Mad Money w/ Jim Cramer 9/17/26

0:00From kickoff to the final whistle, trade the biggest moments in football with Calci, America's number one prediction market platform. Next Sunday, Pittsburgh takes on Burrow and the Bengals. Pittsburgh is currently trading at 42 % to win. A$100 trade pays out over$227 if they come out on top. Download Calci. Use code FAL to get$25 when you trade$25. K-A-L-S-H-I. Calci. Trade what's next. 18 plus only. Restrictions and eligibility requirements apply. Event contract trading involves risk and may not be suitable for all investors. Calci products are not available in all jurisdictions. Prices, values, and available markets may differ from those mentioned.

0:41For more information, see calci.com slash regulatory.

0:58That 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. My mission is simple. To make you money. I'm here to level the playing field for all investors. There's always a boom market somewhere, and I promise to help you find it. Mad Money starts now.

1:36Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. I've been with my friends. Hey, I'm just trying to make a little bit of money here. My job, not just to entertain, but to do some education. So call me 1-800-743-CBC. Tweet me at Jim Kramer. Welcome back to the world of the big bad event. That's when there's scheduled news that scares people ahead of time and makes them sell stocks. Yesterday, we had the big and bad event for a long time. The Fed's rate, I guess, and the market tried to anticipate it by going down six out of seven days ahead of the meeting. And then the big event, it hit.

2:21And we sold off even harder. But after the big bad event, as is typically the case, we tend to get a healthy relief rally, like the tech-led rally today, with the Dow gaining 316 points, the S &P climbing 1.14%, the Nasdaq poll voting 1.69%. Oh, it's been years since we've had a big bad event moment or cycle. The previous Fed chief, the state Jerome Powell, uh-uh, he hated surprises. so they're almost none if you got used to the job. No big bad events. You read the Wall Street Journal, you know what's going to happen. Courtesy of a fellow named Nick Timberis, who was this weird informal Fed whisperer.

2:59At the same time, there could be no scheduled big bad events from the Trump White House because the president is more of a, let's say, an off-the-cuff leadership style. We know he's capable of saying anything at any time, unlike his first term when he was all about promoting business. Now he's about punishing Democrats and our trading partners. I mean, I don't know, whatever. But Trump abhors schedules. He likes surprises. So he's impossible to game unless you have inside information. That's a great quality when you're in the TV business, but it's pretty frustrating in the White House. I know Wall Street would love to have first term Trump back.

3:32He's long gone. I flagged the concept of the big bad event decades ago when we used to have these backbreaking bond sales by the government that crushed the market. You have days on end, days and days of bond selling in order to be ready to buy when the giant treasury auction came along. When bonds go down, stocks tend to go down, too. But once the big bad bond auction happens, bonds would rally furiously. And then stocks would rally and a lot of money would be made. For most people, this pattern is new. The 90s were the last time when bonds were whipping around and taking stocks with them like I'm talking about now.

4:10It was the last time when 10-year yields were much higher than they are now. Seven out of 10 years in the 90s, we saw the 10-year Treasury above 6%. We now have huge Treasury issues like then, and we have oil going higher, driving up inflation. We don't have anyone in Washington who's taking the deficit seriously. The 10-year at 6%, I don't know, could be reasonable. So this moment feels like the old days to me, and I remember them like they were yesterday. Let me fill you in. First, the good news. And it really is good news. Back in the 90s, we had an annualized total return of 18.2 % per year.

4:43If you include dividends, the S &P had a total return of 433 % over the decade. So$10 ,000 became$53 ,000. The bad news. The Fed was a total black box in the 90s. We never knew what they'd do because then Fed chief Alan Greenspan didn't want us to know. I expect something similar from Kevin Warsh. He's certainly not relying on the journal like Powell did. Why is Warsh so opaque? First, he said he doesn't make forecasts. When you're investing in the stock market, forecasts are everything. But Walsh doesn't play that game. He also seems to eschew any limelight. This man doesn't tip his hand. This is incredibly important because I think it explains a lot of the sell-off leading into the meeting.

5:21It also explains today's rally. Walsh was appointed by a president who believes that interest rates are way, way, way, way, way, way too high. No big hedge fund could be sure that at the last minute, Walsh wouldn't buckle under, change his mind from what he voted, and instead vote to keep rates the same or even argue for rate cut like Trump once? It wouldn't have made any difference this time because the vote was unanimous. But don't dismiss this. Trump saved his wrath because of the course. Of course, he had wrath, right? He saved his wrath for the other people in the Fed. He called them political.

5:51He praised Warsh. So far, so good. But who knew he would do that and how long? We didn't know if Warsh would be a hawk. The market apparently wants a hawk as all big money managers are against inflation. We got a ton of it. But what if he said one and done? What if he said that inflation just has to be moderate, that it was transient? Well, you know what? We would have been subplugged.

