(audience cheering) My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a little market somewhere, and I promise to help you find it. Man, money starts now. (dramatic music) Hey, I'm Cramer. Welcome to Man of Money. Welcome to Cramer, Arkham. Like you, my friends, I'm just trying to make you some money. My job is not just to entertain, but it's to teach you. So call me at 1-800-743-CMZ. Quit me, I'm Cramer. A specter is haunting this market. This specter of the year 2000, and it's very hard to talk people out of selling the stocks that resemble the casualties of the dot com era. Even if you think that this time, it's very different. Fortunately, I'm like 26 years ago, there are so many alternatives to invest in that you can easily steer clear of the data center and still make money. In fact, right now, this market's saying that you should stay as far away from the data centers as possible, because the whole AI thesis hinges on a few companies spending way more money than they maybe should, while others continue to finance them. Today may have seemed to date when you look at the average, now gaining 26th points, SB-inching up point, two percent, that's a tipping point, one eight percent. But there were a ton of powerful cross-currence that dominated the action we gotta discuss, and why? Because they are worried some. The market as a whole was strong enough today, because oil's down big, nine percent in one session, courtesy of the pause and bottom, the move, I deal with that to us, it moves the interest rates down, which in turn moves stocks up, that's doubly important, because this week we have a Fed meeting. And then decline in oil helps paint the case that inflation could be transitory. Now there's a term we've heard many times before during the previous Fed Chiefs regime, but whether it's because the price and Brent Group went to the triple digits last week, or because our military's running out of interceptors to block Iranian missiles, so things may be too dicey now to keep bombing, the White House is turning down the temperature. That's clear. See, I bring this up because I've been pushing you to wean yourselves away from traditional tech and pivot to technological companies that are outside the tech sector. Think J.J. for Medtech, Honeywell Aerospace for Air Plant Tech. Now, damn, more than 50 points from its recent highs, because of oil. Traders know to sell aerospace when oil goes up, even though these aerospace stocks don't trade on jet fuel, as much as I like the airlines themselves. It trade on cash flow and production growth. More Honeywell Aerospace later in the show, but it doesn't go mad. Still, while I prefer to talk about what's working, we gotta talk about what's not, at least in most cases, to see if it, if or when we could, it could start working again. This weekend we saw bits of announcements about the tie-ups, combinations, and partnerships of tech. Numbers are huge, $100 billion deals involving data centers and the chips that fill them. Stories about suppliers and builders being potentially billions and billions of dollars. Something to throw up the complex. But unlike previous times, when we've seen big money flowing from customers like the hyperscalers, to suppliers like Nvidia, M.D., the customer's stocks are actually hanging in there. They've been getting really hurt. This time the suppliers are getting pulled for us. Something to happen on Friday too. Most of these supplier stocks started higher this session, but then they finished dramatically lower. That's a bad pattern, it's very daunting. Why aren't the suppliers getting love it? They still had recently, well, instead of the hate that they're getting now. Simple. Some of us have seen this movie before 26 years ago. Back then the telco equipment suppliers were some of the largest companies in the market. We thought they owned the future. Initially the suppliers made fortunes and their stocks were among the best performers in the market, but the customers made very little or no money. Until one day, the customers of the suppliers ran out of money. And investors crossed the stocks of the suppliers beyond all recognition. Once the customers couldn't pay and defaulted on the financing that they had, particularly from the makers of the equipment, the whole dot com edifice collapsed. Huge cavities here. The supplier companies we are talking about now are much, much stronger than back then. They've got fabulous balance sheets, but the stock sellers, they don't care. They can't stop equating the two periods because the customers are losing gobs here on the spending like they did back then. Now you may think that in video guaranteeing $250 billion for the financing for open AI data centers as it was reported today makes sense. Give that open AI. It's one of the big customers. After all these chips are insanely expensive, right? If there were no history in these kinds of transactions, you'd think, well, one odd. But there is history, boat loads of it. And it is very negative. What we learned in 2000 is that you don't land the customers who buy your goods. They might default and your earnings gets smashed. This weekend we learned of multi billion dollar deals where Nvidia actually makes it possible for the purchase to occur. If the buyer in this case open AI