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My mission is simple: to help you make money. I'm here to level the playing field for all investors. There is always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Hi, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Others might think I'm just trying to make a little money. Although my friends are with me today. My job is not only to entertain you, but also to educate you. So call me at 1-800-73-CVC. Tweet @jimcramer. Look, I'm still recovering from what the hell happened this week. It was the exhilaration of victory and the
agony of defeat. If you want to know the truth, it was more like the stench of defeat. If you're too caught up in two new swear words-"data" and " center." I, for one, can't wait for the weekend because I really need to think outside of work about what the hell just happened. Today at the annual meeting, I told the members of the CNBC Investing Club that volatility, which is Wall Street's code word for falling stocks, is not over yet. By the way, I am honored that some VIP members of the club are present at the show.
Today's session: The Dow fell another 237 points, while we gained 3.1%. The Nasdaq added 1.09%. It didn't change anything for me I haven't heard anything positive about data centers that would make me forget about Tuesday's public criticism. I don't think the performance in the technology sector was too low. I felt like it was a "dead cat bounce." I know we will never get a clear signal that everything is clear. No bell ever rings. But it still feels like many sellers are waiting for depleted data center stocks to recover a bit before getting out of the game. The nonfarm payrolls report was very strong, confirming the economy's success, but it had little impact on bonds or the stock market. Personally, I'm glad this is
over. The fewer variables, the better But let's take a look at our action plan to see if there's anything ahead that will make us look more positively at the unpleasant downturn, which I don't think has yet exhausted itself. On Monday morning, we will hear a report from a company called Constellation Energy. It is an independent electricity producer with a large nuclear fleet. Large hyperscalers like Microsoft and Amazon love that Constellation offers zero- emissions energy. We want to hear what they have to say about the election, and whether Tuesday's results mean they will slow down plans to build new power plants. If they say that, data center stocks could face a new wave of sell-off. On Holding reports on Tuesday, and many
believe that athletic footwear and apparel companies are poised for a recovery. Wait a minute. Listen, maybe everything and the stock has fallen to market levels, but my problem is that the whole category, starting with Nike, seems very oversaturated. I will miss this opportunity. We also get the October CPI report on Tuesday, and we need to see some cooling as inflation needs to come down if we don't want further rate hikes from Fed Chairman Walsh. I like how rates have come down recently, but I think that reflects the potential for lower oil prices due to the war, which could subside, rather than a decline in the CPI. We need a surprise number, significantly lower than expected.
Although I don't think that's likely. After the close of trading, one of the most important companies in the world reports, and that company is one you've probably never heard of, Corning. This is one of those neo- cloud companies that builds data centers and borrows a lot of money to do so. The cost of debt is now skyrocketing, too high. Can they explain how they are going to repay it? Can they tell us what their plan is for the future if they can no longer issue debt because it has become too expensive? Can they give us a reason not to worry about interest rates at 15% on their public bonds? Michael Nirenberg, an often overconfident CEO, must have something up his sleeve besides his hand to get these stocks
higher than today's 6 percent rally. I should say-a rush of relief. Wednesday is a really quiet day. Well, except for the earnings report from Corteva, which is now a player solely in crop protection after a split completed last month. I don't know if you remember, but we liked Vayalur much more, which is a separate seed genetics business. Perhaps Corteva can benefit from a new specialization. The shares are cheap. Oh my god, it's starting. One of the most difficult. You know, I gave you Iran, I talked about Corby, but welcome to Nevious. Yes, this company reports on Thursday morning. This will be the third of three major neo-cloud companies to report. Both Iran and Corby are very important, but this one may be the most important.
I have to say, I'm not even sure what I want to hear from this company anymore. That is, I want to hear a lot of things. I want to hear about powerful new orders. I want to hear about ready-made data centers. I want to hear about outlined plans for two or even three years ahead, even regarding international business. It would be a gift from fate. But what I definitely don't want to hear is that the facilities they build are delivered late and over budget, or may be blocked by politicians pursuing new election mandates. I don't think they'll talk about it, but I think analysts will ask. Cisco reports on Thursday. I have to say that this company reported in May, and the shares skyrocketed from $ 102 to $103 in a few weeks thanks to
great orders in the AI space. But whoever comes with the sword will perish by the sword. Stocks were caught in an incredible tsunami of AI sector sell-offs and fell back to the 90s. Right now, in my opinion, Cisco is oversold. I believe Chuck Robbins will be able to deliver. I think his shares are actually cheap. I think it's worth buying some if we can get through the Corby Nevius ordeal. That would be a high bar, but a small price to pay. What about the development plan? These stocks jumped to just under $740 this summer during a major short squeeze, triggered by aggressive buying by a hedge fund operating with situational awareness, right before the manager went bankrupt. Now they've dropped to $332. So normally I would think
this should be a buy, right? Because the price has become so low. But maybe they shouldn't have gone so high in the first place. Remember, when we make money, we don't care where our shares came from. We only care about where they are going. So you can't say, "Oh, they've dropped by half. Let's buy." Not if the profits aren't stellar, and not if the price should never have been where it was. Kraft Heinz reports today, this Thursday, and I'm sure CEO Steve Cahill has a plan that will push the stock to new levels. We love how much money he made for us at Kellogg, don't we? Can he do it again? I think he can.
