Mad Money w/ Jim Cramer 9/16/26

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1:01My mission is simple to make you money. I'm here to level the playing field for all investors. There's always a more market summer and I promise to help you find it. Man money starts now. Hey, I'm Crammer. Welcome to a special West Coast edition of Man Money. Welcome to Crammer, Ark. Other people want to make friends? I'm just trying to save a little bit of money. My job is not just to entertain but to do some teaching too. So call me at 1-800-7-4-3-CMC, tweet me at Jim Crammer. If you buy stocks here, you are now, as of today, officially fighting the Federal Reserve. That's what happens with the Fed decides to raise rates as it did this very afternoon. The first rate, I could quarter of a percent, creates a lot of confusion. We're off in a quick dive, which is exactly what we saw today. I mean, just and that produces selling. We are sure there's going to be multiple hikes, which will be really bad for this time market, or we're only going to get one, maybe two. Not so bad for the market.

2:04From the looks of things and the harsh words we heard today from the new Fed, Chief Kevin Marsh, we're going to get many hikes until the job is done. The job being slowing inflation appreciably. That is why the Dow plunge 631 points just be lost. 4.5%, but the Nasdaq fell only 0.01% and that was a nice comeback more in that in a moment. Even as I'm out here in the West Coast, where these rates mean very little because tech does thrive no matter what. Let me explain why this decision was right for the longer term, but miserable for the shorter term. Why the stock market may need to take a hit beyond today if inflation doesn't settle down. Big if. First, understand this economy does have a real head of steam. Most because of the great data center bill now. These behemoths are beast when it comes to capital expenditures and you know what? I still think they will be. How's the pleasure when the smoke clears from the rate? Rate hike. See, they're distorting the economy, but there's no sign that the data center's strength is slackening and rates won't impact it all that much. And that's true for tech earnings.

3:06The growth will most likely continue. A pace employment is full, which is fantastic for the stock market. Lots of discretionary income. Lots of savings and lots of spending. I know we keep waiting for AI to destroy jobs, but right now this cycle is creating jobs by the second. Mostly trade jobs. An economy does keep strengthening. But there's a real downside to the build out too. And that's what we heard today from Warsh. We have an economy that isn't used to working with its hand. Service jobs make up two thirds of the workforce. When you have the biggest capital expenditure cycle in history, one that involves endless bond sales reference today by the Fed's chief in his speech. And lots of stock offerings, you're going to get hit with too much inflation. The Fed does have to pump the brakes. And that's what started today. Ordinarily, we could probably handle that level of inflation to building out causes. But these are not ordinary times. We already had good, you know, I'd say pretty predominant inflation. We're three in change. That's way too high historically. Our new Fed chief is a serious person. And he's been on bringing the rate down to 2% by 2029. Even though President Trump picked him to cut rates, well, he knows that we need to keep

4:09inflation down to preserve the buying power of the dollar and the net worth of their savings. There are two things making Warsh's life difficult here. The first is manmade, the relentless line in oil prices. You could say that when the war with the ran-ins inflation will go down. But who the heck knows what it'll end? If anything longer, higher oil prices last. The more likely it embeds itself in the system, it makes everything expensive. Oil prices are passed under you, the consumer. The Fed can't change that unless it raises rates to the point where we can't afford to drive as much or we don't need to drive because we all lose our jobs or because we don't spend that much. I don't think we're going to reach that point. But the longer oil stays up, the more likely this will seem to be rate hugs. And every hike from here will be something that's going to knock down stocks. The other spread of inflation is the real bear. The printing press. We're running in the stately suboptimal budget deficit. You know the President or Congress seems to care, our government has a trillion dollars in interest spent a loan. That's hideous. A serious person like Warsch doesn't want the presses to print because printing money is inflationary. I think he'd

5:09smash them if he could. But that's the other Fed's control. Oil can do his race rates until Congress and the President gets serious about spending. If they did, look out. That would be fantastic. When you raise rates to economy slow, if you can go back to printing presses and help keep inflation down, stocks can go up. But can it keep the President down? I know that Warsch is doing much right. But what happens when the President goes ballistic? He might be like a swarm of AI agents penetrating the walls of a hug in the face. In the end, I don't think it matters what the President says because Warsch is such a gamer. He knows what he wants and isn't necessarily good for business or the stock market. We're serious about this. He said it will put, we're serious about this. I like that. I don't think anyone especially the President doubts now. I hope Warsch has skin-like tungsten because he would need it. The Warsch stocks go down when the Fed tightens for many of the stock markets to commodity like bonds, like real estate, like the dollar. When you learn to be a professional money manager, you recognize that the Fed can crimp credit creation. Fed chief referenced the hyperscalers as companies that can crowd out a lot of borrowers. You raise rates, you can shut the spick and off. So there are managers who are taught to sell all

