Mad Money 10/24/25 | Audio Only

Key Concepts

Earnings Season: A period when publicly traded companies release their financial results, crucial for investors to assess performance and future outlook.
Consumer Price Index (CPI): A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. A "benign" or "tame" reading suggests inflation is under control.
Federal Reserve (The Fed): The central bank of the United States, responsible for monetary policy, including setting interest rates.
Interest Rate Cuts: A reduction in the benchmark interest rate by the Federal Reserve, typically done to stimulate economic activity.
Tariffs: Taxes imposed on imported goods, often used as a trade policy tool.
Supply Constraints: Situations where the availability of a product or service is limited, leading to higher prices and potential for increased profits for producers.
Artificial Intelligence (AI): A rapidly advancing field of technology that enables machines to perform tasks that typically require human intelligence, such as coding and problem-solving.
Consumer Packaged Goods (CPG): Everyday items sold in bulk, such as food, beverages, toiletries, and cleaning products.
Diversification: The strategy of spreading investments across various asset classes, industries, and geographies to reduce risk.
Speculative Stock: A stock with high potential for both gains and losses, often characterized by volatility and unproven business models.
Value Trap: A stock that appears cheap based on traditional valuation metrics but continues to underperform due to underlying fundamental issues.

Earnings Season and Market Outlook

The upcoming week is highlighted as the "height of earning season," with earnings taking center stage due to a lack of macro data caused by a government shutdown. This focus on individual companies is occurring at a time when many are reporting "truly great numbers." The recent "benign" Consumer Price Index (CPI) reading, which indicated mild inflation, contributed to a strong market performance, with the Dow gaining 473 points to close above 47,000, the S&P 500 jumping 79% to its 34th record close, and the NASDAQ rising 1.15%.

Next week is described as a "hybrid" due to the confluence of major earnings reports and a Federal Reserve meeting on Wednesday. Kramer anticipates a quarter-point rate cut from the Fed, citing a "stalling economy" and larger layoffs announced by companies like Target and Applied Materials. The tame CPI report is seen as justification for this cut.

Company-Specific Earnings Previews and Analysis

The transcript provides detailed previews of numerous companies reporting earnings, offering insights into potential performance and key factors to watch:

Monday

Nucor (Steel Company): Expected to benefit from President Trump's tariffs, which have protected domestic steel producers from "dumping" of subsidized foreign steel. While Nucor is praised as a "best dealmaker," a "sluggish environment" outside the data center may prevent a "blowout" quarter.

Tuesday

UnitedHealth (UNH): Focus will be on the impact of investigations into their billing practices. Kramer believes these will be dismissed as "not major," potentially leading to a stock climb, reminiscent of its past status as a "huge Wall Street favorite."
SoFi: Despite a "huge run," questions remain about whether the rally is justified. Kramer expresses concern about "profit taking."
Celestica: Described as a company that "does make everything you need to make tech equipment" and possesses "the best chart in the entire stock book."
United Parcel Service (UPS): The stock has been "sneaking up," but its performance is tied to its dividend and financial health. A "good quarter" could push it to $100, while a "bad one" could send it back to $80, presenting a "decent risk/reward." However, recent investors have been disappointed.
Royal Caribbean: Identified as an "incredible performer" and a "winner ever since COVID ended."
VF Corp: Apparel is a "tough" sector, but a "terrific set of numbers" is expected to overcome a weak prior quarter. CEO Brackett Daniel's significant stock purchases are seen as a strong endorsement.
Visa: A "clockwork stock" that "never misses," with expectations for a "blowout" that could lead to "blowout times two."
Seagate: The disc drive company is "supply constrained," which is considered a "great thing to be in this environment."

Wednesday

CVS: Expected to be a "sure winner," especially with Rite Aid out of business and Walgreens "pulling back sharply."
Caterpillar: A "monster performer" involved in infrastructure and the data center, but Kramer fears the stock has "moved up too much" and is "due for some profit taking."
Boeing: After accounting for non-cash charges, Boeing is expected to offer "restrained set of positives" that will drive the stock higher. It's seen as a "most obvious winner from the trade war" as trading partners need to buy "big ticket items" like airplanes to close trade deficits.
Starbucks: Expectations are "not a lot," with humility from CEO Brian Nickel anticipated.
Alphabet (Google): A "monster quarter" is expected, led by YouTube, search, and Waymo.
Microsoft: Expected to repeat its "best quarter of the hyperscalers" performance.
Meta: Mark Zuckerberg is expected to continue delivering "great quarter after great quarter," driven by advertising and AI-powered "Ray-Ban" glasses.
Chipotle: The company's ability to deliver this quarter is seen as "make or break" for maintaining its "growth status."
ServiceNow: Nominated for the "best quarter this whole entire week," with significant AI integration and "big orders." Bill McDermott is recognized as a "most successful non-megacap CEO."
Carvana: Heavily shorted, with expectations that it will "blow the doors off" its reports.
Agnico Eagle (Gold Stock): Recommended over Newmont due to "incredibly low finding cost."