He had just sold a majority stake in Kraft's coffee assets, which include Maxwell House, for nearly $500 million to help pay down their debt. They have too much debt. I believe this man knows how to make money. I think he has a plan to unlock value. Finally, we have PPI figures again on Friday. We are simply looking for any sign that inflation is easing. Never forget that while rates are indeed lower, this movement is minor and people still expect further rate increases if we don't lower oil prices and if we still have many factors such as rising rents. We know that food prices are too high
. We don't want to give the Fed chairman any excuses to tighten policy. So, to sum it up, you know what? It's been a brutal week. A week that tested the souls of men and women, as we were excited about the election and then dismayed by the implications for the biggest story of all- data centers. Can the fire be lit again? We will find out very soon. I wouldn't get my hopes up. All I heard today were the bullies on TV telling us not to worry.
False confidence? I didn't see anything I could rely on, let alone my funds' money. Now let's take some calls from our viewers. Yes, we have an audience. Let's move on to Nick from Texas. Nick. Buoy, Jimmy Chill. I like this jacket. I have to get one just like it I watch you every day on the Mad Money show after nine. Thank you for being here. I'm grateful you're here. Thank you. With beef prices high and cattle prices still low, the stock has risen more than 10% in the last month. Is it time to get back into Texas Roadhouse stock?
You know, I think about this a lot because I like Texas Roadhouse. We have repeatedly invited their leadership. The reason I walked away from them, you know, it's just too crazy. It's so much about the price of the beef, and not about their great service and how great the food is, that I said, "You know what?" "I need to find something else." And so I chose Starbucks, which was a great success. But thank you very much for the question. Good. Now let's move on to Brian from South Carolina. Brian. Buoy, Jim. Buoy, Brian. Thank you for having us. I'm glad you're here. Thank you.
Longtime fan. I read your books. Thank you for having us. you. I, I'm serious. Thank you. Long weekend. It makes the week better. Jim, with the advent of SpaceX and all the new technologies, what is your opinion on AT&T as a promising investment for the future I have to tell you, I have Starlink in Europe. And I replaced the $150 system with a much better and faster one for $50. I think Elon Musk is a tough competitor. I think AT&T is the past and he is the future. So I will say: you should not own AT&T stock. It's a tough decision, but I'll say it this way. OK. Now let's move on to John from Texas.
John. Buoy, Jim. Buoy, John. How are you doing? Did you say that once? Oh, well, you just did it. For posterity I start my day with your Squawk and end it with your Mad Money. I guess you're tired of me already. My wife doesn't watch your show. I learned a lot. OK. Thank you. My question is about Broadcom. You recently removed it from your briefcase. Yes, we did it. This is a pretty good company. Reached No, great company. almost a 52-week low today. Is it worth entering it now?
You see, I'm trying to reduce the impact on data centers, especially where I had a lot of profit, like with Broadcom. I wish I didn't have to do this. I think Broadcom is a great company. If you want to own a stake in Broadcom, that's fine. But you can't have too big a position. Data center companies may go bust again, as you like to say on Wall Street, and I'm afraid you'll lose money. However, Broadcom is a great company.
Please don't.This is one of the hardest moments for trust. I'm selling shares in a company I really like. But I can't have that many assets in data centers, thank you, boo, and thank you for watching me all this time. I really appreciate it. OK. I'm making money tonight. Viewers constantly ask why I haven't invested in SpaceX yet. Today I will present my analysis of this company and tell you what I am leaning towards. Next, what the hell is happening to Papa John's? I'm meeting with the CEO of this pizza chain after a quarter that, I have to admit, was a bit disappointing. And as the market digests the "blue wave," which sectors will benefit in the future?
