Mad Money w/ Jim Cramer 3/26/26

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1:27We're all armed here, generals now, aren't we? Whenever I talk to people about the stock market these days, they don't want to talk stocks, or even sectors. They just want to jab or want to know on about whether the Iranians or our president mean it, whatever, meaning it actually entails. The war decided the markets fade again today, with the Dow tumming 4 to 6 and 9 points. S&P plunging 1.7% worth of the past at plummeting 2.8%. It was a truly hideous session as sellers anticipated a deadline pass and heavy bombing over the weekend. But at the close, the president said that if the request of the Iranians, he said that, he was going to extend the negotiations in other 10 days and said the talks were going well. The amateur military strategist rolled over to the president, that parsing those words again, wondering if the Iranians really did ask for an extension and are the talks really going well. The armchair generals tell me that the Marines are ready to go. The 82nd Airborne's in play. These vertebral warriors are telling me that the Iranians aren't

2:28going to open this trade of removes no matter what. No matter how hard the US bombs emit to the pause, because there'll be no agreement. Look, I'm not a military strategist. I'm pretty honest, I play one on TV. However, I am your stock tactician. And I can recognize an ugly market when I see it. The question we keep asking ourselves is what point can we buy things without needing to worry about an Iran-induced oil shock dragging the whole thing down? Or do we have to keep selling and selling? Tonight we're profiling chewy, for instance, the online pet supply store, and lemonade, the AI insurance underwriter. Those might be worth buying now that they've come down dramatically, right? But you'd be threading the needle, because barry and unlikely active capitulation by Iran were not going anywhere except maybe down. Whoops. There goes that armchair general thing again. There are literally thousands of stocks in this same boat as a chewy lemonade, bad with water, good with peace. No matter what though, the bottom is out of our hands. We can't control it. We're just tonight when the president moves the gold post.

3:28Again, we just shrugged. That's what we can do. So you know what I'm going to do? Tonight I'm going to turn the whole process upside down. And think about what the war really means to someone who's simply trying to build a portfolio. We know we can't predict the outcome, and we can't control it. We can't predict the time either, as tonight's bombing cause extension shows. But what we can't gauge is whether the stocks we like have much of a connection to war. Are they just going down because of the market and war? Are they going down because something's wrong? Look, there are ample reasons to believe that the war is just going to drag on. The president keeps saying over and over again, that he's going to wind the war up soon. Even as you also talk about a possible grand invasion, we have to assume for the moment that the conventional wisdom is right. So let's deal with the hand we've been dealt. Why don't we pick an obvious stock and work through the process? Let's talk to everyone I know is selling. Let's talk to people getting up, giving up, well, let's talk to the hurdle, Dave, is done. Done. Let's talk in video. Yes. Let's match it against a checklist that could actually, in an unemotional way,

4:29determine whether it's worth buying before we get clarity on when the war will end. Stock fell $7 or 4% today, and it's truly hitting a session. Boy, her today was in video, and it's Compadrace. I've hit a watershed moment, and they are finished, and you've got to sell every single one of them. I heard that over and over and over again, which makes me say, do we buy them? First, we have to ask, is the video stock down because of the war? I contend the war is something to do with the video, but it's not totally quantifiable. I will posit this, and it is a big part of the stock market itself. It's also the easiest stock in the world to trade. I think it's going down because it's so easy to get back in at a lower level. In fact, it is a member of the depressing Mag 7, but are we really supposed to switch to the Chem 7 and exclusive list of companies that will benefit in a long war? A list of my old friend, Frank Mitch, from Fermi, suggests by Kim Moore's, by Selonese, Dow, Huntsman, Lionel, Basil, and Basil, Owen, Tronics, there we go. That's what you want, Selon Mag 7. Buy those, just go ahead, do it for me.

5:32Do you think they're more magnificent than in video that they are levered to the Middle East destruction? So therefore, they're as good as gold? No, better, because gold was down today. Right now, the Chem 7 are easier to own than in video. There's not that about that. They only work though. If the worst day's on, a petro-kemble facilities and the gold keep getting bombed, and video, on the other hand, works regardless of what's happening with Iran, at least their business does, the Chem 7 has a shelf life that could be two weeks, especially if the Iranians simply give in. In video, I don't see a foreseeable shelf life. Other than when the journalists and the commentators tell me to sell it, next, isn't video down because the interest rates are going up largely because of war-related inflation. It's highly possible. Companies will do better with lower rates because lower rates make it easier to build more data centers. That's said, if the water ends soon and we have a new fed chief, you'll feel like a moron for staying away from the video. You'll say, why don't I watch that show? Third, is there an intrinsic reason that Nvidia might be down, that's incorrect? I think that's true. Right now, the tech industry is short on what we call compute, and it's also short on memory, future things. That means it's short to computers that have Nvidia inside.

