Mad Money 05/06/26 | Audio Only

追加: 2026-05-07

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[00:00:35]Almost threw a brick at the TV this morning. But I was on the treadmill. I don't carry a ton of bricks when I work out. If I had one though, I would have chucked it at the screen when I heard again for the eenth time the same skepticism that's kept people out of the very technology stocks that keep leading this market higher, including today where the Dow gained 612 points, S&P jumped 1.47% and the NASDAQ where tech hangs out, Paul Volded 2.02%.

[00:01:04]Now, sure, some of these gains might have come about because of still one more possible end of the war in Orlando.

[00:01:10]So I put put it that way. This time aided by the Chinese government's brokering of some sort of peace. Oil plummeted, taking interest rates lower, creating a cozy backdrop for a lot of stocks to go higher. But much of the gain still came once again to those who own tech hardware, not software, but hardware. Things like storage, memory, that process that that that further artificial intelligence dreams of giant companies that sense huge returns are starting to happen. While the stock market is the greatest wealth creator in history, I often feel like people will miss out on the biggest gains unless I beat them over the head with a stick multiple times as I did with Nvidia. I had to rename my dog Nvidia. Look out. I might have to rename Ragu and Tony.

[00:01:54]Yeah, I know Ragaton. Someone's really funny at home. Anthropic and open air one day. Imagine Anthropic, come over here. He'd come over with a piece of steak in his hand right here. But right now, I think some people are getting the message at last that the computing AI revolution represents perhaps the greatest single trend of our lifetimes.

[00:02:15]Yet, all I ever hear is people trying to talk you out of participating in this mono from heaven machine. It's too hard to stick with the winners long enough to make yourself rich because the critics always talk about how ephemeral the moves are, how dangerous they could be, or how much you're going to lose if you don't trade in and out.

[00:02:34]LEG CAN REALLY CATCH those moves. I I say no way. Consider this. If you put 10 grand into video a decade ago, it' be worth roughly, I don't know, $2.4 million. How about that? But who had the fortitude to stick with this one for an entire decade? Sandis, Western Digital, Micron, and they are all making us so much money. So was the redible AMD 66 points today. Yet there's a whole cottage industry that exists just to scare you out of these winners. Today was a discussion of the gains in the data center stocks and how ephemeral they'll be. The guest that I wanted to throw the brick at said, "This rally proves if you build it, they will come."

[00:03:08]Which is a minor misquote from the movie Field of Dreams. If I hear that and I own tech, well, it would make me want to sell. You make a Field of Dreams analogy when you're trying to explain that this whole move in tech stocks is just a fairy tale. This kind of doomsday statement, possibly uttered really subtly or maybe even without a thought about it, could mean to people at home, time to get out now. It's a major reason why investors have such a hard time sticking with winners. You see, the whole point of this data center rally is that it's not a fairy tale because the data centers are being built and the customers really are coming in. They're on the playing field. They're in the seats. They're paying big bucks and the momentum is building for every seat to be filled. Go back to what we learned from Amazon on Monday on the show. The age of compute domination based on AI is already well underway. The guest this morning was begging for a brick. He had it all backward. See, they meaning big time paying potential customers are already here. And unless you spent the money to build the infrastructure, they'll go somewhere else. Amazon Web Service is racking up big client wins at an accelerating pace because it's committed tens of billions of dollars to get the right plant and equipment in place because it's spent, not in spite of it. Because of it, Amazon is winning and it's winning big.

[00:04:29]That's an incredibly important thing when you have companies like Anthropic or OpenAI or Meta or Tik Tok or so many other key clients making decisions about where they should go, which which web service should they use. If you don't build the stadium, they're going to go elsewhere and you'll leave a lot of money on the table. CEO Andy Jasse made it clear that there could be an existential problem if Amazon doesn't spend enough on infrastructure. Doesn't unless you build it, they won't come to you. And that's just one example. There are similar canards I hear all the time about this seismic shift in the economy.

[00:05:00]Oh, here's another one. We hear that there's FOMO, fear of missing out, which implies that you have these tardy money losing investors or fools actually coming in and picking up the trash. I come back and I say, "You bet I had FOMO." And that's what got me into so many incredible stocks for my charitable trust on the way up. You can see them join CBC Investing Club. They're all there. I plead guilty to FOMO. I pulled in some great winners at terrific prices even though I was worried about paying too much at the time. Fortunately, I was more worried about missing out. FOMO can be right. You know what else? We hear it can't continue to run like this. The other day, I talked about how stocks gallop to where they have to go. There are times when the market's so out of whack with the potential of a company that it stock just has to blow through level after level after level. There's no such thing as perfect information, people. These valuations change correctly overnight because the facts change, too. As AMD's Lisa Sue explained on this morning squawk on the street in November, she thought that her CPU market would grow at about an 18% clip.

[00:05:57]Turns out here we are in May, it's growing at 35%.

