you're a pro you're not feeling great, but you came here to do cnbc's "fast money. that's the ohio in you >> you know it >> ibm i thought the quarter was pretty good as people rotate out of high growth, they'll get into ibm. >> thank you for joining us and watching >> my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always and i promise to help you find it. mad money starts now. welcome to mad money. i'm just trying to save you some money. my job is to educate and teach you. call me or tweet me. we got what we wished for. that is my take away.

the nasdaq punched 2.05%. well, welcome. for many months now this market has been led by tax. the magnificent seven. the new kid on the block, nvidia. today we saw how things look when these stocks get hammered. the money rotates away. today was a terrible day. what's taking their place, we have giant retailers beaming down healthcare stocks. utilities. these stocks are cheap. i like them. let's start with what triggered the bloodletting

their password cracking down has been working. it seems to have hit a wall. i think netflix. one that later. sell sell sell. elon musk spent huge amounts of money on uncertain projects like self driving cars. i think it's wrong to doubt him. probably the biggest reported a disappointing set of numbers made from semiconductors fallen pc makers. they even question the frenzy for artificial intelligence which is been the most important. many of these stocks trade together and they get hammered together. if you want to diversify your portfolio stocks that represent

great value now you crushed it. many people now believe that the rest of the market something that only does have to happen if they are going to get to the healthy breath it needs. even as i am comfortable it never bothered me. as long as those leaders are terrific companies. i'm getting a little nauseated seen the same stocks go up every day with no information and it has led to a remarkably overbought stock market. i think it is suboptimal. they represent rock solid value. companies do tremendously we are headed for recession. these stocks make sense. they embrace them very inexpensive sectors. let's go over the winners. they care about the future more than the past. travel trust owns a couple of stock which proves much of a win thanks to its amazing diabetes/weight loss drug.

i wouldn't be surprised if this doesn't become the best-selling drug of all time given the scale. today we saw healthcare stocks. johnson & johnson. good numbers and great med tech numbers. they came out to one of the biggest buybacks in the company's history. maybe it'll allow investors/we also got tremendous one-time market darling. the best of the best of medical devices. they've been experiencing one of the worst covered hangovers i've ever seen. a company with the best devices and an amazing baby formula franchise. it's time to recognize. overly punished. they are now too cheap. the recession has been canceled.

the winners here are the big dog at j.p. morgan, wells fargo, bank of america. as well as not great numbers for the future. they are all cheap. they were talking about the ipl market come back. most of retail even if these companies are for the most part excellent performers. it might be almost done. hard to find a stock that's beaned down its targets. costco stocks have been doing better but it looks like they're going to break. dollar general is well. here is one for you. semper. energy infrastructure company in the southwest. it makes so much sense. palpable. you might want to consider pg&e. the well-run california utility. the fires that bankrupted the company a trust representing a victim of those fires is now

one of their largest shareholders and their selling down the position. one that we have featured forever in the show. now it's yielding almost 4%. we even got a rally in the transport. they are breaking out here. my favorite under the radar is kansas city. the company created by canadian specific and putting on the greatest north american railroad. i like it. we don't know the staying power. it could be minor or it could be led by 40% of the market. if it has one good day we returned to the magnificent seven next week i think there is more to this rotation than that. bottom line, tech will be forsaken but it won't come back immediately. i say give it a week. the admission of the other stocks is excellent news to the market. let's hope it lasts. adam and georgia. >> what's going on?

check it out. i had home depot in my bank account for 21 years. i've been rolling with my dividends the whole time thanks to your advice. i'm thinking, is there any way i can find out how much i've made? >> that would be something you have to calculate your self. i'll tell you this, i care more about how much you could make how much you made. home depot is good stock. i like lowe's two. how about jeff? >> i have to ask you a question. i've been looking for value stock. i've been watching about 6 to 8 months. i have about 30 billion in assets. why is that? am i living in reality? >> you are when it comes to stock, but we also care about the other side. the bonds.

