at that? can we get the camera on his vest? >> look at that. chenil chenille. >> do you know what else looks good? a red hot would look nice. >> that's a great call. thanks for watching. "mad money" starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. ♪ hey, i'm cramer. welcome to "mad money." welcome to an vest in america, defining the future. welcome to cramerica. other people want to make friends. i'm just trying to make you some money. my job is not just to entertain you but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer.

all right. i'm tired of hearing about the kool-aid as in cramer's drinking the kool-aid again. on a day like today where the dow gained 107 points, nasdaq cliemded 0.64%, i got to tell you, i know what the kool-aid looks like and what it takes like and this ain't it. i actually covered the horrific event where the phrase drank the kool-aid came from. back in 1978 i was a reporter covering everyone who died violently in california for the late lamented harold examiner. i was assigned the actual jim joans case, the man who lured 900 of his followers to his death because they did drink the kool-aid. that concoction was laced with cyani cyanide. this market i think it's laced with some tried and true principles. but to get upended by the rhetoric is next in line for the people's temple potion. what are some of the old-fashioned concrete methods that can call this poisonous

tonic into question. let's start with the transports. it it's one of the old evidence theories when it comes to stock before you can trust a rally. meaning that the transports have to make a new high along with the dow for us to have any kind of solid grounding to a rally. i got some news for everyone in the kool-aid crowd. that's exactly what's happening. the railroad stocks, the truckers, the freight forwarders, and the airlines are leading the way here now, which tells us that this rally is backed by a genuine uptick in commerce. remember my theory. i totally agree that some of this move has been driven by the bullish animal spirits unleashed by our pro-business president. but it's the numbers themselves, the earnings that are driving things, not the hoped for prospect of tax relief. now, you can pick apart some of these. csx is going higher because of the possibility of a new ceo, hell bent on bringing out value, not that the old ceo was a slouch. fedex is benefiting from amazon's business. of course the traditionalists say you don't need to validate

the components individually. it's enough for the transports to be roaring along with the draw industrials. don't look through it. but let's just say you are a stickler. you still think it's kool-aid or at least hawaiian punch. you don't want to get hit. then look at who's buying the stocks of all these airlines. none other than warren buffett. when was the last time you doubted his judgment? yeah, i think maybe he likes the stock of coca-cola more than it deserves to be and he's too wedded to ibm and american express. i come back and say you don't get to be the oracle of omaha by rationalizing purchases to keep up with the averages. buffett is a buyer because he thinks there's intrinsic value to the airlines. they're very inexpensive stocks relative to the rest of the market and because of structural changes in the industry, they have become wildly profitable. value is something that most commentators don't ascribe to any part of this market. yet if buffett a's buyer, are you really going to sneer he's some sort of yahoo who is drinking the kool-aid just like that dupe, jim, booyah cramer?

how about the leadership? do you know how many times we used to cast gate the stock market because it was led by facebook, amazon, netflix, alphabet and a couple of small cloud companies, some utilities and a handful of biotechs? this market is the exact opposite of that. the best acting group shlgsz the financials, especially the banks. there's no leadership better than the banks because companies represent the gasoline to the system. if the bank stocks are going higher, it's a sign they're taking your deposits and either lending them out at good rates or buying treasuries, buying back stock and paying higher dividends than they currently do, or both. i think that with president trump, it might be both. the economy is heating up. the consumer price index came in hot today. a lot of that increase was because of the price of gasoline which, believe it or not, is beginning to be a about a story of massive exports of gasoline to latin america, mexico. it doesn't matter because it's going to force the fed's hand to raise interest rates a bunch of

time and that's fantastic for the bank as is the potential for deregulation that makes it so they can boost dividends and buy back stock with just, well, let's just say nobody's approval. certainly not congress, maybe not even the fed. a really healthy economy needs more lending, not just banks rewarding shareholders. i can tell you when the bank stocks roar higher and are good investments, then commercial lending and economic expansion cannot be far behind. oh, and for the record, even if it's run, these bank stocks are much cheaper than the overall market on earnings, and this time the earnings are for real. now, it would be one thing if we just had the banks leading but the industrials remain on the new high list pretty consistently. that's a sign of worldwide growth, not just domestic. and while the stocks are beginning to get expensive, i will give you that, they're a lot cheaper if the growth i'm counting on overseas, the expansion reflected by these markets flying high all over the globe comes through. you know what else would tend to confirm traditional benchmarks of reasonable valuation despite these rallies? the techs and the biotechs that have set out for years and have

