New Yapig Arch Med 226 gram saftigt kött, 100% nötkött och den perfekta sydliga Big Arch-såsen. Nya Big Arch för riktig McDonaldshunger. At Love Duffer. Men om du inte tycker att det är så enkelt, är det bara. Sväng in till oss nästa gång du behöver läsa. Welcome to Mab Mike. Welcome to Kramer. I'm trying to do some teaching. So call me at 1-800-743-CNBC or tweet me at Jim Kramer. The market's got these incredible moods things.
So I say let's be careful. That's the best advice I can give you right now. That and hold on tight. Because we're experiencing one of those moments I mentioned, how to make money in any market. A moment where we could go down a lot and then rebound like crazy. Drone, no drone, bye. Bye bye, bye bye. It's my job to help keep you in the game so you don't miss that snapback. I don't want you shaken out, even as I don't want you to trade your way into oblivion. No, thank you.
And today was a true test of what's ahead, with the Dow sinking four and four points, SP declining point nine four percent, NASDAQ losing one point oh two percent. A bad day. But we erased a big chunk of our losses from the swoon this morning. How low did it get? At one point the SP had fallen from sixty eight hundred all the way down to sixty-seven ten. Let me have the Furious Rally for 6816. Think about that.
Remember yesterday we started lower uh until opportunistic buyers came in because they were hoping this war with the Ram would wrap up quickly. When the price of oil soared and then pulled back, the market got jiggy. So anyone who sold near the bottom ended up kicking themselves. The house of pain That's why I've always told you that panic NOT
Today though we saw the other side of the coin. The market sagged badly as we recognized that Iran actually had a plan for what to do when their leadership gets taken out. They basically told local mil military commanders Fire at will! Putting thousands of autonomous drones and missiles in the sky. They're using the cheapest rockets possible to exhaust their expensive countermeasures.
The launch sites are everywhere, and Iran doesn't seem too picky about what they hit, whether it's oil infrastructure, luxury hotels, the Gulf, or U.S. The coverage got so negative at one point today that I started wondering if the war might take months and uh as we bring in more ammo, or maybe we actually lose. Yes, it read that negatively. The spike it oil more permanents than the day before, the formerly Magnificent Seven had no legs whatsoever.
Worse, the selling in the hottest semiconductors of late, the memory stocks, uh micron, C gate, wash, and digital C and just it was particularly brutal. Culprit. I did some homework on this and it got me follow the following answer. Black Tuesday's the culprit. Oh, you don't know Black Tuesday? That's what they're calling the sell-off in South Korea last night, with the index once red hot, plummeting 7.2%. Two weeks of gains, van.
But the don't don't sweat the program here cost me people. Uh this thing's up seventy five percent last year, up thirty seven percent to date. I mean, even after last night's pummeling pummeling. All right, listen. The South Korean market is extremely hot and it's very active. It's highly concentrated. The two most important stocks, Samsung Electronics and SK Heinex, they make up 52% of the market. Two stocks.
Simpson stock fell 9.88%. SK Heinex got hit over the head with an eleven point five percent two by four. When we get these kinds of declines, we get a spillover to our stocks here. Some of the spillover might be the selling by Koreans in our market who are trying to meet margin calls in their market. And some of it might be scared holders who watch those two Korean stocks like a hawk and figured something might be wrong. Remember those two stocks.
Those companies really do have a corner on memory. I'm going for the margin call theory because there's nothing fundamentally wrong with the memory and data stage c stage core, nothing wrong with data storage. Everything memory did get crushed. Now to complete the tableau of negativity. We saw more pressure in the private equity stocks, this time because of redemption jitters from a private credit fund.
Run by Blackstone. Good firm. Plenty more about this pesky negative later in the show. But it it's got a lot of the professionals on edge. Even if the amateurs have no idea what they're scared of. The only thing green of any note beyond the oil, Target Invest Buy, two once loved retailers that have provided nothing but worries and headaches about their dividends of late. They both imported strong quarters and now their stocks are flying.
But as the day went on, once again, the oil markets couldn't hold. And they just can't keep their gains. I'm gonna talk about that more later on the show. As we got reports the United States might directly ensure traffic through the Persian Gulf. The President says our navy's gonna escort taggers if necessary. Oh what the heck, why not?
And the Iranian missile warfare, the president said that Ira that Iran's military has largely been knocked out. Today a missile strike apparently destroyed the conclave that was supposed to choose their next supreme leader in Iran. I dunno. Seem negative. Well, then there's a swing from despair and defeat to victory. Personally I think that neither assessment seems realistic, but both occurred today.
If you took action in the morning, if you did a proverbial, get out now! You didn't have time to get back in once the averages started bouncing from their lows. You never do. But if you sold into the strength at the end of the session, I hope you're swift enough to get back in. If we have a decent opening tomorrow, especially if South Korea finds its footing, I don't know if you'll get back in at all. That's why I keep telling you that so many people miss.