Don't miss my analysis and stay with Cramer. Don't miss a second of Mad Money. Follow @JimCramer on X. Have questions? Tweet Kramer #MadMentions. Email Jim at mad***@c**c.com or call us at 1-800-743-CNBC. Did you miss something? Go to madmoney.cnbc.com. With all the craziness of the past few weeks, I haven't had a chance to delve into one important story that I've been meaning to tell, because I know it interests many of you- SpaceX shares. If you're a member of the CNBC Investment Club or a viewer of "Mad Money," you've probably already heard that I want to own SpaceX stock. I've been eyeing this stock for a while now, and the company's third-quarter earnings report released last month only
fueled my interest. Buy, buy, buy. But the members of the Investment Club also know that I still haven't purchased them for the charity fund. We had discussions backstage, the discussions were quite heated. In fact, we haven't pulled the trigger yet, maybe because we're a little cautious. Today, as our Investment Club members are present in the hall, I thank all of you. I thought this was a good moment to explain my position. The arguments in favor of SpaceX were clearly demonstrated when the company released its third-quarter earnings report a little over two weeks ago. It's hard to remember now, given everything that's happened. It was incredibly difficult, but this report, at least initially, was a
powerful positive catalyst for SpaceX shares, which jumped nearly 8% the next day. It's easy to understand why. SpaceX's revenue soared to $14.6 billion. This is 161% more than last year and almost $2 billion above expectations. The company's revenue growth rate accelerated from 15% in the first quarter to 92% in the second and to 161% in the third. Profits also grew rapidly. SpaceX's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 306% year-over-year to $8.8 billion. Everyone expected only $6.4 billion. Additionally, SpaceX reported GAAP net income for the first time as a public company,
earning 35 cents per share, nearly triple the consensus estimate of 13 cents. This GAAP profit is important because consistent GAAP profitability is a requirement for inclusion in the S&P 500 index. We know how good this is for a company. As if these third- quarter figures weren't enough, the company provided a very optimistic outlook. SpaceX expects to end the year with $100 billion in annual recurring revenue and is forecasting $33 billion to $37 billion in revenue in the first quarter of next year. This was significantly higher than Wall Street's estimate, which was just over $22 billion at the time of the report. Each of SpaceX's three segments: space, communications, and the newly renamed "superintelligence
" or AI business, delivered better-than-expected results in both sales and adjusted EBITDA. So, the space segment, where SpaceX's initial commercial launch business is focused, is currently small. Revenue jumped 84% from the second quarter alone , and an unexpected EBITDA profit was recorded during this period But the success of the space segment depends on the development of the SpaceX Starship program. These are their massive new rockets, capable of launching significantly more cargo into space. SpaceX's 15th test flight is scheduled for next week. And they will try to catch both the booster and the ship itself after this launch. This is a
key functionality that will allow for much more frequent Starship launches in the future. During an earnings conference call, CEO Elon Musk said, quote, " Starship will be flying weekly at some point in the first half of next year ." End of quote. And then twice a week or more by the end of next year. That would be something incredible. Next, the Starlink satellite internet segment has shown really good growth. Revenue grew by 69% year-on-year , and EBITDA by 82% in the third quarter. This is simply amazing. Both figures easily beat expectations, and SpaceX reported significant success with corporate customers for the quarter. Although I should note that a slight lag in the number of individual
Starlink subscribers was practically the only downside in SpaceX's reporting quarter. Wall Street expected 14.23 million subscribers. We received 13.6 million. But the bigger news for Starlink lately has been a series of headlines over the past month that suggest SpaceX is planning to aggressively enter the wireless communications market. In October, the company announced the acquisition of a spectrum lease portfolio for $8 billion. There have been reports that it could lease cell towers from Crown Castle or even acquire budget carrier Boost Mobile, which is owned by EchoStar. The bottom line is that SpaceX clearly wants Starlink to be competitive and become the fourth
national wireless carrier. The company wants it to be more than just a satellite internet provider for rural areas. And if these efforts are successful, the overall available market for Starlink should become much larger than currently believed. Finally, let's talk about superintelligence. If there's one thing I want you to take away from this evening's SpaceX update, it's that the company is now predominantly a hyperscaler, and SpaceX's core business at the moment is computing power rental. This is what she makes money from. When I covered SpaceX's IPO this summer, the AI segment accounted for just 17% of revenue, based on first- quarter figures. In the second quarter, it was 33 %, and in the third quarter, the