can actually afford to pay for these chips, perhaps because it comes public, perhaps because ChatsyBT becomes insanely popular, perhaps there are a whole new features about no about the Nvidia's and perfect shape and Nvidia stock sellers will look insanely stupid. But if the chip bar can't pay, well, that's a different story. I guess there's an opening of I'm money good. Why should we worry? Well, first, they haven't come public. Second, I don't know how, whether they can. Second, they're known to be burning a lot of cash. Third, they are to send investment, great. That makes it much more spicy. The reverberations here are immense people. There are so many companies counting on the data center for their earnings, all sorts of suppliers. If the market decides it doesn't want to fund any more data centers, not give them more cash, and the companies themselves don't have the money or they don't get paid, then we're back in year 2000. Why is the residents so easily, because in the dot com era, the companies that bought the goods didn't have enough money to pay for them. Instead, the companies that made the goods ended up on the hook, because they provided what's known as vendor financing. And that could be the case right now. Back then, it became a giant game of dominoes, and everyone got annihilated, especially the investors in these companies. Couldn't you have seen it coming? Yes! If you pay the attention to the balance sheets of the buyers like OpenAI, when they got broke, Kess, you had to sell. There's a reason my hedge fund got out of the dot com stocks about a week before they peaked. The balance sheets of those who were buying supplies, well, they were so bad that they hadn't rely on the suppliers before the goods. That's what could be happening now in the market hates it, or the stock of Nvidia would not have been down 10 points. It might have been up 10 points. Yes, 10 points today. Notice, I'm not saying Nvidia doesn't have the money to guarantee sales or to provide vendor financing. They do. I think Nvidia's balance sheet is among the best of the world. The company's an amazing investor too, but I lived through 2000, and even the strongest became awful stocks, took them decades to revisit their previous highs. The stock market is telling you what it thinks of Nvidia, because of these kinds of transactions, even as plenty of people, including me, acknowledged Nvidia's one heck of a great company. So many of the buyers of Nvidia AI chips had tremendous balance sheets a year ago, and that's no longer the case. Now some desperately need more money to finish their data center buildouts, and it might not be available. Others are losing their investment grade status. That's going to send the stocks lower. Now let me tell you what sticks in my crawl. Back in 1999, I begged the big suppliers not to do this kind of stuff. I saw it in action, and I pulled out of the stocks. So I cannot sit here and say, don't worry about it, 'cause I was worried then. I have to help you anticipate what sellers, stock sellers will do. It's not a muscle memory, by the way. My friend Michael Simbliss, my favorite strategy, JP Morgan, he just did an amazing piece last week that compared this moment to the dot com era. His conclusion, they're too close for comfort. I have to agree, it doesn't matter if your balance is perfect. They all started that way. It doesn't matter if you have valuable sales, they all started that way. History is brutal. I hope Nvidia isn't actually making these kinds of transactions. I wish they'd just taken server and buy back their own stock. I wish they hadn't given ammo to the short sellers. I wish they'd spend more time thinking about the dot com collapse. I know the may end up on the hope for nothing. Maybe this time is different. That's what I'm wishing for. But investing isn't about wishing. It's about knowledge. No matter how smart they may be and they are much smarter than I am. Maybe they never took part in 2000. Maybe they were doing something else. I saw the movie. I was in a movie. Bottom line. I don't want to see cool. Nvidia shouldn't make these guarantees. Even if it has all the money in the world, just history. That's all, just history. We say Nvidia at the club don't trade it because we believe that we will see these kinds of deals aren't worth it. But the big institutions are not going to listen and they will continue to sell the stock. Why? Because history is on their side. Let's take questions. Let's go to Oliver and Connecticut. Oliver. Hey Jim, how are you? I am good, Oliver. How about you? I'm doing great. My question today is about Intel. It's a quick two-part question. I'm a big fan of Intel. They had good quarterly earnings. And I think they're doing a lot of good things to write the ship. So my question is, when do you think Intel will get the respect it deserves? And where do you think it'll end up the year? Well, I think it was getting some respect. It remembers up 148%. It was at 142. Now it's down to 91. We are buying it pretty aggressively for the CMBC and Best of Club. Why are we doing that? One big CPUs are going to start being used a lot more than GPUs, which is what it video makes. Two, because lip-boutan, the CEO, is making packaging. Came designed tonight, poor, poor, and an amazing quarter for packaging. And three, the world is short, foundry space and lip-boutan knows how to make foundry space. So we are buyers of Intel. We think it doesn't relate to Nvidia. They are very different. Now we're going to go to Jerry and Missouri. Jerry. What's up? As a member of the club, I use the portfolio page often. When the position goes up,
