north america from nike. sell it. >> we have big ones in from san francisco tonight. going gophers. >> i know, i was there. ranger hockey. go. i'm melissa lee, thanks for watching. at 5. "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 minute. welcome to cramerica and welcome to our final day out here on the west coast at cnbc one market in san francisco. other people want to make friends, i'm just trying to make you some money. my job is to the just to entertain, but to educate and to teach you, so call me at 1-8

1-800-743-cnbc or tweet me @jimcramer. sometimes this market can be incredibly difficult to navigate, because the cross-currents are so powerful and so crushing. today, for example, the averages got slammed by a wholesale collapse in the commodity complex, especially oil. but then the republicans passed their obamacare repeal bill in the house of representatives in the afternoon and we rebounded. the doubt ultimately sinking six points, s&p advancing 0.06%, nasdaq edging up 0.05%. it was like there was no session at all. whatever your opinion of the health care bill, wall street likes it. because it contains tax cuts and demonstrates that speaker paul ryan can actually do his job. you might have expected the market would roar on the news. nope. the broader economic backdrop is just too grim right now. with the fed set to keep raising interest rates, right when business seems to be slowing, and it's too dangerous to go

full hog on stocks when the labor department announces its employment report tomorrow, 8:30 a.m. what if it's weak? where are tahe animal spirits? so what kept the lid on this market? it starts with commodities, that are weak across the board. aluminum's headed down. iron's -- oh, man, get out of the way. and oil's simply crashing. down 5% today, the worst day in months, all the way down from 53, just a few weeks ago to $45 right now. what does that mean? let me put in context. from the perspective of a money manager, it means we get a switch, a rotation into stocks that people had abandoned. the commodity consumers. not the commodity producers, and their accessories, but the company's actually benefit from this decline. and that rotation was augmented by some takeover talk that's sto darned convoluted that i'll have to try to throw it into to explain. let's start with oil. you know i've been negative on

this show on oil since it traded at 53 bucks. longer than anything we have seen in ages. everyone was in the pool at 53. but we didn't have the surging levels of demand that we would need to support that level of establishnes nesnes nesnes nes establishness. that's right. they were selling futures in oil in order to raise cash so they could boost production. sewing the seeds of their own demise. now oil is all the way back to 45, but it's trying so hard to hold that level, after still one more day of devastation for the bulls that freaked out a lot of people. in many different parts of the market. so what happens now? of course, while all the oil stocks got hammered again. the bears went after even the biggest ones, like chevron. and pioneer, which i thought reported some pretty good numbers last night. and of course, occidentaoccidenh was just plane horrible. remember, though, these oil stocks are all part of gigantic

etfs, so this company's specific stuff doesn't really matter. and the collateral damage is enormous. when traders see oil getting hammered, they instantly start selling the stocks of any companies that need global economic growth. even companies like caterpillar and cummins, who just a few weeks ago told us things are great. more importantly, that money flows the right back into all sorts of companies that francly don't have much growth, like these darned food stocks. because oil is signaling we're going to get, i hate to yause ts word, but a recession if the fed keeps tightening. it's what oil is saying. the cross-currents are vicious. interest rates are going up, because they march to the tune of the fed, which told you yesterday the economy is going to reaccelerate. so you've got this bizarre confluence, where the bank stocks are actually going higher. remember, they need higher rates. but if it weren't for the fed, i think rates would be falling, taking the bank stocks with them. how do we make money in this rotation? first, i have to admit, it does

have some legitimate numbers behind it. this company we talk about, zoets, put up its usual, incredible numbers and its stock stored. the deflation trade resurfaced, which mean money flows back to the insurers like aig, met live, and all-state. the biotechs always surge at this time, and this time is led by regeneron. did you see insight today? it reported a miserable quarter and still went higher. you know what that means. takeover buzz. medical devices soared, they always go up right now. it's always business as usual in these big names. and large pharmacatches up. eli lilly at 80, bye, bye, bye, they're buying it. these are staples. then we have colgate and general mills rallying, because last night kraft heinz reported a hisohi hideous, horrible, worst-in-show number, so they have to buy somebody, come up with a