AI business accounted for 52% of revenue and 56% of EBITDA. At $7.6 billion, AI segment revenue grew by over 800% year-over-year. Almost 200% in just one quarter. This is because the company's agreements to lease computing power to Google and Anthropic, which were announced a few weeks before the June IPO, have finally come to fruition. Google pays $920 million a month for access to SpaceX's Nvidia graphics cards. Anthropic initially agreed to pay $1.25 billion per month to lease SpaceX's computing power last spring, but we learned from a recent IPO prospectus that figure is rising. By December, it will reach $3.1 billion per month. Thanks to this massive deal,
Anthropic surpassed the US government in the third quarter to become SpaceX's largest customer. Incredible. SpaceX can fulfill these extremely lucrative contracts because it is rapidly increasing its computing power. The company's nominal capacity, that is, the amount of computing resources it owns and manages, increased from 1.0 gigawatts at the end of March to 1.4 gigawatts at the end of June and to 1.7 gigawatts at the end of September. But here's what's really exciting. Elon Musk said during the company's earnings report that this figure should increase significantly over the next five quarters. He said they plan to connect approximately 200,000 Nvidia GB300 racks per month by the end of 2026. They are expensive. And this
process will continue in 2027. Overall, Musk said he expects SpaceX to have 3 gigawatts of computing power online by the end of the year. And it expects to reach 13 gigawatts by the end of next year. Well, that's a huge number of gigawatts. I hope he succeeds. We've already seen how SpaceX's AI segment revenue has grown rapidly even with more moderate capacity additions over the past few quarters. CFO Bret Johnson said: "A lot of customers are asking about computing power ." And he added: "What we are seeing in the market is extraordinary." End of quote. With spot prices exceeding the upper end of the $30 to $50 per watt range that SpaceX previously reported to investors.
John Johnson said that at current average prices, new computing power pays for itself in less than a year. Musk later added during the conversation, and I quote: "It's possible that next year the payback period for computing will be 6 months." This is simply incredible. This is extraordinary. And if SpaceX can increase computing power at the planned pace, then, as Elon Musk claims, by the end of 2027, SpaceX's annual revenue could be between $ 500 billion and $1 trillion, compared to $100 billion at the end of 2026. It's not as crazy as it sounds. This brings me to my final point in favor of SpaceX's stock growth: if forecasts are to be believed, the stock is actually very cheap, trading at 16 times the consensus 2028 earnings per share estimate of just over $8.
In summary, there is an extremely compelling argument for SpaceX's growth. And you can see why I'm so eager to add these shares to our trust. But with so many advantages, why have n't I taken this step yet? Why haven't I bought these stocks yet? After the break, I'll explain what exactly makes me abstain. Mad Money will return after a break. Next: Cramer examines SpaceX under the microscope to find out why you shouldn't buy this stock right now. Further. Before the break, I told you about all the positive aspects of the SpaceX story, which frankly made me drool and I was eager to buy them for a trust to hold for the foreseeable future. But I haven't bought them yet. So let's figure out why I waited
So, first, the issue of costs. Almost immediately after SpaceX's report, investors began expressing concerns about the potential cost of the company's development plans. Just as we have seen with other hyperscalers like Meta, Alphabet, and Amazon in recent weeks. I told you that SpaceX's revenue forecast was much higher than expected. Do you know what I didn't tell you? I didn't mention that the company is also forecasting capital expenditures of $35 billion to $40 billion in the fourth quarter, nearly double the expected $20.1 billion. Looking ahead, let's take Musk at his word that SpaceX will add 10 gigawatts of computing power next year. Well, Jensen Huang says the full cost of
one gigawatt is now about $50 billion. So, you can do the math yourself, and that doesn't even take into account the company's spending on the space and telecommunications segments, which are not low-cost businesses at all. And finally, we come to SpaceX's announcement that the company has entered into a $40 billion debt financing deal with private equity firm Apollo. The proceeds will be used to purchase Nvidia graphics processors. Let's just say the company will need to make a few more such deals or sell additional shares, and that worries us.
