Hocktan is saying 27 and 28 are going to be amazing.

13:21He's always been money good on his projections. If that's the case, I think you could earn as much as$20 a share in 2028. I know you said in your Unicopa talk, we will make judgments over allocations and what to do with capital in December. But if you know that you're going to do that, tell people why it isn't a good idea to be really big right now and buy. Well, the way we have been conservative in judging the number for 28, we're putting out there that just on AI revenue alone, which is the custom AI accelerators we are providing for six customers, the networking that goes hand in hand. This time, we are a chip company.

14:02We sell those chips that goes into their infrastructure. We believe we will get$230 billion alone for those products in 2018. That plus our existing non-AI business in software, semiconductors, I indicated will exceed$30 a share in 2018. Wow. Not 20,$30 a share. So if that's the case, I mean, I'd be buying, you know, I wouldn't wait till December. I'd be buying a huge amount of stock in the open market. That's exactly my view, what it is. But we will earn our way into our valuation, Jim. OK, because I think sometimes people don't look at the numbers. They just make judgments. The judgment should be based on the numbers.

14:48There's something you taught me in many years that I've read your conference calls. Now, you were pretty tough in saying that NVIDIA's product, which we know NVIDIA is a great company, Yes, it is. Your jalapeno chip you think is very competitive versus Grace Blackwell when it comes to inference. Can you tell people a bold supposition knowing everyone feels that NVIDIA is untouchable? No. Here's the interesting part of the whole thing. Technology. if you were co-designed silicon, XPU, we call it, or custom accelerator, the layout of the transistor, you co-design the chip with a frontier model developer.

15:33The algorithm guys, the data scientists who tells you the kind of workloads they need, architect it, and you create a chip that matches the kind of workloads they need. your chip will perform anytime much better than a general purpose GPU. That's the underlying premise behind it all. Excellent. Now, let's talk about what happened this weekend. We have Dario Amadei. He writes a thoughtful note. But at the same time, some could regard it as self-serving. If you get everybody to stop and you're in the lead, like a Formula One race, if you have the flag that says slow down, then you're going to win no matter what.

16:12Do you think there was some cogent points made or do you think the more is it cogent versus self-serving or both? Well, I'll address the cogent points. There are a couple of cogent points that are very real. One, very importantly, is. AI, generative AI, the creation of those frontier models, which is what generative AI is embodied in, will create huge value to us, to enterprises, to people, to consumers, because it makes us more intelligent, more productive. So there is a lot, it's like back to the Industrial Revolution. This is a phenomenon that is very analogous to having that we have access to intelligence to be able to do our daily tests and whether you're enterprise or consumer with that tool but it is a tool right we use that tool people use that tool and like all any tool yeah it's important to put governances safeguards on how we use the tool.

17:22But it is still, at the end of the day, a tool that will make our society, humanity, reach a better level of living. But still a tool. It's not a live animal that will run wild by itself. Not without us managing and controlling. So the government is important. We're all going to die by 2030? That doesn't seem to be in sync with that scenario you just laid out? No, it's a great tool. That's what it is. That's all it is. Well, look, I knew you'd make me... You're a rational person. Do you feel that some of the comments made in Dario's notes or these people who do these frontier, maybe they're a little too charged, a little too emotional?

18:09I don't know the reason, but I do know it's important. And it's important, though, and that I agree, Dario, on that we have safeguards put in place. And it's safeguards not just for the user, but safeguards for the companies like Broadcom and anyone else that chose us to deploy as we have in our infrastructure. But we don't need to slow down to do that. We don't need to slow down to do that. No. I think the way I see it is, look, I don't know about training, but when you want to productize inference, I see it continuing to be very, very strong. Let's leave it at that. That is Hock Tan, president and CEO of Broadcom, and the Child Trust has a position.

18:51Mad Money is back after the break. Hock, thank you so much. Thank you, Jim. Absolutely. Pleasure. Coming up with leading AI labs calling for a slowdown in the technology's development, Kramer's investigating how or if it could work with George Kurtz, next.