[00:06:02]That's AMD's core business. So that stock's not going to want to they're not going to take wait take weeks or months for AMD stock to go higher. It's going to happen now. Hey, speaking of AMD, which shot more than 18% today, there was a piece of research that came out the day before this extraordinary quarter. A downgrade from a buy to a hold by a prominent investment house.

[00:06:21]That's right. Buy to hold AMD. I said on air, I told you I thought it was fanciful and would be wrong.

[00:06:28]In the meantime, I'm sure it scared a lot of people out of the stock because it came out right on the eve of the quarter. When an analyst downgrades right before earnings, people assume they must know something. This time that was very wrong. Very first sentence in the piece was about as wrong as you can get. Quote, "First quarter results and second quarter guidance to be in line with our estimates and consensus as possible upside is limited." Oh man, they know nothing. In fact, AMD blew away the estimates, which is why the stock jumped so high. Their next point, 2026 server CPU upside cap due to foundry capacity constraints. Okay, IS CEO Lisa Sue directly about this issue.

[00:07:05]She told me it's simply not a problem.

[00:07:07]Stop worrying about it. I felt stupid even asking. Finally, the piece suggested that AMD had already been rerated, meaning that the big buyers have already pushed the stock up aggressively, so there isn't enough juice left to keep it running. Once again, dead wrong.

[00:07:23]Throughout this entire magnificent rally in AMD and other stocks that are part of the AI revolution, you had to do the opposite of what this analyst said, you have to think big, big big because the evidence is already in that these stocks can't stay this low given the circumstances. There's just too much money already dedicated to getting in.

[00:07:41]The AI stocks are simply trying to catch up to overwhelming levels of demand from their customers. Don't get me wrong, I get where these analysts are coming from. I too figured these stocks would have stopped going up ages ago, but they haven't. The analysts, including this one, were wrong, and we need to understand why. On the one hand, I won't excuse these mistaken calls either. I'm a journalist, not some big-time hedge fund manager, research analyst. Yet, after spending one day at Amazon, I learned that the money's flowing in incredibly fast for each facility they have, for each part of their data center network, and for so much of their logistics platform. If any of these people were to spend time with Amazon, they'd know why this company feels compelled to keep spending fortunes on building new data centers. If they didn't spend, they'd lose these gigantic customers who can't wait. We're now at the point where if Amazon doesn't put money in, these their numbers actually have to go down, not up, because that business and its billions of dollars in payments will go to Alphabet or Microsoft. The opportunity in this fourth industrial revolution, this compute AI economy is simply much larger than anyone thought with the possible exception of yes, you know, Jensen Wong at Nvidia. Here's the bottom line.

[00:08:48]Forget the ironic reference to Field of Dreams. When it comes to the data center, if you build it, they really will come. And if you don't build it, they will simply go to the other guy who did build it, to the other stadium. And you know why? Because right now there is so much flowing to those who build it that well let's just put it this way Amazon built it and the place it's pot Nico in Illinois. Nico uh Jimmy Chill and our investing club.

[00:09:19]Hey shout out Carly Garner I'll say for being awesome on the charts last week.

[00:09:24]>> Thank you. Yeah thank you. What's up?

[00:09:28]>> Booyah Jim. So, as we know or see, the market has reached a phase in denial.

[00:09:32]And maybe I got the nail on the head here. So, if we're back at or on a trading desk, like the idea I realized to innovate the trading floor some time ago or a data center, what are one or two fundamental catalysts for a concentrated market such as tech that we can look into to start gearing past denial? Shout out Benny off stock CRM.

[00:09:53]Thank you, Jim.

[00:09:54]>> Okay, CRM is very tough. It's one of my smallest positions. Uh, it's tough because the market hates software.

[00:10:00]Whether it be Palunteer, whether it be Service Now, whether it be Salesforce, whether it be workday, it doesn't matter. It hates it hates uh Adobe, it hates software so much that it even has gotten to Microsoft. I'm not going to push anything that's software. All right. When it comes to data center, it's true. If you build it, they're here. I'll make money tonight. CBS Health just reported a huge quarter mill solid beaten raise. I'm learning all about it with the company CEO and Craft Hinds stock has been a real hot dog lately.

[00:10:32]So, could their latest earnings be the positive signal investors are looking for? I'm checking in with the company's formidable new CEO and Honeywell spun off its specialty chemicals business through an alpha called Solstice. I'm learning all about the company and its quarter and its plans for the future with the CEO not talked enough talked about enough. That's what I say about that company. SC.

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[00:11:33]In Friday night's game plan, I told you to expect a great quarter from CVS Health. And that's exactly what we got this very morning. CVS also owns Etna, a huge health insurance company, and Kmark, the number one pharmacy benefit manager. Today they reported magnificent 39 ccent earnings beat off a $218 basis with higher than expected revenue and management raised their fullear forecast pretty substantially. As a result the stock shot up 7.7% today reaching a three-year high. So can the stock keep running? Is it finally coming all together? Earlier today we sat down with David Joiner. He's the turnaround artist, chairman and CEO of CVS Health to find out. So take a look.