Second, there is the potential for a megamerger between SpaceX and Tesla. So, before the break, I talked about SpaceX's stunning third-quarter results, but those numbers were almost secondary to the company's report. The main news of the third-quarter earnings conference call was that Musk announced the creation of special committees at both companies to discuss the merger idea. I have long thought this merger would happen; but a merger between $1.8 trillion SpaceX and $1.4 trillion Tesla , almost certainly, by the way, in the form of an all-stock deal, would still be extremely complicated and add a lot of noise that I'm not sure I want to endure. The shares of such companies are currently not performing. Furthermore, a deal with Tesla would
likely undermine the valuation argument I already made for SpaceX. While the latter trades at a price that exceeds 16 times its 2028 earnings per share, Tesla trades at a price that is approximately 125 times its 2028 valuation. Next, there is what I will call political risk, okay? A week before SpaceX's earnings report, the main topic for the company was whether Musk or President Trump ordered the slowing down of the Starshield service, essentially Starlink for governments and the military in Ukraine. Full service has been restored, but this episode highlights how cutthroat this business can be. And, of course, that was before this week's election results. Now we have to worry about what the "blue wave" in Congress and Texas means for
SpaceX. Who knows where all this will go next? Will Musk be summoned to Congress? Will this affect the stock? Will the company now be able to realize its ambitious plans to develop data centers and launch sites in Texas ? These are all open questions. You know what? Given all the positives I mentioned before the break, and the scale of the possibilities, I could honestly agree with many of the things I just said. But the real reason I refrained from buying SpaceX today is that there is still a huge supply of SpaceX shares on the market that have n't even started trading yet. I think this supply may outweigh demand in the short term. I've talked about it from time to time. I started covering SpaceX this spring. One reason
I thought it was safe to be patient with the stock was the fact that SpaceX's free float, or the percentage of the company's shares that are freely traded, was less than 5% after the IPO. The company had a complex phased schedule for unlocking shares, and we have already passed several stages when more securities could be released into circulation. I'm not sure if the market is ready for this, but by my calculations, only a third of the company's total outstanding shares are currently freely traded. There are many more of them ahead. The remaining shares will become available for trading gradually over the next 8 months or so. The final unlocking of Musk's
and other key insiders' shares will occur after the company's second-quarter 2027 earnings report, likely in July 2027; Each such unlocking means an increase in the supply of SpaceX shares with unchanged demand. Ultimately, I just figure I can get a better price on SpaceX when this whole offering hits the market, and you know I like to buy at the best price. That's why I've refrained from buying SpaceX shares for now. And I must say that it was the right decision. After today's nice rebound, admittedly, the shares are still trading slightly below their IPO price, but they are also down almost 30% from their first-day closing price of $161. If I had bought the stock after the rally on October 21st, which happened
after the third quarter, I would have lost almost 16% in just 2.5 weeks. Now you might say, "If I'm looking at this as a 10, 20, or 30-year investment, what difference does it make whether I buy at $150, $130, or $100?" And I understand this argument. I really do. But I also understand that if I had bought them for the fund at $159 last quarter and had to explain to the club members today why we instantly lost 16%, given how many more shares will come to the market-I don't know. I just don't want to throw people under the train, so to speak But you know what we can do in the meantime? We can follow SpaceX's successes. We created this tracker, which we plan to refer to often. It contains either specific guidance provided directly by Musk or simply
expectations about the company that are already embedded in the stock price. While I wait for the right opportunity to join SpaceX, I can check back regularly to make sure the story remains as compelling as it is now-as can club members. As for the space segment, which will begin next week with the successful flight of Starship 15, I'm very curious to see if the company can achieve its goal of weekly flights in the first half of next year, and then twice a week by the end of 2027. Regarding the communications segment of the Starlink business, Musk did not make as many specific promises. But given last quarter's failure, I want to make sure that Starlink subscriber numbers are in line with projections. I would also like to see these rumors of a big
wireless breakthrough turn into an actual service that people will want to use. When it comes to AI business, everything is simple. Will they be able to reach 3 gigawatts by the end of the year? Can they really add 10 more next year? And overall, is Musk's ambitious goal of $500 billion- $1 trillion in annual recurring revenue reasonable? These are the things I will be keeping an eye on as I wait for the right moment to buy stocks. I will make every effort to regularly update you on the company's progress towards these goals and objectives. But the main conclusion is that, despite the appeal of the SpaceX story, I'm not ready to take the plunge and buy shares yet. The company's projected costs are astronomical. The
merger with Tesla could complicate matters, and political risks have increased significantly this week. Most importantly, we will see a steady supply of new shares over the next few months, when there is already a surplus of stocks and bonds. So I will watch, wait, and monitor the company's progress. And if and when I'm ready to buy SpaceX, well, guess what? You will be the first to know about it Next: Did Papa John's deliver a strong quarter? Kramer is talking to the CEO. Further. Yesterday, before the opening of trading, the pizzeria chain Papa John's, known for its slogan " better ingredients, better pizza," reported what was described as a
difficult third quarter. Sales fell short of expectations, but earnings were 16 cents per share. This was just at the level of forecasts, but less than a year ago. And with North American same-store sales falling more than 8%, Papa John's lowered its full-year profit forecast. Shares fell half a percent yesterday and another 0.8 % today. A little over 2 years ago, Todd Penegor took over as CEO. The question is what it will take to bring back families who used to order Papa John's on Friday nights. So let's talk to Todd Penegor, president and CEO of Papa John's. Mr. Penegor, welcome back to Mad Money. Thanks for inviting us, Jim. Nice to see you again.