the financial, the leverage, the debt. that is too great there. that's why i can't recommend the stock. john in new jersey. >> how you doing? shout out to you and my buddy. >> what a guy. which one? i like the product. that doesn't mean i like the stock. i like the product so much i don't want to on the company. i like that. the admission of other stocks is palpable. let's hope it lasts. we are wrapping up our comeback cc by looking at the winners. tomorrow we are getting rebalancing assets. i'm setting you up for the big event. let's dig even deeper with the company's top brands. stay with kramer

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>> all week i've been taking you through the biggest winners. the cloud software space. everybody is so focused but they wind up ignoring these much larger moves. i've highlighted the software stocks with the most impressive

gains since the bottom searching for names that keep winning. even if the market is harder for tech. tonight i will take you through the best comeback names as of last night's close. that's cloud flare, adobe and z scaler. cloud flare is a content delivery network and an essential part of the infrastructure of the internet. it has a good cybersecurity kicker. during the panic this was one of the hottest on the planet. it served 1373% from its lows in march 2022 at highs in november 2021. then it started tightening and those stocks went out of style and cloud flare was 83% of its value. holy cow. it bottomed last fall. now the stock is at about 80 percent but still down 70% from its all-time high. it plunged from 60 to 40 in may. it's a great first quarter.

we brought ceo on the show a week later and he explained that amanda solid is just taking longer to close deals. i hope you listened to him. he was ernest. the stock is up 50% since then. it's the same pivot to profitability we talk in the other comeback. these guys have been turning profit for nearly two years now but they actually doubled their earnings when they reported first quarter. cloud flare became cash flow positive. i couldn't believe it. these numbers are still very small. whether you see earnings it'll take a couple of years. the stock is expensive. it is an essential platform by its customers. i agree with that. it'll deliver 31% revenue growth this year. i'm a fan. why not wait to find out if you haven't bought it yet? next up there is bill holy.

it is a digital payment play focused on small medium size business. it offers software tool to help these smaller outfits automate their back office operations. these are 89% from its lows while still down more than its peak at the end of 2021. bill holding gave us much more this year. after losing money in 2021 and 2022 fiscal years they are likely to earn in their 2023 fiscal year which is the end of this month. we will find out for sure in august. the cash flows expected to turn positive for the first time. that said, i admit i have been reluctant because i am not sure how necessary their platform is. i've had a hard look at it as a small businessperson. i'm sure it's good. but is it better than what businesses do get from workdays

are one of the payroll processors or into it or maybe even the bank? it wasn't clear to me. you've all heard of this. it's called adobe. of 88%. only down from its 2021 hi. i liked adobe since it transitioned to a subscription business model over a decade ago. that said, it got were positive on this in march when i spoke to the ceo and realized that adobe could benefit enormously right now from the mainstreaming of artificial intelligence. not in 2024 or 2025. i have seen this thing work, it is incredible. it is a regenerative ai tool. it will edit your photos or videos with simple english language commands. some of these same companies and time will at least make

their desires way more productive with how it's being used. firefly helped adobe when they reported tremendous numbers last month. the stock is been 55% since we brought them back on the show in march. i like the club come back stocks. adobe is a mature company. even now the stock sells for 33 times this year's earning investment which is reasonable. that's important because cloud software. you want to go to adobe. i expect adobe is one of the most resilient stocks. these guys may be top-five in terms of generative ai. zscaler. cybersecurity. there up 74% from the bottom. remember those stocks this spring. it was one of the worst players with some bad numbers. the better operators or doing terrifically.

in may. it's even got the following. i think there's a bigger story. they have positive learning and positive cash flow for years. they did become more profitable this year. within this month that is up from $.69 the year before. that's pretty huge. i feel more cautious with zscaler but a particular thing has happened. this company just got hit, i think, while people seem to realize it by big change in microsoft. iker soft announced they are moving a huge chunk of the cybersecurity market. he sounded pretty confident. microsoft won't be able to crush most competitors. however, zscaler is different.