[00:12:16]>> Mr. Jordan, welcome back to Bad Money.

[00:12:18]Yeah, thank you, Jen. Thanks for having me back.

[00:12:20]>> I'm thrilled that you're here. It's been now a little bit over 18 months. It's been a bit of a journey, an amazing quarter. Before we get into it, what have you learned and what are you starting to really work on?

[00:12:31]>> Well, I the last 18 months has been about, you know, mostly a recovery and focusing on the basics. So, um when we looked at specifically in our Etno organization, um it's a really great and well-run business. Unfortunately, they kind of got off track. So we spent a lot of time focusing on culture, focusing on the right team and focusing on execution. And I think what you've seen in large part this this past quarter has been you know the now what is now five quarters of of improvement in in the Etna business. And it's important the rest of the business we couldn't take our eye off the ball. So whether it be our pharmacy business andor a PBM or a clinic business is all about making sure we stayed focused on delivering on the basics and focusing on the consumer experience. Now a lot of people don't realize that one of the major jobs you have is actually pricing pricing of medical advantage pricing of reimbursement. Worried about that. It looks like everything came together though. How did that happen?

[00:13:25]>> Well, if you go back to what we've been working on on the basics, um we spent a lot of time making sure that we had the right actuaries. We had the right forecast. We had the right kind of look in terms of where we thought the marketplace was going. And a large part is how the government chooses to price it business. and we have to then build a product that actually uh be able it can perform within uh within that framework.

[00:13:46]So this is two years in a row of which we've actually demonstrated that yes we can we see where the marketplace is going. We see what we need to be building and ultimately it's been able to deliver um again above our expectations for that Medicare Advantage product.

[00:14:00]>> I hope people realize at home how hard it is to be right for two years. I mean it's amazing and one of the reasons why I think your stock went up is that people say hey this guy can figure it out. But you also are uh a demon about recognizing a word you use five times in the call the friction in the system.

[00:14:17]It's there's tons of it.

[00:14:19]>> Yeah. Yeah. I think that is probably the most frustrating part of healthcare. One is too expensive and people have a hard time navigating and when they do navigate they feel like there just friction. So we have spent a lot of time in our organization trying to rethink and reimagine what a consumer experience would be like and ultimately this is being done at Etna. We've led the market in terms of prior authorization, reducing the number of prior authorizations, connecting more effectively with the provider. So we're doing real-time integration so is being done without the patient in the middle.

[00:14:50]And ultimately we're going to try to standardize that so that works more in real time. And also same thing on the pharmacy side. We spent a lot of time, you know, between our PBM and our retail pharmacy. what are the pain points and what are the friction points that uh that the consumers really find um unattractive and or um or frustrating and so that has allowed us again to focus on the things that we know will actually improve the consumer experience. So a lot of it is technology and a lot of it is working you know more effectively with the prescribers and with the uh with the with the actual pharmacist.

[00:15:20]>> It's detail detail detail. Now the emphasis here is on the latter word. A lot of people know the middle as being the the place meaning the front of the store. The front of the store has not been emphasized in any of the documents for the quarter. I know that must be for a reason. What can we say about that people who are thinking about the stock maybe they shouldn't be thinking so much about the aisles they get to to get to health care but that healthc care is primary for this company and that that's the way it should be.

[00:15:50]>> Yeah. So I I look at the transition of our company. So we started as as a pharmacy and you would actually look at it in terms of the front store and the back store. With the acquisitions of Etna and Carmark, we became a health solutions company and ultimately we're we're moving the business into a healthcare services technology focused on the consumer experience. So we believe that at least from a from a health standpoint that we uh we have all the assets to be able to manage the total cost of care and ultimately make the healthcare experience better so that we can lower cost take the friction out of the process and improve their uh their overall experience.

[00:16:25]>> If I had to go into if my CVS which I like very much and I buy stuff for Halloween and I buy my candy and everything if I had to reimagine the store some of those things I'd still want. How do you satisfy both?

[00:16:40]>> Yeah, it's we we're constantly working on, you know, the local markets and figuring out what that consumer and what that demographic actually finds attractive because we still need to be a destination. We want to be a healthcare destination, but we also in some cases, as we talked about, we're also a a convenience location. So we have to have the appropriate u assortment of products so that people are actually able to to uh to get those on demand or in in a convenient mode but also then lead to the health care solutions that that we're driving in the back of the uh back of the pharmacy which is really elevating the role of that pharmacist to become that clinician to provide more care to the individual.