actually become undervalued on earnings. they're doing some of the leading too. i'm talking about stocks like celgene, amgen, gilead or analog devices which reported a fantastic quarter today. these are the left behinds that have bided their time, kind of stuck in the mud, and now sell at levels even with or slightly elevated above the average stock of the market even though they're growing much faster. the housing stocks, we got to touch on them for a second. they're doing fine. that wouldn't be happening if higher interest rates are really going to knock that industry for a loop. that industry does punch above its weight. finally the ultimate inunder valuation is when we have our prices validated by sha ruf investors who buy stakes in company to bring out more worth or simply acquire them wholesale. last night we learned that nelson pellson purchased an immense stake in procter & gamble, where i'm confident he'll offer a reasonable blupt for higher prices. if our research, only pelt's offered you coattails that beat

the market, meaning if you bought the stock of procter after the announcement of the engaged investors stake, history suggests you should make money. then we should softbank, the gigantic and visionary japanese investment firm buying fort res vestment group. i know many people in this market white have thought fortune was overvalued coming in. well, soft bank, didn't they solve that conundrum? the bottom line, i get the kool-aid chanters are beginning to drown out the other followers in my twitter feed even as some of them are probably too young to know where that phrase comes from. my response is simple. there are some classic metrics and sign posts that suggest maybe, just maybe, the drink in my glass is not kool-aid but gatorade, the kind you imbibe when you're running a marathon, not a sprint. and it's spiked, all right, not with cyanide, but with electrolytes that give you more power than any bear would ever expect.

let's go to curtis in texas, curtis. >> caller: how are you, cramer? curtis from texas. >> i'm good. how about you, partner? >> caller: great. my question is groopro. i bought this stock back in may last year. it was down ninish, rocketed up to 17, almost 18, and then it seesawed back down to 8, almost 9. what do i do? do i stay with it? >> you know what, i just don't think gopro is a great stock. you know, i know hope should be part of the equation but you got to hope it goes above 10 so you can do some selling. let's go to bud in ohio, bud. >> caller: booyah, skee-daddy. this is your longtime fan bun in beautiful acrun, ohio, here to thank you for all you do for us and ask your current opinion on an internet of things semi-play that doesn't get a lot of attention it seems. what do you think about cypress semiconductor? >> have you noticed, bud, and thank you for those kind words and hello to akron, that that stock is beginning to run, and it should because it's dirt

cheap. i think it goes higher. i want you to hold on to cy, cypress semi. i know what drinking the kool-aid looks like and this ain't it. from where i'm standing, this market's got some staying power. coming up on "mad money" invest in america defining the futs, adobe does a lot more than open your pdfs. plus apple is hitting an all-time high despite a major handicap from wall street. but first, it's not all cloud computing and code. there's one old-fashioned, dirty, smokestack industry indicating a big change in this market. i'll fill you in when "mad money" from one market returns. so stick with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something?

head to madmoney.cnbc.com. ways .

especially in my business. with slow internet from the phone company, you can't keep up. you're stuck, watching spinning wheels and progress bars until someone else scoops your story. switch to comcast business. with high-speed internet up to 10 gigabits per second. you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. i know it's been all week

here in san francisco talking about how innovative companies are defining the future, how this new digital economy is transforming everything from the way we do business to the way we go about our daily lives. but while the new economy can be very sexy, let's not forget the old economy of minerals and metals and smokestacks and construction is still extremely important. i bring this up because last week we got a huge development in the not so digital dirty smokestack economy, the price of copper made a big breakout to the upside. and when you're trying to get a read on the state of global commerce, copper is an incredibly useful barometer. in fact on wall street we call it dr. copper because in addition to being a tradeable commodity, it's also used as an indicator to gauge the health of economies worldwide. when demand increases, that means industrial activity is on the rise since copper is use the to make pretty much everything from new factories, houses, automobiles, anything else that requires a lot of wiring. of course we don't know if demand's picked up. all we can say for sure is that