6:16Now, like in the 90s, a big bad event didn't lead to people sitting on their hands. It always leads to selling. Money managers don't want to wait. They want to get out ahead of time. Like it or not, I think that's the new pattern because Warsh seems pretty hawkish. For all I can tell, we need to figure out whether we might even have a half point on the horizon. What's the best way to deal with a big bad event? I've got the playbook here. First, don't freak out going into a Fed meeting. Second, if you're going to sell, you should sell 7 to 10 days in advance of the Fed meeting. Third, if you stick around, I'll tell you what goes up and what goes down after the Fed's tightening.

6:51Yesterday, I said that people would buy tech. We got that in spades today. I continue to recommend the cybersecurity stocks, and I'd add Okta to the list because rogue agents cannot be stopped unless we can identify them first. That's Okta's job. I still think that Intel, as I tell club members, is the best stock in show, and Micron number two. Don't own that one for the trust. Don't own it for Intel because both their products are in short supply. I just bought some Micron. I was surprised by the demand for the financials, but we do have a pretty strong economy, so it makes sense. Let me give you the bottom line behind, besides just telling you I like two semis.

7:26From now on, every Fed meeting will be treated like a big, bad event. But that doesn't mean you should join the sellers. It just means you need to prepare yourself for the new pattern. If you want to do some buying, buy as close to the meeting as possible, because that's when it's going down. Then buy more immediately after the meeting, because that's when it really goes down. And that way you'll participate in the post-event rebound and get the best basis, which is what we always want on May of Money. I want to go to BK in Massachusetts. BK. Professor Kramer, this is BK from Massachusetts. It's an honor to speak to you again.

7:59Oh, thank you. How can I help you? So I have a question on Reddit. You know, I'm a long-term investor of Reddit, and I know you're bullish on Reddit, but it seems like it's just been, you know, trade range bound and it's not moving. It's gradually drifting down. What is your take? Should I be buying some more? All right, my take is this is a$29 billion company. I think that there are companies that would pay$40 billion for just the book of business they have and be able to train all their different viewers and readers by Reddit. Period. End of story. By Reddit. How about Buddy in Rhode Island?

8:33Buddy. Hi, Jim. Good to talk to you. Just wanted to ask you a question about pyramiding. I bought some TGX previously at$143. I bought it again today at$125. That's basically a 15 percent haircut. I'm wondering on the idea of pyramiding. When will I decide to buy into this again? All right. Great question. We put we pulled the trigger for this after Jeff Brooks and I talked today. I think that what you would do right here, because the stock is down so badly from its high, it was at 170. Now it's down to 126, 123 and 120. Buyer, buyer. OK, close enough. We start shortening and lowering our gaps between each buy because it's too cheap.

9:16It sells at a market multiple at last. All right, it's time to get used to the pattern of everyone treating the Fed meetings like a big, bad event. Take advantage of the bounce. This time, I'm saying Intel and Micron, two club favorites. On Man Money tonight, we left our hearts in San Francisco. When we brought back the exclusives, don't miss my sit-down with the CEO of Databricks for an update on one of the most important private companies, the heart of the AI revolution. Plus, it's only September, but should your portfolio be saying, let it snow? I'm sitting down with the CEO of Snowflake to find out what's ahead.

9:46And the Fed just kicked off a brand new tightening cycle. What does history tell us about what could come next for your money? Don't make a move before hearing my take. 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.

10:21Fidelity Active ETFs have the flexibility to shift and transform as markets do the same. So instead of just riding an index, they can seek to outperform it by adapting to market conditions and pursuing new opportunities as they emerge. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms, just like any other ETF. Markets can change in real time. Make sure your ETF can too. Learn more at fidelity.com slash active ETFs. Before investing in any exchange traded fund, you should consider its investment objectives, risks, charges, and expenses.

10:59Contact Fidelity for a prospectus, an offering circular, or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Fidelity Brokerage Services, LLC, member NYSE, SIPC. Hey, what's up guys? It's Haley Bailey. Okay, I need to tell you about something. I just got YouTube Premium. It's got tons of awesome features like offline downloads, so I can download my favorite videos before I travel and watch them whenever I don't have Wi-Fi.

11:33Because we all know airplane Wi-Fi is the worst. I get ad-free, I get backroom play, and there's like a ton more in there. You should try it. If you like YouTube, you'll love YouTube Premium. Try it now for two months free at youtube.com slash premium. Trial eligibility varies. Terms apply. Cancel anytime. That's a mouthful. If your workday happens in two languages, this one's for you. Whisper Flow is a voice-to-text app. You talk, it types in any app in more than 100 languages. The email in English, the text to your mom in Spanish, the client note in Portuguese, and it switches languages as you do, with the ums and typos gone four times faster than typing.

12:15Whisper Flow is free. Get it at whisperflow.ai. That's W-I-S-P-R-flow.ai.

12:28There's been a lot of talk about slowing down the development of AI this week, which is why I want to check in with one of the biggest privately held players in the industry, Databricks. These guys help companies take messy, fragmented data, organize it and analyze it and build AI applications or agents on top of it. You need to structure all that data before you can feed it into an AI model, which is why this private company is now worth$190 billion. So let's take a closer look with Ali Ghazi. He's the co-founder and CEO of Databricks to learn more. Mr. Ghazi, welcome back to Man Money. Thank you so much.