[00:17:17]>> Well let's talk about that we spent uh Monday at Amazon. Amazon's got a terrific health initiative and I like a lot of it. But at the same time, I like to talk to my pharmacist. My right aid closed. My pharmacist Jerry knew me. He knew my wife. I want to know my pharmacist. Uh how much of an advantage is it to have that pharmacist at the store versus online?

[00:17:39]>> Yeah. So, I'm a big believer of meeting the customer where they are. So, I think that there is going to also always be somebody that will want to have um medications delivered uh to their home.

[00:17:50]We have same day delivery in our stores.

[00:17:52]We have a drive-thru as a matter of convenience. But still the consumer, you know, on the vast majority of the occasions still chooses to come into the to uh to our pharmacy because of that connection that that you that you mentioned. Uh we think our pharmacist and we've invested in that colleague experience. We've invested in the um in the technology to allow them to engage and or work with the uh with the consumer differently. And that is what I think creates the loyalty. It creates the trust and then it then becomes the gateway for us to be able to pull through the other services that we want across the enterprise.

[00:18:25]>> And how about technology, the app, the things that you're doing to make us more informed.

[00:18:29]>> Yeah, I think the tech, this is probably where I'm most excited about in terms of where we're going as a uh as a company.

[00:18:35]Um today we talk about all the frustrations around it's hard to navigate, it's too expensive, all the friction. Um we now are actually launching um health 100 which is our our new app and it's going to become the host andor what I would call is the uh is the gateway into um you know into our own company. So we're building an experience so that people can anticipate the prior authorization so they don't it doesn't happen to them. It actually we can solve it beforehand. They know what things are going to cost. They know how to navigate the system. And we're doing this across our own ecosystem. So whether you're a Etna member, a Caremark member, or a CVS member, we're trying to create an experience through technology that allows them to be able to uh have a much better experience. And then we're opening it up to the rest of the market.

[00:19:19]And this is where the interoperability comes in. Because if you look at where the administration is right now, the reason that healthcare is so fragmented because you still have, >> you know, everything kind of hosted inside of each one of the doctor's offices or hospitals. Hart, nobody talks to one another.

[00:19:34]>> Not at all.

[00:19:34]>> And that's part of what we're trying to solve. We're trying to figure out how we become the connector across the entire ecosystem, opening it up to anybody who wants to come in and ultimately the consumer will actually own that data and own that experience. And with the new Aentic AI and other tools that are available, we think there is going to be a transformation when you combine AI and the interoperability that to serve our consumers more effectively.

[00:19:56]>> Well, I think that'd be great. We want to be in control of our health and and control our healthcare. And I think you're going to make it so we can it's good for everybody. It's good business.

[00:20:04]>> Yeah. Well, anyway, I want to thank David Joiner, chairman CEO of CBS Health. The stock went up a lot, but the earnings went up. So, it's not it's not more expensive. I would argue that it's cheaper. It's the right thing to do.

[00:20:15]Man, money's back in the break.

[00:20:18]Coming up, was Craft Hind able to squeeze out a strong first quarter?

[00:20:22]Kramer's digging in with the company's top brass to find out next.

[00:20:36]All right, something happened this morning. I couldn't believe it. I thought my eyes were playing tricks on me because Craft Hinds, the package foods powerhouse, reported a much better than expected quarter. The stock actually popped today, rallying over 2%.

[00:20:47]Keep in mind, this thing's been drifting steadily lower for four years. It's been not a great stock to the point where Craft Times decided to break itself up, bring in Steve Kane, the guy who orchestrated the Kellogg breakup that was so smart as its new CEO. And all the way the stock kept getting clobbered.

[00:21:02]But today, Craft Times posted a clean upside surprise, albeit versus low expectations. Could this be the beginning of a larger run? Let's dig in deeper with Steve Kalin. I regard him as a friend of the show. He's the new CEO of Craft Hind. Get a better sense of the quarter of what comes next. Mr. Kalin, welcome back to Man Money.

[00:21:18]>> Jim, great to be with you.

[00:21:19]>> All right, Steve, I remember when you came in on Kellogg, I was doubtful. I didn't know what you could do. I figured it's going to be too hard. You handled it with a plum. You had two different buyouts, made a fortune for people.

[00:21:29]You're in craft hides. Is it a tougher thicket than even Kellogg was?

[00:21:35]>> You know, it's very similar, Jim. I mean, they're both iconic American companies with great brands that needed to be relevant to the next generation of consumers. And you know what I found when I came inside Craft Hind is the same thing. Outstanding brands been underinvested and with investment, focus, attention, good customer plans, good consumer plans that they can grow again.

[00:21:56]>> All right. So, what happened? I remember when Bergkshire Hathway put this together. It was one of the most exciting deals ever because we really felt you got you a couple great brands.

[00:22:04]You kind of had this great international footprint. What occurred and is Bergkshire still in board or not? Where where are things?

