>> dan >> what is this call time? is it 4:45. >> it was 45 minutes earlier. >> last night it was govt and i'm probably a sleofelr [ inaudible ]. >> 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 welcomed to "mad money" and welcome to a special san francisco edition of cramerica other people want to make friends. i'm just trying to make you money. my job is not just to entertain but to -- call me at 1-800-743-cnbc or tweet yes @jimcramer. we love coming out here to'll

cal to find out what we're missing back in new york every time i do it i make a point of speaking to at least 20 ceos some of that is because i'm completely crazy because it's my job, though, to explain to you what's happening. so first i need to know what's happening myself it's discipline and it's rigor and it's always better to be informed than to be ignorant because in this business information, not ignorance, is bliss. i know it's going to be hard for some of my twitter followers but it does -- bear with me. at the conclusion of four brutal days that coincided with sales fars's dreamforce festival, the stupid nasdaq tumbling another 1.37%, what have we learned here let me put it in the confection of events away from tech first i made a point of asking everyone, i mean everyone, whether they were having any trouble attracting talent to work at their enterprises. i got a very unified answer. absolutely not i mean, like just plain no

last year there was brutal competition for workers. now they can find people easily. both in sales and in software development. and by the way, in service even if you're talking about a restaurant this shocked me because last year coming out of the pandemic good salespeople were hard to find and unemployed computer scientists were practically an engaged species. now that whole dynamic has reversed out here and there is genuine fear of joblessness. some people i spoke to at a red hot chili peppers concert, i remember that name, weren't just worried about their jobs they were actually worried about their companies. i was worried that i didn't know the lyrics others wanted my help finding work man, it's late when you're asking me for help finding work. anyway, what a difference less than a year makes. this morning on "squawk on the street" david and carl asked me if i was concerned fed chief jay powell doesn't know all this and he might press too hard on a severely weakened economy. i said absolutely not. i don't want anyone to lose

their job but i know the fed needs to stamp out inflation, especially wage inflation, and at least out here in silicon valley that process is playing out exactly how powell wants it. what's bizarre is if we do go into a recession the epicenter will be here in san francisco where so many new companies have been created creating too much demand for labor, demand that's now vanishing rapidly. second, there's an overriding sense of indispensability of these products or at least claimed indispensability. a belief in the necessity of the technology most everyone has a story of why their product will have to be bought by customers because the clients will have no choice if they don't want to be left behind versus their competition. i want to give these guys the benefit of the doubt, but in almost every single case i believe the indispensability thesis is exaggerated. for example, it is better to be in the cloud than in old-fashioned on premises systems. everybody knows that, right? but you're not going to go out of business if you don't make the switch for the companies that help get you in the cloud or make it better, i think their clients

could easily defer making that move man even by a year, maybe even two. because there's a real cost for migrating now. for a company i helped found it cost $2 million to make the switch to the cloud from the on prem which wrecked the quarter and the analysts didn't understand the necessity. and the stock almost got cut in half it seems indispensable until, well, it isn't because business is so bad. so companies are making chips for self-driving cars and we know that's the future but what if it's a different future, it's not something near term, it can be deferred anything in test mode won't make you a lot of money it's a dead weight loss, could cost you a lot of money and few companies want to spend that kind of cash in a bad economy. they're frozen some companies are still tainted from covid they had businesses that overearned during the depths of the pandemic like the gaming companies, which peaked as the world went back to normal. this was hard to tell at the time because we didn't realize how quickly our country would morph from a goods and services economy to a mostly service with far fewer goods economy because

we wanted to go places this is what i call the nine wedding thesis they've got nine weddings to go to that were deferred. so the pendulum has gone from solid growth in gaming to an actual retreat in gaming, which has been very tough on chipmakers like amd and nvidia at the same time, though, genuine indispensability doesn't seem to matter skyworks solutions came here, made chips essential to cell phones marvell essential to computing and 5g nobody cares how do we explain that because they're trading in lock-step with the semiconductor sector thanks in large part to the proliferation of the sector-based etfs that the brokers love so much you can have great news from an individual company like we're seeing from marvell, and i know it is great news, or from skyworks and you know what it means nothing. these fantastic growth stocks sell at ever shrinking price to earnings multiples because they're the best houses in bad neighborhoods. the same goes for many of the cloud companies. some of them are doing just fine, but they'll never get the credit they deserve in this