the price of copper has rallied and rallied hard, and as i said before, we know there have been some major production cuts, which means this could be more of a supply-driven move rather than anything to do with stronger demand. but we went over the fundamentals here earlier this week. tonight i want to take a different approach, which is why we're going off the charts with the help of ed uponcy. he's a terrific technician who is the managing director of barchetta chal management as well as my colleague at realmoney.com to get a better sense what this copper rally is trying to tell us about the broader stock market. i want you to take a look first at this daily chart of the red metal as we call it. you can see that copper made a strong move last week, breaking out of a bullish pattern known as an ascending triangle. now, this triangle is what's known as a continuation pattern meaning it tends to represent a period of consolidation within a larger rally. in other words, copper had roared going into this triangle,

and poncy expected to roofar agn now that it's broken out at the top of the triangle. based on that pattern, poncy believed it can rise in the not distant future. just as important, last week's breakout happened on very high volume. see that spike right there. nearly double copper's daily average. which suggests a big institutional move behind this game. however, poncy thinks we need to take things one step further. he's feeling real sanguine because history shows the powerful moves can happen when stocks and copper rally hand in hand. so let's go through some expects so you know what he's talking about. let's start with this pair of weekly charts showing copper prices above the s&p 500 from mid-2008 through mid-2011. poncy notes the copper bottomed in january of 2009, okay?

two months before the s&p generational bottom in march. and then both of them continued to run virtually uninterrupted for a year. nice call by copper. and poncy says we saw a similar pattern late last year. just look at this pair of daily charts. copper in the s&p from last august through today. august time frame, okay? in late october, copper started making a major move higher. and once again the stock market followed suit two weeks later. see, look at that. it's an advance warning, right? that was right after trump's surprise election victory. now, look, poncy is not suggesting copper is a perfect predictor. however, those who ignore history i think are doomed not to profit from it. so it would be a mistake to ignore copper's latest move even as i hear snickering that you should. again, though, what the stock market really loves is an increase in demand for copper. and right now there are many factors driving copper higher.

but most of them seem supply-related. workers are on strike at bhp's gigantic easy condee da mine in chili, and freeport-mcmoran has cut production at its mine in indonesia, the third largest in the world. that obviously makes supply tighter. however, there's one more factor that makes this copper rally seem a lot more bullish for the stock market, and that's china. remember the chinese communists consume nearly 50% of the world's copper. so when their economy is roaring, the price of the red metal tends to rocket higher. i want you to look at this weekly chart of copper going back to 2008. from point a, the bottom in 2009, to point b, the peak near the beginning of 2011, well, copper tripled in price. poncy notes that much of this was buying driven by china, which was undertaking some massive construction projects. for a while, china was the engine driving the global growth locomotive. but when the chinese started

cutting back on those projects, its economy slowed dramatically and copper went into a hideous downward spiral. ultimately bottoming a little over a year ago, and that's point c on this chart. now, though, for the first time in years we're getting bullish signals out of china's economy. witness last week's positive trade balance figures showing chinese exports up nearly 7.9% in january. imports up 16.7%. both huge beats that suggest that their economy could be accelerating. it's no surprise that these excellent numbers coincided with last week's copper rally. and poncy thinks that the strength in dr. copper is great news for both the global economy in general and for u.s. stocks in particular. so let's give you the bottom line on copper. the charts, as interpreted by ed poncy, suggest that copper's breakout is for real. and history says that often means good news is to follow from the stock market. i would be very happy if he turns out to be right although i'm a little bit skeptical because if copper is only rallying because of a tighter supply, then there's a lot less

significance for the economies around the globe. still, copper's strength is part of the traditional metrics that define economic growth and can signal a healthy bull market. so, therefore, it can be part of the rational justification for what so many believe is an irrational rally. still more "mad money" ahead from san francisco including the big disconnect from the stock of apple. now, the stock may be hitting all-time highs but the story is far from over. find out why the company may have more in common with something in your medicine cabinet. then i'm talking about adobe and revealing the story about its 90 trillion number. plus it all started with a light bulb in menlo park, new jersey, now, general electric might have more in common with silicon valley. the ceo is coming up. stay with cramer.