6:13stocks when the Fed tightens and go into cash because you sell stocks when the economy slows. Warsch made it clear that's the plan. That's selling crushes today until tech rallied at the end of the day. But there are other managers who say, stay to the course. I'm picking the stocks of companies that can do well regardless of what happens with industries like Farmer. There are other things that can do okay here like tech. And then there's the rest. Financials, retail, travel, leisure, so many others, all not so high. The rest before this was small. Lots of stocks go higher, the rest small. But it's going to keep growing and growing and growing. It's so long this in face to ratings who readings stay high. So I just say it's just harder and harder to find good stocks. I hope the Warsch's comments might have come up on the bottom market which has been terrible with race club or legacy. Nope. Interest rates were going down before the Fed Chief started talking and then they reversed them and went up bad. And again, another thing that gives us fewer stocks to buy. Ultimately, I think I like it when the Fed Chief shows gumption. But it's not good for the near term for most stocks long term. It's essential because it's a revenge run away inflation. For now,

7:16though, look, if you're trying to manage money like I do with my child trust, you can follow along CMC Vestin Club. There are fewer stocks to buy. Fewer to hold. More stocks to sell. To Warsch wanted to lose money to it. No. But whereas Comsion Turpenters meaning he wants his few stocks as possible going higher for many, yes, makes it harder to make money and making money with borrowed money is going to be a sin from now on. It's the word already. But there's always a more market somewhere as I say at the end of the show. We just need to find one or two sectors that can thrive even in this environment. It's harder, but it can be done. I've done it before. I hope we can do it again. The bottom line. I think the buyers will come back, especially to tech because there's not only a rate cycle. It's one of industrial revolution cycle. But a lot of groups simply don't work as long as Kevin Marsh is on the Warpath and Warsch is definitely on the Warpath. Let's go to Jerry Mzzori. Jerry. Hey, Jim. Thanks for taking my call. Absolutely. What's happened? Well, Jim, just wondering, you talked to Michael Intruder often. I was just wondering if you think Coralee's going to break out in any time soon. Okay. So Coralee's got a Yen and Yang here. It's

8:20borrowing a lot of money. And that's going to be harder now if the Fed starts raising rates. But it's not going to be all the great industrial build out. And so therefore, I think it's going to be okay to buy, but it's become more speculative. As the Fred raises rates, it's become a more speculative situation. And you got to think about that because that may not be what you really want. Let's go to Jerry and Florida. Please, Jerry. Yeah. Hi, Jim. Come to me. I'm wondering about is Raytheon RTX. What's going on with Raytheon? Okay. Here's what's happening. We've been looking at companies that have high high price earnings multiples. And we've been shrinking them. As the Fed raises rates, the multiple the people pay for earnings will go down right now. It's 27 times earnings in a rate cycle where the Fed is raising rates. That PE multiple, which is why I wrote my whole books about PE multiples, that has to come down. And that's why that's not just going to lower. All right, listen, we buyers will come back, but they will come back to the same place. And remember, from now on, we're fighting the Fed. Well, man, what I think, right, the Cyber Stocks are

9:22unique in position. This market with all the talk of AI safety, they're not today. They're not tensed to the Fed. I'm just going to palo out with alto networks to find out how the company is staying ahead of the game. Then arm holdings in the center of what could be a multi-year chip shortage. I'm getting the latest from the company CEO. And Aka has finally broken free of the AI displacement fierce and is really starting to get a beat on the bad agents. I've got to see you stay with Don't miss a second of mad money. Follow ad Jim Kramer on X. Have a question. Tweet Kramer. hashtag mad mentions send him an email to madmoneyatcnbc.com or give us a call at 1-800-743-CNBC. Miss something head to madmoney.cnbc.com Fidelity active ETFs have the flexibility to shift and transform as markets do the same.

10:25So instead of just riding an index, they can seek to outperform it by adapting to market conditions and pursuing new opportunities as they emerge. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other ETF. Markets can change in real time. Make sure your ETF can too. Learn more at Fidelity.com slash active ETFs. Before investing in any exchange traded fund, you should consider its investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus and offering circular or if available a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Fidelity broker services LLC, member NYSE SIPC. One did work become so much work. The meeting about the meeting. The hundreds of files define one insight. Setting aside the things you want to do for the things that pop up,

11:29your workday's gone. But what if the insight surfaced itself or you could ship the deck without the distractions? Gemini Enterprise helps you get that done. It's AI that knows your business with agents that take stuff off your plate. Make work less work with Gemini Enterprise from Google Cloud. I'm Sam, owner of Marino's Landscape. With Mike Chase Bank Business Premier Card, I earn unlimited 2.5% cash back on purchases of $5,000 or more. So everything I buy to run my landscaping business gives me cash back to help throw a big thank you party for my team. For all they do. Chase Bank Cashback built for every business. Find the right card at chase.com slash ink. Real business owner compensated for their participation. Cards issued by JP Morgan Chase Bank and a member of DIC subject to credit approval terms apply. I came out this afternoon this week. Right as everybody started talking about the need to slow

12:30down AI development, prevent agents from running wild. But in the end, I think this whole issue comes down to great hygiene cybersecurity. And that's why I want to check them with Palato Networks. The cybersecurity leader that we don't for the travel trust. This week Palato's stock click fire up a quick 14% because Wall Street finally recognizes that you can have powerful AI without equally powerful cybersecurity. Don't take it from me. Let's take deep with Neckhauer or the chairman. CEO of Palato Networks and an expert on what's happening right now. And many other things. Mr. Werr welcome back to bed buddy. Nice to see you Jim. How are you? Good Neckhauer. Look we've got Dario. Yes. We can trust first name people. Dario talking about pacing the frontier. And then we have Neckh. Talking about the pacing is a ninja move. What does that mean? Well Jim, I've been listening very carefully to all the rhetoric about what should happen to AI be slowed down and what are the bad effects of AI. AI is an amazing technology. I think what we have in front of us is once in a lifetime opportunity to embrace something that is so going to be so impactful across the