You again, Todd. So, here is the unpacked version of "the best" in front of me. To deserve the right to be elected again and again. Why do I want people to choose Papa John's? This is truly our commitment to strengthen the brand and strengthen our system. And when you think about what we built on- better ingredients, better pizza-this is really a back-to-basics moment for us. Not only to highlight what has made us great all these years-six simple ingredients, fresh, never- frozen dough, fresh vegetables, real cheese-but to build on that and ensure we get even better moving forward. We know we have opportunities to improve the taste of our cheese, to make it
a little more melty and creamier. We have opportunities to handle dough even better in our restaurants. We know we can improve heat retention. This is truly a commitment to go back to basics, to prepare for the fight, to make "better" famous again, and to make "better" the calling card of Papa John's. Well, I'm going to digress a little bit, because I like Papa John's, and I've always liked Papa John's. I didn't know Papa John's wasn't as good as it could be. I knew Domino's was like that when Pat Doyle came along, but what makes you think that really good pizza is going to be able to attract more people than the good pizza you had before?
People tell us that we are not consistent enough in delivering on our promise. And our commitment is to go back to our restaurants, to retrain again, to reconnect with our employees so that we can deliver on our promise again and again. We've been too inconsistent, Jim, and we know people say, "I love this Papa John's." We know what the answer is. "I will never go to another." So, the opportunity is to set our team up for success, simplify processes, and leverage technology. We are implementing a new POS system in our restaurants that will allow our team to spend less time on routine tasks and focus on becoming the best pizzaiolo in the business. And this work will continue throughout 2026 and 2027.
Well, tell me what really happened to this category. I mean, the category has always been this: there were a few big companies like yours that had the money, they could compete with small family businesses and do better. That was Domino's thesis as well. And then, one by one, I mean, the category became very complex. Pizza Hut, it seemed to me like they abandoned Pizza Hut at Yum. Domino's performance is just acceptable. This is very good food that doesn't cost much. What happened to this category? Yes, I mean, the pizza is still great value for money. And regardless of trends, people continue to be fans of the
pizza category. She's become much more competitive, Jim. You know, the competitive environment was such that there were a lot of deep discounts. You know, at first people could only get pizza delivered, and there weren't many other types of food that could be ordered home. Now you can order delivery of anything through DoorDash or Uber Eats. So, the competitive environment has changed. Therefore, we must break out of this "sea of sameness" and truly earn the right to have people come to us again and again when they have so many delivery options. So they want high quality, they want value for their money, they want it done right, they want it
hot, and they want it delivered quickly. And we must recommit ourselves to delivering on that promise to stand out from the competition. I agree with that, but to be the best, you need money, right? Well, the good news is that we are starting from a great position. We already have a lot of money invested in the foundation of our slogan "better ingredients, better pizza." We will make an effort to go and retrain the staff in our restaurants. But we have reduced the margins of our commissariats. It was supposed to grow to 8% margin in 2027. We reduced it to 4%.
This really creates 100 basis points of support for our system beyond the four walls margin to be able to go out and compete. We have also caught up with technology. So we have the opportunity to reduce our technical fee from 1.75 to 1.5. That's another 25 basis points of support. So, we are really creating fuel for the struggle of our franchise system. And one of the big things we did was reduce our national advertising budget from 6% to 5%. And we're rebuilding our co-ops and restoring our local spending to 2% so that we can play this game nationally as a big pizza chain, but actually win locally and connect with the communities that we serve. That's how the brand was created. This is exactly how it was until
2023 inclusive. Everything has changed. We are going back to where we were before. Are you doing it aggressively, or are they working? Are you getting a return where you implement your Unboxed Better program? Yes, the Unboxed Better program is just starting to take off. We conducted many trainings. We worked a lot on the technological direction. But where we have restored our cooperatives, we are seeing a margin and sales advantage of several hundred basis points compared to markets where they are not But what's important is, if you look at our top quintile of performers, those who deliver on their promises, compared to the bottom quintile, the difference in sales and profit is 400 basis points
. So we know: if we deliver on our promises and offer great pizza, the customer will come back to us again and again. Perfectly. Now I want to ask you: your division in the UK is doing incredibly well. Have they implemented some of the things you're talking about, or has everything just always worked there and will continue to work? No, they've done all this hard work over the last two and a half years, Jim. They updated the range of dishes. They focused on operational excellence. They invested more in marketing They simplified and reduced the number of franchisees in this market, and we were up 7% last quarter and up 16% over two
years, and now we have great momentum in this market. So the recipe and the transformation that has taken place in the UK over the past two and a half years is an important part of the recipe for success that we can replicate here in the US. I think this is a great idea. I mean, the UK market is very, very strong. Your shares are cheap. The category was not destroyed. This is still a value-driven category. So, Todd, I think you're doing a lot of things right. This could be it. It's great that you're back on the Mad Money show. Thank you, Jim. I really appreciate your time. Of course. It was Todd Penegor, CEO of Papa John's. The stock is down, but I like this plan. They did it in the UK. This works well.