here's something worth

pondering, could apple be valued as a consumer product company someday? could it be valued say as a device business with a never ending stream of merchandise running through it? yesterday we learned that try on, the investment firm run by the brilliant nelson pelts took a hefty stake in procter & gamble with its star product being gillette. why do we like gillette so much? because when you study businesses, the ultimate model, the one so many want to emulate is called the razor/razor blade scheme where you pay once for a razor and spend a fortune over a lifetime buying blades, the only break being when a new more advanced razor comes out that forces you to buy more blades. pretty much everyone agrees that procter with its steady stream of consumer products and its huge market share deserves to share at a medium prices to earnings multiple. its business is pretty much impervious to the slings and arrows of a boom and bust

economy. it's got competitors nipping at its heels but it's still a dominant player. doesn't that, though, describe apple too? apple produces a pricey device with a built-in steady stream of revenue that grows and grows and grows. it has a fabulous buyback and a rapidly increasing dividend. sales are strong around the world regardless of the strath of the globe's economies, yet the stock sells for a paltry 15 times earnings. better than the 13 times earnings it traded at when ceo ti tim cook came on when so many analysts were writing it off. so you should trade out of it, not own it, i position you know a steadfastly oppose. it's ironic pelts goes after procter & gamble versus say an apple, but procter is more in his wheel house as pelts is a wizard when it comes to producing soproduc producing cost savings. in keeping.

you have to wonder why its stock does trade at such a discount to the average stock in the s&p. you know what? i think the answer is the analyst coverage. see, analysts specialize in spefblg sectors and apple, of course, gets grouped in with tech stocks. but if you were to move apple over to the analyst who's cover clorox and procter & gamble or newell brands, black & decker tools, other household product companies with nowhere near the service ref nuf stream that apple has even though they all sport much higher valuations, i think these analysts would be desperate to throw a buy rating on it. instead, apple gets covered by analysts who follow social, mobile, cloud, machine learning, artificial intelligence, where it's compared with much faster growing companies. but i would also argue now that this revenue stream is being broken out from service, less consistent companies as apple's service stream takes on a bigger and bigger porgsz of the

company's earnings profile, as big as a fortune 100 company. this isn't just an apple problem. facebook and alphabet have seen their --. i think facebook could easily become the world's largest entertainment company, one's that worthy of a far higher multiple and that's usually one of the most pro seic visions. hugh about alphabet? you know what i think it is? i think it's a data center and cloud company that's great at sponsored searches but could be better at self-driving cars which we may all be driving in just a few years from now, after riding in one of these wondrous vehicles today at the alphabet division producing them, i seriously wonder if we don't have to start factoring the numbers from ought ton mus vehicles into earnings projection. if you're investing for the long term, i think it now would be silly to ignore this most important division. sometimes it's just about story telling.

those analysts who tell the story of apple are now looking at it as a dead end, an innovation cul-de-sac. but if we looked at apple through the same lens as gillette, it might very well be the best stock a man can get. let's take some calls. john in new york, john. >> caller: booyah, jim! i'm a longtime follower. >> booyah, chief. >> caller: my question is about hilton worldwide holdings. i've owned some shares since the ipo, and it's doing well. recently it had a reverse three for one split. now i have a lesser position in hlt, hgv, hilton grand vacations, and pk, park hotel and resorts. do you think i should increase my positions or hold? >> remember, that's really kind of form over substance. we know they do a split, it really doesn't produce more value. but i like your position. i think you should hold on all of them. i don't want you to add right now. we've had a very big run. let's wait till we get a price

break before we put any more on. the art of story telling. it can either make or break a company. apple could be the best stock known to man or, depending on who's writing, still be a dead end. hey, still ahead on "mad money" from cnbc one market, how adobe went from acrobat to soaring in the cloud. the company's remarkable digital transition and more about its next moves are just ahead. plus my sit down with general electric on its own transformation in the future. can the company edison started keep innovating? but first all your calls in a golden gate, san francisco, edition of the lightning round. so stick with cramer. your insurance company

won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual new car replacement™,

