>> that f-1 thing, sarah has that doc. good for sarah. if you can't go to vegas, buy wynn resorts. >> thank you for watching "fast money." see you back tomorrow at 5:00. "mad money" with jim cramer starts right now. "mad money" with jim cramer starts right now. my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people make friends. i'm just trying to make you a little money. my job is not just to entertain, but explain all this to you and educate you. so call me at 1-800-743-cnbc newsom, or tweet me @jimcramer. with the market growing a little more tepid after a furious advance, the dow sinking 40

points, the s&p inching up, the nasdaq inching up 0.8%, it's the perfect day to answer a question i hear endlessly. why own anything if you just own the magnificent seven. you could have bought one of these highly visible winners. there is a simple answer, and that is diversification. you never really know what's going to work in advance. so you need to spread your bets across multiple sectors. last year, for example, the magnificent seven were terrible performers. you would be kicking yourself if you owned only them and nothing else. but there is another reason, this is something you and i have to work on. it's how difficult it is to own high quality stocks, how difficult it is to stay long, so to speak, especially if you listen to the pros. >> buy, buy, buy! >> sell, sell, sell! >> the researchers and the traders to get you to trade, to get you to -- >> sell, sell, sell! >> how else will they stay relevant? the advice is to get in and out,

in and out. which is why these seven stocks are among the most heavily traded in business. i think owning the stocks through gauntlet, the gauntlet of wall street is a herculean task. so let's go over what might have tent you from holding the magnificent seven and making big money this year. i'm going use the charts to demonstrate how difficult it really was to get to the promised land of the higher prices. perhaps to remind you to hold on to them or buy them back in a weakness when you see the visual, the pictoral. we're going start with alphabet. this stock has been tough to own for a host of reasons, two justice department antitrust investigations, challenge with microsoft and faltering in the google cloud. at the same time, alphabet does have 24 amazing franchise of youtube and it has a remarkable search business. when the company reported, it told a botched story on its conference call where you got a sense that google cloud had lost a step, but they weren't going to tell you why. and the nfl sunday ticket, the youtube on youtube all they did is tell you it was paying nfl a

lot and they liked it. if you stick with apple after that quarter, you had to believe that management simply didn't tell the story, and you had to avoid being freaked out by the google cloud shortfall. i actually think there is some truth here, that google cloud is bad. they should have done better. i also think, though, that the whole conference call was not great. it's hard to convince yourself in the heat of the moment. in short, there really isn't anything wrong other than the glitch in the google cloud. i just wish they explained it, because that would have kept more of you in. instead, people left, and instead i think now we realize it was a mistake to sell. next is amazon. that had been rocky for ages. in june the ftc suit filed against them for their prime offering. in september the ftc sued amazon again for a monopoly. you routinely heard that amazon had far too many employees as they hire way too many people during pandemic. we have been watching that slow motion market share erosion of

amazon web services for years. so there was just a lot to dislike. don't remember here, they had a terrible quarter, and they had terrible expenses, and people didn't think they knew what they were doing. now when you got to -- when we got the actual quarter, amazon web service was gaining share from everybody else. the retail business turned out to be tremendous. and so was advertising. because of worries about the bond market and inflation. remember, those can play a role in valuation of a stock. amazon stock had been tumbling sbleer the quarter. after that quarter, buyers came in and stayed because the numbers were truly remarkable and the cost-cutting is relentless. we went down quickly, we shouldn't have, and then it's been up. i think that of all of them, this is the one most likely to go next to new high after microsoft. we'll goat that in a second. third. >> apple is always hard to stay. we had analysts downgrade it through the quarter, saying negative things when they went to print. the rap was simple.

apple has no phones people are excited about. china has been awful. it's not a growth stock. what would have kept you in? you had to realize the story is becoming much less about hardware and more about the growing revenue stream. billions more users in developing companies. given the unbelievable satisfaction level for apple products, it's only natural you buy the services once you get the phone, creating a fantastic business model. plus, china turned out to be fine. just as you see, this is going up, up, up. people said the 15 is going to be terrific. then down when people realized there wasn't that kind of growth, and down again because of china, and now i think we're in an up phase. that's what i think is going to happen. fourth, meta platforms are crushing it in. reels is so far ahead of plan that it will eventually rival tiktok. instagram is hot. worth tens of billions of dollars. the outbreak of the war in the middle east caused a temporary slowdown in advertising, one it's already bounced back from. and i think when meta reported, it obscured all the positives. the stock never should have been