potential acquisition to save themselves. on the call, kraft heinz was asked if any company would want to sell to them considering their slash and burn methodology. given that warren buffet is a major investor, we know he doesn't favor hostile takeovers. i bet he talks about this. so the question is, who's going to sell to these guys? who would ever do it? after all, when kraft heinz went after unilever, not only did the ceo of unilever object, so did b buffett. its quarter should have sent the stock down a minimum of 2 to 3 if not 4 to 5 pointses. and i think that's where it's headed unless they can pull a takeover rabbit out of the hat. but who would want to sell to them. we had big movement for anheu r anheuser-bus anheuser-busch. corona is an instant readthrough for constellation brands, because it has the american

rights to corona and mow dello. let's not forget the highest growth companies have stocks that tend to run when the economy slows. so faang is a little controversial, because last night cold water was thrown on the bulls by none other than facebook itself, i still think it's a remarkable business. i told you that would happen. it's suffering the same hangover we got the last few times. we all know the apple story by now and amazon is taking a breather. but netflix and alphabet, on their usual roll. here's the bottom line. the rotation today was predictable as it gets. when oil gets slammed, the algorithms take over, the cyclicals get sold, the recession stocks rally. that tends to keep happening, until oil turns around, because you can't untrigger a machine anymore you can teach an old dog new tricks. don't get too comfortable with this rotation, though. because tomorrow we get that non-foreign payroll number from the labor department and it's going to wipe today's slate clean and give you a new one to draw on. while you might have expected the market to rally on the successful health care vote in the house, the rip tide of oil

and worries about payrolls put a lid on what could have been a raucously positive session. let's take some calls. why don't we start with carl in new york. carl?! >> hey, jim. boo-yah from new york, buddy! listen. >> boo-yah. good to hear you from. >> caller: ak steel, buy or sell? >> we are buyers of newcorp. my charitable trust buys new corp. almost every single day. it's the best in show and we have to think long-term. i'm going to ben in new york. b ben! >> caller: big boo-yah from new york. how about cg? do i buy more, hold, or sell and realize my gain? >> no, no, no, you want to hold this as long as the stock market gets better, it's great for kkr, great for carl icahn, we want to hold on to blackstone.

they're all good. how about steve in missouri? steve? >> caller: this is a big boo-yah from brother jim's church of cramerica. i have invested in amazon, and due to that, i have tried to concentrate my online purchases to amazon, but i've noticed that amazon appears to almost always limit free shipping to prime members. so i found the same things on other sites, mostly ebay, that ship for free. so due to this, i'm questioning amazon's is online selling. i know it's only part of amazon, but it's what the company was built on. what do you think? >> no, i think amazon is fine. it's -- you know, it's a great revenue growth story. it actually had good profits last time. i prefer it to ebay. ebay had a so-so quarter. i say stick with amazon. all right, ready, set, rotate! we saw the recession stocks rally today and that will happen

until oil turns. but you know what, tomorrow's non-foreign payroll number will give you a new slate to draw. on "mad" tonight, hey, it's our last day in san francisco. better do things big. so we're talking with intel about the future of tlechnology driverless cars, and why not throw in lebron james. he's been looking good. i said big, didn't it. and tech inventor twillio has had a tough week with the company losing more than a quarter of its value. i'll take you behind the warning it issued to find out whether this drop is an opportunity or not. and there's one bizarre ingredient you need to understand in tesla's conference call last night. hallucinogenic drugs. i'll explain. 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.

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from desktops to data centers, intel has undergone a revolution with deals, drones and driver's license cars, this giant is looking the to the future. is now the time to plug in or could this tech shift fall short? can a tiger change its stripes? that's the big question with intel. the semiconductor titan is generally, and i think, incorrectly viewed as just a play on the personal computer. lately, intel has been trying to diversify into different end markets, like the data market, and the autonomous the driving business thanks to its shrewd acquisition of mobileye. can they grow these divisions fast enough to offset the sluggish pc business. earlier today, we got a chance to check in with brian crosanich. >> few companies have committed to putting as many people to work as you have.