19:12Your financial life rarely fits between nine and five, and the questions shaping your future don't follow a schedule. That's why Citi created Citi Sky, a secure AI member of your Citi wealth team built with the Gemini platform on Google Cloud. Whether expanding your portfolio or planning your future, you'll be able to access tailored wealth guidance on your time. Start building with Gemini at cloud.google.com. slash AI. CitiWealth investment products and services are provided by Citigroup Global Markets, Inc., member FINRA and SIPC. Hey, Fidelity. How can I remember to invest every month? With the Fidelity app, you can choose a schedule and set up recurring investments in stocks and ETFs.

19:53Oh, that sounds easier than I thought. You got this. Yeah, I do. Now, where did I put my keys? You will find them where you left them. Investing involves risk, including risk of loss. Fidelity Brokerage Services, LLC. Member NYSE SIPC. You've never been one to settle, stand down, or stand still. You're a lifelong learner, energized by excellence. There's a fire inside you you can't ignore. You've got competition to outrun, momentum to build on, and your own high standards to meet. Stop now? Not a chance. At Capella University, we help you catch what you're chasing because you've always had the drive.

20:35Now, go earn the degree. Capella University, what can't you do? Visit capella.edu to learn more.

20:50Over the weekend, the co-founder and CEO of Anthropic published an essay where he pushed for a slowdown among the frontier AI labs in order to handle newfound security concerns. In response to that, the cybersecurity cohort just went crazy because there are companies that can prevent AI agents from randomly hacking into networks all over the world. It's the cybersecurity companies. Take CrowdStrike, which shot up nearly 14 % to lead the S &P 500, something I feel great about, of course, because we own it big for the travel trust. These guys have been adamant that AI represented a great opportunity for the business.

21:20And now Wall Street's finally gotten a memo. So let's dig deeper with George Kurtz, the founder and CEO of CrowdStrike Holdings. Get a better read on the situation. Mr. Kurtz, welcome back to Man Money. Jim, always great to be here. Oh, thanks, George. So first, let's get right to it. Can you slow down the pace of the frontier? Well, I think the pacing of the frontier is going to be up to the frontier. And if they want to voluntarily slow down, they want to put extra safety guardrails in, they want to update their testing. That's fantastic. What we have to remember, Jim, is the genie's out of the bottle.

21:58There's plenty of models that are already out there, both frontier as well as open weight models that can already be dangerous. So it's incumbent on the security industry to be able to help protect at least the models that are out there while the frontier models determine what pace they're actually going to evolve at. Now, I felt when you had your Falcon conference, you actually have prevention remedies. You actually can stop this stuff. How much time did Dario and Sam Altman take talking with you? You are the leader of the cybersecurity field. Well, they're both partners and customers of ours, Jim, and they were both at our Falcon event and we are working closely with them.

22:43And I think what's important to realize is there's there's two elements to this in beyond just CrowdStrike, but security in general. Right. There is what the frontier models are doing, which is basically training in guardrails. putting guardrails around what these models can do. That happens in the post-training phase. And essentially, it's training out all the bad behavior that could happen. Well, when a model gets released, things can deviate, and potentially you can work around the guardrails. So what the security industry is focused on is runtime security. And this is what we do, which is when these agents are running, the agents are nothing more than software.

23:17They're programs that run, and they call other programs. Unlike traditional software, they're not deterministic. meaning they can randomly infer something and take a different path. So similar to what we've done in the human world, which a human can take random events, and we built a company around that, we can look at what these programs do. We can put our own guardrails around them at runtime. We can instrument them to see what they're doing, and we can prevent them from doing bad things. So it's a combination of what the frontier models want to do from a safety perspective and what the security companies like CrowdStrike can do to prevent these agents from going rogue.

23:54But is it not true, George, that unless you hire, say, CrowdStrike, maybe Palo Alto, you could go out of business if something happens? I mean, these guys, obviously what you're saying is that the agents are far more sophisticated than the so-called older bad guys. These agents are much more capable. If you don't hire CrowdStrike, if you don't hire Palo Alto, aren't you just legally, I don't know, I don't want to say deserving of what's going to happen. But, you know, you have to take insurance and the insurance is cybersecurity. Well, I think, Jim, what you're really pointing out is a bit of a church and state, right?

24:33So if you're creating the model, you want a different company to be able to protect you from those agents and what those agents are doing. And one of the things that I really want to double click on with you is that the security industry is moving from purely security, which has been keep the bad guys out for as long as I've been in the industry 30 plus years, keep the bad guys out into into safety, which is how do we allow agents to operate effectively? It sounds the same. It may sound the same, but it's very nuanced. And the safety is really a higher calling in security for the security industry.