13:02Very excited to be here. In all the years that I've interviewed you, I think that something has happened that is just unbelievable for your business, which is AI. It makes so much sense. It makes it so that customers must be thrilled. Tell me what they're doing. Yeah, look, so what's happening is that we have all this really intelligence explosion that everybody's talking about. But, you know, if you look inside organizations, they're still struggling getting just the basic stuff up and running. So our goal at the enterprise is how do we just make the AI useful for everyday organizations out there?

13:31And it turns out the main thing missing is getting the context that already exists inside of the organization into the AI. If you can do that, magic happens. So give me an example of how, you know, you're a private company. Maybe you could just tell us, say, give me some examples of the use cases. Happy to do that. I mean, look, let's start since AI is sort of front page news today and people are talking about pacing it and so on. Should do a benefit cost ratio. There's a lot of benefits. So, for instance, there's a company called Crisis Text Line. They use us and use AI and they analyze, you know, how, you know, teenagers are using AI and what they're typing.

14:12And, you know, if they're about to do self-harm or suicide, it helps prevent that. You know, this is amazing because we hear how much online has created an atmosphere of ideation. So this is a company that specifically is trying to stop it before it gets stolen. So crisis text line. And, you know, literally that's what you can use AI for. So you can see that, you know, someone is starting to show behaviors of self-harm and they can intervene. and it actually literally saves lives, right? So that's one use case. Another use case, we have a company called Zipline. You might have heard of them. Of course.

14:48Exactly. So Zipline, big database customer, would be using us for AI, you know, so they have, you know, their drones can, you know, use AI, you know, to steer, to find locations. They started using us actually for delivering medicine in, you know, places of need. So this was one of our, you know, favorite customers. You know, the CEO uses it. And then you've got this genie. Tell me about this. Because it's just, you know, to me, it's the next big genie ontology. It's the next big thing in sales life. Yeah, so when you get this ontology of the organization and you can get that. By the way, I had to study it from Palantir.

15:22I had to admit it was their idea. The more I learned about it, the more it is the 360 of a company. So tell me. Yeah, so ontology of Palantir is a great partner, and they actually will help you build that inside of an organization. But what we do is we automatically, so you don't need to build it. It automatically gleans information and then creates this graph of small little snippets of information that helps the AI make accurate decisions. So let me give you a use case, for instance. So Novo Nordisk, might have heard of them. Oh, now they want to drop the Nordisk. That won't necessarily make them a lot more money, but I applaud the new name.

15:54So, you know, GLP-1 drug maker, you know, everybody knows them. So it's been a game changer for them because they use Genie. and they can now, when they're doing their studies and they're doing their research, they can actually shorten the time from weeks to minutes in when they're running, for instance, cohort analysis, like an obesity study. And they want to understand the side effects and things of that nature. They can now shorten the time because they can directly ask the AI and they can connect all the data sets and then the ontology is essential for that. So that's another use case. That's terrific because people don't realize the clock is ticking the moment they come up with something.

16:24Next thing you know, it's not worth doing because it'll be off patent. We have a lot of drugs that stop. After 11 years of work, they just shut it down because they know there's not enough time. This could change that. Yeah, absolutely. Absolutely. Another favorite of mine is Merck. You know, as we're talking about. I love Merck. We're talking about, you know, drugs. Were you involved with the melanoma? Well, they've built. No, we were. Well, I don't know exactly what database was involved. Maybe. But something. But they built. Yeah. So we built an AI model together called Teddy Transformer Enabled Drug Discovery.

16:54And this AI model is amazing. It basically can figure out the gene regulatory network that exists in the body. So if you can figure out which genome is responsible for which disease. So the hope is to really shorten the time it takes to develop drugs. People have to recognize that this is the good side. We're hearing, Al, you can help. I've known you for a long time, and you have a constructive attitude. You know that there are people who are talking about how it can cause the end of humanity. Do you mind? I mean, how did that happen? because what it really could do is one by one cure a lot of diseases that make it so people, for people who die young, which is what we have to stop.

17:33Yeah, yeah. Look, there's a benefit-cost ratio one has to do with all technology. So we've talked about a lot of the benefits. I actually think people are not talking enough of the benefits. So, you know, they only hear about the costs and the downsides. Well, that's why I think what you just said with Merck and with Novo, we tell these stories. I mean, a lot of people tell me, you know, Jim, AI's not doing anything in medicine. You told me it was going to do this and do that. It's actually the opposite. It's short of time to study. And it's the study and it's the lab time that makes it so no one wants to take on heart disease.

18:01No one wants to take on difficult cancers. They want to take the easy things. It is a game changer, actually, for drug discovery. But, you know, you have to look at the cost side as well. And, you know, I think right now there's so many people talking about the risk. I think, you know, first and foremost, I think it's our responsibility to tell people that right this moment there is no existential risk. Like, you know, people are freaking out. People can sleep at night. And I think most researchers would agree with it at this very moment or like in the very near future, there's no existential risk.