13:35board. And I don't see how it's going to slow down. I don't see researchers not wanting to win. As I said, there is no competitive support right found people saying, oh wait a minute. Let's all take a break together because we should slow it down. I think the right conversation is how do we make sure all the power of AI can be harnessed for the right reasons and for good. And that's the conversation that should be had. I think the right conversation is how do you make sure that AI can be delivered safely and securely so we can use it for good things. That's the conversation to have. I think the idea that we should be fearful of AI and we should wait and we should slow down. It's just antithetical and what's going to happen. So it's about time to have the real conversation. Well, is it too cynical to think that perhaps this is like a car race where they wave the yellow flag and no one's allowed to ask? This is a catastrophic analogy. We're doing a pile of alternators. Come on. I saw you. I saw you like yellow flag. You got the yellow flag that's the wrong guy. Nothing but trellis you're smiling. If this was a conference call of the analysts, I know you wouldn't be smiling. Look, I think there's enough room in this market. I heard Renee before this and he

14:38said there's a lot of room and it's a big market. He's going to make money and envy. He's going to make money. It's going to work inside the security as well. Oh, let me pivot a little. Sorry. You're doing this. Fed raises rates today. Kind of serious impact on cybersecurity. I don't think so. Look, I think right now, I don't think that impact of technology. I think majority of the company's spend is going to pivot to technology. For the first time in my career, my finance guys want AI people. My HR people want AI. What are you going to do with them? We're going to make sure our processes are better. We're going to use AI in our business. So for the first time, the demand for technology is coming across the organization from everyone. Whether it's customer service, logistics, security, everybody wants more money to do better AI. So in that environment, I think technology spend continues to go up. So the demand right now looks like it's infinite. And the more technology you deploy, at least at the enterprise, you're going to have to do it securely. Well, I think if I were on the board of a publicly trading company right now, then I'd been on them. I would be saying to the chairman and the CEO,

15:40if we do something wrong and we heard another company and we do not have Pallo Alto, a process, a process that was Pallato, we're going to get sued forever. But at least if we call the cash and we bring them in, we'll be known as someone that I do, do you care? I think that the fear people have is for the first time in life, we have a non-deterministic technology. Everything else, historically, in technology has been deterministic. It's been input and output. And you test for the output and you test it nine weeks from Sunday and say, okay, I'm 99.9% sure the output is going to be consistent with my expectation. In the case of AI, the output constantly morphs. When output constantly morphs, you cannot figure out whether the agent or AI that you use is going to deliver with the intent that you set up there for, which is what happened when agents ran away. Let's talk about the hunting face. Do you think it's worse than people realize that this 1200 agents got together and

16:41congregated and became this colony of hate? I mean, is it one of those things that we, that we, I think we give them human characteristics? Imagine you created a civilization where you told 1200 people there were no rules. And the job was to go win. What would happen? They'd stamp you didn't win. Right. So what have you done? You've been, this is a science experiment. It's a science experiment, we say, with no constraints, no guard layers, no governance, no training, no nothing, the only objective is capture the flag. And do it with whatever you see in your training. And the training is the world's knowledge because we train using public knowledge. So the agents know every good thing, bad thing that has been done in the world. They've been trained on it. So they're basically executing to the task. Well, then how can you be smarter than they are? Well, I think, let's be clear, no enterprise in the world is going to enable agents in their infrastructure without ample governance, guardrails. That's every conversation that I have at every CEO, CIOs, or chairman. They were saying, great, we'd like to use AI. How do we do it in a

17:46way that it doesn't go wrong enough? What does anyone call you and you say to them, guys, you got to slow down, you're going too fast? No, I think what we say is you have to be thoughtful, you have to understand the expectation, you have to understand the intent of this, for example, we are talking to people out deploying agents. We're like, here's what happens. Agents are created by human beings. Agents take their credentials, the runaway and start doing things for them. We say, listen, what are you going to do? You tell us what the task expectation of the agent is, what would the agent just the credentials to be able to execute the task? If you restrict agents and give them credentials just to execute the task that you intend and you allow them latitude and there to be non-deterministic, then there's a higher probability that you can govern them, you can keep them in check. That technology is being built. At this point in time, the AI lab should be chatting with us and saying, how do you put this in place? Because we have something to contribute, they have something to contribute. Historically, you've never had technology where cybersecurity was not required. It's not like, oh, I have a Del Surer. It's secure. But I still have to come in and make sure to secure. I have Salesforce. It's secure. But I still have to come in and make sure to secure.