Rally after rally after rally. Now let's talk about what's really going on. Something that could change the focus of the entire market. You know that the tech stocks have been very troubled of late. Enough with the Magnificent Seven. We've got this big four thing going on. Adobe, Salesforce, Service Now, and work. These are once popular enterprise software companies that are widely thought to be carry-in, victims of anthropic and something called vibe coding.
Just consider as a machine that you can talk to and say, I want you to write code that's like ServiceNow except for better and cheaper. I want sales help and I don't want to pay sales forces exorbitant fees. I can draw, I don't need to do it. Workday one step from extinction. That's what's going on. Now I get that narrative.
These companies could see their earnings growth slow because of artificial intelligence. There are ways to create products that might be good or better than the big four. However It would help to see some real actual weakness in the results beyond what we've seen from Workday, which now is a terrific new CEO, the predecessor of the previous CEO, and Neil Bush.
Last week, Morkday reported what was widely perceived as a disappointing quarter and the stock still rallied. Salesforce reported a what li widely was considered to be a not great quarter and guess what? After it immediately lost$8, it has U-turn. It's rebounded from$181 to$196. The other three zoomed today too. Surface now soaring three point five percent. Adobe rally nearly four percent. Workday vaulting more than seven percent.
Why does this matter? Because there's so much money betting that so much enterprise software will be wiped out by just a handful of AI companies to the point where it could rock the public markets and really create havoc in the private ones. Some major private equity firms and even some banks that will in that area. Last week you heard that Anthropocrite might potentially destroy everybody. But at the end of the week, by the way, Department of War broke with Anthropa.
Maybe these stocks are rallying because anthropic no longer seems invincible. Remember what I care about. I don't want you acting on a US TKO of Iran. I don't want you to think that everyone's out of missiles except the bad guys. I want you to be thinking that these are companies you're investing in, not trading cards. You're shuffling. And if you want to get metaphorical, what retailer would you sure
Coming into the session, given the spike in oil, probably the one that's most hobbled. I bet you would have shorted Target. Yet Target was one of the Today's biggest winners. Up six and three quarters percent welcoming a new CEO. Here's the bottom line. If you think that you should be taking action on every drone, every missile, go trade in the predictions market. Get out of our house.
That's gambling. I prefer to focus on investing, and that's less connected to the war than you might think, and a lot more connected. Guess what? To the performances of the companies themselves. All aboard? That was easy. I'm gonna go to Steve, my home state of New Jersey. Steve! Hey Jim, how's it going? Steve, it's a great day. How about you? Hang it in there. There you go. I called uh yeah. That's all you have to do. So my call today is about Boeing. Despite record orders the last few months.
The stock continues to go down. I was wondering if you could explain why this is happening. Okay, I think it's going down because of the travel and leisure at possibly the end of the bull market. A lot of people worry, Steve, that there won't be a lot of plain orders because of what's going on in the Middle East. I think that's short-sighted, I think that's wrong, I think Boeing should be bought plain and simple, big position of my trust. It's the right stock, right time.
It's hard not to get hung up on all the news out of the Middle East, but you've got to stay focused. Oh man, Matthew tonight, chairs of cloud there, haven't been immune to the sell software sell-off. a winner from all the AI. I'm checking in with the company's top grass. Then, crude oil's been surging because of the conflict in a rent, but is this move sustainable?
And CAR is undergoing a major transformation under CO Dave Gitlin. And tonight I'll find out if the stock is ready to fire on all cylinders in 2022. Have a question? Tweet Kramer. Tag Mad Mentions. Send Jim an email to madmoney at CNT. Come or Call at 1-800- 743-CNBC. Nya Big Arch såmäktig med 226 gram saftigt kött, 100% nötkö och den perfekta syrig Big Arch-sausen. Nya Big Arch för riktig McDonald's-runger. At love doppelcircle k. lika enkelt som att Men om du inte tycker att det är så enkelt.
Gång du behöver ladda bilen. Ikea presenterar Ljud av förändring. Älskling, vi fick det. Vi var. Vida. Och ska inre det Välkommen till IKEA! Can any enterprise software stock escape that gravitational pull of a market that dislikes the entire group? If there were, it would look like something called Cloudflare, an internet infrastructure play with a cybersecurity kicker. This is not something that can easily be replaced by some piece of code written by the AI platform.
But somehow that still hasn't saved the stock. When Claudia reported three weeks ago, it delivered a top and bottom line beat. I've got stuff which says it was a it was right, of course, from the Olympics, and it was the gold medal of the period.
In response the stock popped five percent and but then it drifted down and it's down to 31% from its high four months ago. Stock is pretty expensive on a price-to-earnings basis. Then again, it's holding up much better than many of its other rivals because that is fabulous growth. So let's take a course over with Matthew Prince. He's the co-founder, co-chair, and CEO of Clouther. Mr. Prince, welcome back to Mad Mike. Jim, thank you for having me.