Mad Money will return after a break. Coming soon: You have questions, Kramer has answers. Get ready for a quick blitz round. Further. It's time for a special edition of the Lightning Round from Investing Club. That's why I think you need to eat something, and then the stock will go up. See you later. So, what's up with these major stocks this time? My team prefers the fiery Kramer. We plan to hear the signal, and then the blitz round will end. Are you ready? Ski Dad. The blitz round begins with Adrian from Pennsylvania.
Adrian. Boo-ya, Jim. Uncle Jimmy. So tell me, how does Okta compare to, uh, CrowdStrike and Palo Alto? Well, I have to say that this is a very difficult task for me, because I think Todd McKinnon does a great job. Like the people running CrowdStrike and Palo Alto. Let's combine all three of them. The choice is yours. Now we'll move on to Todd from Louisiana. Todd. Boo-ya, Jim. I've noticed that people are wearing Vans more often now. So what is your opinion on VFC Corp? She is good. I think these stocks will go higher. I saw the recommendation from 24 to 28. I am in favor of investing in VFC. I think they can go up six or seven
points. And Dallas is doing a great job. You have good stocks with VF Corp. Now let's move on to Lisa from Kansas. Lisa. Hello, Jimmy. I'm calling about Trinity Capital. And you know what? I'm here live. I'm not calling you. Well, no, it's true. There was a slight switch here. OK. Now this is a difficult question. I don't.How did you choose Trinity Capital? Well, this is my husband. So I have to be.
Well, you know, when I see. First of all, when I see a yield of 11 and a half percent, I get nervous. Secondly, I don't know what they have, so I can't express an opinion. I have to say: skip this. Sorry, but you are live. OK. That's right.Yes, that's it . You are on the air. Okay, let's move on to George from Texas. George. Jim, it's an honor for me. Mutually. Jim, Tina Turner once had a great song and its lyrics apply to you. You are simply the best, better than everyone else. Always better than everyone else. Wall Street has its legends. You are definitely one of them. It is an honor for me to be with you. You are very kind. Thank you very much.
Jim, give your opinion on JP Morgan Chase. What can I say? I think, listen, this is just a great bank. I mean, Jamie Dimon is just incredible. I, I love, I love him. And I believe that if you want to own it now, you will make a lot of money. Rightly? Thank you for these kind words. Okay, let's move on to James from Illinois. James. Jimmy Kramer, boo! Thank you for everything you do. You're going back to what I call home. Thank you very much. Please, sir. Nice to meet you. Jimmy, is now a good time to buy AMP Ameriprise Financial stock? In fact, there has never been a bad time for this promotion. I watched her
grow and grow. And I always asked myself: when will it fall? We have an opportunity. It has fallen this year. I like your choice. Let's buy. Now let's move on to David from Florida. David US Navy, cheers! Oh, man. Thank you very much. Buoy! Thank you. Jimbo, you always say how to make money in any market-always take profits. Tell us about Cardinal Health Oh, man. You know how she showed herself. I mean, the stock is probably up 60 points; We bought it for the club, and then-boom, two good quarters in a row. We had to cut the position a little because it got too big, but you know what? I think he will tell great stories at the JP Morgan conference
in January. We need to save most of it. Cardinal Health is a winner. I understand you, brother. Thank you, and thank you for your service. Let's move on to Mark from North Carolina. Mark. Buoy, Jim. Buoy. Professor Jim, you're such a cool guy Yes, you are giving me a lifetime right to the position. I agree. Yes, 6 months ago, quantum stocks, stocks of quantum computing companies, were at their peak. They fell. Is it time to re-enter them?