25:05And I think that's where we all can play a valuable role to take advantage of this powerful technology for the good of humanity. Well, George, we heard from a former one of these people, one of these companies, talking about how we're all going to die by 2030. I know that it's entirely possible that we could all be extorted by 2030. But, I mean, is it possible that these machines that are software are able to just create, say, a virus or create some sort of, let's say, atomic weapon, a weapon of mass destruction, that would be where it would be, I don't know, directed by some sort of robot to kill us?

25:41look jim i i'm not a dumerism type guy i'm uh the glass is half full and i think there are plenty of technology specifically around cyber security that can help these agents from going rogue and you know when someone's trying to come up with these predictions of 10 in 2030 uh if if that was so accurate you know they should be working on playing the stock market i mean i don't know how you can come up with these sort of predictions what i do know is that the agents are dangerous. The agents need to be controlled. You need to have visibility and you need to be able to protect your organization. All that is true.

26:15But at the end of the day, what the agents are doing, they've only been trained to do, which is what companies like CrowdTrike have been focused on stopping. All the different breach indicators, the indicators of attack, how these attack chains work, those are all known. They just happen at superhuman speed with agents and in agent swarm. So the key, Jim, is that you need equivalent or better AI defenses to combat the AI agents. And that's, at the end of the day, what we're talking about. You can use this technology safely. You just need the right AI defenses to be able to allow you to harness the power of AI.

26:49OK, well, where are we in terms of thinking about what the Chinese may be doing versus us? If we slow down, China goes faster. Does that matter? Well, I do think it matters. I mean, if you look at sort of the geopolitical landscape, right, from my perspective, one man's view, like we want to continue to lead that we have. And to be fair, I think it's a it's a narrow lead. If you look at the open weight models, many of them are Chinese. They're incredible models, incredible capabilities. And we always want to be on the frontier. And this is what I think made this country great is being at the edge of technology.

27:27So, you know, I don't think anyone is calling for the halt of developing AI. But when we think about how we put this together and how we sort of train it and put guardrails around it, we still want to be able to use the technology and keep our competitive advantage. And again, I think what I've said, you know, I put out a post last night is that CrowdStrike is ready to come to the table, take what we know about these attacks and work with these labs and be part of the solution. We're happy to do that. And I think greater safety in the lab and greater safety in production in runtime is ultimately the best course of action.

28:02OK, now you do race cars as a side light. I was thinking of you when I read this piece by by Dario, because I know if you're in the lead and they do they wave the yellow flag, no one's allowed to pass anybody. And I was thinking that might be a cool thing to do if I'm in the lead. I know I'm going to win. I wave the yellow flag. No one's ever going to catch. I mean, that had to be thought by. You had to think that that's a possibility. Well, look, people are going to have a lot of views and you've seen and heard all the views that are out there. Is it regulatory capture? Is it a way to slow things down?

28:39You know, I'm not sure. I mean, I guess history will ultimately judge that. But I think what's important is if we put too much regulation around this, then it's going to stifle innovation, in my opinion. I think if anyone voluntarily wants to come up with their own best practice, wants to be the exemplar in this community of how it works and the safety around creating agents and creating models, fantastic. I think then if you look at best practices, the market should be able to determine, hey, I want the safest agents, I want the best models, et cetera. And I think ultimately that that's going to get a better outcome than just hoping that there's a lot of regulation around this.

29:18I'm not sure that's the exact solution, but, you know, we'll let others kind of figure out what that looks like as it unfolds. All right. Last question. Any of the companies out there that are listening to you right now, would you be able to say to them, As I think you said at Falcon, what we have at CrowdStrike right now will prevent the kind of misalignment that everyone seems to be so worried about. Our product can do that. Is that true, George? It's true because once you train the model, Jim, and once you put it into production, it can drift. And there's plenty of ways to work around guardrails.

29:57Basically, the training of the model, particularly in post-training, trains out all the bad behaviors. But when there's a situation where the model and the harness don't know what to do, they have to infer something and they may draw a conclusion and take an action that you hadn't intended, which is why you need the second half of the equation, Jim. This is very important. Runtime protection and control. You need visibility into what the agent is doing. That's after it leaves the labs and you're using it, you need to put the guardrails around it when you're actually using it in your own environment.