[00:22:13]Yeah. So I think the industrial logic of putting the two companies together was sound. Where we missed the mark, where the company missed the mark was all the cost savings that were generated which were quite substantial flowed directly to the bottom line. I mean the evida margins went up to close to 30%. There was not enough investment put back in the brands to attend to the top line and grow the top line. There was not the revenue synergy. There was just the cost synergy. On the Berkshire Hathaway front, they're big share owners. They own almost around 27% of our stock.

[00:22:44]They're no longer on the board. Uh but they're uh supporters. They're investors and uh very important investors obviously.

[00:22:52]>> All right. So what did you do to take uh already obviously in the right direction 20 29% of your portfolio is gain your holding share of the first quarter to 54% in March. What are you doing? This is a radical gain for this company.

[00:23:07]Yeah, we still have a long way to go, Jim, but we're we're pleased with the results that we've had so far. You know, the top line this quarter was flattered by an Easter shift, then by some pantry loading, but there's no denying that the share uh performance improved as you just outlined. It improved because we invested behind the brands that were uh, you know, we have the right to win in, you know, our sauces, our spreads, our mac and cheese. We innovated really well. You know, I found inside the pipeline some exciting things like Craft Power Mac. we put substantial incremental investment behind that.

[00:23:39]Because of that, we got 35,000 stores uh substantially more than we would have.

[00:23:43]So, it's the blocking and tackling and the investing handling this business like a consumer good um uh company with lots and lots of treasures behind us.

[00:23:53]And so, that's what happened. The other thing that I'd say is, you know, when I came in, obviously the company was very focused on the separation. You know, when you take 36,000 people and redirect them towards a maniacal focus on growing the top line and not in separating the business, it's amazing what you can achieve with that type of, you know, human capital against uh much more, I would say, aspirational goal, a more uh constructive goal, something that they could really get behind.

[00:24:20]>> Yeah. And that was, you know, from my take that had been lacking till you got there. I whether it was being split or not, frankly, I think that what you've done with hold, win, and win big again has everybody understanding what could go on. How did you pick those buckets and how do you know that win big is where you can put the most money in?

[00:24:42]>> Yeah. So, we we started by examining all of our brands and where we felt like we really had the right to win, where we had competitive differentiated advantage versus our competition. One of the single clearest examples of that is the brand Hines. I mean, Hines is one of the most recognizable consumer brands in the world, right? Like 98%. It's got household penetration that's a fraction of that. So, a real opportunity to get in more households and grow. We look at Mac and Cheese, which has been around for a long, long time, but, you know, had been a bit, you know, challenged by uh smaller competitors coming in with better offerings around protein, around fiber. And we knew we could make adjustments to the portfolio there. So where we felt we had strong brands where we could differentiate better and make a connection with the consumer through the customer is where we decided. Now we made some changes along the way. Capri is a great example. We had that in you know a win category. Well as we discovered more and learned more we felt that that was a win big opportunity because where we were losing business in Capri Sun is you know kids were aging out of the brand. Well, by coming up with something that was halfway between a kids drink and a sports drink, you know, come out with Capri Sun with electrolytes, we could actually innovate to keep consumers with us. So, we moved that into win big. And so, as I explored the the portfolio with the team, I found that there was a lot more saliency to these brands and a lot of equity building opportunities if we just put our investment uh into smart ways. The other thing we did which I think is really exciting which we're just starting now is this NFL partnership.

[00:26:19]And so you think about our condiments business. I mean Hines ketchup, Hines mayonnaise, Hines relish. It is built for Thursday night football for Sunday afternoon football. And partnering with the NFL and starting with the NFL draft, you know, with pick number 57 gets a lifetime supply of ketchup. I mean, the team just came up with some great ideas to make our brands fun again and very relevant.

[00:26:44]>> I think that's right. They they've not been fun. I think they've been pushed around way too much. Uh, I did want to ask you, you've got some brands that are inexpensive, uh, perfect for a person, you know, it's kind of struggling and you've got some brands that are expensive. Uh are do you find that you've got a mix that's right for the American consumer or is the American consumer hurting too much to pay up even for good uh for hinds ketchup so to speak?

[00:27:10]>> Yeah, I think we've got a portfolio that's built for the moment for sure.

[00:27:13]We're in just about every aisle in the store. Uh but affordability which you just mentioned is incredibly important.

[00:27:20]Even if we're in the higher end of the price tiers like Hines Ketchup, which is a premium uh ketchup offering obviously, we have to look at our whole price package architecture structure and say, do we have the right entry-level price points? Are we doing everything we can leading into productivity so that we can put the best affordable options out there for family budgets which are under pressure? So that is very much a focus of ours. How every item in our portfolio, every product in our portfolio starts with a question. Is this the right affordability value uh equation for the consumer today?

[00:27:54]>> And what percentage do you think you have to augment with natural just to be able to kind of change the the impression that Craft Hinds has which is that you know and you can tell me maybe it's just not true but people feel it's just got a lot of preservatives. That's the problem that's been dogging Campbell even though it's not true either.