how much of is it that president trump has expressed that issue and you're heeding the call? how much of it is patriotism? or just best workforce? >> we've always manufactured the majority of our products here in the u.s., still to this day, 70% of what we manufacture is built right here in the u.s. the recent announcement we did back in the beginning of this year was really about, where do we place our next big bet, big factory? and we were going back and forth, but certainly, you know, the push for tax and, you know, american jobs, we -- it made sense to do it here in the u.s. >> and if the government's policy were to change, we get repatriation lower, corporate tax rate, this would probably make it game, set, match. could it not be hundreds of thousands, but millions of jobs because of companies like yours and where they place people? >> i think you look at the amount of cash overseas right now with companies, and they want to bring it back. i think we're all willing to pay tax. it's just, we want to pay a fair amount of tax.

and yes, we're going to go to reinvest that money. and it's going to be reinvested in factories like we just announced, in stock buybacks, in all kinds of applications. all of those will be job creating and wealth creating for the u.s. >> let's talk about the new intel. and i say that because people are still lagging behind. they're still saying, as pcs go, so goes intel. stock's up 20%. last quarter, people were saying data center wasn't growing that much, but no one's talking about your commitment that you identified on our show several times, internet of things, driver's license car. you made an acquisition that i think really was a state, a state that said, you are going to be the leader in driver's license cars, which i think is the biggest single market in the world. >> you bet. so, first of all, growth businesses. $30 billion of revenue this year from our growth businesses, growing double digits. so when you take a look at it, it's now, you know, approaching 50% of the revenue of the company. it's more than 50% of our profit. so it is where the company is. >> and that's a very big change.

revenues were up -- profits were lagging, not up more. >> so all of those are doing very well. but you're right, mobileye was a big stake around autonomous vehicles and those are going to be cars, i think, you know, within our lifetime, it's going to be things that fly. all kinds of autonomous vehicles. and it was really taking a look at it and saying, just like we do in most of our markets, how do you deliver the most value and the most performance for our customer? and you do that by thinking, not just as a cpu company, but you think about it as a complete platform. the complete car. and what we'll be able to do with mobileye is really deliver what we believe is the best performance for autonomous vehicles. >> now, what makes it so special, because somebody could look at it and say, 600 people, $15 billion. talk about the value of it. >> you always hear this term, artificial intelligence. you hear it, you hear it, you hear it. >> you're the first person who told me about it.

>> but it's all about the software and how that software interacts with the hardware, the cpu. what we make. what we're bringing together is what we believe in, and we search the world high and low. the smartest people on this planet for making the software, the arlgorithms for how the cameras, the lightdares, the radars see the world and identify, this is a little girl crossing the street versus a stop sign versus a puppy versus a ball. that is the hard part of this task. >> now, at the same time, you're spending $15 billion on that, you're still ensuring your flank. you are not letting your core pc business go, but at the same time, you were more downbeat on it than others. >> you bet. this is the best time, i think in history, to go out and buy a pc or be in the pc business. the innovation is tremendous. it's just that, we do see that there are other places people are spending their dollars. so i can't come into you and

say, this is a revenue growth engine, but we've been able to grow profitability and we've been driving innovation with our partners, microsoft, high pressure, dell, lonovo. the products you're going to see over the next couple of years are going to wow you, i think. and there's really no other reason to buy a computing device rather than a pc. >> still great synergy between pc and the others, you don't have to split it out and buy a cash cow versus the other now that you have mobileye. >> you bet. this year we're introducing products, laptops with zion class cpus so you have basically a server in your lap. if you're going to do those artificial intelligence algorithms, you can take your laptop off, write them right there, and actually do the testing. >> in the '80s, intel got out of d ram as commodities, and i know you do some flash, but is that just boom bust again? other than the highest end flash, not something you want to play in? >> well, flash, like all memory,

is still a cyclical market. it's a commodity. >> and that's not what intel's committed to. >> absolutely not. so now, why are we in this business? >> yeah. >> okay. there are two reasons why we're in this business. one is on regular flash, we believe we have an architectural and a technical -- a silicon differential. something that gives us a lower cost and a better performance. so if you take a look at it, 80% of the flash we sell goes right into the data center. >> okay. >> there's a synergy, again, when you're thinking about the platform, it's tying that flash memory with the cpu, with the -- >> but you're not able to get that crazy price increase? >> we get paid very well. we had 55% growth in our flash business. there's another reason, though. you've heard about it. you've talked about 3-d cross points. we label it octane memory. a whole new class of memory that is a mix between dram and nan.