6:35They need more Nvidia, they need hundreds of thousands more Nvidia chips to meet the demand. But at the same time, memory chips separate have been going up in price, and that's hurt the sales of the adjacent products that also go to the server, like a video. The non-memory chips, including Nvidia chips, haven't sold as well as they could because the high cost of memory means business, businesses can't afford all the machines they'd like. In the last few days, though, we've been hearing about a new technology, Google, has that obvious to need for huge amounts of memory chips, not Nvidia chips, memory chips. If there's anything that alleviates the title of some memory, then we have less reason to worry that Nvidia's sales will be heard by a memory shortage. In other words, it's a positive, not a negative. It's ridiculous how the stock is acting, at least in reference to the Google issue. That says buy a video right into the teeth of this decline. Next item, how about oil? Nvidia's data centers run most known natural gas, which is US-based and is rarely budged. So no, its computers could be in pie. Its customers could be impacted, absolutely. But everything you use for Nvidia

7:37is considered mission critical, so I'm not concerned. Then you have to answer yourself, why do you want to own anything that is so obviously going lower? Who would be such a glutton for punishment? The answer there, there's only one, a shocking surprise deal, with a rant could turn this thing around immediately and you're afraid to miss it. And it's possible. President now's the extension right tonight. What if he had said the straight will be open this weekend, there'll be no nooks, the war is over? You think you could buy Nvidia at 172? Good luck. Finally, we need to know, is there anything about demand here that could be dropping off the war or not? It's conceivable that sovereign capital from the Gulf is drying up and that it's finance of data centers, a private credits involved with data centers. But last week I attended the Nvidia GTC conference and I learned that demand is incredibly strong. That's like five days ago. What does the evidence cut to? I take the Chem 7 right now over buying Nvidia tomorrow. But depending upon what happens these next 10 days, I might be dumb in the chemicals. I won't be dumb with Nvidia. Is there more to the process?

8:37Oh, I wish there were. But to me, you're only being given a chance to buy a high quality stock at a lower price than you normally expect because everyone's saying it's a watershed moment and it's finished. You can't time it. Don't forget that you can always buy more lower because actually shocking Nvidia does get cheap versus stock goes down. Here's the bottom line. All things equal, I'd want to wait for Nvidia. I don't want the Chem 7 either though. Let's just say you are too early on one and too late on the other. But I'd rather be early than late any day of the week. Even this week. Let's go to Tony and Florida, please Tony. Hey, Jim, I want to thank you. You sent me a book that you signed and I really don't read, but that made me keep on reading and I really appreciate that. Oh, you're kind and you're very kind. Thank you. I hope you're at the meeting tomorrow at noon. We're going to talk about a lot of the stuff that we're going over tonight, but it's much better. I will never miss a meeting unless I'm working, but Friday's I'm using you up, so I'm looking forward to it. All right, you're like, my daughter, never's a meeting show.

9:37It tells me that's one yet, but that's what pop told me for 40 years. So let's go to work. OK, yeah, this is a stock I bought three times as it went down, down, down. And I don't think it's going to get hit with the stuff that I ran. And it's from it's a mechronic MDT. I had to tell you, I was surprised that the mechronic got back down to the high 80s. I think that everything they've been doing lately is right. I think you've got to go win. By the way, it's 15 times early, so it's very inexpensive. I would buy more Tony. I know it sounds like you're just averaging down into oblivion, but I think it's a great level. And thank you for those kind comments. And I'm really trying to do something out here. It was a hard day. Jeff and I were talking all day. We were concerned, Ben Stotters. We don't want to lose anybody money, but we've tried to make people a lot of money over time. We're just going to keep trying to do that. It's the only thing I know how to do it. All things being equal, I want to wait right now when it comes to the market, including a video, but I know I want to be in a long term. That does matter. Remember long term? All of my money tonight is AI consolidation

10:39going to impact the legacy players of cybersecurity, or it's mostly blowing it out of proportion. Doing a lot of other things being blown out of proportion. I'm checking with crowds straight to get the latest in situate. And Chewie isn't the cheapest it's ever been. So as the time they get into this name, I'm going to get the cup of his recent earnings, give you my tank, oh, oh, Pets, are they going to 10 days, Pets, no 10 days? Oh, no, Pets will still be here afterwards. And AI enable an insurance company, Lemonade, has seen a big pullback belly on the bike. Don't miss my exclusive of the CEO's smart fella, so stay with Prima. Don't miss a second of mad money. Follow at Jim Kramer on X. Have a question, tweet Kramer. Hashtag, mad mentions. Send Jim an email to madmoneyatcnbc.com, or give us a call at 1-800-743-CNBC. Miss something, head to madmoney.cnbc.com.