and exceeds the club's target price. Why isn't the target price in? Is the club's fastest percating more profits? The stock I'm talking to today is crowd strikes. - Okay, look, we like crowd strikes very much, and that's just my bad. If we're not raising the price rate, it says we should. If we do like the stock, then we just have to stay on top of things. We can't do everything. If we have a really an amazing group, but we're a small group, and we're sure it keeps trying to do well for you. Crowds' strike isn't an incredible stock. I know the stock was down to that, 'cause Microsoft's doing some cybersecurity things. Let me tell you, crowd strike is part of this group that wants an open model. It's very positive. George Kurtz is probably now the foremost person in cybersecurity in the world, own crowd strike. Right now, people, I still say, own, invitiate, don't trade it. But history is no longer on their side if they do these kinds of transactions. I'm talking about it. That I believe ain't no, and maybe they're not so good. Well, man, money tonight, Mercky's best is selling off at commercial earnings as expected, so it's now the time to buy. I'm taking a look at the quarter. Then I've been recommending Honeywell for ages, but how's the stock on post-breakup? I'm doing some of the parts and letting you know. And it might quest to find stories away from tap. I bet you're down to the series is quiet again. And really up front personal look in Mercky innovation, like you wouldn't believe. Don't miss my explosive interview and stay with Kramer. [MUSIC PLAYING] Don't miss a second of Mad Money. Follow @Jim Kramer on X. Have a question, tweet Kramer. #MadMensions. Send him an email to
[email protected]. Or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com. [MUSIC PLAYING] There are some patterns that pop up over and over again during our any season. Certain stocks tend to sell off from response to even good numbers before bouncing it there too later. Stocks like America can express. As I predicted last week on the show on Friday morning, Amex supported a strong set of numbers with inline revenue and a healthy early speed. But the stock had a negative reaction, plunging 4.3% on Friday. 10.5% is generally 3% because this is what almost always happens with the stock of America. He's pressed. Given that the stock still has an erased its post-earnings losses, I'm going to walk you through this one. Because I think you're getting a terrific buying opportunity as you always seem to do after they report. Why? Let's talk numbers. For the second quarter of America's press, so it's Bill Business, jump 9% your rear. Coming in, that's a bit above expectations. While the revenue was a tiny bit light, it was still up to 10% and the company delivered a 13 cent earnings beat off a $4.40 basis. That's not easy. Even better, Mark, especially slightly raises full year forecast for revenues, although the company often maintains just the earnings outlook. Now, I think that's why the stock really sold off. When you beat on earnings, then don't raise your guidance. Wall Street sees that as the fact don't number. Cut. I'm not sweating that. Because when you check under the hood, it's where about to do there were a ton of positives. First, the Bill Business was very strong, which tells you that America's best card holders haven't really stopped spending at all. In fact, if US consumer services businesses are still accelerating up 11% your rear. That strength was broad-based with goods and services spending up 11% your rear. And traveling in your cabin spending up 13%. That's kind of modern mail, not modern mail, right? When you think of an economy, at some company say it's breaking down, and people aren't traveling, well, that just says that's not true. But the most encouraging thing about the US consumer Bill Business numbers was the breakdown demographically. With millennial spending up 14% in Gen Z spending up an incredible 40%. 40%. When you're looking to companies to invest in for the future, what do you do? You want to find companies that they have the younger demographic, America's best is killing it there. And remember, that's lifetime. These people aren't going to leave America. The investors go on and on. New member acquisitions remain over steady in this important quarter, 3 million cards in quarter. More important, 75% of global new accounts were required on fee-paying products. Many of Amos's higher tier cards, which come in with annual fees, card holders now pay a hefty fee of $895 per year for that platinum card, but they're happy to do it, because it's got incredible words program. That $895 fee, that's a bargain, relevant to what you get back in points and goodies. At the same time, Amos's credit metrics, cheese, I don't know, man, they still look fantastic. Despite broader amorphous fears about the state of the consumer, their right off rate remains steady at 2%. By the way, there's more or less where it's