it's the speed of dram and the non-volatility of flash, and it's going to rearchitect ow memory is laid out on your pc. i can put that memory in your pc and give you a 20% performance improvement, just through the memory. that's huge! that's like a new cpu to you. >> and i'm used to the blue man and intel inside, but you've got a new campaign with lebron, who has been having an unbelievable series. how's that going? >> that one's going good. and i good give to our ceo. it's really showing intel in a different light, right? it's really all back to how do we take our compute models and push them into new markets, which we're doing quite a bit with sports now and digitization of sports. >> have you talked to him? it's a very different campaign from the old days. >> lebron -- yes, i have spent time with lebron, and the great thing about lebron, great sense of humor and he's just a great person. >> will there come to be a championship that you might see down the road? >> i hope so.

you know? huge warrior fan. don't tell lebron that, but -- >> fair enough. >> but you're going to see a lot of sports. you'll see the pga in virtual reality. >> i think it makes sense. it's time to refresh. >> yes. >> brian's refreshed this company. and i think what he's doing is made it so you have an inexpensive stock with a good yield, that you're being paid for this next initiative, which i think is going to be the king of internet of things and autonomous cars. because it's the one that's most motivated to do it. that's brian krzanich the ceo of intel. stick with cramer. >> announcer: after the break w, elon musk on line one. and cramer's dialling in. >> you're a simulation! simulation! >> he doesn't -- >> you're a simulation. >> a 50% chance. >> he's no simulation. cramer takes tesla for a spin, next. it's our little differences,

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how do we deal with a company like tesla? if you're an analyst, i think the only way to handle an elon musk conference call is to take some mind-altering drugs, so you can really tune in and turn on the whole psychedelic story. i honestly don't know what else to say. no matter what you ask, to matter what you do, the answer is going to be something that blows your mind. and you really don't want to approach tesla with a stone-cold sober nature that rigor demands. because i think you'll just look like a total dope. musk is just that good. although, not good enough to keep his stock from sinking 15 bucks today. still, it's got to be incredibly frustrating for those people who are trying to draw up financial models that they can get their arms around and ask questions on the call about it. take, for example, this attempt at a rigorous question by the incredibly sharp tony sag naggy from bernstein. by my math, it looks like tesla's new car inventory has increased substantially over the last couple of quarters, maybe

3,500 units or about 50%. even though short of production and delivery have been relatively constant, he says. so therefore, he wonders, is there demand pressure on the model-x or the s? is there some sort of cancellation problem? do we have an inventory overhang? hey, you got to say to yourself, that seems like a pretty serious issue, right? no, not when you don't know -- not when you're dealing with musk. because musk quickly explains that there was confusion look customers about the value of the model s versus the model 3 and that caused some issues, which he says were his fault, because he wanted to name it the model e and ford sued him. plus, tesla likes to give fully loaded loaners to anyone whose car is in the shop, so he needs all those extra vehicles. aha! of course! how can you argue with that? in one fell swoop, he got you to understand that not only is there no demand problem, but what other company gives you a loaner that's better than the one you drive?

there were so many priceless moments on this call. like when brad johnson at barclays reminded us a couple of years ago when the stock was at $200, it's at $295 now, he asked musk if there was a scenario where the stock could get to $700 market. musk responds, now i'm going to want to preface this by saying, of course, i could be completely delusional, but i think i can see a clear path to that outcome. normally, i could be totally delusional is not a phrase you want to hear from a ceo. but musk has enough confidence to pull it off. how about this one. tyler frank, seems like a nice fella from bear wants to know, and i quote, elon, you had previously pulled out a target of 1 million cars by 2020. do you still think that's achievable? come on, tyler! you're talking to elon musk for heaven's sake. not some regular circumspect captain of the industry.

