Mad Money 6/10/25 | Audio Only

Key Concepts:

• Two-track market: Different investment focuses between younger and older investors.
• Analyst coverage: The impact of analyst expectations on stock performance.
• Digital assets: Cryptocurrencies, blockchains, and related technologies.
• Quantum computing: A nascent field with potential but long-term development.
• Generative AI: AI models for summarization and information retrieval, but with limitations in calculations.
• Retail trading platforms: Platforms like Robinhood, Weeble, and E Toro catering to retail investors.
• Data centers: Facilities requiring significant power, driving interest in nuclear energy.
• Agentic workflows: Tasks performed by AI agents communicating with each other.
• Dynamic observability: Real-time insights into technology infrastructure.

I. Market Overview and Investment Focus

• Two-Track Market: Kramer highlights a fractured market where younger and older investors focus on different assets. Older investors focus on established companies with analyst coverage, while younger investors are drawn to stocks with little to no analyst coverage, often discussed on platforms like Reddit.
• Analyst Coverage Impact: Stocks covered by analysts are subject to expectations; missing these expectations can lead to a stock decline. Conversely, stocks without analyst coverage can experience rapid growth based on hype and social media sentiment.
• Mildly Positive Day: The market shows modest gains, with the Dow up 105 points, the S&P 500 gaining 0.55%, and the Nasdaq climbing 63%.

II. Disney and the Generational Divide

• Bob Iger Interview: An interview with Disney CEO Bob Iger led to a stock increase from around $115 to $118, showcasing the network's value.
• Generational Contempt: Younger investors may not be interested in traditional, large-cap stocks like Disney, which are heavily covered by mainstream media.
• Obscurity Preference: Younger investors often prefer stocks with less coverage, finding excitement in companies discussed on Reddit.

III. Stocks Favored by Younger Investors

• Crypto-Related Stocks:
  • MicroStrategy (MSTR): A company that buys crypto with borrowed money.
  • Coinbase: A cryptocurrency exchange.
  • Circle Internet Group: A pure play on digital assets, including digital currencies and blockchains.
  • Mining Stocks: Hut 8, Riot Platforms, Clean Spark, Cipher Mining, and Galaxy Digital Holdings.
• Galaxy Digital Holdings: Run by Mike Novogratz, specializing in digital assets, cryptocurrencies, and blockchain. Novogratz is described as articulate and credible, with a background in Goldman Sachs and Fortress Investment Group.
• Lack of Coverage: These stocks trade millions of shares daily but are often ignored by Wall Street analysts due to a lack of pedigree and sponsorship.

IV. Nuclear Energy Stocks

• Data Center Demand: The increasing electricity demands of data centers are driving renewed interest in nuclear power.
• Popular Nuclear Stocks: Olo, Camo, PWXT (BWXT Technologies), Centress, Talon Energy, and NextG.
• Kramer's Preference: Kramer prefers GE Vernova, which builds nuclear reactors, considering it a "real company." He notes that new nuclear reactors are still at least 5 years away.

V. Quantum Computing Stocks

• High Trading Volume: Quantum computing stocks are popular among young investors, with high trading volumes.
  • Stocks Mentioned: io NQ, D-Wave Quantum, Regetti Computing, Quantum Computing.
  • Trading Volumes: io NQ (30 million shares), D-Wave Quantum (60 million shares), Regetti (61 million shares), Quantum Computing (65 million shares).
• Limited Knowledge: There is little known about these companies, and analyst coverage is scarce.
• Long-Term Development: Quantum computing is still years away from practical application.

VI. JM Smucker: A Contrasting Example

• Traditional Company: JM Smucker, a company making coffee, jams, and pet food, is covered by 15 different firms.
• Hostess Acquisition: Smucker acquired Hostess (maker of Twinkies) for $5.6 billion in November 2023.
• Impairment Charge: Smucker took a $980 million impairment charge related to the Hostess acquisition.
• Stock Plunge: The stock plunged 15% due to tariffs, higher coffee costs, and negative analyst sentiment.