[00:28:11]>> Yeah, it depends on where you are in the portfolio Jim. But look, health and wellness is a real trend. It's an important trend. Clean labels is a real trend. It's an important trend. So, we're looking at our portfolio where we can renovate, where we can replace, where we can innovate around that health and wellness, you know, taking ingredients out that consumers don't want. That's that's part of what we must do. But, you know, I always say you have to make it and you can't fake it. So, you know, when we came out with Power Mac and Cheese, it really does have, you know, 17 grams of protein, seven grams of fiber, uh, and in a much more affordable offering than some of the competition. That's real. That's not made up. And so we're working on our portfolio to make it more relevant for what the consumer wants today.

[00:28:53]>> Well, this is the same Steve I saw who got in and realized that wait a second, there's something here with Kellogg.

[00:28:59]It's not just Frosted Cereals. There was a lot more to it. You made a lot of money then. When I saw that you came in, I reached out immediately because I know you're going to have another win, Steve, because that's just what you do. Thank you so much for coming back on Mad Money.

[00:29:12]>> Super. Thanks for having me, Jim. Really appreciate it.

[00:29:14]>> Absolutely. That's Steve Steve Kane. is the CEO of Craft Times, KHC. I'm telling you people, you may not believe me. I don't care. This guy's a winner, so therefore KHC is a winner. Mad Money's back after the break.

[00:29:27]>> Coming up, the countdown to summer is on. But that may not be the only Solstice that should be on your radar.

[00:29:33]The CEO of Solstice Advanced Materials is making his case to Kramer next.

[00:29:48]Last October, one of my longtime favorites, Honey Wall, spun off its specialty chemical business as Solstice Advanced Materials, which started trading at just under 49 bucks. This is a company that makes advanced materials for semiconductor manufacturing, data center cooling, refrigerants, nuclear power, healthcare packaging, and the defense industry. Those are all strong end markets. Hence why the stock's been just a fantastic performer. ran for all the way up to 83 as of last night's close. Okay. When souls reported this morning delivered higher than expected sales, slightly better than expected adjusted earnings, but their net income came in at tap below consensus. Same time management didn't raise the fourear forecast, which is not what you might want to see given you have a stock that's up 64% year to date. Maybe that's why it fell 2%. It's okay. Still, many of their core businesses are doing great. Electronic materials up 21%.

[00:30:34]Refrigerants up 19%. nuclear business which is all about making fuel jump 27%.

[00:30:39]Club members know that we thought that was really exciting. So is this a viable pullback or should we be concerned?

[00:30:44]Let's check in with David S. He's the president CEO of Solstice Advanced Materials to learn more about the the the company. Mr. S, welcome to the show.

[00:30:51]>> Jim, great great to be here. Thanks for having me.

[00:30:53]>> I got to tell you, David, it's been u one great ride from the very beginning.

[00:30:57]The stock came out undervalued because people didn't understand all the things you've had. How are you sorting things out? Because you got some really fast growers in this company.

[00:31:05]>> No question about it. We're really excited about the secular growth trends that we're a part of. And I think we just had to tell the story of Solstice because as you mentioned right at the beginning, we're in a lot of different markets, but those markets are really exploding in a lot of areas. And so getting that message out and then doing a lot of capital investment to make sure we can withstand that growth from a manufacturing standpoint has been a key uh key initiative for us. And you're starting to see the growth, you know, 10% this first quarter and we're we're really excited about the future.

[00:31:34]>> But you also have a great balance sheet.

[00:31:35]They gave a good balance sheet which sometimes they don't do. And are there areas where you want to put more chips down?

[00:31:40]>> So we've we've announced three three major uh expansions. Our our nuclear uh hexaflloride expansion in Illinois, our advanced electronics business in uh Washington, and our defense business in in Virginia. So those those businesses are really growing fast. The demand is really strong and in fact in all three of them we're trying to accelerate that expansion because of the demand.

[00:32:02]>> Okay. I have been telling club members who have held on to it the CNBC investing club that of all the nuclear plays many of them are just science projects yours has been working the whole way.

[00:32:14]>> Absolutely. We we've been in the nuclear business 60 years and we have the only uranium hexaflloride converting site in the United States. Uh one of four in the world basically. and nuclear is is a great solution for some of the energy shortages that we have and we just feel that we're extremely well positioned and we we're in the process of debottlenecking our plant and increasing capacity. um semiconductors ju just our it's data center it's all there for you right >> yeah and we're there in a couple different ways so we're there on the chip uh with our depositions and our thermal interface and some of our specialy polymers and then we're there in coolants with our thermal management uh because you've got to get that heat off the chip as these chips are getting faster and faster and generating more heat. The growth there has been significant. Uh we had a really nice first quarter in our electronics business with 21% growth. Uh and that's what's driving our our capacity expansion in in Washington.