microsoft is a huge sales partner to zscaler. if microsoft goes out it's cybersecurity platform zscaler is likely to be the hardest hit. i go from being friends to being not friends. i'm sure there will be a good story but i worry that microsoft is going to come at them. it doesn't help that they are 100 times earnings. no shame to take some profits here. i know i would. i have an idea. take some profits and go buy yourself a sweater. that's what my mom used to say. of the winners tonight i think adobe is the safest by far while cloud flare and bill holdings is done very well not that it's essential and zscaler is a long time favorite with its biggest partner microsoft turning into a competitor. that's the bottom line.

when you go to this whole new today nearly every one of them is doing much better at the possibility front then a year ago. this industry has changed dramatically for the better in the last 12 months. do not be surprised if some of these cloud winners are way higher even if the nasdaq faces some tough weather over the next four or five days as i expect it to have. mad money is back after the break. coming up, the magnificent seven moseyed into town and now the saloon needs renovations. cramer breaks down the nasdaq 100 new balancing act next.

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saw today. tomorrow night, something big is going to happen to the nasdaq 100. it's not a good thing. it's reason for the tech today although not as fake as the widely panned numbers from tesla. i'm talking about the nasdaq 100 rebalance. it's kind of shocking. i didn't follow it initially. i figured it out with the help of some others. i don't want you to be unprepared. tonight we will go over exactly what happened, what the impact might be and how you can try to profit from it or at least avoid getting hurt. this rebalance is everything you do with the mechanics of the market and absolutely nothing with the fundamentals of stocks. we are going off the charts to learn more. i'm with mark sebastian who spends a lot of time talking about it but he really understands this kind of situation. let's take a page as in just the facts.

what are the facts here? two weeks ago, nasdaq announced a special rebalance for the nasdaq 100. it is made from the largest nonfinancial stocks. the goal? they want to reduce over concentration in the index. they feel like -- it is a small number of stock with extremely heavy weight. you better recognize these names. we are talking about them getting her the magnificent seven. apple, microsoft, amazon, nvidia and tesla. the companies are so good. the stocks have so much value. i understand the concern. 55% of the index and only seven stocks. in fact, apple and microsoft add up to a quarter of the nasdaq 100. that's not representative of the entire stock. after tomorrow's rebalance the magnificent seven should

collect the accounts for more like 44% of the nasdaq 100 at least according to the chief u.s. strategist. we don't know what the new will look like but we have a general idea of what they're trying to do. these changes will take effect monday, but according to mark sebastian it will likely take place tomorrow night just after close. with only an hour or so he expects billions of dollars worth of shares in the magnificent seven will be forced sold and a lot of the sales you saw today were to get ahead of tomorrow's tally. by sebastian's methods close to 300 billion in the nasdaq 100 index. the lion's share of that you know is series 1 etf. this has 209 billion-dollar market. there's a bunch of mutual funds

to track the index too, like fidelity's nasdaq 100 index. put it all together and 300 billion is the rough estimate. it makes sense to me. you hear about these estimates when you are waiting. that is more than $35 billion of selling in an instant. take a look at this table to see. more than half will be in just to stocks. microsoft and nvidia. they are going to be the hardest hit by the rebalancing. sebastian expects them to be hit with $9 billion in forced sales. the daily buy-in to microsoft is seven or 8 billion. we are talking about more than a days worth of by ends all to be sold sales happening after hours in trading. it's a short period of time. that's why sebastian imagines paying for all seven and what you saw some stocks of it today. this is a rebalance.

a lot of forced by ends. they get higher. today you've got texaco, costco and adobe. all seeing the ways increased by 40 to 60 baselines. that's a lot of buying. with that in mind how to you pay for rebalance tomorrow night? sebastian has been surprised there's even more pressure on the shakeup even with today. five of the seven stocks are up since then with alphabet and tesla reported last night down. i decline for both these companies only happens during today's tech sale. you can expect another brutal day for these stocks tomorrow. i told you earlier today, you can't go in and buy these. they have to settle. what could this mean for the major? there should be zero

impact in the nasdaq 100. they are moving money. all the forced selling could have a nasty impact on the s&p 500. the magnificent seven weigh in at 28% of the smp. closed tomorrow to the middle of next week it should be something like 1 to 2% up and five or more percent down. in preparation for nasdaq 100 rebalance it's a good idea to go long with the average. also the nasdaq 100. these are some of the best performers. that's what sebastian has been doing and that strategy works incredibly well today. more importantly, if you have any of the magnificent seven stocks maybe consider taking some tomorrow. nvidia is still up 211%. nobody got hurt by taking something off. i'm pointing it out.