down on something that predictable. some sort of cataclysm around the world, but if the marketplace is good, they always come back. they have to advertise. that's what happened with meta. if you take a look at this one, what you will see is people are realizing things are getting better and better and better, and all of the sudden we get worried there is a glitch. just so you know, this thing went down all the way to here, and then came right back, as people realized you know what? there is no problem. the advertisers are there. i think it takes out that level. how about microsoft? the previous quarter cfo amy hood crushed on the conference call when she said there was a lot of up-front expenses for ai. and then you is a this, boom. all right. but is not any pickup in revenues from ai. here you had to wait a couple quarters to increase the ai adoption, both the copilot deal and more expensive version that came out. what hurt the previous quarter? it ended up being what hurt this

endedhelping this. because they didn't have the revenues right here from copilot, and here they're starting to come on. you had to buy microsoft on a weakness as we advised members of the cnbc investing club because eventually the company would be able to monetize investments. that's chase happening. nvidia doesn't report until november 21st, but it's been tough since it had the blowout quarter in the spring. the stock has been meandering aimlessly. here the huge number, and that is what's -- because it hasn't been able to break out, people are saying you know what? maybe it's finished. you're enduring all sorts of cackles if you own the stock lyle potential slowing or government banning ultra high chip sales to china. this was enough to shake out tons of investors, something you can't say about the other members of the magnificent seven, except for tesla. every time nvidia stock dipped, people fled. this is the stock i'm most asked

about wherever i'm wandering the streets or when i'm leaving an eagles game. i think nvidia is still not believed. it was the last to be admitted to the trillion dollar club, and it makes chips that are vital to artificial intelligence. but many people don't believe any one company could possibly have that whole market to itself. yet nvidia does. it practically invented the market. it has a huge edge on everyone else. own it, don't trade it. finally, there is tesla. this is a tough one, tesla did report a not so great quarter. not talking about elon musk owns the company known as x, that's why i can still recommend buying tesla. but unlike the others, this is a pure cult of personality play. while i'm very much a believer, i know this is a difficult moment for the auto industry. so owning tesla requires a leap of faith. it doesn't include the endless attempts by mike walsh and

morgan stanley to get you to sell, the negative channel checks and the light. it doesn't emphasize all the work by the justice department, the ftcs to hobble these companies. often to the detriment of the consumer. it doesn't include the endless discussion about how the magnificent seven are always overvalued. news flash. they've been overvalued since they were born. it wasn't easy to take on the magnificent seven. you had to fight so many obvious pain points so, many outspoken naysayers. as obvious as the winners seem in retrospect, it was very toes get shaken out. and most at one time or another have been shaken out, perhaps even multiple times. joseph in florida, joseph? >> caller: hey, jim, boo-yah. >> boo-yah, joseph. what's going on? >> caller: hey, man, i wanted to say thank you so much for having me back on the show. >> my pleasure. what's up? >> caller: so i was just wondering, considering intel is less expensive than amd, do you see intel being a better investment for the long-term? >> no, i don't. i think intel is frankly -- and we talk to arm later on, intel

can inch up, but arm can go far, far faster, particularly even though arm has been hit in the after market. how about jim in florida. jim? >> caller: hey, hi, jimmy. >> hey, buddy! >> caller: so, here is my question. >> sure. >> caller: i bought l3 harris around 200, and i thought it was a great buy because aerospace, defense, and florida institute of technology, all right here. so we got a bright crop of engineers and we have good weather. but the stock has lagged. >> but you know what, jim? sometimes the stock is wrong. i'm going to urge you. >> buy, buy, buy, buy, buy, buy! >> to buy l3 harris. i think it is an inexpensive good contractor, selling 14 times net share. pick up right here. as obvious as the magnificent seven winners seem in retrospect, you have to remember it was very easy to get shaken out. that's why i always emphasize the importance of going your own

research, not letting yourself be swayed by the opinions of experts, and let us help you with the cnbc investing club. dutch bros has fallen from highs. but after spending last month creeping higher, the west coast coffee chain going east. i'm getting the latest from the ceo. and members of the investing club are familiar with our position on humana. after last week's update, there more to the story? i'm sharing where i come down on the name. and arm holdings, reporting a first quarter, and people are selling it like it's going out of style. that the right thing to do? i've got the exclusive with the ceo fresh off the report. so stay with cramer. don't miss a second of "mad money." follow @jimcramer on x. have a question? tweet cramer, #madmentions. send jim an email at