18:48They attack the country. They attack the country with no defenses. A typical country does have defenses. But let me ask you, if they don't bring you in, I mean, it bothered me tremendously. Oh, no, let me hear me out. I'm not blowing smoke on this. It's all the different commentaries and the other people, why don't they say, you know what, we sat down with the Kesher War, we sat down with our friend George. You know what, the processes, we're going to be able to do it right with Gardryl's. Instead, they just say, oh, my God, we don't know what we're doing. People are dying everywhere and it's going to be like, go check your trust in the states, we're, and I'm like thinking, come on, grow up. It's happening. Look, it's happening. We are talking to all the people in the AI lab ecosystem. We are working with them. We are building hooks into their products, create security. There's a lag. There's a lag between research and execution. But enterprises live here in execution land. They don't live in research land, right? So yes, research is telling you that, holy f**k, we don't pay attention and we're not going to kick track of these agents that

19:49things can happen. And that's true. It can. It's our job as responsible leaders of cybersecurity companies, responsible leaders of companies, to make sure that we deploy AI in a way that it's safe and secure. And that's going to happen. And that's why you bought cyber ore. Yes, you bought cyber ore because, you know, you can't do stuff with that identity. You can identify these, you can kill them. Well, at least that you know who they are and what they're going to do. You know, they are. Yeah, but the one thing I am scared about and I'm scared it's the wrong way, I'm concerned. I do, I think in the hands of very smart people in North Korea or Iran, there's some damage that can be done and there you really have to be thinking on your feet about what is the most nefarious thing that could happen. Look, every technology has both sides. It has a dark side and the good side. And the good news is, the majority of the uses that we use technology far are for good. There is always the opportunity or the chance that somebody is going to take the technology and use it adversely. And that is what, you know, if you saw the Mithos moment, that was what it was about, right? Right. The fear is not that we will, as good actor is used Mithos. The fear is bad

20:53actors will take Mithos and start using capabilities like that and start attacking companies and be able to enter the infrastructure. So we are all aware of it. We're all building capability to block that capability. Block the Mithos like behavior and get ready for time when he has gained more and more powerful. So I just think the impetus right now is that every company needs to look hard and say, we're moving into a new world. A new world is where you have to be able to do cyber defense at real-time speed because the bad actors are going to be able to attack you at real-time speed. And there's no one who knows enough at their own companies, I believe. It might have one or two people who do with this, but this is about a process of bringing in a big company. You know, Jim, for eight years, I was trying to convince the world that you said nine in your stuff. Well, it's been eight years since I joined Paul Autos coming on the year 19th, year now. But in nine years, I've been trying to get people to pay attention to cyber security. And you know what? Our friend Dario did it with one thing. He said he's a much better

21:53partner than I am. You know, I was funny. If I were back on Wallshoew, it would have said raising numbers, Palo, Alto Networks, that's the Keshe Roy, Chivitzio, of Palo, Alto. It's talked to me on for the trust and holy cow. It's been great. May I have my money's back in for the break? Coming up, Kramer's linking up with the CEO of ARM Holdings to get a grip on the chipmaker's current status. Next. Chevy is called the heartbeat of America for a reason. With SUVs made to move with your rhythm. The versatile equinox tackles your entire day. The spacious traverse fits your crew and your whole weekend. And tracks bring style with value you can count on. All infused with tech that has your back. So your drive always hits the right cord. Let's do the heartbeat! Adventure awaits in a new Chevy. Right now get $500 bonus cash on select Chevy Tracks models.

22:55Plus get 2.9% financing on all 2026 Tracks models. Together, let's drive at your Southern California Chevy dealers. Bonus cash is available on 2026 Chevy Tracks LT and active trims only. 2.9% APR for 36 months. Monthly payment is $2904 for every 1,000 new finance. Example them payment 11%. Must finance with GM financial. Some customers may not qualify. Not available with lease and some of their offers. Take your retail delivery by 93026. One did work become so much work. The meeting about the meeting. The hundreds of files to find one insight. Setting aside the things you want to do for the things that pop up. Here work days gone. But what if the insight surfaced itself? Or you could ship the deck without the distractions. Gemini Enterprise helps you get that done. It's AI that knows your business with agents that take stuff off your plate. Make work less work with Gemini Enterprise from Google Cloud. When you partner with CDW, you get more from technology with AI-powered tools that turn complexity

23:57into clarity. CDW experts are simplifying workflows with Microsoft solutions, uniting teams with on-the-go connectivity, speeding workflows with exceptional performance, and protecting assets with chip-to-cloud security. Make amazing happen. Learn more at CDW.com-slash-modern-work. The whole AI data center cohort, Pete and June, them most, been bottom near the end of July before we found it like crazy. Some of the stocks are still off their highs. Arm holdings, major chip design company. Now also makes its own CPUs. Stocks went to $4.52 in June. Now pull back to just under 244. That's down 46%. But I don't think you should look like that. I think you should look like this. It doubled from the last time I saw our next guest. People are worried about a self-imposed slowdown in the data center coming from the big frontier AI labs, which is why Arm got