11:45That's pure automotive joy. I'm Peter, the owner of Musclecar Junior. It started as a hobby. Then I started posting about it. Before I knew it, I built a business for storing muscle cars on Facebook Marketplace. And the community of car lovers on Instagram. Today, new customers send me what's that message is from all over. Not bad for a hobby. Learn how meta helps over 35 million American businesses, like Peter's Grow, at meta.com slash community. Here's a shift worth noting. Better health care is care that meets patients where they are. United Health Group is bringing it directly to living rooms. This is a win for patients managing chronic conditions. And here's the interesting thing. By closing those care gaps, administering in-home exams and identifying risks earlier, more diseases can be prevented, and patient outcomes can improve. In 2025 alone, United Health Group patients received over 19 million home visits. Learn more at unitedhealthgroup.com slash commitment. This episode is brought to you by Schwab Market Update,

12:45an original podcast from Charles Schwab. Join host Keith Lansford for this information-packed daily market preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and subscribe at Schwab.com slash Market Update podcast, or find Schwab Market Update wherever you get your podcasts. Let me know the whole cyber security cohort has been under pressure from worries about AI-driven disruption. That's why even though we got some big announcements to speak at RSA, that's the world's largest cyber security conference, many of these stocks continue to get hit. Take crowd strength between home for the child of trust and have for a long time. At the conferences, we crowd strength rolled out a bunch of announcements related to what they called the Egentic Security Operations Center, SOC. They're using AI agents to automate detection, investigation, and response,

13:46allowing the platform to respond to cyber threats faster than human teams ever could. What does this mean for the stock? Let's check in with George Kurtz. He's the founder and CEO of CrowdStrike. To find out, Mr. Kurtz, welcome back to Man Money. Great to be here, Jim. Thank you, George. Look, I want to know, let's just cut right to it. At the highest level, should investors think about AI as a disruption risk to cyber security vendors like you, or as the single biggest long-term demand driver that the sector's ever seen? Well, it's the latter, Jim. I can tell you, after a full week of meetings with some of the largest Fortune 100 companies around the world, there's no more important topic than cyber security and the protection of the Egentic world that they're living in today. And one of the things that was obviously clear to me in every single meeting, I couldn't be more excited coming out of this week was, they said, George, we want you and CrowdStrike to help us. We want you to protect our agents. And the tip of the spear for the Egentic Revolution

14:49is now the endpoint. That's where Cloud Code runs. That's where OpenClaw runs. That's where all this Egentic technology runs. And they need to get a handle on protecting it, providing governance and observing it. And I said, what is your number one outcome? They said our number one outcome is, we can deploy AI faster because our executives and our boards tell us to go faster. And it's the compliance and it's a security that's slowing us down. And they're looking for a solution from CrowdStrike. Let's talk about compliance for a second. If I were running compliance at a major firm, and I were to hire Anthropic, and then Anthropic could also say, you know what I can also do? Your cyber security. Would a compliance officer ever say that you can do both? Well, there's always this concept of church and state, as you know, right? And what that means is, if someone's actually providing a service, you have a third party, some independent firm could be auditors, it could be a firm like CrowdStrike, that's providing a third party view and protection around it.

15:52And when you look at some of the LLM in the frontier models, they're very good at finding vulnerabilities in code, but that isn't real-time prevention. That isn't stopping breaches. So this is why there is a long and large tailwind in the security market right now. I have never seen RSA so busy and so excited. Given the pace of change that has been taking place, just from October, things have rapidly changed, and we're now in the agentic era. You know, first, obviously it was Gen AI, then it was reasoning, and now it's all about the agents, and protecting those agents and getting work done. And we're at the tip of the spear in helping customers do that. I do have a problem here, George. I listen to you, and I totally agree with you. I talked to Jensen Wong about it last week. He actually just said exactly what you did, and he said, because we have outfits like CrowdStrike, we can afford to have claw on all these different agents running around. And then when I speak to people on Wall Street, they're also scared. Is that because they haven't done the homework or because maybe some of these companies

16:53that are talking about like a Databricks, maybe they're just very good at convincing people that they can take over your work? Well, Jim, I've been doing this for 30 plus years. I've seen companies come and go. I've seen all kinds of solutions. And what I can tell you is, security is really hard. You need incredible domain expertise, and you need to focus on it. And if you're a company that's doing all kinds of different things, and then security is a sideline or a part-time opportunity for you, you're never going to be as good as a company like CrowdStrike. Every day we get up and we think about, how do we make sure we stop the breach? And that's what customers are buying. They're buying the outcome. And when you think about some of these other solutions that are being put together, I sat down with a CIO and they said, yeah, maybe we can put some stuff together and make it work by using vibe coding. But the problem is they never fund it for the next 10 years of maintenance. I think Wall Street has forgotten about the fact that you have to maintain it, you have to update it, you have to support it, you have to sell it,