you won't have to worry about replacing your car because you'll get the full value back including depreciation. and if you have more than one liberty mutual policy, you qualify for a multi-policy discount, saving you money on your car and home coverage. call for a free quote today. liberty stands with you™. liberty mutual insurance. >> announcer: known for its business and beauty, adobe's adding more color to its growth story. through acquisitions and a.i. >> how can i help you? >> announcer: but could this stock paint profits far into the future? few companies understand the digital future bert than adobe system, the leading maker of digital and media marketing software. it's been steadily transforming itself in a cloud computing play a few months ago, the company moved into the field of

artificial intelligence with sen say, their a.i. platform that uses machine learning to help computers match images and understand both the meaning and sentiment of documents, especially documents used in marketing although i have to adm admit -- meanwhile adobe has doubled down on the advertising space. in december they closed on the acquisition of two mogul. put it all together and adobe is not just defining the future. they're embracing it. they're owning it. no wonder the stock has given us a 34% gain since i highlighted its meta more foe sis, including the 15% rally year-to-date that my charitable trust which you can follow along at actionalertsplus.com has been along the ride for. i think adobe has got much more room to run, which is why i was so thrilled to be able to sit down and check in with shantanu narayen. he's the terrific chairman and ceo of adobe systems earlier this week. take a look. >> you just came off still one

more amazing quarter, and i'm always stunned when i see you out here because the growth is what i expect of a company that maybe is trying to go from $500 million to $1 billion. how are you able to continue to put these numbers up? >> well, i think, jim, first it's always great to be back on your show. when we think about two massive tailwinds that the company has, it's design and digital transformation. and everybody has a story to tell. so the creative business has gone through this amazing renaissance where anybody who wishes to express themselves, we have the best tools to do that. and every company is using design or expedience as a way to differentiate themselves. so you're right. we think we're in rarefied atmosphere in terms of a company that is growing both top line and bottom line the way we are. >> talking about it, i typically would not stop and just have my eyes pop out and say, wait a second. i got to be surement i got to ask about this. the free cash flow growth is

great. 50%. i mean you're an established company. this is not a startup. >> well, we went through the transformation as you know, which was, you know, as we moved to the creative cloud and the recurring revenue right now, it was 5% recurring revenue. a few years ago it was 80% recurring revenue right now. i think all of those yield very, very solid balance sheet, and our investors have been pleased. >> we talk about all these companies who use it. i know we've been speaking to john legere, t-mobile. is he emblematic of what you can use, you can translate the creativity you give people? >> i think design has never been more important in terms of giving people the personalized experience. when you think about telecommunications and what's happening and what john's trying to do at the uncarrier company, they want that expedience of how you engage with them on mobile as well as in a physical store to be completely differentiated

and personalized. you can actually send a message, i think, to your own personal support person. so the underlying infrastructure to enable them to do that on the web and mobile applications, that's where adobe is helping them. and how do they harness all the data that we're collecting on their behalf so that they can deliver a better experience? but it's not just telecommunications. travel and hospitality so that when you enter the hotel that you're staying in or the airport, they all know exactly who you are, what your preferences are. that's the kind of thing we're doing, whether it's marriott or starwood or qantas, some great customers. >> now, because you have everyone, the panoply, i mean we're talking about a huge percentage of retail that uses you. you also have fantastic data. how about the data for valentine's day? >> well, i think to your point, we process over 90 trillion transactions, and it's amazing to me that -- >> that's a t, people.

90 trillion transactions. >> a year. and to your point, when we used to have government statistics, they actually didn't include actual empirical data of what was happening online. in fact, consumer price indices and the other indices didn't include what's happening online. so what i will say for valentine's day is if you bought early, you saved 15% over those who bought late because prices went up. and mobile is clearly where all the action is. >> let's talk about mobile and tube mobile. i have not seen you since that acquisition. i know it wasn't necessarily additive when you announced it, but what does it bring? >> well, you know, we have certain high poth sypotheses th and focus the company on, and one that's probably obvious to most people is video is going to be immense. >> right. >> it's all going to be on smart, tcpip networks as opposed to just the traditional broadcast. and so when people are delivering this video, if we can