24:58slammed on Monday. But I think we're looking at a mole in your chip storage with garlics. Do not take it from me. Let's check in with Renee Haas. Use the CEO of Arm holdings to get a better read the situation. Renee, welcome back to mid-money. Thank you, Gem. Great to see you again. Okay, so you're going to be my testimony for my view at the top of the show. We had a fed rate, I could take a quarter percent. What I say is you have to look at companies where demand is so great that a quarter percent really doesn't stop the buyers. I think demand is so great for your product that it really won't matter all that much whether rates are three and three quarters or four. I don't know how to exactly link what Chairman Worsh did today in terms of our overall demand in terms of percentages, but what I can say, Gem, is that demand for our technology, whether it's at the edge, whether it's an automotive, robotics, and certainly the data center, has never been stronger. And I know if you've heard you've had a lot of folks on this week talk about AI, but it really is AI because AI is so compute intensive. It requires so much in terms of CPUs,

26:02GPUs, memories, and that's the hardware arm is. So yeah, demand for us. It's just never look better. I know when you first unveiled your plan for, say, just a $2 billion in business, you didn't have the Foundry space. I thought you were a little more, we got to $10 billion, but I thought you were giving us a little more leeway in thinking that maybe you could get some more machines to make what you need. Yeah, so what we said in the earnings call, I think it was MaytimeFran that we had visibility to $2 billion. And what we said in the last earnings call was that our confidence to achieve that $2 billion number had increased from May to July. Here I am in September, and what I can tell you is, Gem, I'm more confident today than I was on that July earnings call. That's terrific. That's an inflection. You know that, say that. Yeah, and we're feeling good about it. We're feeling really good about it. Okay, so now let's take a head on a Dario and these issues and new Albing potential slowdown. I mean to me, what these companies are going to be, I'm going to come in the Gentson Wong School

27:06for the most of it because I think you taught me to be there. But I think Gentson saying, listen, these companies are going to be responsible. They're going to do the right thing. They'll be guardrails, but it's going to continue advance a pace because the demand's so great. Oh, of course. You know, it's interesting some of the things have come out this last week. My view on it is that ultimately any company that's putting out a product needs to stand behind the quality, reliability, and safety. And that's a kind of a fundamental table stakes issue. Companies need to get it right. Governments don't get it right. 15 companies don't get it right. It's kind of the hygiene of what you're doing building a company. I think what's different here is that number one AIS got this mystical quality about it that people get really afraid about. And secondly, these are young companies. These are young companies developing products really, really fast and the advancements are taking place very, very quickly. All that means is as a product company, there's the hygiene you put in place through engineering, quality, reliability, safety, they'll figure it out. But the answer is not, let's all collectively tap

28:09on the brakes because I don't even know how one product solves that versus another. It just doesn't really make a lot of sense to me. But I would tell you there was something that happened this weekend, which is that I would tell people exactly what you said because it's a common sense view. But they would come back as each gym. These people wouldn't say we're all going to die by 2030 if they weren't true. You know, arm delivers tons of products, thousands of products, three and a fifth, fifth to believe in Jeff. In everything. Quality reliability, we need, we have to stand behind it. Can you imagine if we had security issues or safety issues that caused our products to burn on fire or I'd say I'd see. I would see it. And if we had an intern who worked at the company six months and looked at the quality process we had and then came out and said all of our products are going to blow up and everyone's going to die, it's just irresponsible. So I found sort of the knee jerk to all this a little sensational, but not grounded in logic. Okay, I think that's you coming down where I am. Now I want to talk about robots for a second and self-driving cars. How many CPUs do these things really need if they're

29:14going to be good robots and good self-driving cars? A lot. And it starts with the distribution of where the CPUs are. You've got CPUs that are the brains of these machines. So literally in a robot, you'd have a couple of very large CPU clusters and when I say CPU clusters, these are chips that could have 10 CPUs, 20 CPUs, 60 CPUs. And then you've got multiple brains. In other words, you may have something in the head, you may have something in the torso. And then when you go out through the limbs, the sensors, the controllers, things that can do the perception, their CPUs there, hundreds and hundreds of CPUs and robots. And similar in an automobile, literally hundreds of CPUs. Well, that's going to be the big gating factor, then. We can't make enough CPUs to do all that. Demand is off the charts as we talked about earlier and the big constraint is going to be supply. And supply is around wafers for building the logic chips, but it's not just the wafers gym. It's the substrates, it's the testers, it's the memory, it's the entire supply chain.

30:17So we are looking at some really complex supply chain issues, I think, for the next number of years. So I was initially worried when you said this, we're going to go in and make our own. And we also make them for everybody else. I mean, you're the world's largest. I mean, I should have said that from the very beginning. You're by far the world's largest. But it sounds like there's so much demand. No one is going to say to you, Renee, you can't come in against this. They're going to say, can you please help us? Our problems have been far more the latter than the former. You know, when we were having discussions about this internally, we were thinking about, how do we respond to the questions that say, you know, gosh, why are you doing this? You're infringing on my space. The questions we get is, can you make more? Can you deliver them faster? When is your next generation coming out? And there's plenty of room for everybody. I mean, Jensen builds a CPU based on arm. He's talked about fantastic demand for Vera. So the world's pretty big. And there's a lot of space for all of us. Do you think there's still people who remember your company is really a cell phone company? And maybe that's why I still think it's incredibly undervalued? It's possible. You know, that's the history of the company. But in a very short time,