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a wild day for dutch bros. last night the oregon-based coffee chain reported solid top and bottom line with excellent same store sales growth and jumped 8% at the opening today. but then it gave back all the gains and spent the rest of the day flipping back and forth between positive and negative territory, finally finishing up nearly 1%. bankers said they saw decelerating traffic trends, although that's something they expected as a result of a price increase they put through. is this a chance to get a strong quarter almost for free or do we need to be more cautious? or should we be thinking real big? let's check with geoff ricky, the outgoing ceo of dutch bros.

welcome back to "mad money." >> thank you, jim. before we get started, i have never been able to give this to you in person. but i wanted to virtually present to you your holiday annihilator so you could hear about the opportunity that's ahead of you. i thought i would start us off with that. >> i'm going to do a quick commercial for you. i want people to understand that this may be the single best drink i have ever had. and i like a pick me up any hour of the day. and your day part cold is just doing incredibly well. why don't you give us a little -- you've done remarkable things here. give us the arc of what's happened to dutch bros since you came in, how small it was, how big it, and what you're leaving for the next person. >> well, what's amazing with dutch, and thank you for a that is in early 2018 we had 37 company operated shops. out of a total by the end of '18, we had 317 shops. we now have 500 company operated shops, and we just opened our 800th location earlier in

october. trailing 12 month sales over a billion dollars. we just opened alabama and kentucky. it's amazing how far east this brand has gone and how well it's been received over that period. so taking the small brand, creating capacity for a team, building opportunities for operators so that they could live their best life and look forward to their future and do something very special. so it's been an amazing, amazing five-plus years here. >> and why don't you tell me about the concession plans because i have yet to know your successor quickly. >> christine barone is our new ceo. she'll be replacing me officially in january 1. she has been with us now for almost a year. i've known christine for ten years. i think that she is the most talented up and coming ceo in this industry. her background was starbucks. her background was true food kitchen in the phoenix area. she brings an amazing wealth of knowledge and a talent set in a skill set that will take dutch bros way into the future.

and she does so many things better than i do, i can't even begin to list them. sun microsystem excited for christine. i'm excited for dutch bros and excited for our investors to really be able to give our investors talent like that. >> okay. the market was tough so the stock came down. you needed the money to be able to expand you. fine now if you wanted to continue? if you wanted to double the stores, do you think you have the cash flow to do that? >> well, capitalized balance sheet, that's the turn. we walked into the quarter. we had a plan. we upsized our credit facility by 150 million. well did our follow-on offering in september, cleaned the balance sheet up, leave everybody with a great place going. and i think christine's working on a revised real estate strategy that will help us build into for years to come. so there is a lot of flexibility built in now on the back end of this business with the ability to fund the things that we want to go do. >> have i my first about ten years ago. i was always worried that it would only work in oregon. it turns out that's completely wrong. it seems to work every single

place you put them. >> yes, it does. i mean, we've been excited about the reception. you know, building that many company-owned shops in a five-year period, you also have to remember that you're building a brand. and so the reception that we've gotten in every market we've gone into, we're ecstatic about. we opened big. we have big lines. our number one issue in traffic is still the length of our lines and the ability to kind of get the perception of how long it takes to get a drink at dutch bros. we'll continue to work on that operationally. but the attention we've had in texas, the attention we've had in alabama, the attention we've had in tennessee and kentucky just gives us great look forward to what i think we can accomplish in other markets. and our people and our people development systems are really what drive that. and we've talked about that before. our people are the magic behind this. and with our company-owned system and with our growth from within program, it really allows us to take that magic from what you experienced in southern oregon ten years ago to what our new customers are experiencing in huntsville, alabama.

it's fantastic. there. >> was period a couple of years ago where we're worried about how people were poaching and people wanted to leave, be able to get a raise. i know it's difficult to train people and then see them go. but i think now you train them, and they're staying, correct? >> yeah, people i think our teams love it here. this is a great place to work. it's a -- we talk about throwing a party in the parking lot every day, and the team tmosphere, the energy that we have, the people systems, the development systems that we have. 325 people in our leadership pipeline right now that are ready to come in and open new markets for us. so our talent depth is strong. hiring continues to be a strength of ours. our turnover remains very low from an industry perspective, and it's something that we pride ourselves on for the future. there is lots of wage activity and other things going on in markets. we feel like we're really well positioned to compete in that environment. >> home depot moved to new york, and now we're talking late '80s, the stock doubled instantly.