help them with video advertising in a personalized way, that's the holy grail. somebody who is watching your show, how do you understand the demographics of who they are and deliver them the right ad at the right time? >> do you think one day the facebooks will monetize, the googles will monetize this? just from your experience, can it be monetized? >> i think it can absolutely be monetized because there is more content that's out there than there has ever been before, and this revival of content, when coupled with the appropriate advertising, that's going to be the business model that evolves on the web. >> we just haven't been able to figure it out yet but we will with your help. i love this quote from your most recent conference call. while others are jumping on the machine learning and a.i. bandwagon, these capabilities have been the foundation of our innovation nfor decades. all we hear about is a.i. from these companies but you've owned it. >> when we last met, we talked about how people were talking

about it while adobe was quietly doing it. >> we did announce adobe sensei, which is our framework. there is nobody who understands images or videos or documents or what's happening with behavioral data and online the way adobe does. and enabling our rocket scientists to make that power available for our customers is something that's supercritical. people have always said how did they do that when they see an image for a video. now we're making it easier and easier to use. >> one last question. because of all this data that you have, can you tell me whether you share my view that things have gotten better, business in this country and worldwide? >> i think the sentiment when i talk to most ceos is that the business climate is better. >> okay. >> and i think we do see that. you know, i think in our particular space, because digital disruption is front and center, i think we're in the tailwind. but in general i think the sentiment is positive. >> let's leave it at that

because you're a positive person but i know you're also an impeer cal person. i got to tell you adobe is even at 117, i think you can go much higher. stay with cramer.

>> announcer: lightning round is sponsored by td ameritrade.

it is time! it is time for a west coast best coast edition of the lightning round on cramer's "mad money." that's where i take your calls rapid fire. you tell me the name of the stock. i tell you to buy, buy, buy or sell, sell, sell. we'll play this sound -- [ buzzer ] -- and then the lightning round is over. are you ready, skee-daddy? it's time for the lightning round on cramer's "mad money." let's start with rocco in florida, rocco. >> caller: dr. cramer, i presume. >> yeah, you got him, chief. >> caller: i'm calling about nvidia. >> a little profit taking in the nvidia. we did have brian krzanich on the other day. he kind of offered an alternative view of nvidia versus intel. i think that's hurt the stock of nvidia after he gave out his vision. i like nvidia, though. carol in florida, carol. >> caller: hey, jim. my stock is hershey, which is

now -- >> stay long hershey. it's a great long term situation. not going to run here. nick in texas, nick. >> caller: hey, jim, booyah from texas. >> good to have you. >> caller: real quick i just want to give a shout out to my wife, kim, and our beautiful daughter kaley. love you girls. >> kim and kaley, how you been? >> caller: i'm wondering your thoughts on accenture. >> should have never gotten down to 114, 115. i'm a buy, buy, buyer of acn, which because of spell check comes out as can. mike in illinois, mike. >> caller: booyah from chicago, home of the world champion chicago cubs. >> yeah, you're lucky. >> my stock is cqp. >> i like it. it's got a good yield, and i believe the schenneer dream is coming true.

how about dally in texas, dally? >> caller: booyah, jim. >> booyah. >> caller: i was going to see what your opinion is on ino. >> total spec. vaccine business. we have not liked. we have lost -- you know, we've gotten hurt on vaccines, but it's not bad. let's go to -- i mean if you want a spec only. brian in texas, brian. >> caller: hey, jim. booyah from down here in the permian. hey, i got a question for you. >> rockin'. >> caller: oil is stabilizing. i'm look into the frack industry, specifically emerge industry. >> we got schlumberger trading as if the permian isn't coming back. we're going to go high and not low. and dallas in texas, dallas. >> caller: booyah. >> what's shakin' partner? >> caller: fsw. >> we do not recommend container

ships, tankers, anything that is sea borne because it's killed us. and, ladies and gentlemen, that's the conclusion of the lightning round. [ buzzer ] >> announcer: the lightning round is sponsored by td ameritrade. h e g-sized rs m cry reedin re out ts coade soroug in omrt pony,rrp me h e g-sized rs m cry reedin re out ts coade atight wren?n?, t supporfrom thinkowim's hat. it ls you at and sha yscreectl th a livperson rig from thapso yon't need my ohso what out tiva meerkat -app chat on. bp eee use underwots, y keep watch overos even fm thousand feet beuse safety ver beg tisfd.analwakingo .