30:25And you can see what the agents are doing and you can actually put guardrails around it. If you look at the Hugging Face incident as an example, if you just look at what the agent was doing and you tracked it, and there was a lot of activity, if you looked across that entire timeline, you would see that it was actually doing bad things that it wasn't intended to. And that's what companies need to do, to be able to look at and inspect at what these agents are doing so they can use them safely, which means they're harnessing the power of AI for good. Well, there's some common sense in a debate that seems to be fraught right now.

30:56I want to thank you, George Kurtz, CEO of CrowdStrike. And everyone should read your post on X. It's more thorough than what we could cover in an interview. And I want to thank you for coming on the show tonight. Thank you, Jim.

31:11Coming up, Kramer's picking up the CEO of Lyft for a chat as Mad Money continues from San Francisco. Next.

31:29All right, what are we making in the recent action of the stock of Lyft, the number two ride-sharing platform in the United States? Its stock's been under a lot of pressure this year, even as the company keeps putting up solid numbers. We've seen a pretty impressive turnaround here, yet that's not being reflected in the stock. A year ago, Lyft acquired FreeNow, beefing up their European business, and they started doing self-driving deals last week. They've made Waymo available in Nashville. They've got some great bike initiatives. Can the stock get back to its groove? Well, let's check in with David Richard, the CEO of Lyft, to find out what's going on.

31:59Mr. Richard, welcome back to Man Money. It is great to be here. Thank you, Jim. I was thinking, it's so tough to continue to take on the beast. Okay, but you have. You've been poking it. Now you're, in many cases, beating it in a lot of places. And yet your stock's not flying. So let me ask you something. Are you still excited about the job? I love my job. I literally jump out of bed every morning. And that includes Saturdays when my wife is like, David, settle down. But I'm like, hey, why isn't it Monday yet? So here's why. Look, at the basic level, we are giving people a billion rides every year.

32:34That is a lot of people getting out and living their best lives, going to work, going to parties, going to concerts, going to Eagle Games, whatever it is. Right? So that's a big deal. And that feels really, really good to be part of people's lives. And we're going through this incredible transition of self-driving cars that are safe, reliable. People really like them. So how often do you get to be in an industry that is going through such an incredible transformation towards even better economics and even better service at the scale we are? Well, I think that you mentioned one reason why maybe the stock's not reflecting all the goodness is people do believe that self-driving is going to be an existential threat to what you do.

33:08But you've got a solution that I think is pretty good in Nashville. It's happening in Nashville. Yeah, yeah, yeah. Look, I think people who say self-driving is a threat to rideshare have got it completely backwards. In fact, I would say it is one of the biggest gifts we could have gotten, right? So think about it. Again, it's a product that people like. It's a product that is reliable and safe and all those different things and will be in the future. And think of the economics. What are some of our biggest costs? Insurance is a huge cost for ride share and self-driving is going to be safer. So you've got a safe product that's going to have better economics that people like.

33:41Okay, so what do we have? We have demand, a billion rides a year. We've got pricing and pick-up drop-off locations and lost and found and customer care and all these other things that have to happen. And we have 1.5 million drivers on the platform. So imagine putting these together and creating the best of both worlds. And then we also do something called fleet management, which we can talk about in a second. But you put all these things together, and it is, I think, a great, great future for the industry and for Lyft in particular. Well, this is important because when I look at your cash flow, look at your numbers, look at the buyback.

34:08I come back and say, last time the stock was at$15, it's probably, I don't know, about half as good a company as it is now? If that. If that, yeah, today we're, you know, generating a billion dollars in cash. You know, a bunch of years ago we were losing$300 million a year. Come on, I earned you not to take the job. Yeah, I remember that. I remember it. I didn't pay attention to that advice. But, yeah, so here's the thing. I think what we've shown is, you know, ride share. Look, again, remember, we're doing a billion rides, which is great. People do 160 billion rides in their private cars every year.