for people who are opportunistic and go in it is not a bad idea. even if you don't want to do any or other preparation for the rebalancing at least be aware of what's happening. don't panic. you'll see stocks part of magnificent seven rolling over. this is just one moment. that's why it could be a buy opportunity for the magnificent seven. if you're kicking yourself for missing the moves on these tech stocks you might get your chance to skip them up at a big discount. i would wait until the middle of next week. here's the bottom line. the numbers interpreted by mark sebastian the whole market could be impacted by the forced selling in just seven stocks. the magnificent seven. sebastian recommends doing some edging or at least taking promise to the stocks that are

about to be hit with a haymaker. this is only temporary pressure. what you absolutely can afford to do, listen up, you can't afford to panic. you'll see the magnificent seven going down and you get to move. it has nothing to do with the underlying companies and everything to do with the mechanics of the stock market. let's take some questions. let's go to tony in florida. >> just last year did real well. 13 to 30. now, at this point, in mike that i am still seeing a short term and long-term. i wanted to get your opinion. >> i'm with you. i think he's done a remarkable job. i don't see any setbacks but i will tell you that he has really pulled away from the competition and we are going into football season. i think they are going to do a remarkable job pivoting to not

start making a lot of money. it's go to larry in north carolina. >> hey, jim. this is larry. i want to know your opinion on kroger. they had their annual revenue of 210 billion if they merge with albertson's. i think it would be a great investment. >> i want to give you my view. i think as much as kroger has expressed and plans make sure there is not too much overlap with any trust. i do not think this is going to pass. all that said, kroger is a good company. you don't need it to buy it. it's a great deal. i'm telling you that the work i do tells me they will not be able to close on that deal. please don't panic if you see some of your magnificent seven stocks rolling over this friday after the nasdaq rebalancing. it's to be expected. if you want to get ahead of that i get it.

if you want to do some buys i would wait until the middle of next week much more ahead. could generative ai be more than a buzzword for a company like s&p? i'm checking in with the ceo after earnings and it looks like we're having one of the post earnings we occasionally get into terrific companies. tesla and netflix. should you be worried? i'll tell you why coming out. this is the lightning round. stay with cramer. i was told my small business wouldn't qualify for an erc tax refund. you should get a second opinion from innovation refunds at no upfront cost. sometimes you need a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

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i'm watching corporate technology like a hawk. for the

past few quarters we heard about an environment with major i.t. investments. overall, not great. are we still saying that or is this the start of relaxing? we got some clues from s.a.p. known as -- on one end they delivered higher than expected sales but on the other hand their club sales came in weaker than anticipated. they trimmed their club forecast. it overwhelmed the good news for the rest of the business including a strong practical use from generative ai. i don't think that's the full story. let's check in with christian to see if we can get a better read of what's happening in the quarter and spending. welcome back to mad money.

>> great to be back. >> we got to do with short-term consideration or long-term. short-term we talked about. longer-term it seems like your business could be more than ever because of all the interest you have in generative ai. maybe you can put things in context. people worry about whether there is something really wrong but the future seems so bright. i want you to be able to explain the dichotomy between now and what could be great in the future. >> first of all it performed really well in the last 12 months. off of this quarter we delivered good numbers. when you look at it our current cloud backlog is up to 25% to 11.5 billion which is the foundation for future client revenue growth. client revenue is growing 22% above our profit is up 28% which is very important to show that we are accelerating our

club momentum while we are super profitable at scaling our cloud business. you are right. long-term ai allows s&p to give our customers high productivity as our systems will self automate our customers or they will also help with supply chains without taking any hits on profit as we are having the mission-critical data with generative ai technology to give our customers this recommendation. >> i want people to understand your german company but it's rare that i ever see a company do the resource planning without s&p. halliburton count on you to be able to give you money which pays back very quickly. that's ridiculous. how do i give a company like s.a.p. money and it pays itself back? maybe you can describe to the