thomas alva edison and the one invention that has probably done most to change the lives of people the world over. electric light bulb. the invention that helped man

overcome darkness. >> announcer: from the light bulb to a bright future, general electric is blurring the lines between the physical and digital. can it navigate wall street and rapid change at the same time? we know that general electric is one of the largest and most innovative companies in the world. it's finished shedding its financial divisions to become more of a pure play industrial. we know the company is spinning off its oil and gas business and merging it with baker hughes to create the number two oil service play, yet the stock seems to have fallen out of favor with the wall street fashion show even as so many other industrials rally. i thought the shift to a pure play industrial would be a real positive. so far many investors seem puzzled about the results of the transformation. last week we got the opportunity to speak with jeff immelt, the chairman and longtime ceo of general electric in order to get more clarity on the situation and find out more about its remarkable embrace of technology throughout the enterprise. so take a look. >> jeff, you have ambitious goals. you've reinvented the company.

you're talking about becoming a top ten software company by 2020. you're poaching talent from apple, amazon, facebook. is this goal really realistic for an old line industrial? >> jim, i would start with, you know, we didn't start with this a notion that we had to be a software company per se. you know, today the industrial assets that we sell, they' produce a massive amount of data. sever today, we're probably $7 billion in orders, so we're kind of half the way to our goal to be $15 billion by 2020. so i think the proof in the pudding is reality. our orders are growing 25% a year. we're kind of first among equals. we can do this. >> you have staked your help sigs on this. you say your success or failure depends on the digital transformation. that's a tough claim to make. >> $100 billion market when we

first started it, i didn't really know kind of where we were. now i know this is a good idea. it's a big idea. the question now is are we good enough to do it? are we good enough to compete for it? it isn't whether there is say market there. there is a market there. i think both from an offensive standpoint but also a defensive standpoint, every company is going to have to stake its digital claim, and we can lead this. >> give me an example of productivity gains because i know that is a big portion of what you're talking about, that you have delivered to customers zblmpts so i was at nigeria a couple weeks ago with the natural gas company in nigeria, right? we're getting them 5% more output through their line number 6. they know how to monetize that. we're doing it three what we call asset performance management. we do it with aircraft engines, mr scanners. but it's all about asset, uptime

asset utilization, customer productivity. >> okay. but you have people you've been talking about trying to get code writers. you've got these tremendous commercials where people are talking about what ge is versus what ge really is. the people who work at some of these tech companies like facebook, they get apartments. they get huge stock bonuses. they're making fortunes right out of stanford. i mean can you do that? can you compete? >> look, we've got 30,000 people already who are doing this. >> fair enough. >> the thing i would say, jim, is, look, what's hard in this world, we can hire the tech talent. what's hard in this world is knowledge of the assets. what we have that the other guys don't have is we know the material history of every jet engine, right? we can build digital twins around gas turbines. i think we bring the physics along with the analytics. so, you know, we can kind of see this happening. we'll get a billion dollars in prediction orders this year, so

it's real. >> this is a company that has a public school system that doesn't produce enough code writers, and we have immigrants that can play an important role. but ge made its voice heard with the new administration and congress. you're talking about the travel ban. you stuck your head up on this. >> look, jimmy, i think we need a good immigration policy. i understand the president's desire to keep the country safe, but we need to be open to talent and things like that. but if we don't do it here, we're also in bang alower, in munich, in budapest, in all these other countries around the world. the amazing thing about software is you can do it anyplace you need to if that's where the talent is and that's what you need to do. look, i think in a broader context, look, there's a lot of thing each the president's doing that i like. tax reform, regulatory reform, investment in infrastructure. i think as it pertains to globalization for a while, we're going to have to figure that out on our own, right?

we kind of set our company up to navigate the world we see, not the one we wish for. >> let's talk about something that is new that you guys have capitalized on very quickly. artificial intelligence, machine learning, because i feel that this was something that did not speak up on you. you saw this coming. >> i mean if you grow up in the health care business the way i did, right, 10% of the power of an mr scanner, ct scanner, is used by the radiologist on the first read. the other 90% can be modeled using a.i. post-processing. i saw -- we saw that 10 or 15 years ago. so these are concepts that are well known inside the company, and once we think we can leverage across the installed base. >> you talked about the need to play defense. zeman's claims to me that they've got -- they're really a software company too. ibm wants to play against you directly. i mean i hear a lot of what sounds to me like watson. what's your edge versus these guys? >> look, it's a $100 billion

