Mad Money 7/30/25 | Audio Only

Key Concepts

• Fed Policy & Rate Cuts: The Federal Reserve's decision to hold steady on interest rates and the market's reaction.
• Magnificent 7: The dominance of a few large tech companies (Microsoft, Meta, Nvidia) in driving market performance.
• Earnings Reports: Analysis of earnings reports from companies like Meta, Microsoft, VF Corp, and Starbucks.
• Inflation & Consumer Spending: The impact of inflation, tariffs, and consumer behavior on company performance and the broader economy.
• Turnaround Strategies: Strategies employed by companies like VF Corp and Starbucks to improve their performance.
• Data Center Infrastructure: The growing demand for data center power and cooling equipment, particularly for AI applications.

Market Mojo and the Fed's Decision

The market has shifted back to favoring tech stocks, particularly the "Magnificent 7," after the Federal Reserve meeting. Jim Kramer expresses mystification at investors who expected a surprise rate cut from the Fed, despite clear indications that it wouldn't happen. The Dow, S&P 500, and NASDAQ had mixed performance, with tech stocks outperforming. Kramer believes the market lacks "oomph" outside of a few tech giants and their related companies. He anticipates continued criticism of Fed Chairman Powell from the President due to the lack of rate cuts and the next Fed meeting being in September.

Earnings and Economic Indicators

The Fed is hesitant to cut rates due to healthy GDP growth, a strong labor market, and limited price decreases. New tariffs are also a concern, as companies may eventually pass higher costs to consumers. While some companies like Stanley Black & Decker, United Parcel, PayPal, and Whirlpool have shown weakness, others like Visa and Starbucks indicate continued strength. Kramer believes the mixed economic signals make it difficult for the Fed to take action.

Meta and Microsoft's Strong Earnings

Meta and Microsoft reported strong earnings, exceeding expectations. Meta's revenue forecast was higher than expected, and its capital expenditure budget was lower. Microsoft's Azure cloud infrastructure business saw growth accelerate from 35% to 39%. Their AI business is also performing well. Kramer emphasizes that these companies are like "nation states" and are not heavily influenced by the Fed's decisions.

On Holdings (OnCloud)

A caller, Sam, discusses his experience running over a thousand miles in OnCloud Monster shoes and notes a design flaw that digs into the Achilles. He worries about repeat purchases due to this issue. Kramer acknowledges the concern but believes On has a history of adjusting to problems, citing Roger Federer's involvement. He also mentions potential competition from Nike but considers On a decent buy.

Intel's Foundry Business

A caller, Aaron, asks about Intel's foundry business. Kramer states that the foundry was "ill-advised" and not necessarily profitable. He notes that Intel's new CEO, Lip Bhutan, understands the challenges of the foundry business. Kramer suggests that investors who bought Intel stock may break even compared to other stocks like Nvidia.

VF Corp Turnaround

VF Corp, the parent company of Vans, North Face, and Timberland, reported a better-than-expected quarter. CEO Bracken Darrell is interviewed.

• Vans: Darrell states that Vans will be turned around, citing green shoots at the top, luxury trends in stores, and positive feedback from events like the warp tour. He attributes past struggles to a stale innovation pipeline, overextension into value doors, and stale marketing. They are resetting distribution, pulling back from value doors, and reducing the number of doors by almost 20%.
• North Face: North Face continues to be a premium brand, with innovation in the core business and growth in footwear and bags/packs.
• Timberland: Timberland has the potential to get big again, with the yellow boot and boat shoes picking up steam.
• Altra: Altra is a hot trail running shoe and the fastest-growing road running brand. It has low brand awareness but high customer loyalty.
• Dickies: Dickies needs to be the best Dickies it can be. Trends are improving, and a new team is in place.
• Tariffs: Tariffs are being managed through cost reduction, factory relocation, and price increases. VF Corp expects to offset all tariffs by 2027.

Darrell reveals he has invested $3 million of his own money in VF Corp stock.

Starbucks Turnaround

Starbucks' latest quarter was a "roller coaster" experience for investors. While headline numbers were weaker than expected, Kramer finds the overall results encouraging. CEO Brian Nickel, who previously orchestrated a turnaround at Chipotle, is implementing a plan to improve the instore experience and solve the throughput problem.

• Green Apron Service: Starbucks is testing a new service model in 1500 stores, which has shown improvements in transactions, sales, and customer service times. The company plans to scale up the Green Apron service across all US stores starting in mid-August, ahead of schedule.
• China: China was a relative bright spot, with same-store sales up 2%.
• Strategic Update on China Business: Starbucks has received significant interest from more than 20 interested parties for its Chinese business and is evaluating options. The company remains committed to keeping some of the China business and wants to retain a meaningful stake.

Kramer believes that if Nickel keeps delivering on the turnaround front, Starbucks and its shareholders will be huge winners.

Lightning Round

• Uber: Kramer is bullish on Uber and suggests buying more.
• Micron: Kramer suggests buying a little Micron, but needs to see DRAM pricing go back up.
• KeyCorp (KEY): Kramer doesn't think KeyCorp is in sell mode and doesn't mind owning the stock, especially with its 4.5% yield.
• General Mills (GIS): Kramer's stance on General Mills hasn't changed. He believes the company is part of the inflation complex and needs to lower its food prices.

Vertive Holdings

Vertive Holdings, a maker of specialized power and cooling equipment for data centers, reported excellent results. Sales were up 35% year-over-year, and earnings beat expectations. The company issued a strong outlook for the current quarter and raised its full-year forecast. CEO Gio Albertatsi discusses the factors powering the sales momentum, including the strong data center industry and Vertive's expanding portfolio.

• Data Center Gray Space and White Space: Albertatsi explains Vertive's role in both the gray space (power and cooling infrastructure) and the white space (IT stack). As power density increases, the white space is becoming more important, and Vertive's cooling and power technology is making a difference.
• Partnerships: Vertive has partnerships with CoreWave, Dell, and Ollo. The CoreWave partnership involved enabling the first colo-level GB300 deployment. The Ollo partnership involves working with small nuclear reactors for local power generation in data centers.
• Tariffs: Albertatsi states that tariffs are a transitory cost and that Vertive expects to have tariff-offsetting actions in place by the end of 2025.

Inflation and Consumer Behavior

Kramer discusses the impact of inflation on consumer behavior, using Chipotle as an example. He notes that the price of a chicken burrito has increased significantly since 2019. He believes the Fed is worried about another round of price increases from tariffs.

Kramer argues that the only thing that will get prices down is a strike by consumers. He notes that Wall Street doesn't want companies to cut prices, even though consumers are struggling. He suggests that the market is favoring tech stocks because pricing isn't a factor.

Synthesis/Conclusion

The market is currently driven by a few large tech companies, while the broader market is struggling due to inflation, tariffs, and the Fed's reluctance to cut interest rates. Companies are employing various turnaround strategies to improve their performance, and the data center industry is experiencing strong growth. Consumer behavior is a key factor in determining whether prices will come down.