environment because the whole group has gone out of style. i also learned this week that if there's any true indispensability out there it comes from the abundant talent pool located here. i managed to pull off -- this is a great honor. with mark tessier levin. he's the president of stanford and we managed what makes the best of the best come out here to stanford. a big change from when i was going to high school he talked about learning, the joy of the campus. i know sometimes people think that's par for the course in higher ed. but we never had any of this stuff when i went to harvard in the '70s we went to the new research hub of johnson & johnson earlier this week. it was quite evident there's a ton of talent coming out of stanford and ucsf as well as other schools. it's an insanely good research institution at ucsf. i love it. nothing the fed can do, nothing can change that, thank heavens speaking of fed as much as jay powell can impact all these companies negatively, and he can the best ones have the ability to reinvent themselves on the

fly. salesforce.com, the host of dreamforce, is the best example. for a long time salesforce grew aided by expensive acquisitions that often did pay off yesterday co-ceo brett taylor told me the focus was profitable growth and returning capital to shareholders holy cow the company raised its growth forecast, reiterated its target of $50 billion in revenue by fiscal year 2026 despite now having an additional 2 billion in foreign exchange headwinds. and also committed to returning 30% to 40% of the company's bountiful free cash flow so the $10 million buyback the company announced in august, its first ever, might be the first of many such programs. what a change. if you've been selling the stock of salesforce, it tells me hey, maybe you ought to rethink what could be be an ill-advised strategy look, we are in a tough moment i have not denied that from day one. as i've said multiple times, although almost no one seems to believe me, the fed wants the price of all assets down, including your homes and your portfolios jay powell could only do that by

making it more expensive to borrow money that's exactly what he's doing bottom line, while some of these tech companies have business alliances that may be somewhat immunized against higher borrowing costs, they are few and far between out here regardless of what people might say about their own indispensability terrific companies, great products, but not as much immunity from the hardship as many of these ceos seem to think. all right. let's take calls let's go to jackson in illinois. jackson! >> caller: hi, jim thanks for taking my call. >> of course >> caller: with heightened geopolitical tensions what is your outlook on raytheon technologies >> i'm going to see you and raise you one better i think raytheon and lockheed are both fantastic these are the stories right now because we can't make enough weapons and we need to give the weapons to other countries so this is one of the few bull markets out there. i always end the show by saying there's always a bull market somewhere. it's in defense. eric in tennessee.

eric >> caller: hey, jim. thanks for taking my call. >> oh, thank you, eric >> caller: my question is in regard to dick's sporting goods, ticker dks i currently own shares of this company and i really like the management and fundamentals of the stock for some time. the stock has been in an upward trend since june 16th of this year >> right >> caller: looking at the the three-year chart it looks like the chart might even be seth up for the last leg of a reverse head and shoulders pattern, which tends to be bullish. >> lauren hobart, that was one of the three or four best research calls that we've had in retail this year that last quarter was monster good i applaud you for finding that stock and i want you to stick with it. nine times earnings. while some of these tech companies have business lines that might be somewhat immunized against higher borrowing costs in a slowing economy, they are few and far between. even though they hope that's not the case on "mad money" tonight after salesforce completed its acquisition of slack last year, where does the company stand in

its integration? i'm checking in with slack's co-founder and ceo then inflation remains high. but what could history tell us about what's on the horizon? it is shocking and we're going off the charts to find out. have investors found an opportunity or do they need to steer clear for now? i'm talk to the company's top brass. so tastay with cramer >> announcer: don't miss a second of "mad money." followed @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.