people realized, holy cow, i can't believe there is a store like this. i feel the same way. if you were to come near wall street, i'm telling you your stock doubles. when will you be here? >> well, you know that my answer to that is discipline. and we will stay with our plan. i'm not going run to shiny objects. we're not going to be chasing things. we're going to be very disciplined. our success is in contiguous growth. our success is in the ability to run an entire system that allows us to have the four wall margins that we have. if we start chasing ideas or get off the way we're supposed to do things, then i think we'll start talking about why we have margin decline even though we're chasing volume. i want to be careful about that. >> that is really the answer i want, because that's the great answer for shareholders. that's joth ricci. i look forward to your next big thing. thank you. >> i appreciate that, thank you, jim. >> "mad money" is back after the

break. coming up, the young month has been unkind to its health care stock. is its turnaround part of cramer's prognosis? keep it here. hello. it is so fantastamazing for me to see other trolls. is this how people feel when they meet me? yes. poppy, i'm your sister. my what? whoo. did you just braid my hair?

sometimes the market is just plain gets it's wrong. [ buzzer ] last wednesday morning humana reported. wall street department like it, not one bit. the managed care giant saw its stock tumble 6.6% in response. before spending the next couple of days grinding even lower. impressively awful, given that this has happened during the best week of the year for the market. but i think the pullback was actually a mistake. we've owned humana for the charitable trust since last year. while we've sold some shares, it's still a decent sized hold. i told you to buy on air in june. the stock up nearly 10%

trouncing the s&p 500, which was down slightly over that period. i think have i street cred here, someone who follows humana closely. i think you're getting a terrific opportunity to buy the stock again in weakness, especially if you don't already own it, a fact i will hammer home again next week at the investment club conference call i do. you may have terrific results. they delivered a 62%% earnings up more than 6% year-over-year, while their sales also came in higher than expected, up more than 18%. so what was wrong with the quarter then? what scared people into selling the stock so aggressively, i think there were three main reasons for the post earnings sell-off. first and foremost, humana stock came in way too hot, okay. it has been posted a strong quarter in august, the stock gliding higher and higher in september and october. even as the border market melted down from the end of october up nearly 24%. that meant humana had to clear a very high bar to keep investors

happy. second, there is this key metric management calls the benefits expense ratio. now most health insurers call it the medical loss ratio, mlr. it's a percentage of the premiums that the company ends up spending to cover medical costs for members. for humana, they want that number as low as possible. this time 86.4%, which was lower than expected on the surface. this could be good. however, the expense benefits ratio for the core insurance benefit was up from 80.6 in the first quarter and worse than what management planned for. on the full year they raised. their guidance implies their number could be as high as 89.5% in the current quarter. i don't like that. it is worrisome. it's worrisome because all year wall street has been worried about that higher medical utilization rates would crush the managed care industry. is that's what's happening now? there was a huge backlog of procedures that got postponed during the pandemic, procedures humana needs to now pay for.

the expense ratio guidance we got last week posed maybe that's not the case? those worries gradually went away. back then, management said they believed the utilization trends in the third quarter were, quote, incrementally positive as compared to the assumptions utilized in the june quarter update, end quote, meaning not as bad as before. but as we learned last week, something clearly changed over the course of that quarter. on the conference call, cfo susan diamond explained they're seeing higher than expected medical costs, mostly because of a surprising number of people coming down with covid. and covid bad enough to get you sent to the hospital. humana actually saw this spike coming, but they projected it would hit them in the fourth quarter, not the third. for all we know, it simply came ahead of schedule. diamond explained that the company is simply being conservative. i don't mind that. i don't see the covid hospitalizations as a structural

problem. human is still best in show when it comes to the medicare advantage plans. and attractive business given our aging population. that's where the money is for these guys. believe me. they have good management too. i bet they're reacting to a upod situation, the medical costs up fourth quarter, i think they're underpromising so they can overdeliver. the third problem, wall street didn't love humana's guidance. even though they delivered a big earnings beat, they left their full year unchanged. there is commentary on 2024. while humana has been running circles around the competition in terms of membership growth, they expect 2024 to be closer to the overall industry growth rate, around 6 to 8%. that's down 19% this year. not great. doing 19 and now go down to the high single digits? listen to the explanation, though. humana is targeting slower but more preventible growth. they don't want to add tons of members by offering customers tremendous bargains that will