been for at least the past five quarters, the 30-day deluxe rate actually took down to 1.2%. In fact, thanks to strengthen those credit card quality numbers, Amos was able to have $191 million reserve release coming back into the bottom line, which contributed to the earnings fee. So nothing to worry about on the quite a front. And the only big negative here is that the fact that Amos did raise this full-earning forecast hence the cell phone Friday, I think that's totally beskyed, though, and clearly Wall Street started to agree where this talk wouldn't be bouncing so seriously today. So during the conference, we'll see if Steve's query went into great detail explaining why, even though the company's app performed its own expectations, it's choosing to invest in business, and that's mainly perks for card holders. And because of those investments, the market's press can't raise its earnings guidance. Etruscphone starts to the year as query says, "Amaccessive choice." They can either use their better than expected earnings to buy back more shares, or they could, and I quote, "Invest to grow the business further through the wide range of attractive growth opportunities we have across our businesses." End quote. He decided to do the latter, because he thinks that's how market's best can create the most value for you, a shareholder. Their latest quote, I just saw a 36% return on equity. So I think he's mentioned the right call. So one year ago, Squiery decided to improve-- see, he decided he wanted to spend big, OK? He wanted to improve AMS' flights to apply to the US. He figured that they quickly see an uptick in customer engagement followed by higher fee revenue and stronger credit metrics, because better rewards at the high end attract wealthier consumers. And hey, that's exactly what has happened. The investments paid last year have driven accelerated spending and revenue growth. That's what we want to see. The Platinum Card portfolio that Amex invested in last year is now the fastest growing in their US consumer business. Good choice by Squiery. He went on to add some very thoughtful commentary about market's best members, how they find value from the cards. Here's how he puts it, and I love this quote. "In essence, a great premium value proposition is not just a product. It's a multifaceted relationship between the brand and the customer. This is what our membership model delivers, and it is very difficult to replicate on a global scale. To build deep enduring relationships with our premium customers, we've leaned into adding benefits they value and where they spend, like travel, which is why we continue to expand our lounge and luxury hotel networks." End quote. That's what we want. In fact, Mark's freshness announced a new global partnership with all Accor. That's the parent company of 45 worldwide hotel chains, including Fairmont and Softfatell in Europe. They've acquired the fork and online restaurant booking platform, which will add 50,000 restaurants, of course, 11 European countries, and the Amix is dining level. For business cars, there's a new $300 annual statement credit for a chat GPT. Oh, it doesn't hurt the Amix case that oil may be breaking down, making travel cheaper, of course. Lowest or short, halfway through the year, Mark's freshness is doing better than expect to beat this point. But they didn't raise their earnings guidance because they're taking that extra income and reinvesting it into the business. The goal is to keep doing what's gotten them this far, offering better rewards to attract more customers. Scurly says that with this playbook, his business quote, compounds earnings more durably and a faster pace than in the past end quote. End quote. Compared to its historical performance, Amix still has more momentum in both the top and bottom lines, a more premium fee-paying customer base with stronger loyalty, less credit risk, and more younger customers who represent greater lifetime value. Yes, that's the point. Sounds great to me. Here's the bottom line. Based on Steve Square's track record, I think he deserves the benefit of doubt here, which is why I'd be a buyer, especially since the Merck Express is down, where 13% of its old time I said late last year. I think it's a terrific opportunity in one of the best run companies on Earth. Everybody's back at the bridge. Coming up, Kramer's checking in on the status of Honeywell Technologies and Honeywell Aerospace to see if now is the time to buy. Maxed. [MUSIC PLAYING] About one month ago, Honeywell finally broke itself up into Honeywell Technologies for building controls and industrial animation and Honeywell Aerospace, where they make all sorts of components for the commercial aerospace market. I'd recommend Honeywell for ages, in part. Well, because I'm big-bladed in backups. I thought we'd see that there's much more than the-- what the thing is trading after the beginning. I don't think the company's getting enough credit for the businesses buried inside of it. It's called the sum of the parts. They're worth more because they didn't belong under the same roof, SOTP, sum of the parts. Well, super for smaller, more bite-sized companies, and that's been true for decades, it's true now. Honeywell started breaking itself up last fall. and a spot off the special chemicals business as solstice advanced materials.