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as we wrap up our coverage of salesforce's annual dreamworks conference i'll take a closer look at a business they bought last year it's called slack. popular business collaboration platform they spent 27.7 billion for this asset. and since the deal closed they've worked hard to integrate slack's technology into all of this core platforms. the idea is to bring in everybody relevant to sell you a product or a service so they can all congregate together op slack and work to give their customers the best experience possible good idea in theory. how does it play out in practice let's check in with stewart butterfield, the co-founder and ceo of slack, now a division of salesforce mr. butterfield, welcome back to "mad money." >> thank you for having me, jim. >> when i mentioned it the first time, i'm all fired up because i'm a big user of the product. it seems like now it's a combination of it can be legion, that's not an insult, but it also seems to become the de facto non-teams way for people

to coordinate. and in has happened incredibly fast from the first time i met you. >> he yes. we're over 200,000 customers now. whether that's smbs around the world, some of the biggest companies in the world we've had five consecutive quarters of 40%-plus growth, 100,000-plus customers there's a little bit of a tailwind that comes from salesforce but there's also a cost of integration. so i think there's more up side to come. >> brett taylor made clear to me the acquisition has already paid off, gross margins are higher, did not interfere one bit with the target -- of 50 billion. if anything, it's integral to reaching the 50 billion. >> yeah. i don't want to take too much credit for that because obviously salesforce has been on a 20-plus year run of just like kind of amazing topline growth 31 billion this year past s.a.p. coming in on oracle. and oracle's got a 20-year headstart. no one else has ever accomplished that. i think we'll contribute but obviously there's a big effort

>> you introduced a couple product. we know people are already using slack canvas and we've got huddle i want people to understand that a conference like dreamforce, i know marc would say he'd hate the term conference. because it's much more than that >> festival. >> festival. you get to show off these products there are people who are wowed and people who say i've got to get off my current system and move to your system. >> yeah. and i met with customer after customer after customer yesterday. it is quite an impressive machine that we've got here. and there's a lot of excitement. if you'll indulge me for just a second >> i invited you on. so consider yourself indulged. >> thanks. go back to march 2020. popular universe like speculative fiction we could all keep going to the office, commute, use conference rooms, business travel, but you took away the software every large enterprise would have just disintegrated. they would have lasted 24 hours or something like that the reality was we took away the offices and people continued

so this is not a militant anti-office position at all. but it is a recognition of the importance of that digital infrastructure that supports productivity and collaboration, which at some point in the last 30 years or something like that really inverted the importance of the physical hq and the digital. so i think what we're starting to see with customers is a real realization of a-ha, there's a lot more possibilities, it's much easier to reconfigure a digital hq than a physical one and kind of reimagine how work gets done, organizational design, process, work flow, everything >> well, look, i worwork from h work from anywhere would be made for slack. i know you're not this greedy son of a gun but the fact is this business if it weren't for the bear market is worth a lot more now than it was then. did you ever think that there could be a world where people are out like salesforce, that

they're criticize for not coming in enough by local townspeople, that this would be the ideal thing, this is the way people communicate. >> yeah. i mean, honestly, we're slack and we were 1 1/2% or 2% remote work before the pandemic and if you asked me in february of 2020 could you just switch the whole company to working from home like that and maintain the same levels of productivity i would have said no being honest, right? but when something you thought was impossible turns out to be possible you've got to ask yourself what else is possible >> i did a poll on twitter about who liked teams more or slack. i thought it would be 80 candidly i thought it would be 80% slack, 20% teams. i was surprised. there was about 45% teams. how do you get those people to realize, in your mind at least, the sales pitch, that it's better to be at one -- it's better to be on slack than teams? >> you know, honestly, for our large enterprise customers almost 100% of them are microsoft customers.

of those almost 100% are office 365. and of those almost all have teams. and we just co-exist alongside and our success the at the large -- you know, at the high end of thing market, it's like 7 of the top 10 telcos in the world, five of the five big retailers in the u.s., the largest issuer of credit cards or financial services, health care, manufacturing. i mean, obviously media and technology because that's where we got started people just use slack and teams alongside one another in the same way that we at slack the company use slack and zoom they use teams for voice and video calling and they use slack as their digital hq. >> if that's the case when you add something like huddles, something like canvas, these are really powerful. i knew quip from brett taylor. when you layer these on, then maybe it's not as homogenized. they're very different could these be difference makers for you? >> i think they will be. and it's funny just looking at salesforce the