[00:33:10]>> Okay. So refrigerants there was a it was a government it was a glitch but it wasn't really you had to have a a change in what you were the materials you're working with. I guess that's put it.

[00:33:19]>> It's it's exactly right Jim. So so before it used to be hydrofluorocarbons for refrigerants and coolants. uh we came out with a new technology uh patented technology very innovative low global warming and uh it it's moved to hydrofllora olphins. So during that transition as we communicated it's uh we'd see a little bit of margin pressure until the aftermarket kicked in which which we'll start to see in the second half of this year but the growth has been significant because of our strong IP and the margins are still fantastic.

[00:33:50]I mean 35% ebida margins uh and 19% growth in the first quarter. Now, to me, it seems you can correct me if I'm wrong, but we had we had a hard time finding competitors to any of your uh businesses. They it seems like you kind of like are the only one in some of them.

[00:34:06]>> We're we're really unique and so that's what we've had to do to tell the story when we came out. We agreed with you that we were undervalued. So, we've really been communicating we are really at the at the forefront of these secular growth trends and we're very well positioned. But you do have a lot of different I mean like do you want health care packaging? Uh do you want the low that lower billing solutions in there? I mean I just feel like sometimes they just said okay listen here we're going to give you all this stuff because they were splitting up themselves. You take it, you sort it out and you know that makes it so it's a little harder to run the company.

[00:34:38]>> Well you're exactly right and you I'm sure you've seen that with other spins as you mentioned. Sometimes they throw throw a little bit of the the whole kitchen soup in. But with this this business was actually a standalone business within Honeywell since 2017.

[00:34:52]And there is with all of those segments in um in six out of those seven segments there's a strong florine chemistry and that's really our expertise and our innovation. We have 5,700 patents around around this. So there is a synergy to it and we've just been able to expand the markets of that technology.

[00:35:10]>> All right. One last question. I'm going to go back to nuclear because it's just so important to our viewers. Uh this has been a business that if they add, let's say they add all these small modular nuclear reactors, are you going to be involved in all those?

[00:35:24]>> We are. In fact, there was just an announcement the other day of a of an SMR that we've already signed a contract with. Um there's about 80 companies SMRs out there that are trying to commercialize. I don't know if you know how many of these f come together but uh they have to get their supply chain and so we're an integral part of that uranium conversion so we're having discussions with them as well as all the uh the large nuclear reactors uh that are proposed to be built as well.

[00:35:52]>> Well then we've told people the right thing because uh a lot of the companies are um they're it'll never mount to anything and those are dice rolls. Why not just go with the one that's actually making money for 60 years? I like that very much. It's David Su, president and CEO of Solstice Advanced Materials. You know, we've liked this. You know that this is not just nuclear, but it is the only nuclear one that we've been saying can actually make money. And now that money's back.

[00:36:19]>> Coming up, you've got questions.

[00:36:21]Kramer's got the answers. Get charged up for a fast fire lightning round next.

[00:36:36]It is time time for the light round by the front jam say bye bye bye still just curtain of the course my step by you playing this now and then the lightning round is over are you ready D the light let's start with Bill Jimmy I got a question for you with all these giant IPOs in the pipeline how will how will Goldman Goldman Sachs fear.

[00:37:01]>> They're going to be the big winner.

[00:37:02]They're going to be big winner IP in IPOs and in M&A Bill and that's why I think it's a huge position for me, my travel trust, and I think that uh it's going hard. How about that? Let's go to Phil in Kansas. Phil, hey Jim, I'm a club member and I uh I love your book.

[00:37:17]Thank you very much. Thank you. Hey, I've got a stock um I want to add to my current position and the stock I'm asking about is Taiwan Semi T. They have what? They have more business than they can handle. What can I say? Even tonight, Arm Holdings said that they were going to have this all this business, but the problem is is they can't get all the chips they need from Yes. Taiwan sent me. Let's go to Leo in Wisconsin. Leo.

[00:37:42]>> Yeah, Jim. I've been listing you over 20 years. I got a little stock you like and own Extreme Networks.

[00:37:50]>> No, this stock at Marcort. This stock has just I I I don't know. I mean, it is going like this. And I don't recommend stocks like this, but I will give you a considered opinion, come back and tell you what I think is going on. Let's go to Jason in California. Jason >> Jim Booya.

[00:38:08]>> Booyah. Jason, what's up?

[00:38:11]>> My question is Dwave Quantum.

[00:38:15]>> Well, that's Dr. Barrett. I've got to tell you, if you want to do quantum, D-Wave is the one that I identified as being the best. I also like IBM for quantum. Uh, and uh, don't forget Honeywell is a spin from Quantum Common.

[00:38:25]Let's go to Dave in North Carolina.

[00:38:27]Dave, >> Mr. Kramer, first time long time. Thanks for all you do for us home gamers.