18:30All the researchers are talking about, you know, further out. That if it continues, this and that could happen, hypothetical. But we can catch them ahead of time. We now see what they can do. Humans can figure things out. One last thing. I'm not going to ask you when you're going to come public. I will tell you, as I did a couple other times, it's not fun. And maybe it's better to stay private. You've done so well, private. Would you ever really think that you have to be public? Yeah, we're operating the company as if it was public, you know, with the board structure and public company audits.

18:59And, you know, we've been keeping ourselves free cash flow. Oh, no, I know. There's no doubt about it. My trust wants to own the stock. I mean, it's not even an issue. I'm just saying for you, you have a great attitude toward life. And I hope that when you come public, it doesn't spoil it. Because a lot of people went to their head and a lot of other people get depressed when their stock goes down. And you're just naturally buoyant and effervescent. That's one of the reasons why I think you're so much fun. Ali Goss is CEO of Databricks. I know it's private. Stay close to it. It's the one private company that I know is doing unbelievably well because you're a transparent guy even though you don't need to be.

19:35Be lucky. Minibani is back there. Coming up, Kramer's looking back to the history books for clues on how to handle the latest rate hiking cycle. Next.

19:50Hey, what's up, guys? it's Hayley Bailey. Okay, I need to tell you about something. I just got YouTube Premium. It's got tons of awesome features like offline downloads, so I can download my favorite videos before I travel and watch them whenever I don't have Wi-Fi, because we all know airplane Wi-Fi is the worst. I get ad-free, I get backroom play, and there's like a ton more in there. You should try it. If you like YouTube, you'll love YouTube Premium. Try it now for two months free at youtube.com slash premium. Trial eligibility varies, terms apply, cancel anytime. That's a mouthful.

20:48That's CISPRflow.ai. Where others see obstacles, you see opportunity. You collect wins, even when no one's watching. This is what hustle looks like. So chase that degree and let your hustle make it happen. Capella University. What can't you do? Visit capella.edu to learn more.

21:13All right. Yesterday, the Federal Reserve hit us with our first rate hike in more than three years. And even though this was widely anticipated, the market still got clobbered because the Fed seems eager to raise rates again this year. In other words, it's not just a rate hike. It's a brand new tightening cycle. Like I told you last night, if you buy stocks when the Fed's tightening, it means you're trying to fight the Fed. And there's usually a good way to lose money unless you're being very selective about what you own. Remember, when the Fed wants to stamp out inflation, they do that by raising interest rates in order to slow the economy.

21:48So it's not a great situation, even if it's necessary, because when the economy slows, many companies miss their earnings estimates. That's why tonight I want to dig deeper into how things normally play out during a rate hike cycle. You'll remember this. We're going to continue to bring this stuff up. This scorecard will help you immensely when you ponder what I said at the top of the show. Yesterday, Deutsche Bank's head of macro research, Jim Reed, published a real good summary on the history here. This is only the 15th rate hike cycle since the mid-1950s, and it's only the fourth one of the 21st century.

22:19What can we learn from the past cycles? That's what matters. Let's start with the bad news. Of those 14 previous rate hike cycles, the average one lasted for 22 months. and the median was 15 months. In terms of the scale, the median tightening cycle saw the federal funds rate rise by more than 3%. That would be brutal from these levels. But here's the good news. A rate hike cycle is, by design, intended to cool off the economy. However, that doesn't happen overnight. On average, it took 42 months, three and a half years, from the Fed's first rate hike to the start of the next recession. In fact, it's been four and a half years since they started their tightening cycle in March of 2022.

22:58And we haven't had a recession at all, right? Although 2022 turned out to be a terrible year for the stock market, but no recession. Ultimately, the S &P 500 fell 27.5 % from its early January 2022 highs, when we knew rate hikes were imminent, to its October 2022 lows, while the Nasdaq composite fell nearly 38 % from peak control. That was a terrible time. But after that sell-off ended, the market mounted an incredible multi-year rally, even as the Fed kept tightening through the summer of 2023. In other words, you had to be there. How about the rate hike cycle before that, which ran from December of 2015 to December of 2018?

23:32For most of that period, the market did fine until the fourth quarter of 2018 when Fed Chief Jay Powell started talking about the need to put through a series of additional hikes. That was shocking. It was also an unusual period. 2015 was the first rate hike we got after the financial crisis, and they were very gradual about tightening for the first couple of years. Finally, if we want to look, let's say we look at the third most recent rate hike cycle before this. That was the one that lasted from June of 2004 to June of 2006. Holy cow, that's pretty terrifying because the Fed took rates to high levels, then left them there until the financial crisis nearly destroyed the Western world.