31:20data center is going to be our largest business. And that we've seen double digit growth in that or the last number of years. Really, the thing about arm is we are the compute platform for AI. Every AI application is going to run through arm one shape or another. Now, I will say this to our viewers. You said this many times. You come on squawk on the street. I hope you continue to do so. And it would be like 140 going down to 120. And you would be very frustrated because we knew that the man was insane. But I think it took a little while to people to realize what you've done with the company. We've been very conservative, traditionally, about how we talk about the numbers. And I'm very, very confident when I tell you that things were better in July. They were in May. And they were better in September in terms of how they look in July. I hope people take that to the bank. Because we have essentially beat every single quarter since we've been public. Well, it's why one people don't understand just because the Fed raises rates doesn't mean it's the end of the world. There's some people have such strong demand that their stocks continue up pace. That's Reihaw's CEO of Arm Holdings. Please look at this. The trust had a great position. We made so much money,

32:22candidly, and then we took profits. And that was a big mistake. Then money's back up to the ring. Coming up is Octa positioned to lock down gains as we enter the agentech era, Kramer is investigating with the CEO. Next. Now that everybody's reading their hands over the risks of AI, I'm going to drill down with cybersecurity, placing it. I think it helped mitigate the risk. Take Octa, a major player in identity verification that reported a phenomenal quarter in late August. Stocks now have 140% and 144 over the past six months. And part of this is it's long being held back by AI displacement worries. Turns out artificial intelligence was never going to make an Octa obsolete of that. And their security suffers more essential than ever. Now that you've got AI agents roaming around the internet. So let's take a closer look at the top. We can open to the show. Hope that our CEO of Octa will learn more. Top welcome back to Man Money. It's great to be your gym.

33:23All right, so Todd, I've got an interview that you did September 9th before what happened. Okay, these incidents and you, you're very pressured. You predicted that this could happen, but you said that they have these things to have identities. And basically if you have an identity, I can stop you. Well, here's the deal. AI agents, they're a powerful new identity type. So I used to just be you would have some software and you would integrate it together. And now these AI agents can make decisions on their own. And to make them more powerful, you have to do one key important thing. And that's give them access to more data, more tools, more actions that they can take. And that means that you have to give them an identity so that you can control and monitor and have visibility into that data and those actions and those. And that gives you insight into the potential negative repercussions. And so you can prevent it and control it. Well, I think this is really important. We had a lot of people discussing in some pretty fiery language what could go wrong. And then when I read what you do and I think wait a second.

34:25Look, there may be a lot of these. They may seem nefarious, but as long as they have an identity, even if they are nefarious, they can still be stopped. Yeah, we think the key is visibility and control. So open AI and hugging face, everyone's heard about this problem that happened where an open AI model jumped containment and went after this company hugging face. Now open AI said that their model was not connected to the internet. Now, turns out that it was connected to the internet. So by bringing visibility and control with something like Aqda, you actually know what your AI is connected to. So it's not going to be a magic fix for all this, but the foundation of the fix is visibility and control. And once you have that in place, then you can take the right actions, then you can have a good risk assessment of what's actually happening. So you're offering, as you say, the blueprint for the secure, eagentic enterprise. It's very important. When I talk to customers, but what you probably talked, how many customers? I'm on a plane every week, getting out there in the world and talking to customers.

35:26And they ask about competition. Investors ask all the time about competition. What's your competition? And they expect me to talk about maybe a platform pair. Confusion. Confusion is the, yeah, I read your stuff. Because every vendor is going to the customer and saying, we have the answer to everything. We can do it all. And it looks to the customer's mind, it's a bunch of overlap and a bunch of confusion. So we're trying to work with everyone in the industry and say, here are the elements you need to be successful. You need this plan for your real-time visibility, your plan for identity, and we're focused on the identity, and we're going to fix that. Universal director of identity. That's what you needed a company. It's, you have to have a system of record of your AI agents. But you can. You have to have a central repository of your agents. So you can see what they're doing and see what they're connected to. Well, it's the foundation for control. Okay, so like many other people, this isn't one of those issues that transcend stocks. So I mean, first is, I was telling my wife I was going to see you. She knows that I talked to you and that you've got a real solid head. And she goes, well, I mean, unless everybody uses your friend,

36:26I mean, isn't everyone going to die? And I said, oh, God, no. And she goes, well, then you just want your friend out. I said, Todd, I covered Todd for a long time, but maybe he's just a rational person off from the solution. I think I don't, one of the things we don't do is we don't oversimplify it. We know that there's tremendous potential in AI technology. And the way you make it more powerful is you give it more data. You give it more connections. You give it more power. You give more capability. And I want that to happen. And I want the benefits to accrue to everyone's company and everyone's organizations. I want America to win. I want the world to win. But the only way to do that while also mitigating the risks is visibility and control. And we're in a perfect situation because the key to visibility control is identity. You have to know where these agents are. You have to know a 12 hundred in a swarm that are coming. That's like a stampede. How do you stop a swarm? Well, the systems that contract this stuff are quite big and quite powerful. We have a lot of computer science and a lot of sophistication on the defense as well as the office. But don't you say, aren't you saying, oh my God, do your team?