Thursday

Mastercard: Expected to report an "enviable quarter" and is considered a "put this one on auto" stock.
Eli Lilly: The stock is considered "luckless" if it doesn't announce a new use for Zepbound or the pill version's release date, potentially leading to a pullback.
Apple: While initially a concern due to its lack of movement, its recent "explosion higher" has raised expectations to "huge" levels. Kramer advises to "own Apple, don't trade it."
Amazon: Amazon Web Services (AWS), once a "jewel," is now seen as an "albatross." The stock needs AWS to grow from high teens to low 20s for a rally.

Friday

Chevron and Exxon: Described as "laggards" tied to crude oil prices, making it difficult for them to gain traction.

Consumer Packaged Goods (CPG) Sector Analysis

The CPG sector has been a "lagger" in the market, being the "second worst performing cohort in the S&P 500" this year, attributed to persistent inflation, a flagging consumer, and the market's appetite for risk over "sleepy consumer packaged goods stocks." However, recent signs suggest a potential bottom, with some money flowing back into the sector as riskier stocks sell off. The Federal Reserve's move towards rate cuts is also expected to make high-dividend stocks more attractive.

Procter & Gamble (PG): Identified as the "best CPG company in the world," with unmatched scale, portfolio range, and science. Despite pressure on the stock, a "robust quarter" was reported, with beats in beauty and grooming, and flat sales in fabric and home care. The company reiterated its full-year forecast and highlighted resilient performance across regions and product categories. Key initiatives include innovation in Tide and baby care, and a two-year cost-saving program involving job eliminations, improved marketing productivity, digitization, and portfolio rationalization. PG is trading at less than 22 times earnings estimates, near the low end of its 5-year valuation range, and offers a 2.8% yield. Kramer believes PG is the "one to buy" if the CPG group is bottoming.

Analysis of Speculative and AI-Related Stocks

The transcript delves into several companies operating in speculative or AI-driven sectors:

Globant: A 22-year-old Argentinian company described as a "global technology service provider" and an enterprise software development company with a tech consulting business. It was the first Latin American software company to IPO on the NYSE. After reaching an all-time high of $354 in November 2021, the stock has fallen over 83% to below $60. Growth has slowed dramatically, from nearly 60% in 2021 to 15% last year. The rise of generative AI is seen as a significant threat, as AI is "terrific at writing software code." Globant's AI efforts, like "AI pods," are not yet sufficient to offset this challenge, with the stock down 72% year-to-date. Analysts have downgraded the stock, with JP Morgan predicting "shrinkage" and a "very hard time" for positive revenue growth. While trading at less than 10 times earnings, it's considered a potential "value trap." The government bailout of Argentina is deemed irrelevant to Globant's performance, as its revenue is primarily from North America and Europe. Kramer cannot recommend Globant, stating there are "easier ways to make some money."
CoreWeave: A company with "very strong ties to Nvidia" that is "way off its high." Kramer is "on the fence" due to an acquisition attempt, believing the acquisition would be beneficial and a dip in the stock after it's completed would be an "exquisite time to buy."
Circle Internet: Kramer has "come around" to believing Circle will be a "big company" and the "fintech company for the next generation." He sees it as a way to invest in digital assets beyond Bitcoin, blessing it as a potential investment.
Quantum Stocks: The term "quantum" is frequently mentioned, with a general observation that stocks with "quantum" in their name or related to it saw significant gains. However, Kramer cautions that the "real quantum kings are IBM and Google." He blesses D-Wave as a potential "spec" for those seeking exposure to the quantum space, acknowledging it could be a "life-changing" investment, but emphasizes that IBM and Google are the established leaders.