24:08But even then, it took three years to go from the first rate hike to the early stages of the financial crisis in the summer of 2007. While I don't think that's the right analog for the current moment, And it's always worth keeping in mind how things can go wrong when the Fed gets too hawkish. Right now, we're fine. Now, let's go a step further and look at the kind of stocks that historically work and work best when the Fed's tightening. During the last rate hike cycle from 2022 through mid-2023, what worked and what didn't? Well, start with the very short term. Look at what worked best from the time of the first rate hike, like we just had yesterday in March of 2022, to the second rate hike in May of that year.

24:51Towards the top of the list was energy and material sectors, which were thriving thanks to sky-high inflation for energy, specifically the war in Ukraine had just begun. West Texas crude's head spiked to about$130 in March of 2022. Aside from these inflation winners, we saw some solid performance from the consumer staples, utilities, real estate stocks and health care. The worst performers were communication services, financials, consumer discretionary, industrials and information technology. How about if we broaden things out and look instead at the six months after the first rate like that? Four was the first.

25:26This is the six months and that which hit on March 16th of 2022. First, nine out of 11 sectors were lower in this six-month period. That's very important. Again, energy was best. But again, near the top of the list were utilities, consumer staples, and health care. Worse was communication services, IT, and financials. Real estate materials went from relative winners to relative losers. And consumer discretionary and industrial stocks were in the middle of the pack, but still down double digits. What if we expand the window to look at the entire period where the Fed was raising rates from March of 2022 to July of 2023?

26:01I'm picking this analog because it's probably the most likely. Energy is still on top, but tech's going from second worst to second best. Remember, during this period, we saw the launch of ChetGPT and the rise of Magnificent Seven. Other sectors like industrials and communication services were doing relatively better. Real estate and utilities did relatively worse. But the big takeaway from this full cycle look is that even if you want to avoid tech after the start of a rate hike cycle, please do not stay too bearish on that sector for too long because it tends to bounce back and when it does bounce back hard.

26:33That's why I keep emphasizing at both the night at the top and last night that tech is the first one you want to go to. Of course, that's just one tightening cycle. What about the previous cycle from December 2015, December 2018? Let's start with the three months after the very, very first rate hike. Again, we see safety sectors doing best, utilities, staples, real estate. The communication services sector was technically best in show. But, you know, that was a little misleading because that grouping was only created in late 2018. So what we were actually looking at here is the performance of its predecessor, the telecommunications sector.

27:06And telco was considered a safety group. Next, let's look at what did best and worst from the first hike to the second hike, though in this case that was a longer period, lasting almost a full year. from mid-December 2015 to mid-December 2016. In that period, the energy sector, again, was best in show. Materials did well, too. But in many other ways, the list looks very different. Traditional safety groups like health care, real estate, and staples were the worst performing sectors. Financials and industrials were some of the best. IT was middle of the pack. That's because there wasn't much inflation back then, and no one was worried about the broader economy.

27:42Now, finally, okay, just one more. Let's look at the period that encapsulates the full tightening cycle from December 2015 to December 2018. I think this could also be analogous. Here, information technology is the dominant sector. Some more cyclical groups like consumer discretionary and finances were relatively better. And many of the traditional safety groups were near the bottom of the list. Communication services, aka telecom, staples, the energy and materials groups had gone from some of the best to some of the worst, which is what you'd expect when the Fed gets serious about raising rates.

28:12Of course, every tightening cycle is different. This time, we're hostage to a war in the Middle East that's pushed oil price to the triple digits. You resolve that, and let's put it this way, the Fed's not going to be continuing to tighten if oil goes back to 80. But the bottom line, if history's any guide, these rate hikes could be with us for a while. Just remember that while it tends to be bad news for the stock market in the short term, anything that helps us beat inflation is good news for the long term. So here's my advice. Those who don't like to trade, which is the vast majority of you, let me give you a suggestion.

28:43Raise some cash in the strength when we get these kinds of moves like we had today. So you are ready if we go down hard. But otherwise, buckle up. See, Warsh is doing what's good. And as we saw today, there are many people actually know that. Let's go to Earl in Illinois. Earl. Oh, yeah, James. First time caller. Ticker symbol is UBER, Uber Technologies, with the chairman announcing he's going to buy some stock last week. It's now the time to buy some. OK, look, in my book, How to Make Money in Any Market, I did select. I had a huge bunch of winners. This was the only one that's not working. But you know what?

29:22I did a huge amount of work for this book, and I am not backing away one bit. I am still recommending Uber. All the others did really well. Uber, no. But I got to tell you, I think Uber is a good situation. All right, listen to me. It's really hard to know what happens after a rate hike. Rate hikes may seem like bad news for the stock market, But here's what you really need to know. In the long run, they're good because we must stop inflation. That's what we have to do. All right. I made money tonight. We got my sit down with the CEO of Snowflake. Then as AI leaders call for guardrails, I'm looking beyond Silicon Valley, revealing how other industries could offer up a blessing.

30:02And oil calls rapid fire tonight's edition of the Lightning Round. So stay with Kramer.