ultimately hurt their bottom line. it seems reason. if you're look for a reason to sell, the commentary certainly gave you one. the earnings forecast for next year. previously talking 11 to 15% which is in line with the long-termenings growth, but now likely toward the low end range. why? once again, i think humana is being conservative. they're assuming medical costs stay elevated into next year. it didn't seem matter the company said it's on track to reach the 2025 earnings target of $37 per share. that's all the bad news, i mean there is a lot of it there, right? stocks have tumbled 9% over three days last week. i don't think it's that serious. i think that the decline is serious, but not the news. the stock just came in tooele v8ed. then management slightly reset expectations to account for higher medical utilization costs from the covid wave, something that could be temporary for all we know. that's why i'm focusing on what i think is the most important, the long-term with humana. i'm going understand the stock on a weakness in june, i pointed

out management pointed out 25 per share that was the ball you had to keep an eye on. at this point i recommend focusing on the 2025 forecast at $37 a share. this stock sells for 13 times 2025 earnings. that is incredibly cheap. for the past five years the stock has traded just under 19 times forward times on average. they can get their own 2025 earnings targets and the stock returns to historic valuation, i'm telling you this, around 700 bucks. that's up more than $200. either you give these numbers a haircut. buy ten shares. you don't have to buy 100 shares, a $500 stock. don't sweat the small stuff with humana. there were incremental negatives in the quarter as we explained to cnbc investing people but the bulk remains unchanged. some of the negatives don't seem that bad to me, like slowing down their medicare advantage growth in order to focus on what i like, profitability. that's why i once again urge you, like i did last time when i was right to buy the stock of humana into this undeserved post

earnings pullback. let's take calls. dan in georgia, dan? >> hi, jim. thanks for taking my call. >> of course. what's up? >> caller: we're an investor in the health care such as unitedhealthcare, and we're concerned about kind of the recent downtrends in this category. what do you suggest? should we hang on? >> oh, man, if anything, buy more. i think that this group is ready to have another move. i think that unh is a competitor to humana that is very, very good. i like them both. i want you to own it. if it dips, buy more. humana has some incremental negatives in this quarter, but i think the bull thesis remains unchanged. that's why once again, i urge you to -- >> buy, buy, buy! >> i was right last time. i think i'll be right this time. don't touch the dial. much more "mad money" ahead. interview with arm ceo. i'm in disagreement where the stock is right now. i'm going to tell you that.

and i'm sick and tired of executives telling you everything is fine and it's not. we got three reports last night we were told everything is fine and it's not. all your calls rapid-fire in tonight's edition of the "lightning round." so stay with cramer.

tonight, arm holdings, the newly semiconductor kingpin reported its first quarter since the ipo. and it's clear, at least to me they're off to a great start. for several quarters arm had negative revenue growth. this time the revenue came in

much higher than expected, up 28% year-over-year because many more chips are being sold that use the company's proprietary architecture. hey, get this, free cash flow up 400% year-over-year. at the same time, though, arm's guidance was a bit noisy with what i regard to be a conservative earnings forecast. however, sellers are smashing the stock down because i think they don't understand how this company works. i think they're dead wrong, and people should be buyers, not sellers because of how great the future is. when you consider cloud, cell phones, autos, data centers and artificial intelligence where nvidia is their key partner. why don't we take a look with rene haas, the ceo of arm holdings to learn more about what's really going on here. mr. haas, congratulations on a strong first quarter right out of the gate, and welcome to "mad money." >> thank you, jim. thanks for having me. >> first time. so what we have to do is put you within the -- how about the world of semiconductors so people understand how special you are both in your model of a

royalty-based model and also all the different uses that will be being used a opposed to just telephones and hand sets which is what we used to know, yes? >> thanks for giving me the opportunity to talk about our company, which is not an easy one for people to first time out. maybe the easy way somehow 70% of the world's population touches arm in some way. so whether that's your automobile, the data center, your smart lock at home, your set top box and your digital tv, you're touching arm in some way. we're known for smartphones, i is kind of the birth of the company, but now we're a much more diversified company. cloud data center, as i said, auto automotive, iot, and of course pcs and smartphones. >> i think it's important for people to recognize, your background is with one of our favorites, nvidia. you are an arm and arm select partner with nvidia for some of the most exciting technology in the world right now, artificial