his answer, "yeah, i do. i think we need to come out with a model y. some time in 2020 or aspirationally late 2019 and i think a million units is most likely combined, maybe more." elon, why not just say, definitely more, or absolutely more, or at least aspirationally more. of course, there are fabulous moments where he says the tax credits to the electric car industry are hurting him. and the tax abatements from informed for the gig factory, they aren't even real. he ain't using no stinking subsidies. finally, rod lash from deutsche bank steps right up and asks about china and if the government will liberalize foreign investment and what that means about plans to build a lot of cars for musk there. why doesn't he just groove a hanging curveball right over the plate. musk sends it 440 feet into deep center bleachers this one. i don't think this is the right time to make an announcement on that front, but i would expect

us to define our plans more clearly by end of year, specific to china production. so just in case you thought there was an inventory problem, just in case you thought there was a demand problem, just in case you thought he was off-course in market cap. just when you thought maybe he was hyping for production. the one thing you do know, you can't short this stock now. because by year end, you have to figure that musk will be saying he's going to make a million cars in china by 2020, at least aspirationally. and you'll be hit by one of the biggest short squeezes in history. a continual one! my take, tesla makes for great theater. and while i think it's too risky to bet on this one, musk's grandiosity makes it equally risky to bet against it. but, boy, is he a lot of fun. hey, let's talk to todd in missouri. todd! >> hey, jim, hillbilly boo-yah from todd in ozark, missouri. >> i like that. >> caller: jim, my stock is o'reilly auto parts. i've got two questions. first, it just hit a 52-week low on monday. is it a buy?

>> i think that o' -- i like auto zone more. auto zone has a bigger buyback, but i know the group is under a lot of pressure, because the whole auto business is under a lot of pressure. i say stick with it, okay? i'm not going to tell you to sell it at a 52-week low. how about david in michigan. david?! >> caller: hi, how are you? >> i am good. how about you, david? zbr >> caller: i'm good. so my question is, since auto sales are going down -- >> right. >> is ford still a good buy? >> look, if you're willing to sit and wait for at least six months, maybe even a year, you get that 5.45% yield pinpoi. i want more than that. but it's going to be a down year for ford and i don't recommend stocks when the year is going to be down until much closer to the end of the year. and we're not there yet. i mean, we're only in may. i mean, sure, tesla's call was fabulous to listen to. but kind of an alice in wonderland sort of way. you know, red queen. the company's product and man

are terrific. but understand, it sure seems like more theater than it does seem like, well, i don't know, like fact. but it's working. still more "mad money" ahead from cnbc one market, including my sit-down with twilio. it counts facebook, air bnb, and uber among its top clients. but this week it gave investors a warning that sent the stock tumbling more than 25%. i'm investigating what happened to this one-time start-up star. and a company behind some of the plastic in your wallet is engineering a major turnaround. it's not visa, it's not mastercard. i'll reveal the name, just ahead. and let's pull out all the stops before i hop on the red eye back home edition of the "lightning round." so stay with cramer. >> announcer: tomorrow, kick off the trading day with "squawk on the street," live from post 9 at the nyse. >> i could use a --

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>> part of the reason for that miss is that one of its top clients, uber, has pulled back some of its business. >> the playing field in tech is always shifting. and innovation is the reigning champ. in silicon valley, it can be tough to roll with the bunches. can this software newcomer pick itself up off the mat? >> what the heck just happened to the stock of twilio. while we're out in san francisco, i think we need to check in with cloud-based communications expert, because the stock did just implode after the company cut its numbers. it plunged down to 45 over the next 24 hours, and all i can say is ouch. twilio helps software to develop reliable communications systems via the cloud. and the platform is used by nearly every app that sends you text messages from uber to twitter and air bnb.

twilio's sales and earnings came in better than expected. the company had to slash its guidance for the rest of the year and it scared off investors. the problem, its largest customer, uber, is changing the wait it handles its communications and offfloating its business to competitors. no one wants to hear that your company's top customers is hitting the bricks. so let's dig deeper with jeff lawson, the cofounder and chairman of twilio. get a better sense of the quarter and the company's prospects. you didn't say, hey, listen, i can't talk. you said, let's come and talk. first, i have to tell you, i got it wrong. i knew that uber was a great client and i didn't see past that. i couldn't believe that someone could have the luxury of having uber. why don't you walk us through, with the idea of answering a question that's asked by two different research firms. one is, once bitten, twice shy, we were wrong to underestimate the uberists.