Okay, so Matthew I'm uh checking your Twitter file, whatever uh may come next from Iran, Cloudflare is well aware of their techniques, not worried and fully prepared to defend our customers. Tell us about your interaction, what you know about Iran, and what you can add to what's really happening behind this. Со Іран із бій церк секурід плес, алонг Росія.
China and North Korea, they launch cyber attacks all the time. They're really good at it. We're good at defending against it. What's interesting is what you usually see in these kinetic conflicts is right before there's a conflict. you'll see a spike in cyber attacks. And so on February 27th, shoot a form, we saw a spike in cyber attacks coming out of Iran. What was interesting though is usually those cyber attacks
stay high in these kinetic conflicts, that's not what happened here. We're actually down 90% from those peak levels below what baseline levels are. And what that indicates to me is actually the kinetic war, the the bombs being dropped, have actually disrupted the command and control infrastructure inside of Iran and that's affecting even their ability to launch cyber attacks. Wow, okay. So m looks looks like that they're
uh the anti Iran faction may even be aware of this kind of thing. Yeah, and I I think that like we shouldn't count our chickens. Um they can rebuild and they I think will use cyber as a way to strike back against the West and from some of their uh affiliates or other groups like Hezbollah, we're still seeing an increased level of cyber attacks that are there and Cloudflare is incredibly good at stopping this.
But what I think is the most interesting is where in most of these these sorts of conflicts you see an elevated set of attacks. In this case, we've actually seen a significant drop in what's coming out of Iran. Very thorough very thorough cloudflare threat report. Thorough and also a little scary, frankly. There is the muddy krill, the convolute krill and the crusty krill. They sound funny. But they're not, are they? Well one once upon a time we would usually we would give uh attacker group
names that made them sound really kind of ominous and scary and and fearsome. We we tried to take a different way of making them sound absurd and small and like insects or bugs or or bad things. What what we're seeing though is that around the world Cyber is being professionalized, where they are actually taking the attack and focusing very much on how can they get a return on investment, how can they actually make sure that they're making money from these attacks.
And that's what's happening over and over again all around the world. Uh it's funny when I read it, Matthew, I was saying
You look y you look these could be uh clumsy toad out of China, the p a poony toad. I mean, I would buy shares in these things. I mean they're businesses, aren't they? They are absolutely businesses. And in some cases they've actually professionalized where they've got Someone who actually hacks into the account, then somebody who will run the sort of the campaign to encrypt all the data within a customer, and then someone who will actually run the uh the ability to
stort money out of these these companies. So these have become very professional organizations. And some level that's a bad news, but at another level, that means we have ways of disrupting them. And we have ways of actually striking back against them, targeting various aspects of how they're doing it. And every single day the Cloudflare team is on top of these security threats.
And able to stop them, and we're really proud of the enormous percentage of the internet that we project. Well you should be. You got a forty-two point five million dollar uh annual uh a uh annual v uh uh volume uh I mean one of the biggest asked me one of the biggest contracts ever.
Well you're a contract value. That's a huge contract. Yeah, and again, I think what we're seeing is that more and more the people who are building uh and protecting what has to be key online. And in this case it was an AI company, one of the large AI companies. that wanted to make sure that they could stay safe whatever they were doing online, they're turning to Cloudflare to do that. We see that over and over again across all kinds of enterprises, not just from a security perspective.
But increasingly, because we have this infrastructure that spans the globe, when people are building the future, they're building it on Cloudflare. And so no matter what, In the future there's going to be more code than there was yesterday. Right. And what that code is increasingly where people are building that is they're building it on Cloudflare, they're deploying it on Cloudflare, and we can make sure it's fast.
Secure, reliable, all around the world, whatever audience you're trying to do. Well, you should tell people what percentage you are of this because it's so unbelievable.
Well we've we've said for a long time that we're more than twenty percent of the internet sitting behind Cloudflare and we we don't want to sort of say exactly how big it is, but we've continued to grow and we're uh we just think it's so important to see that. And one of the things that give us that ability is that's not only an ability to
Make sure that we can keep everything online, make sure that the developers of the future can deploy code and get the advantages of our network, but we also have the best sensor network. Being able to see what those threats are. And so one of the things that's really amazing is we're starting to experiment with giving our customers actually AI systems.
to look through their code, find the vulnerabilities, and then we can automatically protect in a bespoke way from the individual vulnerabilities that an individual customer has. That's something you do, I know Anthropics says they can do, but I'd rather have you be the 360, the whole way. Be able to look in. I don't want to hand it off to anthropic. Yeah, well and again I think that Anthropic is a terrific partner to us and someone that we you know is is uh has been a great customer to us.