at the end of October. And this is a big win with the Solstice jumping from below $50 or the first day to the 90s of just a few months later. Then it comes in as a big merger with element solutions and since then the stocks fall back to 60 and change. I still think it's a buy but it has not been smooth sailing. What's more frustrating is that Honeywell Technologies and Honeywell Aerospace haven't exactly been great performers since they separated at the end of June. The stock ended its first official day of trading, June 29th, at $220 and it made its highest $266 in a week later. But since it's come all the way back down to $210 for some really ugly trading over the past couple of weeks. Tough dough and aerospace stocks from the price of oil sores although now it's coming right back down. Meanwhile Honeywell Technologies had the exact opposite experience. The stock was initially, I should say, I was going to say hated but let's go along with it. Then July turned and the stock turned with it. Honeywell Technologies put a strong quarter last week and the stock just bolded jumping to $245 in changes of today. On a standalone basis, Honeywell Technologies earned $1.95 per share. Wall Street was going to look for a buck in E3. That's an increase of 10% in your year. Sales came in higher than expected too. Thanks to strength in both building automation and industrial automation. Both divisions, margins also got a real boost from cost cuts and productivity improvement and most people did not expect that to happen. Quickly! Then there's the generous order of buck. Organic orders were up 16% short cycle orders growing in a double digit pace across every segment of business. Total backlog increased 9% to approximately $20 billion in other supplies. When Honeywell Technologies started trading independently, investors looked at this thing as a slow growth collection of leftover industrial assets. Some even said cats and dogs. Instead the company delivered accelerating orders, expanding margins, strong cost discipline and a growing backlog. That allowed management to raise their full year forecast across the board and these were some substantial number buffs. Now it looks like Honeywell Technologies can truly hit its long term financial targets, which previously seemed like they were on the optimistic side. If it can hit those targets, it deserves to trade at a higher price to raise multiple, like its higher quality peers in the industrial space. That's why we stuck with it for the child to have a trust on those much harder for me to recommend at these levels now that the stock's had a big run. It's a great example of the kind of tech I like best right now, though. Right now, how about the more complicated Honeywell aerospace? Quiz goal. Even though the stock got slammed this month, the aerospace business was the crowd jewel of the old Honeywell. And that hasn't changed. The company makes all sorts of high-tech components for commercial aviation business assets, defense, space, even helicopters. This is a big hard-to-replicate aerospace franchise. The portfolio is divided fairly even among three businesses. Electronic solutions represents about 39% sales. Engine and power systems represent 31% and control systems accounts for remaining 30%. More than 75% of commercial flights begin with one of Honeywell's engine-start systems. Once you have such an enormous installed base, it means you get many years of service revenue. These guys have enormous backlogs at both Boeing and Airbus, which are pretty much fully booked for the next decade. Their defense and space business gives them exposure to higher military budgets, especially missile programs and fleet modernization spending. That's something we desperately need. You know that after the conflict with Iran. At last month's investor-day management laid out the long-term case for owning this stock. Through 2030 Honeywell Aerospace and Space and Space Generate organic sales growth of 68% annually and targeting more than $6.5 billion of earnings for interest and taxes with earnings growing faster than revenue. That's right. Those targets look cheap to me, and they're maybe actually room for upside-by-thing. Commercial aircraft deliveries should continue increasing through the end of the decade. The aftermarket should benefit from growing air traffic and the fact that old airplanes are being kept in service longer, defense spending remains strong. Honeywell also has power, because so many of his products are mission-critical, sole source or deeply integrated into an aircraft that have known this for years most aren't for other guys. The biggest question is execution. Honeywell Aerospace says more demand than it can handle. Well that's supposed to be a clause. Whereas a problem is getting enough parts and hitting its deadlines. But I think that should be easier now that this is an independent company. They're now aiming to stabilize production by managing the supply chain as one integrated system. The analysts will seem to think that's possible. It is. Now Honeywell Aerospace reports its first and a loan quarter after the close August 5th. The first report could contain some noise because it won't be apples to apples with the aerospace numbers from the old