intelligence. how did you get that? it's somewhat approproprietary that i know you jenson and you are friends, and you don't like to do things that hurt the environment. somehow people have to get their arms around this. that's really important to you. >> it is. nvidia is a great partner. and yes, i spent a lot of years there. jenson is a great friend, mentor and boss. we do a lot of work with nvidia. and i think one of the better examples in terms of how we work together and why we're a great partner for them is their next generation chip called grace hopper, their super chip for ai. training takes a tremendous amount of compute power which the gpu is very good for. but every gpu needs to connect to a cpu. you can't have a gpu without a cpu. and the cpu does a lot of work in terms of helping with the training, but also everything relative to the software in the system. when you're in an application that i just described, you need the most power efficient cpu on the planet. previously, they used to connect

to external devices. now with this grace hopper design, they use 72, up to 140 arm cpu. we're great at power efficient it is. that's what we do. it's a great combination. >> i don't want to pitch you to hold you even that. i'm looking at this gigantic pc refresh. i got to believe that arm has decided you are going to take a big role in the next generation pc. >> well, we like to think we already have started that. one major ecosystem and operating system has moved all of their platforms to arm, and we're thrilled. the windows ecosystem is starting to move that way as well. the experience you get on these pcs, great performance, low battery life, again, that's what we're really good at. now, when ai starts to move to these edge devices and you start running things like the gpt agents that sam talked about the other day in the open ai developer conference, or copilot for microsoft, that requires

even more and more compute. and when you're doing more and more compute to support these ai algorithms, you want to do it as efficiently as possible. so i think we're into a refresh cycle for pcs and phones, but candidly, jim, i think for all devices. our quarter was so strong, largely driven by licensing revenue, which is an indicator for r&d investment. and what we're seeing now is really a super cycle of investment where today's compute requirements are greater than what the capabilities of the chips have. so what does that mean? we're nowhere near good enough. so people are investing in more and more chips, more and more compute, which is good for arm. >> now i know that there are people who are quickly reacting to a stock. actually, before the com school, but they look at what you have done with hand sets. they know that hand sets are down, but they're just extrapolating, and also because you're a very large customer that we tend not to be able to

talk about because of the custom of things, they're looking at you, you know what? they're stagnant right out of the box. isn't it quite the opposite? this is the beginning of a new arm, an arm that even if cell phones don't do well can have extraordinary numbers. >> we were largely associated with smartphones, as you said. now today less than half of our revenue comes from that segment. we are a very, very different company, very, very diversified. combination of a strategy that we put in place a number of years ago to do that, but also at the same time, jim, what has happened is the electrification of your vehicle. you now run on batteries. a car is a computer on wheels. that needs to be power efficient. that's great for arm. we talked about the data center. there is iot, 5g, all these applications that use arm. so for us, i think just associating with a smartphone, while it's a great market, it's not the right way to think about the company anymore. >> grace hopper, let's talk about that. that is probably -- that is the most sought after next-gen chip

there is. it's an incredible. there is amazing video. every time i see the video, it's always arm and nvidia. i don't see amd, and i don't specifically see intel and amd. i think a lot of people might think that intel and amd are fungible versus you. to me it seems like you're locked in. intel is out. >> well, i don't know about that, but what i would say is that the needs for these large ai compute systems in the cloud require a lot of compute power, and they have to be very, very power efficient. when you're talking about hundreds of megawatts into a data center and increasing the compute workloads, you want to squeeze out every ounce of energy that you possibly can. so that's why we've seen partners such as aws with graviton moving heavily to the cloud, and we're seeing even more and more applications such as sap hannah running on graviton. so even areas that are around

conventional applications where people thought well, that's not really a good place for arm, we're seeing a very rapid conversion to that. so we're really optimistic about our growth potential in the cloud. >> i think there are people who look at the free cash flow that i mentioned and say that's not possible. but the fact is you have an amazing model where the actual -- the actual making of these chips is done typically a taiwan semi. that's why you can have this kind of cash flow. i think people are going to think it's other worldly. >> it's a little out of this world. we sit completely in the semiconductor value chain. so all the companies we talked about build chips or build systems. and as we talked about, 70% of the world population in some hardware device has arm inside. yet we don't build anything. so what we do is we do the designing, and we design that cpu or gpu or npu, and then we license it to someone who is going to go off and build a chip. my whole life has been in