17:54and you have to be there when a customer has a problem to make sure you stand behind your technology. And that's why I think the security industry has got a fantastic future ahead of it. I agree with you again, but I wouldn't say that there's a perception that there's someone at anthropic, you can call, maybe the CIO, when there's a problem, when the CIO and no absolutely nothing and you would have all the data. Well, when you look at the labs that are out there, they've created incredible technology. Most security companies are leveraging them in some fashion. And I think it would be a big part of helping power the security industry, but at the end of the day you have to be a net data creator and you have to have the proprietary data that allows you to train these models, which is what we've built up over the last decade plus. And again, if you're not in the business and you're not totally thinking about security and you don't see all the threats from 176 plus countries that we're actually in, it's very difficult to be in the path to stop the breach. You know, it's not about reporting on it,

18:55it's about stopping it and that's what customers are paying for. And that's why we've been so successful. We talked about it in our last call after our quarterly results. Records up and down, tailwinds across every part of our business. And again, it's just been confirmed with a week of meetings at RSA in every enterprise meeting is how can you help us? You've got the technology and we're looking for a platform player like CrowdStrike to do it. I know we bought stock for the Childhood Trust, if you said that because we just couldn't figure out why people aren't listening, but I think there's a lot of fear. The fear I think should be against the bad guys, a major medical device company that I know, I don't even feel like it's fair to mention their name. Suddenly was blanketed with an Iranian title on its building. I mean, to me, this is the kind of thing if you can't stop that, you don't have cyber security. Well, right now in this geopolitical environment, it is the wild, wild West and it's incredibly dangerous. And you see everything from nation's data tax to e-crime, to activism.

19:57And the challenge that we're facing is that the window that a defender has has dramatically been compressed because of the AI adversary. You don't need to be all that sophisticated. You just need to leverage the models that are out there. We demoed some of this at the show. In a matter of minutes, one prompt can take down an entire company because you can automate the entire attack sequence and you don't need the expertise that you needed in the past. You can look like a nation-state adversary and you could be a teenager in your basement doing this. It's incredible. And this is why there's so many attacks that are out there and why companies really need to be prepared. I know that I'm actually kind of fired up about this because I'm tired of hearing one after another. You know, they're saying they're in your business. I don't want to do short shrift to the things you announce at RSA, which I think are probably significant for shareholders in your company. Yeah, well, and if you think about what we announce this week, one of the big things that we were excited about was something called agent works where our customers are able to create their own security

21:00agents on the data, the rich data set that we have across our platform and our next gen SIM to do tasks on behalf of their own humans. And this unleashes the power of our platform, unleashes the power of our data. But more importantly, you have to get a deterministic outcome. This is one of the hardest things to do in the agent world because every time you run an agent or every time you actually do something, you might get a different result. We have guardrails, we have boundaries, and they're trained in the business of security. Our customers are excited about it, and I think this certainly will be a game changer for the industry. Well, I'm glad you got that in, my bad that I just insist on trying to swatch some of these things down, but this is all I hear about. And I think you put an end to it right here right now. And people will remember that. That's George Curse, his CEO of CrowdStrike. It's a big position with my child with us. We're gonna be talking about it again tomorrow and our conference. May have my back after the break. Stay. Coming up, sit, stay. Kramer's fetching the key takeaways from Chewie's quarter. Next. Thanks.

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23:16and key results and statistics that may impact your trading. Download the latest episode and subscribe at Schwab.com slash Market Update Podcast or find Schwab Market Update wherever you get your podcasts. Yes, very morning. We got a solid set of results from chewing. You don't mind pet supply retailer. The stock immediately jumped 13% of response. Warping has been beaten down for the past 10 months. So it didn't take all that much to generate a rebound. This stock has been a real roller coaster. Since it came public in 2019, chewie caught fired during the pandemic, like old e-commerce. Then plummeted once we got past COVID. With the stock bottoming in the mid teens in April of 2024, nearly two years ago, we had gotten positive with the story just before then. When CEO Sumit Singh came on made money at the end of 2023. Why do you be a possible, he sounded so confident about the company's ability to grow and take share.