Honeywell. But I think the stocks with this heading of the earnings, that's the real opportunity. The daunting trades at roughly 21 times the next year's earnings estimates by contrast to the aerospace, which I know everybody loves, it trades at 40 times earnings. RTX, Prater, Whitney and Collins Aerospace, Google competitor, sells for 28 times earnings. Honeywell Aerospace is a great company doesn't deserve to trade and discount the RTX. That's why my travel trust has been using this pullback, which I have to tell you, it is very surprising to add their position because it's just too going cheap versus the rest of the stocks that it's grown. In the end, Honeywell technology is finally starting to get credit for the strength of its business. But Honeywell Aerospace, it's seen as stock fall by the wayside thanks to the recent jump in oil prices. Let me give you a bottom line here on this very complicated story. See I'm still a huge believer in the great Honeywell breakup. We know Honeywell technology is doing just fine. Now you're getting an incredible buying opportunity in Honeywell Aerospace, honestly. I'm hoping the latter action can slam on reports next week. Why? So we can buy some more on wait. I know we at the CMBC Embassy Club haven't been able to get enough stock in. If it goes lower, we will be certainly buying beside you. I need questions. I'm going to Kevin and Kentucky. Kevin. Hey Jim, I've been watching for 20 years. Thanks for all that you do. Thank you. Thanks for all that you've done. I'm looking around space. Thank you. My questions are on SpaceX. I bought in at 150 and it has gone down. I bought some more and I wanted to get through thoughts on where to go. Well this is complicated and I'm glad you asked me about it. We're spending a lot of time thinking about ourselves. What you have to understand is there are long term believers in anything Elon Musk does. So if I tell you to sell it and then get back in lower, you're going to say, why did you do that when Elon gets it right? So my take is we're not going to buy it for the trust, but it's Elon Musk. If you believe in Elon, you believe in space exploration tech. Is that a punch? No. That is exactly how you should look at that company. I'm still a great believer in the great honey. Well, break up. And I think you can get in at a great price here. Maybe you wait for the quarter coming up soon. What's worth of money ahead is the data center close to where you finally face some cracks in this facade. Like I told you in the show, I'm going to serve it in space. Give you my advice for staying afloat and it's important. It's personal fans. And I'm taking all your calls, rapid fires, and I see there's a variety around. But first, coming you from CRH don't go anywhere. It's going to be a plan. Earlier today, I had a chance to visit CRH. That's the largest producer of aggregates, rocks in North America. Get their mount hope quarry in Northern New Jersey. We're talking the literal basic building blocks of the economy here. Rocks gravel. This stock's been a great long-term performer. Up over 80% since it listed on the New York Stock Exchange nearly three years ago. But it's been hard hit this year. Down nearly 18%. Thanks to higher oil prices and higher interest rates, that weighed on the entire building materials co-orders. The company reports on the 30th of this month. But we want to take a longer-term view on the company's business ahead of the report. And that's why I wanted to check in with Jim Mintern. He's the CEO of CRH. Take a look. Jim, this is not my usual backdrop. Where the heck are we? Welcome Jim to our mount hope facility here in New Jersey. Thank you. This is, we've got 800 aggregate facilities in the U.S. This actually ranks three in terms of size. And that's aggregate being rock. We produce about four million tons a year. This is one of the closest quarries to Manhattan. And it's a hugely part of our network. At the same time, I understand it's not new. It's not new. This history goes back to the early 18th century. In fact, this was an iron ore facility and actually made some of the, you know, the blasts for Washington's Continental Army. Well, this was an iron ore facility right up to 1960. Okay. And then became a quarry in 1960 and became part of CRH in around 2001. Now, if we were to look around in Manhattan, how much would we think that find out is from in here? A lot of it Jim. I'd say well over half of Manhattan has been built by rock coming out of this quarry and some of the network. And you think some of the real iconic projects, the Mario Como Bridge, Laguardier, Hudson Yards, the reinforcing the lower east side. It's rock coming out of here and it's network of quarries which is supplying all that material. Now, one of the things that intrigues me about your business is here we are, something it was using the 18th century. Why hasn't it run out? I mean, we're going to blow something up today. How come there's still something to blow up? We do about four million tons here a year and we have still 120 years reserves left. So this is a 1000 takeer site. It's a big facility. We're going to have a chance to see it shortly, but yeah, it's a lot of reserves here. But you are always replenishing or getting bigger. You've got a huge acquisition on the table and this is our co-sah. I think some people don't really understand it or they might say listen, why do you keep fine things but actually your history is filled with acquisitions that I'm