semiconductors. as you said, i used to work in nvidia and with jenson. when i came to arm and saw oh, my gosh, we have no inventory. we've got no scrap, we've got no breakdowns on orders that we can't fulfill, what a great model. so, yes, we operate at software-like gross margins, but we sit inside the semiconductor ecosystem. >> one last question. i want people to understand that when you think of artificial intelligence, when you think of training, that's really key, training, we should be thinking not just nvidia, but we really should be thinking always of arm. overstatement? >> not at all. and in fact, when you think about ai, you should be thinking about training, and arm is very, very god, as we just mentioned with nvidia on this partnership of grace hopper. but you should also think about inference. inference is about taking all that training and then using it for real live applications. one of the analogies i gave is think of training as teacher. but inference as the students. and students are essentially take all that training work load

and put it in a real life application. and that is where you're going to see the explosion of growth across ai. i know you're a big football fan. so am i. we're two minutes into the first quarter of this game. there is a long way to go. it's going to be very exciting. >> well, mccaffrey is the only person who can stop us is what i have to say. rene haas knows more about pcs and more about cell phones and more about autos, but really knows more of the artificial intelligence than anybody i have ever met, save perhaps your mentor jensen huang at nvidia. thank you so much. congratulations on your first quarter which is a great one, and thank you for coming on "mad money." >> thank you so much. >> "mad money" will be back after the break. coming up, pom open those umbrellas and tee up your toughest questions. cramer takes on all comers in the "lightning round," next.

that first time you take a step back. i made that. with your very own online store. i sold that. and you can manage it all in one place. i built this. and it was easy, with a partner that puts you first. godaddy. (swords clashing) w-had enough?r t-no... arthritis.t. here. aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. ♪ unnecessary action hero! ♪ -missing punches? -unnecessary! -check reversals? -unnecessary! -time sheet corrections? -unnecessary! -unentered sick time? -unnecessary! -go! -unnecessary! -go! -unnecessary! -when you can take this phone, you'll be ready.

-make the unnecessary, unnecessary. let your employees do their own payroll. "lightning round" is sponsored by charles schwab. trade brilliantly. it is time! it's time for the "lightning round." cramer -- say bye-bye -- [ buzzer ] and then the "lightning round" is over. are you ready skee-daddy? let's go to leanne in hawaii. leanne? >> caller: aloha, mr. cramer. thank you for taking my call. >> mahalo. what's happening? >> caller: the recent downgrade of fortinet. was it overdone? >> no, i want you in palo alto networks, panw. i think that's going much higher. let's go to scott in arizona. scott? >> caller: boo-yah, mr. cramer. >> boo-yah. what's up? >> caller: boo-yah, boo-yah.

thanks for everything you do for all of us. >> i appreciate it. thank you, thank you. >> caller: i've got ai plays in nvidia, microsoft, adobe and meta, and i'm interested whether or not you think i should have more of a speculative play, ticker symbol path. >> no. that doesn't even belong in the same paragraph as the ones you just mentioned. stick to the ones you mentioned and if they go down, buy more of those. do not touch path. joe in new jersey? >> caller: hello, this is joe from freehold, new jersey. >> what's happening? >> caller: how you doing? i love you show. >> thank you. >> caller: i have a question for you. i own -- i'm retired and own prudential financial inc. in my 401(k). that the right place for it? >> i'm concerned about it. i'm concerned about it because when i see a stock that yields 5.5 and sells seven times earnings, it makes me think something is wrong, not something is cheap. let's be careful. i need to go to luke in new york. luke? >> caller: boo-yah, jim. >> boo-yah, luke! >> caller: i watch you every

night with my son elias. he has been begging me to call you for this. >> i'm glad you're on the show. how can i help? >> caller: we wanted to ask you about -- >> the browns and the clears are not selling as well as we thought, and they paid top dollar for a bunch of them. i want you to stay away from diageo. you want to be more in bier, and that means you want to be in stz constellation, which we opened in the trust. that's the one to buy. bob in florida, bob? >> caller: mr. cramer, thanks for taking my phone call. how you doing? >> i'm doing well, bob. how about you? >> caller: i'm doing great. thanks for asking. hey, i have a buddy who is a former apache pilot and now in the coast guard. shout out mdr. but he always recommended this stock, and i want to get your thoughts on textron. >> i thank your buddy and thank him for serving has got a real good call. textron is way too cheap. i don't understand why it's down here. it's a buy. let's go to steven in new york.