30:14While we're out in San Francisco, I got a chance to catch up with Snowflake, the software company that gives customers a platform to store, use, and share their data, often with the goal of building AI applications. And compared to weakness where the stock sold off, thanks to AI displacement worries, Snowflake caught fire in recent months. The stock's up 185 % from its April lows at this point, in part because they've been putting up incredible numbers. But we have to ask, can it keep running? Over this week, I spoke with Shridhar Ramaspami. He's the CEO of Snowflake. Take a look. Shridhar, first of all, it's great to see you.

30:50I'm sorry I missed your quarter. Jim, it's always great to talk to you. Oh, thank you. Well, in that quarter, I realized this is not the Snowflake of when we first met. You are now offering tools, AI tools, to interrogate the data that people have that makes it so you're not just a warehouse. else, you're now where people should go to understand what they're doing. That's right. That's right. Snowflake has always been at the center of people's data. But what we've been able to do with AI and great products that use the power of the great models is get real value from the data, get things done faster, but increasingly transform how you as a business operate.

31:34And that's what you see customers like Kraft Heinz do with competitive intelligence, for example. But that's the story that's repeating itself. And the Snowflake story has gone from a place to put data to a place where you get insights and transform how you operate as a business. Well, you dropped KHC. Steve Kaling is a friend, okay? And it's very clear he's been telling me he knows more than anybody's ever known about Kraft Times. He must be using some of your data to know exactly that real-time data that you give him that's correct that's correct it is that incredible visibility into what's going on with your company as it is happening it just changes the speed of decision making i was visiting some customers last week in tokyo and i wanted to know when i had met them previously it had not been part of the brief so i literally took a picture of the people i was going to meet put it into snowflake co-work and said, when was the last time I met with these folks?

32:32What should I know? And a minute later, I got the answer. That's the power of data. It is incredible. And I know that when Steve came on the show, he seemed to have a real grasp of what was going well in his company. That's right. I will tell him I met Snowflake. It'll know. Sridhar, okay, I did something last night. I was mesmerized, frankly. I stayed up way too late because of it. I was playing with Coco and playing with Cowork. these are nothing short of amazing yeah if i had had these when i was starting certain businesses i would have known why i'm doing well i ran a restaurant i would have known i ran a club that people subscribe to i would have known and i would have gotten up each morning and looked at and do something that you use the word it would be i would triage i would know what was worthwhile.

33:28I'd be taking four hours of my day and turning it into 10 minutes. That's the magic of data. That's the power of AI on top of the data. But it's the magic of you. You're very nice in being generic, and I love you. You've always been humble, but there is an element of brilliance here. Transformation is hard. Setting a vision for where a company needs to go, especially when it has a heritage and a history of succeeding in one way, that's hard. I think What I brought to the table and what increasingly Snowflake sees in itself is the confidence to seize the opportunity that is coming in front of us.

34:06And AI has created more opportunity for a data platform like Snowflake than anything that we could have thought of. We went from being the back office for a company to be the place where the CEO goes to get the latest information about their company. It's quite a difference. to go to manual triage, which is what I was doing, and instead of going to your program, or for Coco, knowing exactly why one ski lift is doing better than the other if I'm running one of these companies. There was no ability to do that before. That's correct. And the ability to do that responsibly, the ability to have trustworthy answers get generated for you, the ability for your data team to leverage themselves even more, That's what we are offering with the combination of Cocoa for builders and then Cowork for the business users within the company.

34:54Let me ask you. I know you know. We're a dream force. A lot of what Salesforce is offering seems either complimentary to you or perhaps antagonistic to you. I can't tell. Well, Salesforce has been a partner of Snowflakes for 10 years now. Mark told me you need to speak to Sridhar. I said, Frank Sloopman, president told me. And he goes, no, it doesn't matter. You must speak to my great partner. Well, Salesforce has certain domains in which they are amazing. OK, obviously, the sales, as the name indicates, but also areas like support and even marketing. But what Snowflake is, is that single plane of glass for all of a company's data.

35:43In that sense, we are actually quite complementary. country, but Salesforce like to present a big vision for everything. They're very good at what they do, but we also feel very comfortable about what we are because we encompass all data that matters to a company, not just one from a specific application, important though it is. All right, that's good. Not that I'm looking for peace, but I just feel like so many companies seem to be at war these days. I would like to see someone who has great, you know, equal respect for each other. Well, we have a number of great partners and we love working with them.

36:15And I think that's part of what makes Snowflake successful, because we don't see the world as a winner take all or as a win lose. I see the world in terms of a win win. What are things we can do together? And that's what you see us doing. Let's talk about something that you're absolutely right. A total cost of ownership, total cost of operations. Pfizer has always been challenged with too much expense. Yep. They bring you in. They have a remarkable transformation in terms of the expense side. That's correct. To me, business is very simple. As a businessman, my objective is, can I make more revenue?