but then the uber reset creates an excellent buying opportunity. that's where i want to be. give us the arc of what happened. >> obviously, the news on uber is not one we were happy to share, but we did feel it was the right thing to do. uber is our largest customer and if you annualize their q4 spend, they were on track to spend $60 million on twilio in the year. and they're an outlier at that level of spend. and when you're spending that much on one vendor, they wanted to get better control and better visibility into what they were spending. >> that's about 17%? >> about 17% of revenue. so they wanted more visibility and more control. they continued to be a great customer. they will be a great customer of ours, we believe. but as they start to understand their spend and understand how they want to do it, look at it by geography, we're going to help them do that, but they're a great customer. you did say through each quarter, it will be lower. and that will impact 2017 in a negative way?

>> yeah, because of the size of the spend and how important of a customer they are, when we got an inkling that they might change how they're thinking about communication spend, we wanted to be transparent and get that out in front of investors. but we do believe, they will continue to be a very important customer of twilio's. >> i want to understand, did they -- it wasn't like they found a better mousetrap. that's really important. i don't want to tell people, twilio's good, but there's another company out there, and they're the first one of many that are going to really migrate away from your company. >> what they've done, they have a multi-source strategy. what they've essentially said, they've built the ability to more fluidly move around how they're thinking about their spend, based on geography and based on their use case. so they're bringing in several different vendors all around the world to think about how they're doing this spend. so it's very different than saying, oh, there's another vendor that we're coming in to replace. now, that said, there are, you know, dual sources of things, many companies have a dual source strategy for key technologies in their company. some customers do that for reliability and resiliency and things like that, and that's not

communications alone. that's kbass and -- >> your second largest customer, whatsapp, has always had this. it's not like whatsapp is going to pug pul the plll the plug. >> whatsapp hassed a a multi-source strategy for a long time. at that level of spend, it can make sense for a company to look at how they spend in a multi-vendor way. but if you think about our customer base, after whatsapp and uber, our next biggest customer is only 28% of research. it's a very different game at that level of spend versus everyone else. >> there's no way i can say, i can ask to risk uber, that was huge. but otherwise, there was a lot of momentum. you had a lot of new customers. it was an extraordinary quarter until this bad news occurred, right? >> obviously, aside from uber, we had a very good quarter. we added over 4,000 new active customers, our best quarter since we went public in that measure. our base customers outside of uber grew 60% year over year. we added george who of our ceo and he was the ceo of sales

force through k5d billion of revenue there. scaled that company wonderfully. so we feel we had a great quarter. >> what do you do if you have someone? there's no way you can call uber and say, you're such a big portion of our revenue, we don't want to do business. and all of us have to recognize that any customer at one point could have a different a dispute or something be different. what choice did you have with uber. you had to roll with the punches until -- so what happened? >> you're right, when a customer grows, and this is part of the power, but a little bit of the risk of our great usage based model that grows customer expansion very strongly. that's up to us to manage it. a certain level of scale, they make decisions thaur goi s they make. and every company will make their own decisions about how much they want to trade off risk and price and quality. and this substantial undertaking

at uber is based on the size of that spend, which got so big. >> one last question. i want to be sure, the core business, tons of money to fund, right? we're not in a situation where we're fine without a big uber client, the cash flow problems or issues, no, right? >> no, we're continuing to invest. we have a leadership position in a very large market. and we feel great about our position, about our product, about our customers. so we continue to invest forward. >> all right. i want to thank jeff lawson, who came on. understand, this was a tough week for jeff, but he came on and he talked about it and he addressed head-on the problems. that's why i think jeff lawson is a guy who is worth banking with. founder, ceo, and chairman of twilio. read the research and make the decision yourself. "mad money" is back after the break.