24:18Even in the post pandemic era, it was a great cause. Chewie then tripled from its lows, peaking at $48 and changed last summer. But since last summer, Chewie's turned into a... The House of Bays. Sliding steadily lower, down more than 50% overall by the time the stock reaches lows this Thursday. I'm sorry, it's Tuesday. The frustrating thing about this move is that it's hard to explain. Chewie's consistently put a robust revenue growth and rising profitability. They've been generous about buying back their own stock business was good. But for whatever reason, the stock simply hasn't been working. I think it's fear of competition and a general lack of confidence in the consumer. Honestly, I've been wrong about this one repeatedly over the past few months. Every time I tried to defend it based on the fundamentals, the stock just punches me in the face. Now what I even discussed this one with Rob Pace, this is the CEO of 100X last Friday. Chewie had screened positive as one of 100X's best MVP names. That actually stands for more value for price.

25:20This is one of the rare MVP names with a stock that's been an under performer. If I thought it might be an opportunity, sure enough when Chewie reported yesterday morning results were fine. Not great. Technically, this was a small top and bottom line miss and their main operating metrics were pretty much just in line. But given how barely the stock had been trading, that was enough to send it much, much higher. Now Chewie's net sales effectively matched expectations growing 0.5% year by year, though it's more like 8% if you exclude an extra from the year ago, period. Their gross margin grew 90 basis points year by year. That's not bad, but it's more like the head of expectations. Even though their earnings before interest taxes and depreciation and memorization, who in a 30% clip, very impressive, their earnings per share is still missed by a penny. But Chewie's keep performance indicators were solved. Active customers grew 4% year by year. That's over, get the big number, 21.3 million. That's slightly ahead of expectations, by the way. While net sales per active customer grew up over 2% year by year, that we have no many customers, that's a big deal.

26:21Autoship sales were up almost 5%. Autoship now represents a terrific 84% of the business we like that because it's sticky. All these numbers were solid. Even if some lines were haired to light versus what Wall Street was looking for. What really matters though, is that Chewie gave solid guidance for the current quarter. And it's very bullish before your forecast. But the current quarter management's talking about 78% revenue with 40 to 45 cents of earnings share per share. The analyst was looking for 41. For the failure to get this, they're projecting 8 to 9% revenue growth nicely higher than expected with a very strong EBITDA margin. So again, these are results from Chewie with even better guidance. But what really got to stop moving yesterday was the story told by CEO Sumit Singh on the conference call. Singh took a different tact entirely in the usual. Startings prepared remarks, not with the discussion of the quarterly results, but instead offering a broader perspective on the pet industry in Chewie's market position in general. Singh didn't try to claim that the broader pet business was going gangbusters.

27:22I'm glad he didn't. He said they expect the pet category in 2026 to look a lot like it did last year. Stable and durable. But, and I'm gonna quote here, without cyclical acceleration. Current industry estimates expect low single digit growth. He said, with dogs at the lower end and cats at the iron, most of the growths expect to come from volumes not price. But Singh remains very bullish on Chewie, of course, despite that lukewarm outlook for the industry, saying first that he expects the industry to continue its secular shift towards e-commerce, quote, as consumers increasingly prioritized convenience, transparency and order of replenishment, end quote. More importantly, he thinks that Chewie can keep taking market share thanks to its quote, differentiated flywheel-like operating model end quote, where well over 80% of sales are now auto-ship orders, and the business is supported by a world-class fulfillment network delivering best-in-class consumer satisfaction. Now, we know Chewie added 150,000 and 200,000 active customers per quarter last year,

28:23and same things that can keep putting up similar numbers. He also thinks that they can continue to grow net sales per active customer, as they've been doing for the past several years, for perspective. That metric stood at about $360 and 2019, when the Chewie came public now, it's nearly $600. At the same time, Chewie also expects his commodities will continue to move higher, thanks to modernized fulfillment centers and the use of AI helping Chewie to structurally lower its overall cost. All that said, you wouldn't appreciate why this was a good quarter for Chewie. If you only looked at the sales reactions to the port, because most lower the price targets for this set, that's right, lower PT. But honestly, I wouldn't read too much into that. Most of the analysts were hung with high price targets in the 40s or 50s, when the stock was in the 20s. So they were just using the quarters and excuse to get their targets more in line with reality. The street is 22 buy-out ratings, seven holds, and zero sells on Chewie. And the new average price target stands at $40 in change. That's still up more than 50%

29:23from where this stock's currently trading. Instead, I think Chewie's 13% gain yesterday, which was followed by another 1.7% gain today, a really terrible market, was the right beat on the quarter. This was a solid set of numbers from Chewie, with a better outlook, and perhaps most importantly, a reaffirmation of the company's long-term plan, which will lead to continued market share growth and steadily expanding profits. Here's the bottom line. I know Chewie's had a rough run for the past six months, but here with the stock selling for just 17 times this year's earnings estimates with this kind of growth, to cheapest it's ever been. I think you're getting a great chance to do some buying, even after yesterday's big bounce. Chewie's story remains firmly on track, and I bet yesterday's move is merely the beginning of a longer and larger rally. Let's take questions. Let's go to Robert, New York, Robert. Jim, I want to thank you very much for guiding us through these tough times right now. And I thank Robert. Oh, thank you, everybody. You tell everybody, don't panic. And you're right. And you know what you said the other day? You said nibble away.