market. there's going to be a ton of kpetdors as they play. i think the edge that ge has is we've got an amazing array of installed base that we start with. we've got $225 billion of contractual agreements already signed with customers that are productivity-based. so we have this kind of connection with customers that nobody else really has, and we can add analytics on top of that in ways that ibm and seems can't do. >> i thought the baker hughes deal was terrific. we used to have no technology when it comes to oil. what have you done to lower the cost of a barrel of oil coming out of the permian, and also who have you done to reduce the bad parts of fossil fuel snsz. >> i think when you go to the permian, you're going to go from kind of the day where people would buy service, people would buy equipment. they would package them together. i think in a couple years on the onshore oil and gas business, they're going to be buying

outcomes. they're going to be working with people like ge/baker hughes, and they're going to be buying, you know, barrels per day. and we're going to be packaging the analytics and the equipment and the services together. and in that world, the analytics -- look, we can do a forward lean on production because we know the analytics better than anybody in the world knows. and this is going to be highly disruptive in the oil field service space. >> let's go back again to this watson issue. you're reducing the cost of health care. you partnered with ucsf which is an amazing medical complex. how can you box out others? watson -- ibm said to me over and over again, you must own the health care space. it's one of your faster growers. >> jimmy, ge products take 45 million images a day. a day! ibm doesn't have that, really. we have connections with every radiologist around the world. so the industrial internet is going to break very differently than the consumer internet or

the enterprise internet. there's going to be more computing at the edge. you're going to have to differentiate stanford. look, stanford, ucf, and kaiser, they don't want to have the same platform necessarily. >> no. >> they're going to want to be different shaded. we have a brain and a body. other people just have a brain. >> fair enough. >> i think ultimately the guys that win this are going to be the ones that can deliver sheth solutions point by point. >> does it raise the price to earnings multiple that we get from ge? >> the way i look at this is our service organic growth is going to increase at higher margins. you're already seeing that and i think it's going to accelerate. then i think there's going to be a software platform that's a little bit like crm. so when you look at salesforce.com, oracle, the crm value space is $100 billion plus. there's going to be that kind of -- you know, i'd say with in

a service platform, the cfo is going to sit there and say, i can eat the savings that you guys give me. there's going to be a big space there. >> all right. speaking of big, you're a big thinker when it comes to people who work for ge, the stakeholders but also the employees. we are creating automation. you are now doing automation that puts people out of business at the same time you're creating great productivity. what do you tell president trump, who wants to bring jobs back here -- america first -- about the notion, well, look, our productivity is sometimes about taking the human element out? >> i would start with the fact that this country has been in an investment recession for the last 10 or 15 years. our productivity stinks fundamentally. so there's a space we're going to go through where we're actually making our workers more valuable. we're making them more valuable because they're going to be able to do more and different things. the guys that are making our

next generation jet engines, they make a ton of money and they're extremely productive, and they can compete with anybody in the world. >> i know a lot of them are here. >> so my view is we're going to go through a door where the workers are more productive because of the digital tools not being replaced. maybe someday you and i will both be robots here on the set. >> no. we'll be simulations. >> i think we're leaping to like 2030, and we can still go through making these workers more productive. like every day i hear in the oil patch he everybody retiring, stuff like that. we're going to make our workers smarter and see where we go after that. >> thank you so much to jeff immelt, the ceo and chairman of ge. >> jim, thank you. >> thank you.

good numbers from cisco after the close today. could propel the averages farther tomorrow. and we're going to have chuck robbins, the ceo on "mad money." i like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money." i'm jim cramer, and i will see you tomorrow! atevert is..

it hunting. the wall.1 -smells great. -...digging ditches. -(grunts) -it's all in a day's work... when you're a millionaire. these folks invest in hedge trimmers, not hedge funds. they turned d.i.y. into r.o.i. and thanks to hard work, incredible passion, and a whole lot of mud, sweat, and tears, they turned their dirty jobs into filthy riches. -time to go make some money! -(horn blares) -tonight, meet a construction couple whose relationship status reads "married with millions"... -let's go get some ice cream. woo-hoo! -...a high-tech mechanic who makes cars fast and money even faster... -it doesn't get much better than this.