people why halliburton needs as a piece of badly they're willing to spend up front in order to get a return later. >> many other u.s. companies actually want global business. we are running over 130 countries in the world. look at all the contention. there is no other company than s.a.p. then your software and your business over 130 countries in the world. second, when you want to change your business model you want to offer your product subscriptions or more pay-as-you-go business. you actually want to personalize your product if you want to sell more and have next day delivery. this is s.a.p. next year we are going to deliver because we are wanting the material flows of the world so we can measure carbon footprint not only for halliburton but for all their suppliers. you're certainly going to see her carbon footprint and that sets you up to all the d

carbonized supply-chain and want a more sustainable enterprise that is super important. >> that is what you're doing with the auto companies. it seems like all the companies rely on you to get there supply- chain right and environmental. >> indeed. you are informed well. we are doing this for automotive when all of their supplier we are now doing this for the manufacturer as we are wanted in almost every industry. now we can connect the supply chains of the world build more resiliency into the supply-chain but also help our customers to d carbonized. >> he did mention they were from one part of your business. i want to try to understand what that is. i do believe there is a mention but what everyone takes is so strong. how can we explain?

>> first of all, you look at our backlog and the client revenue growing 22%. our business is actually growing by 26%. these are strong results. we are talking here about the massive business. everyone wants s.a.p. and we are growing this business in the cloud by 75%. yes. we had one part of the business about contingent workers. there was a downturn but that was for a quarter. it's definitely not the trend. the pipeline for the rest of the year is super small. >> one thing people don't realize. the largest company in the world. a lot of people don't drink. what you do for bacardi? i know that family and they are brilliant. they can choose any company they want to be able to do this. >> bacardi actually have their

product in over 200 countries in the world. you're not going to find any other who can run their business in 200 countries in the world. bacardi has business requirements for next day delivery, or some personalization of the product. actually on automation. this is s.a.p. while they used transaction in the past now with generative ai we can boost their productivity. we can get to a higher productivity and all of their workflows. that s.a.p. and the business case is more stronger than ever to move now to s.a.p. in the european supply-chain. >> i couldn't agree more. i followed your company closely and it has been a good year for us. it's been a bad day for tax. i think it has a lot of what to

do with what's going on with the stock. i want to thank you for coming on. it's great to see you. >> thank you for having me. >> ceo of s.a.p. it was huge this year. what they are doing with generative ai is great for next year. coming up, cramer wants to hear from you. your calls for the thunderous lightning round next

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let's start with duane and marilyn. >> hey. love the shadow. >> thank you. >> i have 2% of my ira in alumina. >> too much. be careful. that's too much. >> i want to go right now to walter in virginia. >> love everything you do. >> we ill have to wait until 2024. it needs to move up a little. is it going to be a good trip or am i hallucinating? >> it's difficult. no one knows how to handle it. j&j has a good drug but it is very difficult. let's go to peter in pennsylvania. >> i would like to thank you. i've watched your joe's -- >> you're talking 37 years now.

thank you. >> jim, i have some jpmorgan but i'm interested -- is it too early to invest in a regional bank? >> today they have a disappointing number. the stack got hammered and it reverses. it is time to buy the stock which is an excellent company. jeff in tennessee. >> thanks for taking my call. my question is regarding corporation. i've been long for 10 years. >> it's done incredibly well. it is the entire change going towards elective vehicles. you are smart. going to rebecca and florida. >> hey. a beach bully out to you. >> what's going on? >> looking for advice on a

biotech stock i'm interested in. it's got reduced ldl cholesterol and one dose. >> it is trying to do that. that'll be remarkable if it does. many people are taking some very difficult drugs to reduce cholesterol. some are allergic to them and it is unbelievable if we can find something like this. it would be fabulous but it is speculative. >> hey. how are you? >> how are you doing? >> a pleasure to talk to you you have taken me through so many ups and downs. i cannot thank you enough. >> you are a gentleman. thank you. what's happening? >> i'm calling for data analytics.