30:25Close your eyes and nibble away. And when you're going to panic, when you're going to panic, you do one thing. You go and read the book, how to make money at any market. That's this book is for Robert. Thank you for recognizing it. It's about the idea of not panicking, about having a strategy, about nibbling, about staying in the game. I've written other books before they were never as clear-cut as this one. And right now, we need- Thank you, Robert. Thank you, guys. Thank you. Thank you. Anyway, let's get to business, because I know your time is precious. All right. So this next company, this next company is the largest dollar store operator by annual sales and total store count. They operate over 20,000 stores around the US. They have a plan to open up another 450 new stores in the US, Jimbo, and 10 in Mexico. They're remodeling the stores. They're relocating the stores. You got a new CEO in there that is absolutely fabulous. I did my homework, Jerry J. J. Sleeman. And you still got the other guy, Voss, okay? Now the name of this company, which I think is going to go much higher.

31:26And you and I have always agreed 99% of the time, Jim, and I respect you, but I think this stock goes much higher, dollar general. Yes. Yes, Robert, because they're trying to expand really well in food. And they picked a guy who has managed a lot of great, really great grocery change and done a terrific job. I say yes to dollar generals, also kind of the right environment for dollar general. And thank you for the kind comments about the book, which is about these kinds of moments. I'll talk about it again tomorrow at the club meeting. Joey's story is firmly on track, people. I think yesterday's move is the beginning of a larger rally. And yes, I didn't get you out of 47 and I regret that. But I like this company very much. Much one bit on your head. Pretty much exclusive with insurance company lemonade. Then there's a strange trend happening in this market. And this talks to some of my recent guest's improvement. I'm telling you what it is and how to fight it. Push all your calls, Robert, and tonight says, why do you round? So stay with great people. I'll see you in the next video.

32:52movies sideways. But over the past 18 months, people recognize the value of AI. Lemonade's growth has accelerated. While losses have shrunk, and the stock climbed from the mid-teens to a high of just under $100 dollars earlier this year. Of course, as the market got choppy in recent months, the things pulled back just under 66th of the day. Like many other stocks. I gotta tell you, I think this is a belly story. So let's take a closer look at Daniel Shriver. He's the co-founder, Chairman, CEO of Lemonade Fisher Shriver. Welcome back to Met Money. Wonderful to be with you. Thank you, Daniel. Now, I've got to tell you, I went through my diet. I like to do a lot of studying before I see a guess. And I pulled the office, and of course, my office has made up majority of young people. I says, hey, when you use this lemonade, and I realized right then, I am still someone who has an agent who uses the old-fashioned way. I'm kind of like the state farm ad, so to speak, but everybody used you. So can you explain to me why people are so confident that they use, that there isn't a young person I couldn't find

33:53that doesn't use you, and how they heard of you? Absolutely right. Something like 90% of our customers are first-time buyers of insurance. So while our market share is growing across the board, among first-time buyers of insurance, we may be the number one brand in many states today we are. And I would put it to you that the best predictor of future market share is market share today among the new entrants into the market. So that's really fabulous news for lemonade. Well, I have to tell you, when I looked over some of your blogs, I realized that one of the things that is in your favor is this happens to be a very high-bound industry. How much is it really changed in the last 100 years? Well, something like 11 or 12 of the Fortune 100 are insurance companies and the average age is over 100 years old. So this is really an industry that came of age during the horse-drawn carriage era and has really managed to or the industrial

34:55revolution has managed to largely ignore every revolution since. So still dominated by companies that were really architect for a different time. And here we are in the AI era where things are moving at a just staggering pace. Lemonade was founded as an AI company, not when chat GPT launched, but back in 2015, a founding motto was artificial intelligence, not artificial delays. So we were really created for this moment. We're moving at an absolutely stunning pace, accelerating, we've had nine quarters of successive acceleration of our growth. We've seen our growth 10X since chat GPT came out. So we're really flying right now, lemonade is on attack. Well, when I looked at your website, which was incredibly easy and very intuitive, I noticed, for instance, if I wanted pet insurance, I think I could have gotten it shorter time than it would even take a phone call. That's absolutely right. Average time to buy a