36:50Can I spend less money? It's all about top line and bottom line. And again, at Snowflake, we are now very confident. And AI, in fact, makes things like optimizations easier so that our customers can use Snowflake more efficiently. and we go and tell them you can use Cowork. It comes from an existing budget. People don't need to invest lots of money, for example, in dashboards anymore. Cowork more than takes care of itself. I tell our customers every single project that you do needs to be ROI positive for you. And it's the confidence that we bring to customers, whether it's a Pfizer or whether it's a Kraft Heinz.

37:26I wish that there was a piece of data which was able to measure time versus money because the ability to take three hours worth of trying to figure out where you are and put it, I don't know, in eight relative minutes. Who doesn't need that? Who doesn't need Snowflake? Well, it's funny you say that, but the way I put it to my team is I want time and money. I want to save on time and save on cost. And that's what we can do today because time becomes a little bit hard to measure. If you make somebody 15 minutes more efficient, what do they do with that time? These are like tricky questions to answer.

38:03I prefer to go in there and say hard ROI as well as the potential to transform your future, which is what we did with our own sales team. We saved them time, but we are also seeing measurable benefits in things like how many use cases can they deploy to production every single quarter. Those numbers are up 40 plus percent year on year. And so that's how you get accelerated revenue like you have accelerated revenue. That's why we are able to guide to 38 % for Q3, which is pretty remarkable. Remarkable. And I know I should focus more on the earnings. I did miss you for earlier. I just wanted people to understand how you can get those numbers.

38:36All right, one last question. I'll give you a little anecdote. Yeah. My son's a coder. That's awesome. And he has the edge on me until I looked at your product. And I'm asking questions in English, and it's giving me answers like I know what I'm doing. That's correct. How is that possible? Well, somebody like your son is now a lot more leveraged. They can not only ask the first order questions about business, but they can also now do deep analysis. They can build new pipelines. They can build new products. So what AI can do is elevate all of us to focus on either building more or spending more time on the judgment aspects of what we do, which is even more valuable.

39:21That is a great point. So in other words, the human, there is a human at the end either way. I can get to the same information he has and still be the human who makes the judgment. That's correct. It's the judgment that we bring to the table that's important. Just like you and I don't worry about how an email that I send you gets delivered to you. You worry about the content of the email and what to do with it. It's going to elevate our work so that we focus on what we should do and why we should do it rather than how we should do it. And I think that's a welcome change for lots of us. Well, I want to thank you for taking it.

39:53I'm not calling it a warehouse that's now smarter. I'm talking about the way to be able to figure out your day to be really useful for your company in a way that I didn't think was possible. So I want to thank you. Thank you. The world thanks you. The people who are not coders, thank you. Now we're suddenly reorganized. That's right. K &C. Steve Kaling. Maybe. I don't know. But that's one of the reasons why I like that stock. Turns out it's because of you. Don't tell him I said that. I think he thinks of some of the other things he's doing, like making it so we love ketchup. Anyway, Shreedar Ramoswami says, CEO of Stokelake, accelerating revenue growth.

40:28That's how I knew it was the right one. No longer just consumption model warehouse. Thank you. Thank you, Jim. Always great to chat. Thank you. Very much. Very much. Coming up, you've got questions. Kramer's got the answers. Get charged up for a fast-fire lightning round next.

40:54It is time. It's time for the Lady Round. Come to get money. That's what I think about front calls. It's hitting the start. Instead of buy, buy, buy, sell. It's still disappeared. It's a record. Every time I stock, please. Leave it in place. Ding. Boom. And then the Lady Round is over. Are you ready to get that? Don't worry. We're going to start with the Indian Indian. Ann. Hey, Jim. I sold Casey's after they reported. But I brought it back after I listened to the conference call. What say you? So I think that was a very wise move. You know, this was just totally oil. We're seeing with Texas Roadhouse, too.

41:27I think you're wise to go back into it, especially down here all the way. It's almost been cut in half. That's a very good move. I praise you. Let's go to Frank in New York. Frank. Jim, my question is about BlackBerry. With a billion-dollar Q &X backlog, connected cars, robotics, medical radar, cybersecurity, increase in revenue streams in all our partnerships, the stock seems like a bargain to me. should I buy? I agree with you. We've had the company on. I am surprised that it came back down, but there's been a lot of selling and some very good stocks. I'm with you, my friend, Josh in North Carolina.

42:02Josh! Jim! I got a good question. Sure. It's about a social media company and they've started expanding to ugly and expensive glasses. It's Snapchat. Yeah, you know what? Look, I wish I could get behind those guys. I really do. And maybe they can show a profit and I can get more positive, but it's been a loser, and I think that we need profitability before I can get behind it. Let's go to Thomas in Delaware. Thomas. Jim, do you believe in coincidences, or is Ryan Poen and GameStop, with$11 billion in market cap, $5 billion in cash, best Q2 on record, just put about$20 million of his own cash, is now at$22.70 or so?