[00:38:34]>> Thank you. Thank you. What's going on?

[00:38:37]>> You recently had Mark Casper from Thermoffisher on after the stock took a big drop after earnings. Is TMO a buy, sell, or hold?

[00:38:46]>> I like it here. I see so many IPOs every morning that Carl mentions and they're all going to need TMOS machines. I think you can buy it at this level. I know at 19 times earnings, I'm surprised it is that cheap. And that, ladies and gentlemen, is the conclusion of the LIGHTNING ROUND.

[00:39:05]>> THE Lightning Round is sponsored by Charles Schwab.

[00:39:09]Coming up, Kramer's noticed some quality stocks have dropped to some very attractive prices. He's revealing three names you should buy into next.

[00:39:28]This morning on Squawk on the street, I said something I I kind of want to take back. I was being swarmmy about meta platforms saying they didn't have the horses and the stock had become a source of funds. That's the kind of thing you sell so you can swap into something better. It's one of the worst things you can say about a publicly traded company.

[00:39:44]It's like saying that they're a team that nobody wants to play for because they aren't headed for the playoffs.

[00:39:48]After the show, I was reminded that Meta had 33% growth in the last quarter.

[00:39:53]That's the fastest pace in 5 years. That last great growth quarter, by the way, was from 2021 when the company had 29 billion in revenues. Now, it's 56 billion. Yet, that got nearly the they've got nearly the same growth rate.

[00:40:06]That's impressive. Meanwhile, Meta has 3.5 billion daily active users. I mean, that's almost half the world. They're adding some gigantic data centers. with a capex budget that's approaching 150 billion at a time when we are now realizing from Amazon at least that these behemoths are going to make you your company a ton of money. Bye bye bye.

[00:40:25]>> More important met is run by a man named Mark Zuckerberg. People in the tech business do live in fear that he might have something that they don't know about that could change everything.

[00:40:33]After all, the guy's done it before and now I'm counting him out. Did Zuckerberg somehow do something that makes him a less effective CEO? mixed martial arts and the Met Gala hanging out at Mara Lego. I don't know. In retrospect, I think it's time to stop worrying and start buying. Clearly, the market agrees as Meta rebounded nicely from his early morning lows. And look, it's not just Meta. We all kick ourselves for missing out on winners that seem obvious in retrospect. I wish I'd bought Dell for my chapel trust 100 points ago. We took a big gain in AMD, but we stuck. We didn't stick with it, have we? We have much bigger gain. Often we miss these moves because it's hard to pull the trigger on something it's not when it's down and out, which is exactly what you have to do. Look at the incredibly good aristo network's getting pummeled today.

[00:41:15]This data center networker has always been in the winner circle under the excellent leadership of Jrial. When you dig into why the stock plunged 13.6% today, you find that Arista beat the estimates but failed to raise its forecast, which is of course the kiss of death in a techdriven market. But wait a second, why didn't Arista raise the forecast? Why didn't anyone look at this? It's not because the demand isn't there. That would be bad. It's because company's supply constraint. They said the problem could persist for one or two years. I think that that that's a tough one, right? But I think having more demand than you can handle for multiple years is a pretty high quality problem, especially because I think that JRE will solve this. I believe in JRE. I think a risk of stock now reflects the fears.

[00:41:53]Fears that I bet will prove to be wrong.

[00:41:56]Time to buy. Or how about Shopify? I just interviewed Harley Finkelstein, the president of this e-commerce enabler, yesterday. If you're a small to medium-sized business, Shopify lets you compete with the heavy hitters online.

[00:42:06]An economy that's filled with Gen Z side hustlers or small businesses seeking to be big ones pretty much runs on Shopify fulfillment. The company just reported outstanding 34% revenue growth, but it did guide for future growth to slow to the high 20s. On that, the stock has now plummeted from 182 in October to 127 on Monday, then 105 as of today after it sold off in response to earnings. And wow, look at that trajectory. But Shopify is the same fabulous company.

[00:42:31]the first choice for so many startups that will inherit the earth. You don't want to buy this thing when it's running, when it sales are strong and everybody thinks it's the stock is headed to the moon. You want to buy it when the stock's ice cold, yet the business remains very good. It's now derisked and it's still the envy of many businesses, including several that have tried to acquire them. It's very easy to dismiss companies when their stocks are down. None of these counts as a turnaround. They're just momentarily struggling. We all want winners, though.

[00:42:58]Sometimes though, you have to choose the stocks of great companies with temporary problems, betting that management will solve those problems. Or to put it another way, you write off Meta, Arista, and Shopify at your own peril. They've been thrown away by the impatient and the frightened who are now giving you some tremendous entry points. I take all three. I'd like to say there's always been market just for you man money. I'm Jim Kramer. See you tomorrow.

[00:43:32]All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Kramer 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 or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full MadMoney disclaimer, please visit cnbc.com/madmoney disclaimer.