And what we see is that as they succeed, we succeed as well. But we want to make sure that no matter who you use, Whether you're using Anthropic, you're using our own solutions, you're using a great company like CrowdStrike or Sentinel One, whatever it is, it gets fed back into the Cloudflare network, and that we can be that.
I feel like we've given short shrift to something that I personally take very, very seriously, which is that you're a protector of journalists. There will be no journalists if these Major sites, the AI sites can can just scrape everything. You are the way that It can be stopped. I think that's that's exactly right. And we think that there's actually good news in the journalist and content creator space.
where we know that there are willing buyers. The AI companies want as much data as they can get. What we need to make sure is that they can't just get it for free. And we're helping that. I'll tell you the thing that I'm the most worried about though and I know this is something you care a ton about. I'm worried about what happens to small businesses.
Because what I think is going to happen is more and more the way that we interface and buy things online is going to be through our AI agent. If you think about your small businesses that you do business with, you do it because it's convenient or because you have a personal relationship with them, your AI agent doesn't care about any of those things.
And so I think it's going to be this massive consolidating effect. And so what we're thinking about is how can we partner with great companies like MasterCard, Visa, PayPal? um you know Shopify to actually how do we create that toolkit where small businesses are not only gonna be able to survive but thrive in this world that's coming and that's key to what we have to do. Well the small businesses the most easily blackmailed They might have something. They the threat would the threat actor would
What could put it online and wreck their business. Totally. And th you're the only way it can be stopped because most of the people don't know they're not sophisticated enough to stop the the threat. Yeah, and so I think that that's why so many small businesses use us. But now as we see this new threat coming from AI. Where again it's it's this massively consolidating um force of you. I go back and watch old uh reruns of the Jetsons, the old cartoon show, and yes.
Where did George Jetson get his information? The answer was Rosie the helpful robot. And he would say, hey, Rosie, go buy me some eggs. Rosie didn't say, I'm going to support the local bodega down the street that's always been nice to me and and has great eggs. Rosie's going to say, I'm going to go get eggs from wherever it's cheapest or fastest or whatever is is best.
And over time that could be major consolidated forces. We need to make sure that that local bodega has the ability to say, hey Rosie, you should shop from us too. We need to support small businesses. Why do we ever? Because if it's just if it's just Costco and Walmart and Amazon. There's really not a lot of chance for the Yeah.
That'll be next time. Moldova, which is a a place I know very well. I mean, I don't know. I thought that th they almost had to be corrupt elections, but you kept them from being that way. That was That was terrific. That's Matthew Prince. He's Cloudflare co-founder and co-chair and CEO. And it's not gonna be beaten by some bot. It just doesn't work like that. Big money's back. Coming up, oil prices are rising as the war in Iran continues.
But will the high prices stay if the conflict ends? Kramer's going to be a little bit more. Charts to search for answers. Nya Big Arch såmäktig med 226 gram saftigt kött. 100% nötkö och den perfekta syg Arch-såsen. Naa Big Arch för riktig McDonald's hunger. lika enkelt som att ha Om du inte tycker. Sväng in till oss nästa gång. Laddning. Kia presenterar djud av förändring. Du är min tur och längre. Läng slut! Jag har inte helt tänkt snå! Vi kan gå från vänner till rival.
What do we make of the surge in oil prices in response to the war with Iran? We've seen this kind of spike before, haven't we? Even if the current conflict is a lot more intense than our bombing run against Iran's nuclear facilities last summer. So to get a better read on the situation, we're gonna go up the charts with the help of our resident commodities experts. She's been very right on oil.
Her name is Carly Garner, a brilliant technician who's a senior commodity market strategist and broker at the Carly Trading. She also the author of the Carly Prospective Newsletter. And her view is pretty simple. If not for the military action in Iran, she thinks oil would be In the forty.
While the price of crude has rallied now that we're in a shooting war with the with the Rin, Garner points out that we've seen multiple rallies like this since oil peaked in March of twenty twenty two, each one accompanied by the threat of supply disruption. But in reality
Not many barrels of oil were ever really taken off the market. This time we've got the additional wrinkle of Venice Well, which is upping production in a way it simply couldn't do before when it was under heavy sanctions from our government. That's why to garner the recent run in crude is all about Iran and whenever oil rallies on bloodshed in the Middle East, that tends to be about fear more than fact.
Keep in mind, Iran's also spent decades under heavy sanctions. If they wind up with a pliable government, a regime that we may like, this war may end up increasing oil production by a lot. Even if there's no real regime change, these oil spikes tend to be temporary. Garner points out that in May of last year, oil rallied from a multi-year low of$55 a barrel as our government was quietly planning those strikes on Iran's nuclear program.