No, you see, in this unstable environment, we have reliable companies with very good profits. We will not go down this chain. It's too dangerous right now, but I appreciate the question. I appreciate your opinion, but it won't work for me. Ryan from Dubai. Ryan Hello, Jim. Thank you for inviting me Thank you for being here. My favorite phrase is always: discipline breeds conviction. This works every time. Anyway, what's up with Netflix? I mean I think people feel it after the survey. Listen, that's a great question, but I think after the Warner Brothers Discovery application, people decided they ran out of ideas, and the
last few quarters have just been nothing. I don't like "none". I'm not buying. But thank you. Let's move on to Mark from Ohio. Mark. Jim, it's great to be here, and your wife's tequila is amazing. Thank you. Steeply. Perfectly. TJX is in decline. Ross Stores-simply incredible. What about Burlington? Okay, Burlington is somewhere in the middle, and we don't know. Listen, we're still sticking with TJX for the club. We have to wait another quarter. Ross is the best right now. I hate not having the best. I hate it, but we have long linked
our fate with TJX. I think they can fix the situation in a quarter, but if not-goodbye. Let's move on to Thomas from Pennsylvania. Thomas. Hello, Jim. Nice to meet you. Mutually. I really respect your work and your energy level. You are cool. I am your big fan. Given high oil prices, what do you think about Chevron stock? Chevron is the number one oil company in the world. This is something worth buying. They have the best buyback, the best dividends, and the best CEO-Mike Wirth. Good advice.
They drove. Oh no. And with that, ladies and gentlemen, we conclude the blitz round. We had a great annual CNBC Investing Club meeting today, where Jeff Marks and I discussed the charitable foundation's portfolio, answered questions from the audience, and discussed what it takes to get the market back to previous highs. I wasn't very optimistic. We are at a critical juncture now, with so much money invested in data centers, both in stocks and bonds, that everything has to go too perfectly for those investments to pay off.
I know Elon Musk says that the unpopularity of data centers is a temporary problem. That would be just incredible. And if he's right, you should buy as much Nvidia stock as you can. But it seems to me that Musk hasn't been reading the political situation very well lately. I told the club members that the elected officials didn't seem to be in the mood for compromise. I think it will be difficult to find sites for new data centers, and we will not build as many as we planned. Bad for business. Today at the meeting, I spent a lot of time on other consequences of the election, those that could manifest themselves in two years if the Republican Party loses the White House. I'm worried that Democrats will raise corporate income taxes
and capital gains taxes. In 2017, during President Trump's first term, the corporate tax rate was reduced from 35% to 21%. But after the "blue wave" on Tuesday, I think it's quite likely that the old rate may be returned. Not now, but if a Democrat wins in 2028. This will mean a 67% increase in the corporate tax rate. This will reduce after- tax profits by 18%. So, what does this mean? What will happen then? This will lower the future price/earnings multiple for the entire market. Don't forget about new regulations that may return and restrictions for oil and gas companies. The Senate Banking Committee, chaired by Elizabeth Warren, does not bode well for banks. The tax rate on long-term capital gains can be comparable to the tax on
ordinary income. All of this will negatively impact stocks. This is the outlook for the next few years. The problem with data centers is very acute now. We have to assume that some new projects that were considered guaranteed may not happen. It means what people don't want to hear, what you don't want to hear. Lowering price targets and forecasts. For semiconductor stocks, which hasn't happened yet. That's what really worries me. So far, analysts have been very adept at defending all of these stocks throughout the week. But I think next week some analysts may change their position and start lowering their estimates.
Although many stocks have fallen significantly from their highs, they are still far from support levels. So I don't see how they can bounce back. I consider this group of stocks vulnerable. In my opinion, it would be reckless not to reduce the proportion of these stocks and not diversify the portfolio into growth areas-medtech, fintech, it doesn't matter. Simply buy shares of companies that provide in-demand services and have good results. There's nothing wrong with keeping hyperscalers, but in terms of hardware-I just don't see how they can recover as if there was no election They were. I
wish I was more optimistic, you know that. But, speaking with the participants today, I don't think we're safe anymore. I like to say that there is always a "bull" market somewhere, and I promise I will find one especially for you here at Mad Money . I'm Jim Cramer. See you on Monday All opinions expressed by Jim Cramer in this podcast are solely Cramer's and do not reflect the views of CNBC, its parent company or affiliates, and may have been previously published by Cramer on television, radio, online or other media. You should not take
any opinion expressed by Cramer as a recommendation for specific investments or strategies, but only as an expression of his own views. Cramer's opinions are based on information he believes to be reliable, but neither CNBC nor its affiliates or subsidiaries guarantee its completeness or accuracy, and it should not be relied upon as such. To view Mad Money's full disclaimer, please visit cnbc.com/madmoney disclaimer