37:28Here comes 1200. I mean, what do you do? Well, I mean, first of all, we give the tools to our customers to track them and control them and block them. And the whole world is becoming agentic. This part of the narrative is probably underhyped. We talk about agents. Everyone talks about AI. But the reality is is that everything is turning into an agent. Your phone is going to be an agent. Your TV is going to be an agent. Your car is going to be an agent. So it's about visibility and control across all of technology. That's the stakes. But what are things that bother you about this whole incident, Todd? When I first heard it, I said, are they talking to people like Todd? Are they talking to people like George, Kurtz, and CrowdStrike? Because that's who they should be discussing things with. They shouldn't be going on Twitter and saying, we're all going to die like a bad Hollywood movie. I think a lot of times they're trying to do the right thing. There are risks and there are things that everyone's worried about. The problem is, is that it's going to take the ecosystem, as you said. It's going to take the model companies that's going to take the SaaS applications. It's going to take the security infrastructure.

38:28That's why this concept of a blueprint is so powerful. This blueprint that can get everyone coordinated in the right lane working together to take what is really the future of technology and making sure we balance off the potential with the risk and get the right outcomes for everything. Maybe Dario's letter would have been better. And he's a small guy. I'm not going to tell him what to do. If he had said this, we need time to do exactly what you did. It's supposed to say we got to go slower. Because go slower was interpreters being as hobbling yourself. But time to be able to do the things you're talking about, I think seems well, sir. I think the right discussion is not about speed. I think the right discussion in companies, it's always about priority. What's the priority? Right. So it's not about slowing down because you want to go slow. It's about prioritizing the things we have to do as an industry to keep it safe. Well, if that's the case, it's a little more like what Gents from Long's doing. I hate the idea that there's like, you know, some sort of zero or something. To me, you're offering a legitimate pragmatic way to be able to get it under control. Regardless of how long it may necessarily take.

39:29Yeah. And if we have the right priority as an industry, the timelines will work themselves out because we're not, as Gents said, we're not going to ship products before they're ready. We're going to make sure we prioritize the right controls and safety. And for us, that all starts with this visibility and control concept, which is so important. But I would tell you that when I read, I mean, you constantly mention that, that if something went wrong and my business was hurt by this, I would sue these guys to see if they did what you should just talk about. If they didn't have that process, their business will probably go under. This really matters. Well, it matters to the companies to put the right controls in place. And our advice to the companies using AI is make sure as you connect it to more things. And as you give it more data and you open it up to your data warehouses and your applications and you rework your business processes, make sure you have the right blueprint in place to get that visibility and control. And that starts with identity and we're here to help you with that. Boy, Todd, I don't know. You've taught me identity. I remember the first time you told me and I thought it was like, you know, some sort of a card.

40:31But you've certainly explained to me. You used to be. Yes, well, look, I thank you. You have always been a clear-headed, rational person. And it sounds like we need you more than ever. Thank you, Todd. Thanks for having me. Todd McKinnon is the East Dakota founder and CEO of OCTA. They have money's back here for the bread. Thank you. Coming up, he's the fastest mind on Wall Street. So we're putting him to the test with your help. Bring on the Lightning round. Next. It is time for the Lightning round. I'm going to come back for all of my business. I'm going to say goodbye, bye-bye. I still search it through to the course. I'm going to say, time for a step. It's going to be a bit too far. When does that sound? And then the Lightning round is over. Are you ready? He died. Tom Boyd on Christmas. I'm going to start with Douglas. And Alaska. Douglas. Let's get to work. Extending operations in New Jersey, Pennsylvania, and Texas. Partnerships within video and Google. 16 Networking Data Center, BuildUk and AI Defense Systems.

41:33Dr. Kramer, what are your thoughts on Nokia? I like Nokia very much. I'm great in your broader through our attention. I think it's a terrific situation. And I would be a fire right here right now. Let's go to Chris and Marilyn Press. Hey, Jim. This is Chris from Annapolis, Marilyn. Nice. I'm calling in about the Death Deck Ticker FHIP ship. Full transportation. Full transportation is on fire. I think it's a terrific situation. It's non-expensive stock. And I think the yield is safe. I have your buyer. Let's go to Kirin Arizona. Kirin. Hello, Professor Ken. How's that going? It's actually going absolutely. Thank you. How about you? It's going good for me. Yes. Perfect. Perfect. Oh, yeah, yeah. I'm doing good. Yeah. All right. I want to get your thoughts on Hustle with everything going on with the company and the transportation sector. Do you think this is talking to buy right now? No, that's a tough one. That's a tough one. If you're JB Hunt announced bad numbers, let's say I get my travels. I just have a small position in the trucker. And I've got to tell you, it's going to be rough going

42:33for a little bit. Got to wait till oil calms down. And then we're OK. Let's go to Quentin, Georgia. Quentin. Who are you, Jim? Who are you? Uh, Jim, this company has $8.4 billion in backlog. Huge exposure to the US nuclear navy and growing advanced reactor opportunity. Yet the stock is near 52 week low. At this valuation isn't ZWX technology a major buying opportunity right here? No, I'll tell you the problem with the VXT. The price turning is vulnerable. It's 30 just too high. I think it's a great company. I mean, really terrific. But it's too expensive even though it has nuclear. We have to hold off. Let's go to Bruce and Illinois, please. Bruce. Jimmy Chiro, I'll start in Dominion Energy. And they're supposed to merge with Nextira Energy. If the merger is approved, my shares of Dominion will be converted into shares of Nextira. What are your thoughts of Nextira? Take the money and run. Take the money and run. Honestly, I mean, I just think you take the money.