But by the time the world learned of the strike, the oil market was in the process of peaking and eventually gave back all of those gains. When you look at the ch uh let's give you let's look at a weekly chart of West Texas Croup. Gardener News said it's broken through the same trend line that it rallied above last summer. And even tested, it's 200 week moving average of$76, right? There's the test. Okay. Unlike last year, the current strike on Iran has been well telegraphed.
But Garner expects it to play out the same way. As long as the silium resistance at$7600 holds, which it has so far, she says the bear market in oil remains intact. And long term she sees it heading forty-four dollars per barrel. Simply put, in an absence of a prolonged conflict that threatens oil production across the region, she's betting this oil spike plays out just like the last six. How bullish would that be?
Garner says you need to watch a couple of key key levels.$67 and$65. Okay. Uh the former would represent a retest of the trend line breakout. And the latter tends to be the pretty pivotal uh a really pivotal uh price here. Uh if we get a breakdown below sixty five, okay.
Then she thinks that there's a high probability of oil heading to the forties. That would be incredible. Of course if oil could break through its silium resistance at the two hundred day moving average, Garner thinks that would that would be a sign that we've entered a new bull market.
She's not expecting that kind of move though. But if it happens, oil might see ninety to ninety five before it stops going higher. That's where we go if this around war drags oil much longer than expected. And that's why people are so worried about a uh bear market from what's going on. What makes corner so confident that oil remains stuck in bear mode? All right, check out this chart of the oil futures with data from the CFTC. Commitments of traders report. The green line
Okay, this is the big line. It buy it tracks the net futures position of so called large speculators, meaning money managers, and and they've been buying oil rallies with less and less conviction. You can see that's not really it's going. That way. Uh by by the way, this is exactly the kind of behavior we saw from large speculators shortly before the price of oil collapsed in twenty twenty.
They were buying dips but buying fewer contracts each time until eventually the bottom fell out. Definitely not bullish that we were seeing the same pattern. That's why I'm not as concerned about that ninety dollar pricing at that ninety dollar target, which I really don't want to. Really don't want it to come true.
One more point on oil. Take a look at the weekly chart of the dollar index, which measures the greenback against basket foreign currencies. Over the past nine months, crude oil and the dollar have maintained a negative correlation of about 50%. When the dollar goes down, oil goes up, and vice versa. Why does that matter? Because Garner thinks the dollars finally started to bottom here. Can you imagine?
Uh after a prolonged downturn. After over the last year we got a triple test of the lows and it's already started rebounding with the dollar index possibly headed to one hundred in the near future. Again. A stronger dollar translates to weaker oil prices. In fact, it's bad news for nearly all commodities, and you know we've seen spikes in a lot of commodities.
While we're on the subject of commodities, let's talk about the volatility in precious metals and cryptocurrencies. And garners view volatility as one area that often bleeds over into others. Gold and silver had been both flying, but now they are starting to pull back hard from their highs. It's uh it's really pr pretty remarkable. Lots of people bought these metals with borrowed money and once they start getting margin calls, they often end up selling more stable assets like stock.
in order to raise money. I talked about the Koreans selling our Micron and our Western Digital and our Sandjist at the top of the show. We saw the same thing when crypto broke down last fall. Now last time I mentioned that Larry Williams legendary market historian was calling for bottom in Bitcoin. He sees it running into May or June. You know I like that call a lot. But when Garner looks at the weekly action in Bitcoin, she feels a lot less sanguine than Larry.
If we look at what happened when Bitcoin peaked in twenty twenty one, so we go back all the way to here. It only sold off hard until it found a floor near fifteen bucks fifteen thousand dollars. Remember this used to be dramatically lower. This past October Bitcoin made the exact same double top pattern we saw in twenty twenty one.
Uh and if we see a similar decline, then Gwarna thinks it could fall all the way to thirty thousand dollars. Meaning there's a lot more downside here. This is her target. From where she's sitting the moment, Bitcoin collapsed below 78,000. The Bears took control and they're still in charge, even after yesterday's rebound. Then again, if you look at the decline in 2022. Early that year Bitcoin rebounded like crazy for most of the first quarter before resuming its downtrend.
Garner wouldn't be surprised if we get something similar. Maybe it makes her run at 78,000 to retest itsilium resistance. That sounds reasonable to me. She's betting that rally fails and the sell-off comes right back. I have been a longtime believer in Bitcoin, but I have to admit that all things crypto pretty much trade alongside the markets appetite for risk.
That that the only thing it really correlates. After we I used to think it correlated with trouble, cor uh correlated with the dollar. It didn't correlate with anything other than risk. It's a pure bet, an animal spirit bet. Which frankly is hard to predict in times of turmoil. It's not what I thought it was.
Here's the bottom line, the charts as interpreted by Carly Garter suggest that the war with Iran is the only thing propping up the price of oil. And if history's any guide, she doesn't expect that to last very long. In her view, this is just a temporary reprieve from the oil bear market. She's not feeling too optimistic about Bitcoin either. Let's go to Blaine in Maryland. Blaine. Hey Kramer, pleasure to speak to you, sir. Right back at ya.