company. they use google meet, a little bit of webex, zoom since we turned huddles on internally 34% of their meetings internally are on huddles. >> how long did that take? >> six weeks, seven weeks. something like that. but here's the cool thing. is the average huddle is ten minutes long whereas the video call is like a fixed unit -- >> say it's going to be a half hour zoom call, it's a half hour zoom call. >> and you just do it now. we've got to talk about this, i press the button it goes to exactly that group of people everyone gets on the call. and now it's not like we have to wait until next tuesday at 11:30 to get this thing done on the books. so it both moves it to a more immediate cycle and also shortens the amount of time. also more serendipitous and spontaneous conversations. >> for those of us who don't have it when we hear it we all wish we did. we all know the flaws, the meeting goes on too long, we also know there has to be someone who puts it together and we also think it's bureaucracy and you eliminate like you did

when you started, you eliminate the bureaucracy of work. which is something that marc did from day one and i think that's why you guys are great partners i want to thank you. stewart butterfield. he's the ceo and co-founder of slack. and we still call him that we're not saying he's a vice president of salesforce. but you could end up being that too. thank you very much. >> thank you >> announcer: coming up, can ease of hiring drive this market higher cramer labours for the truth off the charts next

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right now everyone's terrified of stubbornly high inflation. and more important, the damage the federal reserve might have to inflict on the economy. this is the story that controls the entire market. you know it. i know it. especially after yesterday's fed meeting where jay powell hit us

with another 75 basis-point rate hike he made it clear that he'll win this war by any means necessary. so tonight i want to put this dilemma in historical perspective. everybody knows that persistently high inflation is awful for business long term everybody knows when the fed slams the brakes on the economy the near-term earnings estimates need to come down, possibly dramatically that's why the stock market has been so horrendous this year but what exactly does it mean for the market at this point in the business cycle i think the only way to understand this environment is to hop in the way back machine with mr. peabody and see how similar situations like this one have played out. that's why we're going off the charts, with the help of larry williams he's that legendary technician i talk about he's also a market historian who's been the number one expert in the space since i was in grade school larry's written over a dozen books and created a host of proprietary technical indicators which you can find by going to a really cool website of his called ireallytrade.com. and what really matters, though, is he's got a tremendous track

record, especially over the last few years. remember he made that bold bottom call in april of 2020 when everybody in the business was saying that we'd be in covid lockdown endlessly larry told us the economy would start going back to normal by midday he was absolutely right. it was a tremendous buying opportunity. among many others he's given us. what does williams think of the current inflation situation? he thinks we need to judge the current moment against the last few times we've faced extreme inflationary pressures the analogs so to speak. it's been a long time since we've had persistent mid to high single digit inflation since alan greenspan's crackdown. before that we had an extremely long horrible bout of inflation in the late '70s and early '80s, where then fed chair paul volcker had to wreck the economy in order to get things under control. and then going back even further, inflationary shock in 1973 to 1975 that was fueled by the first big opec embargo

when you look at these three analogs, williams has spotted patterns or cycles to these bouts of inflation he thinks it's very illuminating to project that cycle onto the present moment and see what it might tell us about the future i think this makes so much sense. so take a look at this this is a current fed sticky price, consumer price index in black. okay as compared to the big burst of inflation in the late '70s and early '80s and that's in red. williams points out that the current trajectory of sticky price inflation has hugged this historical pattern incredibly closely. isn't that incredible? come on, you have to admit, that's almost a perfect correlation. when you measure the present versus the horrific inflation in the late '70s and early '80s, this pattern puts us roughly into 1980. back then inflation soared before peaking out and it did peak out although it had some more spikes. the peak was in 1980 if this peak pattern continues

to hold guess what, williams thinks inflation is headed lower. to me that makes sense speaking as someone who lived through it. central bankers had no idea how to beat inflation in the '70s. they were totally at sea then paul volcker came in, hed chief, hit us, boom, with a series of ruthless rate hikes. much more ruthless than they'd needed to be if they acted aggressively a few years earlier. sound familiar today unlike back then the fed knows exactly how to beat inflation and jay powell has shown he's willing to bring the pain that means it should peak sooner next let's look at the same sticky price cpi number from today versus the early to mid a&e. '70s in red. williams points out it's very similar to what we had back then again, i'm talking about perfect correlation. it's almost eerie, isn't it? he says the current inflation action looks very similar to where we were in 1974. and 1974 was the peak. two peaks. after that we had a few years where inflation moderated