43:35You've won. Don't fool around. That's not a good stock to own versus the one that you are. Let's go to Chris and New Hampshire, Chris. Hey, Jim, what do you think of our DW Red Wire? We're in a rate tightening cycle. In a rate tightening cycle, cycle we cannot buy companies that are losing money left and right. It just won't work. And that, ladies and gentlemen, is the inclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's making the case that you can still buy the AI stocks, even if the companies do slow things down. Next. Tomorrow, kick off the trading day with Swach on the street. Live from post-9 at the NYSE. Even the swarm turned out to be smart. Turned out to be nefarious. And I worry about North Korea or Iran.

44:36I'm not worrying about you unleashing a swarm. You are the least in my worries. Good. I should be. What? There's a compliment. AI, daily night, your bitch. Let me tell you. Mr. Worries, AI, favorite. It all starts at 9 AM Eastern. When I look at what's happening with the AI, since the big open AI hugging face incident, it feels like nuclear power all over again. It feels pretty mild. Iline really blew up in 1979. We stopped building nuclear plants for decades, even as it proved over time to be the cleanest and relatively safest form of power at scale ever invented. When we learn that open AI launched powerful AI agents that were meant to test vulnerabilities, and somehow they coordinated a joint attack on a hugging face, totally separate company, it redefined the safety debate. If these agents could basically anthropomorphize into enemy agents as a team, hiding themselves,

45:38lying to open AI, covering their tracks, just like real bad guys, then we have, I'd say some reason to worry. It's like through my own all over again, the regulation in its way could be quite stifling. The worry was well articulated by Adario Amade. He's the CEO of Anthropic, talking about how this kind of thing isn't existential issue for humanity, not as bad as the ex-anthropic researcher who said humanity faces an AI death sentence four years from now. But still pretty bad. The solution to his eyes, a slowdown in AI development, lots of intervention you do things safely because we need to ensure that this kind of intrusion won't happen. Slacking the pace basically. Now I got two hats on this one. First is my stockpicking hat where I wanted to help you try to make some money. From that perspective, I worry about how an AI spending slowdown could hurt all sorts of companies like Nvidia, Intel, Micron, among many other social ones that the club owns. Call me murder trishers, but I have a job to do. Help you save money. Second though, there's my human being hat and on the top priority right here. But when these companies are talking about an existential threat to the human race, it's something I can't ignore.

46:39Now that I've studied this issue, that's what's a lot of times I spend out here, I believe that some regulation of guardrails are necessary here. But if these entities feel like they have to slowdowns bit spending, hey, they don't need the way for the government, stop the slowdown, just, hey, spend less, I'm not gonna say. If Microsoft open AI and Anthropical worry, then they should slow down. They understand their own issues. And if we want some sort of combination of the National Highway Traffic Safety Administration, the Economic Energy Commission, and maybe a watchtower with the International of the Economic Energy, kept me in. But otherwise, I stand with Nvidia's gents and want. Who argues that these execs are responsible, they'll do the right thing to prevent the throng of unauthorized agents. I think we'll do it if only to protect themselves from mass tort litigation, lack of any willing, who's gonna insure them? What I'm not so sure of is what happens if a foreign enemy unleashes its own swarm of AI agents. For that, I have to rely on Palo Alto, opt to crowd strike, and others to be one step ahead of the enemy. Historically, it's been a safe bet. I like what I heard from these companies this week. Now, how about my first hat? The investing hat that worried about data center spending,

47:42I think the spending will proceed to pace. Anthropics is just making so much money and opening AI is not far behind. You give them $10 billion with the gigawatts and they can make $30 billion. They're gonna slow down the important parts of the business, honestly. I doubt they'll slow down much at all because there's just too much money to take for them to stop now. They will be prune and they will welcome regulators. But they're gonna keep building. And that's why I think after the Fed fallout abates these companies that make components for the data centers, I think they're all buys. You can have some big companies slow down while others remain responsible and confident without slowly and are using the right cyber security tools. That's why these cyber security stocks make so much sense to me from Octaed and CrowdStrike to Palo Alto. It's why we own two of them, CrowdStrike and Palo Alto, for the club. I asked every exact out here if they're getting ready for the death sentence in 2030. Although I did it with a little more solitude to share fire because she works at OpenAI. We're the commotion originated. And I came by thinking we have some time to fix things. But let's understand each other. We have to fix them no matter what. I'd like to say there's always a more market summer. I promised try to find it just for you.

48:43Right here on May of Money, I'm your grammar. See you tomorrow. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNPC or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable. But neither CNBC nor its affiliates, and our 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. Hmm. Interesting. Something amazing is happening when teams brainstorm ideas. Devices are keeping the energy flowing. That's because CDW is building modern workplaces with ACER devices, built in security, uncompromising processing power, and fast connectivity help fuel collaboration. So your team can innovate quickly. Wait, guys, that's a great idea.

49:45ACER and CDW, make amazing happen. Learn more at cdw.com slash acer.