I was wondering your thoughts on Union Pacific, uh, and the possible merger coming up. Uh Union Pacific has just had a parabolic move. I I always point out th the transports have parabolic moves too. When I see a parabolic move I just don't recommend it. Parabolic means it's going straight up. I cannot recommend a stock I really like, Union Pacific, until it goes lower. And my work would say that you can't buy this$265 stock until it goes down at least$30.
The charges interpreted by Carly Garner suggests that the word around is only propping that's the only thing popping up the price of oil, and it's all temporary. She doesn't expect this to last very long. Cool new way to play the data center build out. Is there a possibility of some big orders down the road? I'm checking the CEO to plan.
Cracks forming across the private credit sector a warning sign for the rest of the market. I'm sharing where I come down on this space and it's me- they're very dispassionate. Of course, audio calls rapid fire tonight's edition of the lightning round. It's been a good year for Carrier Global, the heating ventilation air conditioning company, the stock that's up 16% so far in 2026.
When Carrie reported a month ago, their top and bottom line results came a little weaker than than expected. That's thanks to weakness in North American residential construction. We all know about that. The full year forecast I think was justifiably a little cautious. But inside that disappointment, carriers increasingly a two speed story. The residential business is highly cyclical and it's still in the in the bus phase of the boom and bus cycle.
But their commercial HVAC and aftermarket business is doing extremely well. In part b because it's got some data center exposure. Doesn't hurt the carrier if it's the halo rubric, heavy assets, low obsolescence. You know we like that during the show.
So can this stock keep climbing? Let's check in with Dave Gidlin. He's the chairman and CEO of Carrier Global to get a better read of the situation. Mr. Gidlin, welcome back to Mad Money after way too long. Jim, thanks for having us. Okay, so Dave, I feel like that you and I talk uh and I know the new carrier. I want everyone else to know. to know the new carrier. Because you've really been reinventing and reinventing. So tell us where we are.
Well, if you look at our portfolio, forty percent is exactly what you just said. It's our commercial HVAC business and our aftermarket business. Both have grown double digits for five years in a row, and we're going to grow double digits again this year. Commercial HVAC held by data centers.
Our data center orders in North America were up four hundred percent in the fourth quarter. And the first quarter is going to be great again with orders. So backlog great, orders great, data centers driving great, very, very strong double-digit growth in commercial HVAC. That aftermarket piece, recurring revenues, double digits, very, very strong. As you just said, the cyclical piece, the residential piece, we did cycle down in the US and in Europe last year, those will revert to the mean.
Ninety percent of the people in the United States have air conditioning. It's a replacement business. When they fail, they replace them. We revert to the mean, grow double digits from them. So both We've set some as you just said some conservative guidance for this year. We feel very strongly that as the macros recover, we'll recover with them.
High margin businesses, really good share. When they re recover, we'll drop through at very good margins. Okay, so for the investing club, I've been telling people you have to have A chit in the game for if Kevin Marsh comes in and starts taking rates lower because the housing market has been dormant for so long. I can't believe that the Fed doesn't see that.
But I always look to see if someone has a lot of inventory, they're not gonna make a lot of money because they're still gonna have to just get it out of there, not not full price. You, on the other hand, are incredibly lean. If we do get something, it's you're in great shape. A hundred percent. You know, not only our inventory, but the inventory in the channel.
It was very important to us in the United States to end with inventory levels down thirty percent year over year. We ended January down thirty percent year over year. So as the macros recover, we will recover with it.
We'll be watching about four key macros. We'll watch interest rate and mortgage rates. We want that to start with a five here in the United States, the thirty year. We'll look at consumer sentiment. We'll look at existing home sales. We'll look at new home sales. We've assumed they all stay somewhat Uh depressed a little bit.
As they recover, we recover with it. All right, that's great. Now I am concerned about the the competition in the data center. There's some very good companies in there. How are you able to take share? I mean look we got Verdev in there, I know Eaton's trying to get in there, Johnson Controls is in there. How uh uh how do you uh upend them? We have 100% been taking share. And we've been taking share because we've innovated a bunch of new products. We've come up with a two and a three
air cooled megawatt chiller that has maglet bearings. We have water cooled chillers that were very innovative that helped us take a lot of shear. We've i I introduced a lot of new capacity here in Charlotte in North Carolina in the United States. Another facility here in North America. So we have the capacity, we have the products, we have the relationships with the hyperscalers. And when you look at the investments that our customers are making.
Seven trillion dollars over the next five years, an additional hundred and twenty five gigawatts of capacity. And Jim, if you think about a building like we're in here, the New York Stock Exchange first had air conditioning, three carrier back in nineteen oh three. Four hundred thousand square foot facility, three chillers.