Portfolio Diversification and Investment Strategies

The "Am I Diversified?" segment offers advice on portfolio construction:

Leslie (New York): Holdings include Apple, IBM, Chevron, Eli Lilly, and Verizon. Kramer blesses this portfolio, noting the inclusion of a drug company, a high-yielding telco, a high-yielding oil company, and IBM, which he believes had a good quarter despite a stock dip. He makes an exception for owning both Apple and IBM due to Apple's "own, don't trade" mantra and his personal trust's holdings.
Ian (North Carolina): A 33-year-old investor with a high-risk tolerance and long-term horizon, holding Tesla, MP Materials, Palantir, Crowd Strike, GE Vernova. Kramer categorizes these holdings: Palantir as "software, hardware," Tesla as "robots, no longer thinking cars," GE Vernova as "turbines," and Crowd Strike as "cybersecurity." He sees MP Materials as a defense play due to rare earth needs. He concludes Ian will be "eating money for lunch."
Ryan (Tennessee): Holdings include Meta, Microsoft, Walmart, Valero, and AbbVie. Kramer expects Valero to perform well due to strong oil margins, AbbVie to continue its consistent performance, and Walmart to reach $110 upon reporting. He believes Microsoft will have a "great quarter" and Meta a "terrific quarter," acknowledging the prevalence of "mega caps" in portfolios and the need to accept their significant market share.
Will (Kentucky): Holdings include Apple, Palantir, Arthur J. Gallagher, Agnico Eagle, and D-Wave QBTS. Kramer blesses this portfolio, calling D-Wave a "spec" for potential life-changing gains. He reiterates his positive view on Apple, Palantir, and Agnico Eagle. He prefers Chubb over Arthur J. Gallagher for insurance but finds Will's portfolio "excellent."
Tyler (Nevada): Looking at Apollo for long-term holding. Kramer praises Apollo's negotiators and deal-making, particularly CEO Mark Rowan.
Michael (Illinois): Considering switching from Devon to National Fuel and Gas (NFG). Kramer advises that NFG offers "consistency" while Devon is "more high risk," leaving the choice to the investor's preference for risk/reward.
Dave (Illinois): Inquiring about MongoDB. Kramer is still a proponent but is now leaning towards ServiceNow, calling it his "favorite right now."
Blaine (Washington): Asking about Main Street Capital Corporation, a business development and financing company with a dip and a monthly dividend. Kramer advises against it, stating he has "no idea" what they own and fears a slowdown could lead to "Dead Street."
Steven (Missouri): Discussing GE Vernova and uranium stocks. Kramer reiterates his view that "we should kill the speculation of all other nuke and uranium stocks" but clarifies that Cameco is "not speculative" and is a "very good business."
Pete (New York): Inquiring about VanDeWater Pharmaceuticals, a sponsor of sports teams. Kramer labels it a "spec" and blesses it as such, aligning with his philosophy of allowing one speculative stock in a portfolio.

Supply Constraints and Their Impact

Supply constraints are identified as a critical factor driving company earnings and stock performance:

Intel: CFO David Zinser highlighted "supply constraint for a host of products" and "industry supply has tightened materially," contributing to better-than-expected earnings.
Storage Devices (SanDisk, Western Digital, CK, Micron): These companies are "supply constrained" for products vital to the "data center explosion." This scarcity grants them "pricing power," a significant shift from their past struggles as "commodity tech players." Micron is noted for being too conservative in its demand expectations.
AMD: Supply constrained for much of its product line, contributing to its stock's rise.
Nvidia: Described as the "most supply constrained of all," which is a key factor in its position as the "biggest company in the world."
Reasons for Supply Constraints:
- AI Storage Needs: "Off the charts" demand for storage for AI applications.
- Semiconductor Capital Equipment: Insufficient manufacturing of machines by these companies, leading to a bottleneck in producing other components.
Boeing: Expected to report supply constraints for all its planes, impacting its suppliers like General Electric, RTX, and Honeywell. The demand for planes and attendant maintenance is strong.
GE Vernova: Considered "supply constraint" with its power equipment, particularly natural gas turbines for data centers. Both GE Vernova and Boeing are seen as potential winners due to their ability to produce high-value machinery, which can be used by trading partners to improve relations with President Trump and close trade deficits.
Gold: Despite high prices, gold supplies have become harder to bring to market due to tough terms from host countries and a lack of enthusiasm for contract enforcement or property rights.

Conclusion and Key Takeaways

The upcoming week is crucial due to the convergence of earnings season and a Federal Reserve meeting. While the market has seen a strong rally driven by positive earnings and a tame CPI report, Kramer warns of potential "froth" in speculative names, particularly those associated with "quantum." He emphasizes the importance of supply constraints as a key driver of profitability and stock performance across various sectors, from tech to aerospace and even gold. For investors, a balanced approach, including diversification and a judicious selection of speculative plays, remains paramount. Companies like Procter & Gamble are highlighted as potential safe havens in a shifting market, while others like Globant face significant headwinds from the rise of AI. The overall sentiment suggests a market where strong execution, pricing power derived from supply constraints, and strategic innovation are key to navigating the current economic landscape.