34:35So it's a huge market. For a while it was a question of could it be profitable? Now we've proven beyond any doubt it could be profitable, cash flow positive and profitable. Now the question is, can it grow? And the answer is it can grow up, it can grow out, it can grow forward, and forward means into the AV future. Very good. Now, when I first also talked to you, I said I was worried about scale. You didn't have it. Yeah. You've got plenty of scale. You've got many things that continue to drive people to you. That's right. You've got some great partnerships that are very exciting for people. Yeah, we do.

35:02We do. So let's think about scale. Rideshare is a scale business. So what are some of the drivers of the scale we have? As you said, partnerships is a big part of it. So right now, one in every three rides is tagged to a partner. Who are those partners? United Airlines. You've heard of them. DoorDash. You've heard of them. You know, Hilton. You've heard of them. Chase Sapphire Reserve. You've heard of them. These are big, important companies that are finding real value in year after year after year after year collaborating with Lyft. And I'll give you an example why. Let's say United Airlines.

35:29People take in the real world, not folks like you and me, but people take maybe one, two, maybe three trips a year. Right. That's what people realize. Right. But people do ride share every single day. So they love the fact that they can, people, riders, can accumulate points, miles, membership miles on Lyft, spend them on United, and the other way around. They can take miles that they've accumulated on United, spend them on Lyft. That's a great program. We're the only one in the industry that has that, and that is accretive to both companies, and that helps drive our growth. How about instant pickup, Hope?

35:57Someday. Really? Yeah, yeah, it's coming. It's coming. One of the things, so I worked at Amazon for many years, as you might remember. You're a huge executive at Amazon. Okay. And so one of the last things I said to Jeff and the team when I left is, look, here's something that we can all bank on, which is faster is better. Faster is better. So you see it with Amazon Prime. Obviously, it's incredible. And if we can order a cup and it's there before I finish pushing the button, it's unbelievable. And that's what we're going to try to do with Rideshare as well. Our ETAs, that's what we call them, are faster than they've ever been in the company in history.

36:25By the way, last week we had an all-time high for rides in the company's history. So that's good news. And it's only getting up better as we pick you up faster and even more reliably. Okay, so tell me about when you got started, you were behind the wheel. Have you been behind the wheel lately? I have. And what's it like? So yesterday I drove. No, sorry, it was today. So I drove two days ago. You did? Yeah, it's great. Tell me what it was like. Yeah, I love it. I absolutely love it. So every six weeks or so, I try to get behind the wheel. I always say I drive to learn not to earn, although it is nice to earn a little extra money.

36:53I contribute that. But anyway, what did I learn? I learned that people love the Chase Sapphire Reserve Partnership. That's for sure. So I was driving. They love it. Very interesting. 5x points,$10 a month. It's better than there's another company that's got another offer. I don't even know what that thing is. But anyway, people really, really like it, and they really, really value it. I'll tell you something else. I drove a couple up and down. This was actually north of San Francisco in Napa Valley. They had scheduled six rides, ride after ride. They said, I don't even need to rent a car anymore.

37:19I'm just going to kind of schedule rides from winery to winery to winery. I never want to drive after I've had anything to drink. So it's a good basic feeling of, like, we're doing the right thing here for people. One last thing. You, what, made literate 20 million people? Yes. He's like 20 million people to read. We're now at about 22 million people. 22. Easier or harder than taking you on Uber? Easier or harder? Come on. Honest to God, it's sort of 50-50. But I don't even talk about taking on the other guys. They're going to do their thing. We're going to do our thing. I do think we're a better position, frankly, for the self-driving future than they are.

37:51But that's just me talking. Nothing would astonish you when it comes to your success. I want to thank you so much, David Richard, CEO of Lyft, who, honestly, I did try to get him not to take it. because he's such a good guy, I didn't want him to have the problems. You solved him. Let's work it out. Let's work it out. Man, buddy, he's back after the ring. Coming up, he's the fastest mind on Wall Street, so we're putting him to the test with your help. Bring on the lightning round next.

38:26It is time. It's time for the lightning round. Craners, everybody, that's where I take a wrap. Of course, he's into the stock. I tell you, bye-bye, bye-bye, sell some sort. Just because I didn't know the cars or the stocks ahead of time, my stamp first is going to be playing in a sound. And then the lightning round is over. Are you ready, Ski? You got it. Time to light it on. It's over with Tony in the bottom. Tony. Hey, Jim. How you doing? Boo-ha to you. How you doing? I am doing well, booyah. What's up? Well, I know a while back you said, keep power out of it and sell Centennial 1. How do you feel now about Centennial?