A one gigawatt facility for a data center can have five hundred chillers. So the opportunity in front of us is unprecedented. All right. Now tell me about Europe. You made a a big bet on heat pumps, but Europe again is weak. So how are you going to be able to make that turn without some GDP growth? Well, the European market will again revert to the means. So if you think about Germany for example
The la you got to over a million units in twenty two and twenty-three. Last year were six hundred thousand. The average is eight hundred thousand. So that will revert to the mean. And what's happening now, if you look at what's happening with gas prices. Folks in Europe went and Germany went to bed and you were looking at natural gas prices at about thirty Euros. Per kilowatt hour. You woke up today and it's about 53. So about an 80% increase in just four days.
So when you look at that you do not w wanna be reliant on natural gas and boilers in your home. So you will una unambiguously see this transition to keep it. Well you know this is a break for you. I've been trying to figure out what the spur would be'cause it's not like these governments are now saying, listen I'll give you a 50% off if you buy one of their heat of carrier heat pumps. You needed some spur. This could be it. This could be it.
There are still subsidies, but we do not want to rely on subsidies. So Germany, I think, will continue with subsidies. Many countries will have that to help with the transition to electric heating. But regardless of that Economics and the gravitational force will drive this transition to heat pumps. All right, should I focus at all on the uh the your home energy management system? Because my bill is so gigantic.
I've never thought about it. Yeah, this is a very once in a generation opportunity for us'cause if you look at the United States 13% of the capacity during peak is just from carrier products. We're in one out of every three homes. We're in a number of buildings. So we're using up 100 gigawatts of products in just carrier homes and buildings. So what we're introducing is a combined heat pump and a battery so you can run your heating and your cooling off of the battery during peak hours.
If you think if we just got mild penetration with that offering, you could alleviate significant tension on the grid during peak hours. It's a true game changer. We're coming out with the product later this year. We're working with 10 utilities in the United States. We're working with a couple of hyperscalers. Because one of the issues in the United States is transmission.
We have point of use. Think about a new data center going into Virginia. We would put our integrated battery heat pump in the greater community and it could alleviate significant tension on the grid. Oh that'd be great. Virginia of course the rates are up. I I know that it might not necessarily the data centers fault in some cases, but it's nice to hear a solution rather than just a problem.
Thank you so much to Dave Gidlin, the chairman show of Carrier. There's a lot going on here. I really like it. Don't forget rates will come down, housing will come back, and it'll really be a big snap. Meanwhile, data center will be terrific. We have money's back in today. Questions? Got the answers. A fast fire lightning round. Next. It is time to come to the White House. Talk to it about it by self-centered and the closed ahead of time and just hit my stamp. There's a graphic silver.
Yeah, time for the lightning round question. We'll start with Ed in Virginia. Ed. Hey, Jim Booya. Jim, I'm looking at mine. Hey, I'm looking at a miner in the US critical uh space. Record silver production just signed a joint venture, military grade antimony. Uh is this a project vault play no one's talking about? USA S, America's Gold and Silver. Well, okay, here's the problem. I like that situation, but We've just had our parabolic boo
And I always demand that people do some selling after parabolic moves. That's been my view since I started. It's 40 years worth of it, and it's very rare that I've missed, very rare that I haven't missed a gigantic decline. to miss those declies. Let's go to Aspen. Oh, in Montana. I thought it was in Colorado. Aspen. Who knew? Hey uh hey Jim. Uh my name is Ben. This is my daughter Ash and she has a question for you. Okay. Hi Jim, thanks for taking my call.
to make money at A market. Our question is on Audi O D D with the recent pullback would now be a good time to start possession. You know what, I gotta tell ya, Aspen, that quarter was so bad that my rule is you gotta wait another full quarter before you put that money. I want to thank you for your kind words. I did write the book so everybody can read it. So it's not necessarily, you know, what it's about is someone like Aspen and her dad talking to each other.
try to get it for the big wealth transformation. You're right to think about oddity, but I want you to think higher quality. I would even buy Ulta, okay? I like Ulta, I like CBS too. Why don't we go to Billy in Connecticut, Billy? Jimmy, stop the madness after drop at 18%. Is this the stock to avoid or a buy-in opportunity right here? Or weave. Man, you are good.
I don't particularly like going in the lion's den. I'd rather have you buy NVIDIA. I think NVIDIA's had a lot of good things happen in the last 72 hours. No one's paying any attention to them. That's French. Okay, let's go to Craig in Illinois. Craig. Hi Chip. Great to talk to you. First time along I'm a long term shareholder of Nordic American Tankers, which has been up on Parabolic and big volume lately and I'm my question is
Should I sell it ahead of time? I want you to sell half right now. I want you to sell half. I actually don't even want to talk to you. I want you to get off the phone and sell half. It's really key. Then you can pay with the house's money because this thing has been a blight on shareholders for so long. I can't have it hurt you. Go to Jared in New Jersey. Jared. Hey Jim, thanks for taking my call.