steven? >> caller: hey, the fundamentals on my stock recently haven't been too pretty, but with this recent consolidation, i was thinking about getting target here. >> target is 4%. i like costco. i like walmart. i like amazon, i like tgx. target is really being afflicted by stealing that stock will be dramatically higher if it weren't for stealing. that, ladies and gentlemen, the conclusion of the "lightning round"! >> the "lightning round" is sponsored by charles schwab. coming up, has fintech been fibbing? cramer questions the rosy outlook from three stocks you may already own. when we return. good evening, mr. cramer. thank you, thank you for everything you do. >> you've been such a wonderful source of information with your teachings. i have to say thanks. >> thank you for all your advice and saving us from ourselves. >> your advice let me quit a job that i hated. i love you to death.

>> thank you for everything you do. thanks for making us money. more importantly, thanks for keeping us from losing money. a, unlocking the power of thinkorswim, the award-winning trading platforms. bring your trades into focus on thinkorswim desktop with robust charting and analysis tools, including over 400 technical studies. tailor the platforms to your unique needs with nearly endless customization. and track market trends with up-to-the-minute news and insights. trade brilliantly with schwab.

♪ i'm so tired of executives telling us things are going great when in reality they are anything but. the toast, robin and marcus upstart conference calls. all three companies a brokerage house, online lending platform,

they tried to throw some estee lauder makeup on the quarter, but the market wasn't buying it. upstart lost 27%. while i'm not thrilled with the results of any of the companies, what encouraged me was the obfuscating wording. co-founder and ceo of robin hood went out to way to put lipstick on this pig of a quarter. listen to this. as we continue to execute our strategy, we believe we can grow into one of the largest and most profitable financial companies in the work. equally pro mosesal, quote, i'm excited about the momentum we're building and believe we have a huge opportunity ahead of us. we believe we can new capabilities that can enhance customer experience while creating great -- for our shareholders. these guys go on and on about momentum and increased customer adoption and national expansion. what's reality? numbers were weaker than expected where estimates had to be trimmed across the board. most davm damning, 6% of

options. 12% crypto currencies, and the remaining 21% brokerage business that may be lasting. most average users down, not up. how they call that momentum? looking through looking glass quarter, chairman and ceo painted a totally rosy picture, quote, our focus has been on durable, durable and efficient growth and our third quarter results reflect execution of that objective, end quote. they're talking about building operating leverage through, quote, consistent execution, end quote. toast headline numbers were better than expected, but called the quarter a mixed bag. they highlighted a, quote, softening in same store sales starting in september, which persisted to october, end quote. so except more cuts. every researcher pointed to a deceleration. now toast does point of sale software for the restaurant business. and from my time in the industry, i can tell you this is a very competitive space. you run a restaurant, you're always being approached by something cheaper, better and more innovative.

in my estimate, the stock doesn't have enough of a discount to make it at all enticing for me. third and most egregious, upstart's management team is constantly telling us how great things are. they've already been ready to say how they're optimistic about how the company can grow revenues at a pace any bull would love. they make it sound like they're running the artificial intelligence powered bank of the future and repeatedly missed numbers. the conference call this time, i only had one question, what are these guys smoking? what's the reality? guidance for fourth quarter below our prior forecast while, quote, a sharp deceleration -- a sharp decline in auto originations indicates incremental stress, end quote. they also point out, and i point, credit performance only worse especially for bore roars, end quote. i think this is an incredibly bad business in a world with higher interest rates and a streetsed out consumer is going to make it even harder. but it always sounds rosy if you listen to upstart. i know ceos want to tell a good

story, but if you read the overly optimistic conference calls, you would think things are terrific at all three companies. it's the opposite. their plummeting stock prices tell you everything you need to know, but psst, you didn't hear that from management. like to say there is always a bull market somewhere. i promise jim cramer. see you tomorrow. "last call" starts right now. right now on "last call", a shawn fain exclusive. the uaw president joins us on his upcoming meeting with president biden, his plans to unionize more automakers, and much move. bob iger speaking out that has investors buzzing with the stock on the move. and media mayhem. the book ray dalio does not want you to read, but the author is here. on the five-year anniversary