38:57Do you feel any different about it? No. Look, I think you don't need to. Look, my travel trust is both Palo Alto and CrowdStrike. It's already too many. I think either one of those two is superior to letter S. Let's go to Oleg, please, in Florida. Oleg. Hello, Professor Kramer. Thank you very much for all your wisdom. Jim, I purchased shares of this company at$46. My time horizon is five years. Should I add or should I sell Gemini Space Station? Thank you. Okay, that's the Winklevoss brothers, and those guys are terrific. I know that they're really smart guys. Let's do this. I mean, it's a crypto play.

39:38It's really down way too low. I would keep it as your spec. I think that they could get that one to go again. They are smart. They might figure it out, all right? Let's go to Barbara in California. Barbara. Hi, Jim. First-time caller, club member, and love your book. Oh, thank you very much. Oh, you're welcome. I'm calling about a stock that released a great earnings report. What are your thoughts long term for ABAH Avena Healthcare? They have a good model. They remind me of Hinge. Not exactly, but just this kind of discreet, good model to make money. And I think you're right. You should hold on to it.

40:13Let's go to Rich of Connecticut. Rich. Hey, booyah, Jim. Booyah. Listen, I love your new book, by the way, your latest book. Keep writing. Thank you. I will. Thank you very much. Because of you. I know you like the oil pipelines and you've mentioned energy transfer, but should I be concerned about energy transfer going from the New York exchange to the Texas stock exchange? No, I actually, you know, I got to tell you, I think that's kind of more optics, although smart optics. I think Kelsey's right. I think E.T.'s terrific. I'm going to say bye, bye, bye. Bye, bye, bye. E.T. All right, let's go to James in Michigan.

40:53James. Big Jim, thank you for taking my call from Michigan. Welcome. What do you got? Big Jim, first and foremost, I want to let you know that we are a huge fan. We've watched you for years. You've given us tremendous advice, and we really appreciate your hard work down in the trenches. Well, thank you, James. I think we're all in the trench, frankly, so I'm going to help you right now. My question this evening, Big Jim, is corning. Big stock that we own. Is it a good time? is it a good time to take a little more off the table? Should we sit where we are? I don't want you to do that. Remember, in the club I said sell it.

41:35Then I was despising because it went up and now, of course, it's going down below. Look, it was down$22 today. They're doing this at the Market Sell Program. I don't like those programs, so they're selling stock in the market every day. I'm going to have to say wait until it goes down more. The business is good. I don't like that sell program. I didn't know why they needed to do that. She was just at a secondary. Let's go to Charlie in Minnesota. Charlie. Hi, this is Charlie from Minnesota. Thanks for taking my call, Mr. Kramer. Of course, Charlie. Of course. What's going on? I'm a long-time first time.

42:04I'm a long-time first time and a member of the investing club. Thank you. Anyone who... Thank you. Anyone who knows me knows that I have no fashion sense. However, I do have a granddaughter, Bia, who is a senior at a university in New York City, who does. She states that she and her friends have recently been shopping at a small retail chain called Reformation Clothing, symbol REF. It IPO'd on July 30th at$15 a share and now trading roughly$14.50 a share. They reported the first quarterly result last week earning$0.23 per share. They have 140 stores, so I think they could have a long runway to grow.

42:43What do you think about the stock? I like this idea. I like this idea very much. What we're going to do, I'm going to go with Ben Stoto when I get back to New York. We're going to open the file of Reformation. The company's doing too well. It should be higher than it is, but I don't want to make a snap judgment because, boy, apparel's been so weak lately. So we will come back, and I thank you for the thought. Now we're going to go to Will in Colorado. Will. Ben, so I was going to speak with you as always. I'm in the company for 20 % of my portfolio at a$40 basis here. What are your thoughts on HPE?

43:17Yeah, you know me. Neary's good. Neary's good. You know, candidly, when it was 2030, I didn't think they had the horses. They do have the horses. The fact is that I'm just a Dell fan, I guess, in the end. I just like Michael Dell and I like his company very much. No offense to Neary. And that, ladies and gentlemen, is the conclusion of the Lightning Round! The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's fed up with how tech leaders have handled the AI narrative, and he's explaining why next.