35:56rent is insurance is about a minute and a half. I once googled it, it's about half as long as it takes to get a latte at Starbucks. So this is really becoming a very easy process. And it's one thing to sell you insurance in as little as a minute or two in your pajamas any time of day or night. But we pay claims in a similar way. So most of our claims are handled without human contact and as little as one or two seconds, you just hold the device up, you speak to the screen, you describe what happened, you take photos if you need to, and for the majority of our customers, they will never have to interact with a person, they'll get their claim paid pretty much instantly. Um, those of us who are skeptical a little bit of human nature would want to know how many people have tried to defraud you doing that? Sure. And fraud is a big deal in insurance. And we do a couple of things to contend with that. There's quite a lot that we do in terms of our social impact. We are a B-Corp, a lot of our money at the end of the year that's left over is given to nonprofits

37:00of our customers choosing. We do a lot to try and neutralize some of the worst conflicts of interest because the fraud in insurance is different than the kind of hard fraud you think about. It's not gangs from across the seas. It's people like you and me who are upstanding citizens and other aspects of our lives, but something about the insurance experience brings the devil out enough. So we've been working with behavioral economists since our founding. But beyond that, artificial intelligence is actually stunningly good at detecting any kind of aberrations in the documents, in the videos, in the claims history, in the credit card that you used. So I think we're actually very well positioned. The human interaction is not better at fraud detection. It's actually inferior. Well, let me ask you on this question. It's very important. I know that your AI natives, your examples are filled with companies, even like a great company like Geico. Okay, Tremetta's company where they say, you know, they're doubly AI. But what's to keep an anthropic or what's what's to keep an open AI to say, you know, this Daniel's making

38:03it unfortunate. Let's just go in against them. Sure. And people used to ask us that same question about a Google or an Amazon, and there are pretty good reasons why they stay clear. You can vibe code and pretty soon, you know, you'll be able to just tell your Claude agent, hey, code me an app that's similar to lemonade. That kind of capability is coming, not so much to incumbents, because they've got this legacy hanging around their neck like an albatross, and that's difficult to get out of. But if you start fresh, like you're saying, the software doesn't become the big obstacle, but unlike the SaaS players who in such trouble, lemonade is not about software alone. We need regulation. You need a lot of capital, and you need tons of data. We have collected over the course of our existence, over the coming to school of hard knocks, over 10 trillion exposure data points, we've handled millions of claims, we've had machine learning search through and find the multivariant relationships between each of those

39:03nuance claims. So there's no shortcut to just selling policies, getting claims, then having the machine learning do its work. And we are now coming out of that massive investment period. You know, we've become casually positive, we'll become EBITDA positive later this year. So you're really seeing all of those investments pay off big time. Well, I have to tell you, this may be the kind of stock you buy in one of these sell offsuit. The self has nothing to do obviously with what you're doing. You're just continuing to progress, offer great, you know, offer people great service at a great price, and that's a terrific thing to do. I want to thank Daniel Sriver, he's the co-founder and CEO of Lemonade. Thank you for coming us, coming to us, and come back, because I think that now that I realize that everybody used your name, maybe I have to switch myself. Excellent too. Thank you. Thank you, and everybody's back at the place. Coming up, Kramer takes your calls, and the sky's the limit. It's a fast-fire whitening round. Next.

40:11It is time to start the white mouth cruise adventure. Of course, I need to talk to you about myself. Of course, ahead of time, I step for the reference of flyer plan to sell. And then the lightning round is over. Are you ready to speak that tunnel? Let us hear your mic. Bob, in matches, Bob. Hey, Jim, I'm a greeting from Massachusetts. You get a lot of people up here. A company I'm calling about is Canadian Nashville Gas Producer. I turn right in the last quarter, 5% dividend. The name of the company symbol is the DETT. You know what, Bob, did you get the same, you get a terrific return, not it's not the same, a terrific return. Tony is Chevron. I would rather see in something that's really much more name brand. I just feel better about that. Let's go to Fred and Louisiana, Fred. Hey, Jim, I enjoyed meeting you recently at the New Orleans Book Fest. Oh, wasn't that great. Waterizers together, such a great thing. Thank you. Thank you very much.

41:14Hey, I wanted you to take on a stock that has performed really well over the past year. You think that tower semiconductor still has more rooms to run? I would actually do what they call schnitzel. I would take a little off just because it's in the powerbank move in the last few weeks. But otherwise, I think you're fine. Let's go to William and Kentucky, William. Do you have a ski daddy's gym to you? I have a question about reddit. Yes. Reddits went down today because of these lawsuits. I'm going to take these lawsuits on a very heavy fashion soon. I want to buy reddit right here. I have to buy a ginger leaf because what happens is this stock does trade to 12 point increments. But reddit, these places are going to be overturned. And I'm really going to come at hard because so many people sold J&J went as at 130. I've seen it sold burk into 20s. I'm not going to let this happen this time. I am going to make people understand that there's two sides to every story. Let's go to Bill in Massachusetts Bill. Jimbo, my friend, I was looking into Eris mining corporation.