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. it is time, it is time for the last lightning round edition in san francisco on "mad money." that's where i take your calls rapidfire, i don't know the caller or stock ahead of time. when you hear this sound, then the lightning round is over. are you ready, skee-daddy?! it is time for the "lightning

round" on cramer's "mad money." i'll start with darren in new mexico. darren! >> first-time caller, jim. and thanks for all your lessons. >> quite welcome. >> i have a long position in sh shopify and what i need is a measuring stick on when to expect profits on their balance sheet. >> i've got to tell you, they're doing all the great things i want in terms of revenue growth. i don't know, let this one ride. it was a good quarter. let's go to kenny in connecticut. kenny? >> caller: boo-yah, jim, thanks for taking my call. >> of course. skbl >> caller: i have a question about chemours company, cc. where do you see it going from here? >> we're very worried about all commodity and all commodity chemicals. and i've got to tell you, you've had a really good run in cc. i would ring the register on half of it right now. take it out. because commodity chemicals are not doing well right now.

let's go to victor in georgia. victor! >> hello, jim. thanks for taking my call tonight from south georgia, right above tallahassee. >> man, i've been there many times. >> caller: yeah, man, i know you have. should i add to or smoke out my position in the altria group. >> where there's smoke, there's fire. it's a good one. i want you to hold on to it. we're not done. we're going to dave in illinois. dave?! >> caller: dr. cramer, congratulations on celebrating the second year anniversary at one market center. >> we love it here! the team is great, fantastic. how can i help? >> jim, my stock for today is james whitehurst, red hat! >> the sales were fabulous, the deals were great. whiters continues to do it in the cloud. i want you to stay long it and thank you for the kind comments. we're going to joe in my home state of new jersey. joe! >> hello, cramer. thank you for having me on.

>> good deal. >> caller: my stock is general mills. i've had it for about a year and a half now with modest gains. and with the food companies losing some market share, should i sell? >> no, with i don't want you to -- this would be selling it too low. we can't do that. wait for another stock. at one point it was a six today on the ridiculous rumor that david faber killed about kraft heinz. don't sell it here. and that, ladies and gentlemen, is the conclusion of the are you ready, ski daddy, san francisco lightning round! >> announcer: the "lightning round" is sponsored by td ameritrade. so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade

tonight i want to tell you about one of the most intriguing turnaround stories you've probably never heard of. i'm referring to a company ca called alliance data systems. the symbol is ads. it's a play on private label credit cards on rewards programs and transaction-based marketing solutions. or in plain english, companies like retailers outsource their loyalty card programs and data-driven campaigns to alliance data. from the summer of 2010 through the spring of 2015, this stock rallied a phenomenal move 55 all the way up to 312. as more and more retailers realized that they needed loyalty programs to keep customers coming back into the stores, alliance data made a killing. why was this such an attractive business?

okay, when you go to a retailer and pay with a private label card, it allows the merchant to avoid paying interchange fees and that's where visa, mastercard, or american take a cut out of every transaction used. what a business that is. but if they can get you using their own cards on the system run by alliance data, the retailer ends up saving a lot of money. at the same time, alliance data's loyalty cards allow retailers to track your purchases. and then use targeted advertising. that's another service alliance provides to generate more business. that's why this was such a great growth story for so long. they powered all of these loyalty cards. but then the stock began to roll over, midway through 2015, and it quickly lost its mojo. by february of last year, it had fallen as low as $177. sth this was a stunning 43% decline. but lately alliance data has been making a remarkable comeback, unheralded until now. the stock climbing back to 253

as of today. up 43% from last year's lows. so what's been driving this turnaround? and more importantly, could the thing have more room to run? before we can understand the recent rebound, you need to know what derailed alliance data stock a little less than two years ago in the first place. the roots of this sideline go back to september of 2014, when the whaen the company shelled ot $2.3 billion to acquire a company called conversant. that's a digital marketing firm. the idea is that conversant would beef up the marketing division, making the company better personalized advertising. how important is that these days? and resulting in a major boost to the company's earnings over the following couple of years. now fast forward to july of 2015, and the stock started getting slammed after alliance data reported a seemingly good quarter that nonetheless had real problems under the surface. the issue, epsilon. that's the name of the company's marketing business, and it saw a

major deceleration. with its growth coming in at just 4%, management had been forecasting something more like 7 or 8%, really blindsided everybody, even worse. the conversant business they had just acquired saw its sales decline by 9%. alliance data tried to suggest that this division would start to ramp in the near future when the company reported in january of last year, but then it got hit with a whole host of new problems. while the conversant business that they paid so much for did improve, growing at a 6% clip, that's a nice term, the company's other two divisions, private label credit cards and loyalty programs saw some softness versus the previous quarter. it was kind of a one step forward, two steps back moment. even worse, alliance data said it expected more credit losses going forward. management told us that their ka canadian business was struggling. in response, the stock plummeted 19% in a single session, falling from $247 down to $199, a bloodbath. and it kept tumbling over the next couple of weeks.