44:04Trust, once destroyed, is very hard to restore. That's my takeaway from all the stern and drag about the data center, speed, safety, competitiveness, national security jobs, you name it. And I have to tell you, if you want to destroy trust in the name of, what, capitalism, beating China, security? You couldn't find a better way to do it than the way that the two kings of AI have done it, anthropic and open AI. First, the usual hack caveats. They're brilliant. They're ahead of everyone, including the Chinese. They're ours. These companies are the pioneers of artificial intelligence, so you have to wonder if it's possible to fetter them.

44:33Maybe the president's right, by the way, that we can't afford to because it will just give China a leg up. But think of the journey we've been on here. We've gone from thinking AI will cure cancer and eliminate all sorts of drudgery to thinking it will despoil the environment, and take our jobs and then possibly our lives. At each stage, OpenAI and Anthropica, the people inside, have been well behind the curve. They've promoted a lot of this negativity themselves after they generated misgivings, and that makes it difficult to trust them. Of course, there are more than just two actors who are in play here.

45:00All the hyperscalers, save Apple, have had a hand in this breaking of the trust, but there's been very an apology. Have you heard one? Same goes for the companies that build data centers on contract, but I think that Anthropica and OpenAI are the most culpable because they're the closest to it, stand to profit the most from it, and they're very rich companies in the end. Where has trust been violated? First, we now know that there was a tipping point with the towns and states that sought data centers and gave them bountiful tax breaks, just got had. They didn't know how many data centers there would be.

45:27They didn't know the hazards, like water consumption, higher electricity costs. Maybe they weren't explained well. Microsoft, Google, Amazon, Meta all had hands in that one. So now there's this huge blowback to the point where data centers become politically toxic going into election. No one's even thinking about whether they can possibly stop the pollution. Couldn't these companies have seen it coming and recognize that they need to be good citizens first? Give money, not take it? Fix them? Fix electricity? Second, they have no answers for the jobs question. None. Even now when it looks like things might be okay, but not in the future.

45:57Only Meta has thought about this, by the way, and wants to do a huge amount to help train tradespeople. Good job. But it's late as that process takes a long time. And now after years of joking about the possibility that AI could be an existential threat to humanity, It turns out that the very good people within these organizations genuinely believed that it was a major risk the whole time. Top people assured us that we weren't going to be out of here by 2030. Thanks for nothing on that one. That's why when we read Dario Amadei's essay this weekend, we think, OK, he's just trying to get one person dreading it over us.

46:26They can say the government comes in after Anthropic has a lead on everyone. We think OpenAI Sam Altman might have suspected this company could generate a malignant swarm of agents to attack Hugging Face. If they're smart enough to figure out how to do AI, then they're smart enough to consider everything that could go wrong and do something about it, like bringing cybersecurity early on, not the government later on, as Krauss-Rex George Kirsch just told us. That's why so many of us feel betrayed. Why should we trust these people? Why not just trust Trump and say, damn, the torpedoes, folks, bad.

46:55I have an idea. If Larry thinks Anthropoc is going too fast, then he should slow it down. If OpenAI and Google and Microsoft think that, too, they should slow it down. You don't need the government to tell you to slow it down, and you certainly need to worry about antitrust if you take my method. And while we're at it, Meta has a code of conduct about what it will do for localities when it moves in. It should be universally adopted today. It makes sure that the communities come out ahead. It should be adopted retroactively for electricity, for water, for all the things that we know these data centers do wrong.

47:22That's the only way these companies can start earning back our trust. If not, you know what it's going to be like? Nuclear power, the best technology to provide clean energy ever, which was scrapped for decades thanks to a heap of bad publicity and only really just now is trying to get started in certainly not an economic way. I like to say there's always a bull market somewhere. I promise you, I find it just for you. I'm Jim Cramer. See you tomorrow.

48:00particular 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. To view the full Mad Money Disclaimer, please visit cnbc.com forward slash Mad Money Disclaimer. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Schwab Market Update, an original podcast from Charles Schwab provides an information-packed daily market preview on stock updates, U.S.

48:31and global economic news, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at schwab.com slash market update podcast, or find Schwab Market Update wherever you get your podcasts.