substantially before again exploding in '79, which was on the large chart i showed once again williams notes that inflation only tends to persist for so long before it burns out. despite what you hear about in the media. although how we get there varies by time period finally, how about the last major bout of inflation we had in the u.s. back in the late '80s and early '90s? once again we're comparing that period in red to the current moment in black. and sure enough the cycle from 30 years ago, 30-odd years ago, seems surprisingly similar to what we're going through now and look what happens. williams thinks it looks a lot like we were in 1990, right before inflation came back down with alacrity. let me give you one last chart really kind of incredible. this takes a look at the pro shares inflation expectation etf. yes, the rinf. rinf for all you home gamers williams points out this was a good leading indicator for inflation on the way up. so it's important to recognize that this etf has stopped going

higher definitively stopped going higher in fact, williams is such a believer in this thesis that he's actually shorting, shorting this shorting the inflation's expectations etf, shorting the rinf here's the bottom line the charts by larry whimz suggest inflation could soon cool down substantially. soon if history's any guide honestly it wouldn't surprise me we don't give the fed enough credit for slamming the brakes on the economy, and you think we'll soon start to see the impact of jay powell's decisive action that's good news for the stock market long term even, yes indeed, if it hurts in the short term let's take questions let's go to eric in pennsylvania eric >> caller: hey, jim. thanks for taking my call. >> of course thank you. >> caller: wanted to get your long-term outlook -- and see how you compare it to generac. >> i think what matters in enphase is if you were to speak to president biden and he were

interested in stocks, know previous to this he was urban, t -- he was not but this would be the stock that most korcorrelats to his policies. jacob in north carolina. >> caller: hey, jim. thanks for having me on your show >> oh, fantastic thank you for calling in i know it's a tough market we'll work it together what's going on? >> caller: yes, sir. my question was about visa's stock. i mainly bought it for a trade to be honest because it was trading toward the bottom of a channel it's been in for the better part of a year. but my question was if we're going into a global recession do you think the increased fees they have will offset the decline in volume or -- >> no. no, i do not and that's why i think that the price to earnings multiple at 29 is way too high and i don't think you should own this stock right here by the way, mastercard just broke 300. that was rather shocking mastercard just got even faster growth, and that one has no defense.

let's go to armando in california -- armando. >> caller: boo-yah, mr. cramer long-time viewer since "kudlow & cramer." >> wow dating me. what's up? thank heaven for makeup. >> caller: yeah. my subject is crowdstrike. i own crowd since early 2020 and i sold some with a decent profit my question to you is should i buy, add more to my position, or should i hold given the economy we're in and the rates going -- >> the multiple here is 120 times earnings that's very expensive. palo alto is much cheaper. and they're both great companies. so that's my compare head to head all right. look, if history's any guide, the charts suggest inflation could start cooling soon no one thinks that because of powell's action it might hurt stocks short term like we saw today but good for the market long term and it could be happening quicker than

we think much more "mad money" ahead including my exclusive with a company called spelunk could this beaten down data player be worth a second look? i've got the ceo then i'm cluing you in my takeaways from my time spent out west and all your calls rapid-fire in tonight's edition of the "lightning round." so stay with cramer! at ameriprise financial, our advice is personalized. based on your goals, whatever they may be. all that planning has paid off. looks like you can make this work. we can make this work. and the feeling of confidence that comes from our advice? i can make this work. that seems to be universal. i can make this work. i can make this work. no wonder more than 9 out of 10 clients are likely to recommend us. because advice worth listening to is advice worth talking about. ameriprise financial.

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the cloud software stocks just keep rolling over you've got to wonder if the better ones might be getting too cheap to just sell here. how about -- take splunk

this stock has been cut in half since last november. it's trading at its lowest level since 2017 but it's such a better company now. some of this has to do with a lengthy business model transition going all in on software as a service. the latest quarter was noisy good headline numbers but also lower guidance for the metrics wall street cares about, the most for cloud companies like annual recurring revenue but we'll get in on that this stock's down a quick 11% since we last spoke to them and that was less than a month ago there have been some interesting developments in the interim. let's take a closer look with gary steele, president and ceo of splunk who knows more about how the company's doing. welcome back in person to "mad money. >> it's great to be here, jim. >> it is great to see you. >> great to do it in person. >> and i've got to tell you, i know that you're -- i'm the stock guy. you're the business person but i just want to get a sense, you are a very good business person is your business losing value at the same pace your stock is losingvalue? >> absolutely not. so one of the things i've seen in all the customer meetings