VII. Trading Platforms: Robinhood, Weeble, and E Toro

• Robinhood (HOOD):
  • Disruptive Model: Pioneered commission-free trading.
  • Offerings: Stocks, crypto, options, futures, and financial services.
  • Scale: 25.8 million funded customer accounts, $180 billion in assets under custody.
  • Management: CEO Vlad Tenev is praised for his vision.
• Weeble:
  • Origins: Originally a Chinese company, now headquartered in St. Petersburg, Florida.
  • Operations: Operates in 14 markets, offering global stocks, options, and futures.
  • Crypto: Ditched crypto trading in 2023 but is re-entering the market.
  • Scale: 24.1 million registered accounts, but only 4.7 million funded accounts with $12.6 billion in customer assets.
• E Toro:
  • Origins: Israeli company founded in 2007.
  • Operations: Operates in 75 countries, offering stocks, crypto, options, and futures.
  • Copy Trader: A feature allowing users to passively match the moves of other traders.
  • Scale: 3.58 million funded accounts with $14.8 billion in assets under administration.
• Financial Comparison:
  • Robinhood: Leads in revenue growth and profitability.
  • E Toro: Slower growth but better profitability than Weeble.
  • Weeble: Impacted by discontinuing crypto trading, with revenue growth disappearing in 2024.
• Kramer's Assessment:
  • Robinhood: Best of breed but may be overvalued.
  • E Toro: Obvious number two with good profitability.
  • Weeble: "Do not touch" due to congressional scrutiny and low funded account ratio.

VIII. Cisco and AI Networking

• Cisco Live Event: Cisco announced new products for data servers to deliver secure, scalable AI infrastructure.
• Gulf Deals: Cisco signed deals with G42 in the Emirates, Stargate UAE (with Nvidia, Oracle, and OpenAI), and Humane in Saudi Arabia.
• Agentic Workflows: AI agents performing tasks and communicating with each other require robust network infrastructure, security, and low latency.
• Splunk Acquisition: The acquisition of Splunk is seen as crucial for providing insights based on technology infrastructure data.
• Enterprise Networking Refresh: Cisco announced a refresh of its enterprise networking portfolio, including switching, routing, and wireless access points with integrated CPUs for inline security.
• Firewall Portfolio: Cisco also refreshed its firewall portfolio, allowing firewall logs to be ingested into Splunk at no cost.

IX. Casey's General Store (CSY)

• Business Model: Midwestern convenience store chain known for its pizza.
• Performance: The stock has gained over 75% since September 2023, outperforming the S&P 500.
• Key Strategies: Focus on food, store growth, and operational efficiency.
• Value Proposition: High-quality products, including private label items, at competitive prices.
• Expansion Potential: Significant white space for store growth, particularly in Texas.

X. Lightning Round Highlights

• Joby (JOBY): Kramer expresses confidence in Joby, an electric vertical takeoff and landing (eVTOL) company.
• Arm Holdings (ARM): A partner of Nvidia, with strong performance.
• Nebius (NBIS): A GPU rental company that Kramer is impressed with and believes will go higher.

XI. AI Chatbot Limitations

• Summarization Strengths: Generative AI excels at summarizing information.
• Calculation Weaknesses: AI models struggle with arithmetic, especially when involving splits, spin-offs, and dividends.
• GE Example: AI models provided inaccurate calculations of returns on GE stock, with significant discrepancies from the actual value.
• Warning Label Needed: Kramer suggests AI models should have a warning label about their limitations in calculations.

XII. Synthesis/Conclusion

Kramer emphasizes the importance of understanding the evolving investment landscape, particularly the divide between traditional and emerging assets favored by different generations. He highlights the potential of companies catering to the digital asset and AI sectors, while cautioning against hype and the limitations of current AI technologies in complex calculations. He also underscores the value of established companies like Cisco and Casey's General Store, which are adapting to new market demands and demonstrating consistent performance. The key takeaway is the need for investors to conduct thorough research and not rely solely on AI-generated information for critical financial decisions.