42:48Is it a good time to get the zone? I think it actually works for me. It's a profitable company, and they're trying to turn around, and I think they're having some success. I'm willing to say that that stock is a buy. Let's go to Ricardo in Texas. Ricardo. Good day, Jim. Pleasure speaking with the maestro himself. Right back at you. How can I help? The stock name is Credo, and looking out 12 months, are we now buying more Credo, holding it, or selling Credo and buy Marvel? 12-month horizon. It's been a terrible stock in the last six months. It's settled down to a level that I think you can buy the stock.

43:26I'm going to endorse it. I like chiplets. I like packaging. I like wiring. It's very nuts and bolts. I think that's good. Let's go to Cyril in California. Cyril. Hi, Jim. Any thoughts on Iron Mountain? It's been an incredible stock. It's a real estate investment for us, basically. We know that they shred. 3 % yield, down 20 points from its high. I think it's a buy. And that, ladies and gentlemen, conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's analyzing how we can successfully regulate AI to avoid repeating past mistakes. Next.

44:14Booyah, Jim Kramer. I'm a first-time caller, a happy club member. I want to thank you for being the biggest champion of investment. Thank you for helping me become a millionaire.

44:33We may be going down the wrong path when it comes to letting AI regulate itself. We need to think about other industries, not just tech. When we only focus on tech, we miss the bigger picture, which is that self-regulation track record is not good. Tobacco self-regulated for years. They hid the truth. The oil industry, they always told us they'd take care of emissions. They only did so under duress. The energy industry told us to be mindful of climate change. They did nothing until they were forced to. Mortgage lenders in the subprime industry, classic light regulation that was directly responsible for the Great Recession.

45:07Pharmacies and opioids wrecked a generation of young people. Paint industry, total denial of lead. The materials companies covered up asbestos, even as they knew for decades it could kill people. Look, I could go on and on and on. At the end of the day, you need real regulation because it's the only thing that stops this kind of bad behavior when business threatens society and the welfare of its citizens. Sadly, I think it's just human nature, especially when there is big money involved. And that's certainly the case here. At the same time, we can't have impossible regulation. We have to. We've got a lot of good models to choose from.

45:39You know, when I looked at it, I kind of like this NIST, the National Institute of Standards and Technology. It's an agency in the Commerce Department. It offers best practices, frameworks for both industry and government. It's the authority that would offer guardrail standards. It measures the risk. We want it to have the authority to trust and verify any company in the country. Why don't we start there? We could also go with a slightly heavier hand, like the Nuclear Regulatory Commission, which works in turn with the International Atomic Energy Agency's global watchdog. I favor this one for a big reason.

46:09Years ago, I was a protester against the Clam Shell Alliance, which tried to stop and shut down nuclear plants everywhere in this country. At the Three Mile Island, they won. The cleanest and best source of energy was done. We went to coal, the worst alternative. Why do we need heavier regulation for AI? Because it might stop a movement that's aiming to shut down data centers all over the country. And believe me, it's out there. But regardless of the regulatory framework, the anthropics and open AIs, they need to get right with the cybersecurity companies. I talked to so many of them when I was out west, and I think these massive AI labs spend far too little to protect us from the rogue agents.

46:46They're overconfident. They would do well to bring in CrowdStrike, Palo Alto, and Okta for a belt and suspenders approach. We need Okta because each agent has an identity. Okta knows identity. It can see the agents. It can actually see them at work. It can tell which ones are rogue. Then we need CrowdStrike and Palo Alto to shut down those rogue agents. Believe me, it's in the interest of open AI and Anthropic to hire these companies. If something goes wrong, the product liability here would be immense. I don't think they recognize the level of litigation risk here. I know that I'm always trying to line myself up with Jensen Wong, the CEO of NVIDIA.

47:22You know he's my true north. That's not new. He's for standards, but he also has a lighter approach than I do. I think we need to be more heavy-handed to protect the AI industry from the backlash. In retrospect, that could have saved the nuclear power industry, which was such a good industry. In the end, we lost the ability to make those power plants at scale. We don't want the public to be in charge. We don't want the companies in charge. We want a public-private partnership with the public represented by an informed regulator that has the ability and discipline, but would offer the measures we need and the guardrails that are a must to give people a level of certainty.

47:55Anything else in these tremendous cybersecurity companies can help backstop our safety. They're expensive, but the next rogue AI swarm could cost us a lot more money and wreak a lot more havoc than society might be willing to take. I'd like to say there's always a bull market somewhere. I promise I'd find just for your money. I'm Jim Cramer. See you tomorrow.

48:17All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNPC or its parent company or affiliates and may have been previously disseminated by Cramer on television, radio, internet, or another medium. You should not treat any opinion expressed by 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.

48:44To view the full Mad Money Disclaimer, please visit CNBC.com forward slash Mad Money Disclaimer. If your workday happens in two languages, this one's for you. Whisperflow is a voice-to-text app. You talk, it types in any app in more than 100 languages. The email in English, the text to your mom in Spanish, the client note in Portuguese, and it switches languages as you do with the ums and typos gone four times faster than typing. Whisperflow is free. Get it at whisperflow.ai. That's W-I-S-P-R-flow.ai.