that i've done in my short tenure with splunk is we're so mission critical the security environment's incredibly challenging we're helping customers drive and improve security posture in this very uncertain geopolitical time and in addition to that we're helping organizations drive resilience in their applications helping them ensure that those applications stay up and running. those are some of the most important things going on in companies today. >> now, are you using your cybersecurity background to be able to make it so that splunk's got new customers or how about maybe using some allies? >> we are definitely focused on sieber and really getting close to those buyers because we think there's tremendous opportunity there. and we think in particular we're dealing with a tough world right now. and i think all organizations are on high alert. and i think we all need to be thoughtful about what could happen next. and the great thing is splunk is the underpinning of the security operations helping them understand what's happening and

how to remee mediate it. >> i've been thinking defense because of what's happening in ukraine and cybersecurity are two areas that the fed cannot slow down even if they wanted to they can't slow the bad guys >> no. the bad guys continue to win right? we see it every day, where bad guys are winning against different kinds of organizations. so one of the great things again that splunk can do is have the visibility they need to understand what's going on in their environment. >> there are people who are great investors and i've always felt that hellman friedman, tremendous investors they've come to you. the first thing you did was -- i really applaud this. because they're so smart you said you wanted them inside the tent now, what does that mean and are they being helpful >> yes absolutely i'm super excited to have the opportunity to work with the team from hellman. they're great investors. they entered the stock earlier in the year. and we've worked them to get them inside the tent what's that mean we signed an nda with them

so they get inside information but that also means they can't trade the stock. so they have a standstill. and they'll be voting in the company with a voter agreement these are helpful things in addition i get to take advantage of their great operating experience they're basically extended team that help us get stuff done. it's great >> i'm going to ask a question that would be obvious in any industry other than wall street. why don't other people do that why didn't you just say listen, go find someone else, i'm not your guy >> what do you mean, jim >> well, why didn't you just say i don't want you i don't want you inside the tent, want you outside the tent? >> i view them as an incredible partner. they're super smart, super sophisticated and they have great operating experience i'll use that help why not? i think collectively we can drive great skral yue for shareholders >> i'm glad you say that because some people would say i don't want anyone in and yet i see people like these guys i think wow, this could be terrific, they're so smart i don't have to pay them >> and we've had silverlake in the company and we have a board

member from silverlake and they're running some great projects on my behalf. i will take help every day because we can deliver great shareholder value as a result of those efforts. >> so let's talk about the share repurchase for so long when i had a great company in a portfolio i didn't want share repurchase. but we are no longer in that kind of market we have a market where your stock might be your very best investment are we there with splunk >> we'll be thoughtful we did some repurchases earlier. we'll be thoughtful about that and how we use the cash on our balance sheet. we want optionality. there's going to be great opportunities over time from anime mai perspective. but how we think about how we leverage our balance sheet that will be something we spend a lot of time thinking about >> how about hiring? i think it's got ayn little easier -- >> it's getting easier >> isn't that something? >> yeah. >> is that because there are companies that can't make it because they can't raise more money, or is it because people are uncertain and there have

been layoffs how come it is easier? >> i think there's a number of factors for us i think one, people are now starting to see the power splunk again. and we see a ton of boomerangs, people who have left splunk want to be splunk err whys again. and the market, there's a ton of uncertainty out there. as a company that's not growing fast, generating cash, it's a great place to be. >> it wasn't uncertain there were people who just job hopped and each person keeps making more and more the uncertainty comes when you'd rather stay and develop within a company i think. >> and it's on us to help individuals manage their career at splunk, have them have great fruitful careers where they grow and develop. >> there are other companies in your area and i'm always trying to figure out how splunk can have the big base that it needs, it can have the scale. but you have huge customers. and a lot of people don't understand, you have major,