Uh I got a question on first solar. I know you've uh talked about it a few times in the past. Uh that was a really big quarter, I gotta tell you. You know, I I know Jared I shouldn't be so short short sighted, but I mean that was one awful quarter. We gotta wait another quarter for that one. And that, ladies and gentlemen, the conclusion of the Light it round! Coming up, with the private credit exodus continuing, Kramer is diagnosing just what is and letting investors know.
if there's any reason to stick around. Over the weekend, I spent hours analyzing the woes of private credit, the pools of capital aggregated by some very smart people that are sold to institutions and most importantly individuals. I then put together a long white paper for CMBC Investing Club members that talked about how much trouble we were in because of these funds. I predicted they could be a real cause of pain for all investors, even if you've never heard of them.
Today we found out that one of the best private credit funds, th this one run by Blackstone, saw massive redemptions as individuals feared that they'd lose their money. Why do they fear it? I think the only thing they had to fear was itself. Now you can laugh about that line. Maybe it's crazy to invoke FDR of the Great Depression here. But remember back to 2008 during the Great Recession.
And the stock of Goldman Sachs traded down to the 50s. Back then I got a call from my good friend Lloyd Blankloin, then CEO of Goldman Sachs. Blankfond wanted to talk about how we had a repeat of that Fuhrer Self moment and that the system would hold a fabulous story by the way that he tells in this terrific new book, Streetwater. In retrospect, once the highly levered players collapsed and the Federal Reserve realized it had to stop the chaos.
and destruction in March of 2009, we realized that the only thing we had to fear indeed was fear itself. Because the bank failures have been taken off the table. They were none. Which brings me to the present day. Right now there are four institutions with private credit funds that are important, negatively important to the stock market.
Ares, Apollo, Blackstone, and Blue Al. These are all big institutions and their funds have done well for investors over time. Their private credit funds tend to be invested in some very good companies, mostly leveraged by Al Target.
They were eager to help tech companies take themselves private because they'd temporarily going out of style on the Wall Street fashion show. And tech always comes back, doesn't it? But for those who own shares in these private credit funds, which are really kind of banks in disguise, there's fear, and that fear is caused. Causing an attempted run on the back.
I say attempted because these private equity funds were not designed to let you quickly withdraw your money. The investors went out because they know that these funds are loaded with with debt to companies that seem a lot like the stocks that keep getting clobbered by AI and the public market.
The funds have nominal escape hatches. Blue Al, the most controversial because it has the most tech exposure, had to block the escape hatches on a couple of their funds. They ended up selling some assets from the funds or giving all investors 30% of what they put in. But now they've paused any additional redemptions. People want out.
Turns out that was just the beginning. Last night we learned that a Blackstone private credit fund was hit with huge redemptions when it opened. A record 7.9% of the fund or$3.8 billion. Now the firm decided to honor all the requests. They return the capital, aided by employees who are putting new money in.
Honorable. You'd think that would increase the st that it somehow would reassure the stock market, right? But instead it freaked people out. Blackstone stock got clobbered down nearly four percent. But it was from a major comeback from the lows. Now here's the crazy part. The collection of these loans these firms have put together are actually almost entirely money good.
Almost all their holdings are solid and doing well. But we have a fever in this market. If your company's in software, then individuals don't want anything to do with it. They're terrified that OpenAI and Anthropic will eventually destroy these businesses. But for now, that's pure fear with very little reality behind it. Here's what we learned in two thousand eight.
It doesn't matter if your institution is solvent or not. What matters is if you fear you'll lose the money. That's the trigger, fear of losing your money. I think that's what's going on with the private credit meltdown. Individuals don't know enough to say if the loans to companies will go bad. But they don't want to wait to find out. Of course these pools of capital aren't meant for short-term trading. They normally have a 10-year horizon.
None of these private equity firms seem to think that they were doing anything dangerous, but that was before the Grim Reaper of agentics and vibe coding made it so easy to disrupt the industry. Would I pull out? I liked that the Blackstone employees are putting their money.
It's like putting your money where your mouth is. I like that there are institutional buyers. But you know what? I don't like the upside, which is basically cap tier. That's the nature of the credit business. In the end, these are not for me. Never have been. I've told you that over and over again. My forecast is more pain. As individuals realize that they are in over their heads and prefer getting out of the pool with losses over waiting around to see if they'll drown.
somewhere, promise that just for your year and my money. I'm Drew Kramer. See you tomorrow! All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNPC or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet, or another media.
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 C N B C nor its affiliates andor subsidiaries warrant its completeness or accuracy and it should not be relied upon as a To view the full Mad Money Disclaimer, please visit CNBC dot com forward slash Mad Money Disclaimer.
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