>> okay. >> it has reinvented itself. >> okay. yes. okay. i liked it. i liked it after. now there are too many companies that do that. they do it really well and that's what's causing the problem. how about bob and you tell? >> hey. that's for everything you do. >> thank you. >> you have helped me tremendously. question, asm l. >> the quarter was good but it didn't matter because taiwan said they don't need as much capital equipment. you got to wait three days. you can probably get around 600.

that was another lightning round. the lightning round is sponsored by td ameritrade. coming up, netflix and tesla have dared to dip. cramer is not crying dire straits. find out why these market darlings are poised to weather this week's pain 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 and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. - i got the cabin for three days. it's gonna be sweet! ♪♪♪ what? i'm 12 hours short.

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those periodic swings in tesla and netflix. they've had some of the most impressive moves i can recall. occasionally they sell far. then they have a habit of coming back with a vengeance. let me say i can't blame anybody for wanting to take some profits in these juggernauts. most of wall street found them wanting. netflix has good subscriber numbers. a lot of that is thanks to a crackdown on password sharing but they have a forecast in the question of sustainability. elon musk's businessman who runs tesla with a fire and fist seems to relaxed by talking about how much money his company needs to spend to become the dominant fully self driving, car company in the

world. he discussed how much safer a fully self driving car could be. he also had the possibility of a giant revenue stream that would eventually merge if he licensed his technology to other large auto companies. that's in the very distant future. in the present, wall street seems to care tesla is going to spend a fortune on something. i'm in the habit of watching fantastic companies with stocks that fall apart in reaction to what i call short-term hiccups. hiccups that make everybody feel like the best days of these company are behind them. that theory has led to some big wins including apple and maybe the greatest of all time of the trust, nvidia. both tend to follow the same exact pattern as tesla and netflix. right now, netflix and tesla are experiencing what i would regard classic.

now, let me tell you what i think they are going to work their way up and let me tell you what went on with these sales so people do not think anything is wrong. netflix is undergoing an incredibly difficult to understand but remarkable transformation. it's giving users the option to watch their content for a monthly fee that is three dollars lower than the prior lowest rate. you got to sit through commercials. netflix made it crystal clear they will make way more money from a customer who is on that three dollar pattern. rather than on the tier that is the add tier not the subscription tier. that shows how much money is going to be made in this company. implications that were totally lost on today's sellers. if it wants to, netflix can

raise their subscription prices dramatically and people want to pay less can just switch to the smaller fief. netflix makes a ton more money off an individual customer if they switch. however, it goes into full swing. here's what will happen. the numbers netflix reports are going to be a giant upside surprise. i think netflix can turn into a much more lucrative company and you'll be able to buy it right now ahead of this incredible transformation. tesla. very similar. elon musk has never been bound by the four walls. he always wants to outsell every automaker, but really he is focused on creating a self driving car. you'll be able to lend out your vehicle when you're not using it. basically having ai act as an uber driver assuming you let strangers in your car. it'll pay for itself and much more. it'll be worth more and not less the moment it leaves a lot.

muscat doesn't need to do this. tesla is a dominant company in the u.s. he wants to dominate self driving in batteries, design, pickup trucks. probably a bunch of other stuff he hasn't told us about yet. he can't believe tesla's cash flow. he is actually mocking. he said don't let the door hit you on the way out. every time the decline is justified they scare people away. when you've got fantastic management and phenomenal product you tend to win out over the long-term to spite the speed bumps. it takes more than one day for these kind of stocks to bottom. he is not done going down. there's plenty of big money rotating to other sectors. it may take five days because we've got the nasdaq 100 rebalancing tomorrow. make no mistake netflix and

tesla are some of the greatest investments of all time and i heard nothing at all last night to make me feel differently about them. all that is happened is you are going to get the stock even lower, maybe even a week or two. i'm jim cramer. see you next time. building parallel will if you thought summer air travel nightmare couldn't get any worse, you may be very wrong. the points guy is here. it pays to live in california? it does for once. the billion-dollar powerball winner should thank their lucky ar