major companies. d just give me a use case. >> yeah. we have a large -- i'll put them in the retail category they're an organization that in just almost a ped abyte a day. a pedabooift yte of data. >> i read that and said i've got to ask him what that is. >> all oursystems are delivering data that gets consumed into splunk where you can do date avenue analytics is there something going on with that application if there's an application failure. so the underpinning of their environment to drive resilience is the data that links in spelunk. and it takes a lot of data to do that that's one of the ounique capabilities of splunk is at scale we can deliver amazing results that are hard to achieve with other production. >> how quickly could someone put a query in that and have it come out in a valuable form >> immediate >> immediate >> yeah. >> and what would have been say

before splunk was doing this >> it wouldn't have been possible >> you wouldn't have bothered to do it because it wouldn't have worked >> that's right. >> i can't think of any business that has any scale that doesn't need that. >> i think it's particularly drew in security where you want to keep all kinds of information. things like access logs. people want to know who logs on and was it jim who lotgged on or someone else >> we're in a tough moment because as you said your stock and your company have kind of diverged out here. but that's what i've found out here, great companies diverging with stocks that aren't as meaningful as they used to be in stermz of price. thank you so much. gary steele, president and ceo of splunk and has made our viewers a ton of money "mad money's" back after the break. >> announcer: coming up, cramer takes your calls and the sky is the limit it's a fast-fire "lightning round. next

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it is time it is time for our last san francisco edition of the "lightning round" for this week's "mad money. we laughed, we cried, we did not sleep. what a trip. the "lightning round" is where i take your called rapid-fire -- until you hear this sound and then the lightning round is over are you ready, skee-daddy? ken in ohio. ken! >> caller: jimmy i've been a follower since your take the money and run radio days okay >> holy cow!

you remember that? that's 25 years ago. >> caller: and an investment club member. >> thank you you know we're doing our best every day. do you like the morning meeting? >> caller: yeah. i listen to the morning meeting every day. but you've been a little down on medtronic. but my son works for a competitor and says they have innovative products. what do you think of boston scientific >> your son has got horse sense. p some of the products that are coming out that are obviating the need for some very -- let's put it this way. i've worked and seen doctors with their stuff it is breakthrough bsx is a much better company than medtronic i thought i'd never say that, but it absolutely is now let's go to bob in florida bob. >> caller: boo-yah, dr. cramer and thank you for taking my time >> thank you, bob. what's going on? >> caller: question about a stock. i've owned it for two years. i sold more than half of -- i sold half of it when it more than doubled now it's at a 52-week low but it's still 80% over what i paid

for it but the dividend is over 6%. should i buy it back to get the dividend it's dow inc. is the stock >> no, don't buy it back we're not going to reach for dividend dividend is not helping us right now. it is not stopping any stock from going down, whether it be verizon, whether it be att, whether it be dow. like the company very much, jim fitterly but you do not need to buy more dow it's just not right. i need to go to steven in north carolina steven >> caller: boo-yism, jim >> what's up >> caller: i'm a 29-year-old hybrid investor seeking your thoughts my two-part question is what is your outlook on occidental petroleum and what do i need to do to get back on air with you >> well, here you are. occidental is a very inexpensive stock. i'm overweight in oils when it comes to my charitable trust i say you can stick with occidental and welcome back to the air. i need to go to josh in north carolina >> caller: cramer, my man.

wh p. >> what's going on, josh >> caller: so good to speak with you, brother about a month and a half ago sofi, i purchased a considerable amount of it two days later i walk in the door, "mad money's" on, you're talking sofi what had happened? what happened? >> it's at 5 bucks but remember, the president -- the moratorium and then of course the break on student loans. but that should not be deterdete deter determinant. and this stock is too cheap. and i'm telling you when i look at it that anthony noto, the he ceo is going to make you money if you buy that stock at $5.36 now i'm going to bernie in west virginia bernie >> caller: hello, jim. great big mountaineer boo-yah to you this evening wild, wonderful west virginia. >> great gorgeous there. what's happening >> caller: just to the point, jim, e.t energy transfer partners

>> my old boss lee cooperman said the other day he thinks nrv transfer is good he likes kelsey warren i like pipelines and that concludes this edition of the "lightning round" >> announcer: the "lightning round" is sponsored by td ameritrade coming up, nvidia has a history of reinvention so why does it look like a falling knife? cramer digs deep for answers next thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts

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stock price equals e times m. the earnings times the multiple. that's how wall streeters do the arithmetic that lets them decide what to pay for a stock. the equation determines everything the multiple falls first then the earnings come down later. lots of people ask me how do you come up with a target for where a stock can go i always say it's as simple as multiplication first i try to figure out what a

company can earn that's the ee. then i try to figure out how much i'd be willing to pay for that e that's called the multiple or the m now, this isn't as easy as it sounds typically the company forecasts its future earnings. so figuring out the e part of the equations isn't that difficult. in a normal economy. as for the multiple wall street pays more for companies with consistent growth that will keep putting up the same numbers even in a slowdown. we call those secular growth stories. but what about the cyclicals, the boom and bust companies where the earpings tend to rise and fall with the rest of the economy or some other cycle? those tend to fall apart when the fed starts hitting the brakes on the economy like it's doing now. first the earnings hang in there but people start paying a lower multiple for them. because they suspect it will have to come down. then there's a sharp falloff in earnings and stocks have another leg down that's what's playing out right now on your screen when recessions come it can be cut in half or worse, hence the mad dash out the door right now as investors try to get out ahead of the slowdown.

let me give you an example we've had cleveland cliffs on the show several times, classic steel company. when the economy was expanding, their earnings soared. they soared so rapidly the estimates couldn't even keep up. at the same time wall street was willing to pay more for those earnings, a higher multiple, m, because money managers love growth and there didn't seem to be anything that could slow that one down but at a certain point big money managers get concerned that the economy is growing too fast. not cliffs but the economy and the fed will take action to slow things down and that's when the multiple starts to shrink even as the earnings still look strong the m falls first because the m is the -- determines the price of the stocks where it's going to settle. how low it's going to go the process drives people crazy. they can't understand why their stock is going down when the underlying company's making so much money but the multiple's all about forecasting the future now when the fed's raising interest rates like mad as they are the actual earnings, not just the multiple but the earnings come down, and that's

what causes the second leg that we're experiencing the m falls first, then the e follows. so cleveland cliffs went from making no money in 2020 to making five bucks per share in 2021 people were willing to pay about 7 times earnings stock went to 34 then as wall street started to worry about a fed-mandated slowdown investors started to pay less and less for the same same earnings until the stock dropped to around $20 in june, even as the estimates stayed the same of course the estimates were wrong. they were too high and eventually they started coming down too. and that's taking cleveland cliffs down to $14 as of today when the multiple collapsed earlier in the year, it was a sign the future was about to get ugly and now that ugly future has arrived in the form of lower earnings numbers i don't know where cliffs is going to stop. everyone accepts that the risk -- it's part of -- it's a steel company for heaven's sake. but how about the semic semiconductors now, normally these are growth stocks often as steady as colgate or general mills. except for they grow much faster and they can add dramatically

higher price to earnings multiples. right now the fed's constricting the whole economy and the uses for semiconductors are being choked that's how something like nvidia keeps rolling over first the multiple shrank, now the earnings are shrinking we own it for the charitable trust and as you might have heard at this morning's meeting we did at 10:20 i believe nvidia is too pricey at 35 times earnings i think the earnings projections for $4 a share could be in jeopardy, too high, because of too many inventory of what are known as cards, older cards. right now the stock has become a falling knife because of this process. i'm not sure where it stops because i don't know how much nvidia will ultimately end up earning and i don't know what to pay for those earnings until we get more clarity i think you can keep going lower so why hold something like nvidia then? why not get rid of it? because i believe in the business and i believe in the management nvidia has a history of reinvention and i think it can ultimately make its earnings go much higher. when things turn it will start getting a much higher multiple too. we just don't know when that

term will happen which is why i think it's a hold for the moment i wouldn't be a buyer here the p/e is still too high. but at the same time i think we're getting to the point where it is indeed too late to sell. 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 "the news" with shepard smith starts now trump telepathy. if he thinks it, is it so? i'm shepard smith. this is "the news" on cnbc former president trump tee fends himself over documents he says he declassified >> you can declassify just by saying it's declassified, even by thinking about it. >> why his lawyers haven't filed with the court that process. >> it doesn't have to be a process. there can be a process but there doesn't have to be. >> we'll sort out what's legal. russians protest putin and flee the country after his demand the