42:16Could you tell me a take on that? A Vancouver miner is always going to be way too expected. We're never going to see me recommend a Vancouver buyer. They're just too hard and I've lost too much money in them over the course of multiple years. Let's go to Sam in Pennsylvania. Sam. Jim, listen, more and more, I'm thinking that the world is going to need American LNG and expand energy to the top of the value chain when it comes to natural gas. This is a company that sells the biggest natural gas producer inside of America and it's the key customer selling the gas into LNG that's cheneer energy. Everyone knows how well that stock is done. So here's what you think of ESE. It's okay. I mean, I think you mentioned cheneer. I like cheneer more than ESE. But, you know, like, look, the industry is hot and I do like the natural gas story very much. LNG and particular. And that lands on the conclusion of the lightning round. The lightning round is sponsored by Charles Schwab. Coming up, strong stories, weak stocks. Kramer breaks down the macro moresse, weighing on quality

43:21names next. I'm calling it the macro moresse. That's what we're experiencing right now with so many not-so-hot stocks and very good companies. Case in point, two companies we heard from yesterday show paychecks in general. Let's take them one at a time so I can show you how the macro moresse affects you with me. John Gibson is the eloquent CEO of paychecks and no nonsense representative of payroll processor. That's been on the show virtually since we went on the air. Told a story of strong growth, the terrific acquisition of paycore, which has helped them beef up their medium-sized business offerings. John emphasized that despite what you might think, business is very strong, with a portion of the economy is doing very well. Small and meaty-sized businesses are paychecks just bread and butter. They're also the backbone of the economy, and they're much less hostage to problems overseas. Well, the people are still hiring, and that's paychecks this bread and butter. The stock itself seems quite fetching. Given it's better than expected quarter, paychecks sells at a reasonable price to

44:22enemies, both 17. It used to be much higher. It's a spectacular 4.6% dividend yield. Sounds great, right? Well, let me give you the bear case. The economy's slowing. You can't buy a payroll processor in a situation when the economy might end up in a recession. It has a price to enemies, both 17, but so why? There used to be 30. Why must it stop at 17? Not about 15. G yield is a 4.60. Yeah, but can't it go to 5? Sure. That's the macro morass. It takes everything Gibson says and stands on his head, which makes the stock over value. Even as it's pulled back from 161 to 93, I think the macro morass is absurd. This should be equate stock to match the weight underlying company, but I see no catalysts. I can put them together. So I succumb to the zeitgeist myself. I hit the don't buy button. It's finished up 23 cents today. Don't buy, don't buy. Generax stocks more quiz. Generax, the company makes backup generators. It's going great guns. It's always had a strong residential business because of the debilitated electric grid and the increasingly erratic weather.

45:22Sure, the residential business struggled this year with rates still elevated and the white hurricane season last fall, but after some severe winter storms and with just a little help on rates, well, that could be much better. It generates other business, the commercial business that excites people. Generax being pursued by many a data center builder and hyperscale and divide backup power to their sites. Geo Aaron Yalfeld said something you always want to see you to say that the clients are calling him and ordering things, not the other way around. Great businesses are ones where a company salespeople are simply taking orders. That's genera. But what happens? The stock was actually down 10% at one point yesterday. If your genera told the story, because they did announce a long-term contract from a hyperscale right there, without that perspective, shareholders refused to pull the trigger. Although the stock had a nice jump in the afternoon after some analysts pulled it up, the stock had it was down 50 points from its high with a much better story than when it hit that insolid level. Nothing to this market, because maybe the hyperscalers don't have the money to buy more genera or maybe come as

46:24in catapult or the principal fighters of backup power are doing better and that's all the hyperscalers needed. Today, the stock up lasted for $7 in change. Yes, the idea of things are okay now, but just you wait. Well, that's what people are thinking. Just you wait. It's the true story behind these two stocks and hundreds of others. Only the end of the war and lower interest rates will change the macro harass. Right now, it neither is in sight, so both stocks go wanting, even though in theory, it makes a ton of sense to own right here. I'd like to say this always in one market summer. I promise to find it just for you right here in my money. I'm Jim Kramer. See you in a month. 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

47:24information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit CNBC.com forward slash Mad Money Disclaimer. Diet and Increased Physical Activity

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