no floor. the key tenant of the bear thesis is that alliant data systems turned out to have a lot more risk. we thought it was a credit card company and a rewards company. the majority of its business comes from issuing these private label credit cards, which means they're actually lending money directly to millions of people, like america's best or capital one. if the company acts like a bank, the bears say its stock should trade like a bank, meaning it should sell at a substantial discount. the banks have run dramatically since the election, but still pretty cheap on an earnings basis. however, i think that perspective, fundamentally misunderstands the real power of this story. alliance data gets 32% of its sales from epsilon with, the targeted marketing business and another 20% from their loyalty one division, where they help other companies run the rewards programs. while the marketing business had some trouble earlier last year, it's been a recovery of late. alliance data has cut costs aggressively. in a world where more and more advertisers want measurable

results, that's a very good thing. plus, i really think there's something to the idea that alliance data is more valuable, because it can take the information from all those private label credit cards it issues and use it to guide their advertising offerings. that's not something you get a typical credit card issuer. sure enough when alliance data reported are its most recent quarter two weeks ago, the bears got smoked. the company posted a nice top and bottom rhine beat and the stock vaulted more than 8% in response. more important, it looks like business is really good. epsilon, that marketing division that hurt so bad, saw its revenues increase by 7% year over year. they finally have gotten past the problems from the conversant deal. at the same time, alliance data's private label card division is totally on fire, up 22%. credit losses are expected to be flat for the full year. there goes that bear thesis. you might think a business that relies on retailers would be in trouble, companies had a lot of success expanding into all sorts of digital channels, and that's where the consumers are spending their money these days. in fact, alliance data has made it easy to apply for the retail

customers to sign up new card members online. the application process only takes a few key strokes. finally, management said their loyalty program business should pick up speed in the second half. that would be every cylinder. put it all together, and this is one of the strongest quarters from alliance data in recent memory. for the first time in more than a year, it feels like company has all its deduction ucks in a. and it sure didn't hurt they announced a $500 million buyback on top of the buyback from last year. people have a lot of trouble figuring out how to buy this one. is it a bank or a marketing company or an analytics play. alliance data else for less than 12 times next year's earnings. however, when you consider that alliance data has a 12% long-term growth rate and we're back to that average growth race, that's much better than america's best at 7%. well, what the heck? it's clear this is a cheap stock. throw in the fact that alliance

data's credit card division alone had some of the best growth in the industry, and i think it's worth buying for that business. the improvement of the company's loyalty and marketing segments, they're icing on the cake. here's the bottom line. yes, ads, alliance data systems has come roaring back from its lows earlier last year, but the worries that crushed the stock back then turned out to be overblown. i think this wildly misunderstood stock could have a lot more, not a little, but a lot more upside. stick with carole! looking for balance in your digestive system? try align probiotic. for a non-stop, sweet treat goodness,

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. no, with i don't want you to sell facebook. i told you this would happen. it ran up and then for a couple sessions, it goes down. no need to pull the trigger tomorrow. you're going to get another chance. this is an official sendoff boo-yah and our last show from our west coast home here at one market. i want to thank you all for another powerful week and boy, i just love it here! as i like to say, there's always a bull market somewhere and i promise to try to find it just for you right here on "mad money." i'm jim cramer! see you tomorrow!

okay, let's go. find your awesome with the xfinity x1 voice remote. that's amazing! where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ a stay-at-home mom who began her business in order to support her family. ♪ my name is kiersten and i live in los angeles, california, with my husband and my 12-year-old son and my 8-year-old daughter. i left my job to stay home with my kids, and then my husband lost his job, and so we desperately needed something to help pay the bills.