>> We worked, yeah, we're the number one producer of aggregates in the US. We do about 230 million tons a year. We own about 24 billion tons of rock in the US. Now the Arcosa deal for us, it was straight down the middle of the fairway. It was 35 million tons of eggs and bring us into two new high-growing markets in Dallas and Phoenix, which we weren't in. >> Arguably two and what, the top five markets in the country? >> Certainly two of the top, probably ten, not a hundred times ago, in terms of devastation for us, particularly significant. Now also, Arcosa had a secondary business, which is there in their energy transmission. It's huge complimentary to what we do today with the large utility company. >> Now those are those things we see on the side of the road, they look like big men. >> They are. That's exactly them. And that's obviously an area with the whole development of the energy transition infrastructure, which is a high growth area right now. >> Okay, so we hear aggregates, we think rocks. Therefore no value added. Therefore, can anybody in this business, but that's precisely wrong, isn't it? >> It is absolutely. And that may be, you know, for us, we operate, we call it connected portfolio. >> Connected portfolio. >> Yeah, we just don't produce aggregates. So we hear, we take those aggregates and we convert it into asphalt here behind us. We do about a million tons a year from the Montau facility. With that asphalt, we pave roads. We're the largest pave of roads in the U.S. Now you take the scale and the size of the U.S. into state program at the whole highway network. We pave as much as the next five competitors together. We've also then take that stone we converted into water infrastructure and energy infrastructure. And it's really that connected nature which drives the consistency of all performance here in GRIF. >> Now we all know that we're in the, in fact, the golden age of capital investment. We have reshoring. We have giant data centers. We have buildings going up, fritzes are Ohio, where there was no infrastructure at all, where it's just prairie fields. When we want to build something, we need roads, we need aggregates for them. You're probably there given your dispersal in the country for a lot of those businesses. >> We are here, man. We have about 2000 locations. I think across the U.S. we've 50,000 employees. We're actually within 25 miles of almost 90% of every data center that's been built in the U.S. today. You mentioned Ohio. We're on one of the very big semiconductor plants up in the last number of years. And that's, again, strikes the core what we are doing. We're not just supplying the aggregates. We're often the very first person on site putting in the subterranean energy and water infrastructure. Then we come in with our cementitious product to stabilize the site. And it's only then we bring in our aggregates, our stone, our rock. Then we have our concrete. So these are multi-year projects for us. >> Well, let me tell you, trigger the word that I know you can't leave by mentioning it. Water infrastructure. Many people in the country think that a data center makes ruins the water. I've done a lot of work on this and I've told people over and over again. That's not the case. But I'm just some TV guy. Will you explain because you're at the heart of it. It doesn't mean water dispoilase. >> No, I mean, for us in terms of water infrastructure, we've a leading position of water infrastructure. I'm early in the collection and the early stage quality treatment in water. Data centers consume a lot of water. From that perspective, but for us, it's huge and complementary to what we do with that perspective. But I think, listen, I think we can all agree that the investment that's required in US infrastructure, you can't build the 21st century economy with 20th century infrastructure. So there's very significant investment needed in transport, in water and indeed energy infrastructure. >> Now, you talked about roads. A lot of people get worried about rock companies. They seem to be so hit or miss because they're connected with housing. Now, we know that housing is very interest rate sensitive, but what we know also is that road building is not interest rate sensitive and the nature of the repetitive business that is asphalt and how roads must be maintained could be a secret weapon for you. >> Absolutely. That's exactly why we got into it maybe, you know, years ago, right? That repeatability, the predictability, particularly up here in New Jersey. You think of the severity of the winters you know, well Jim, the freeze tall, the roads get torn up by the winters so that it's almost a repeatable recurring, almost annuity like income stream in terms of pay repaving the roads. Now, for us, you mentioned new build res. That's the single smallest segment we have in zero-h and US. So, we are way more dependent on publicly funded infrastructure and indeed infrastructure. >> Now, this acquisition again, that helped you in areas that are really the highest growth. But does that necessarily translate into, you've done a lot of acquisitions into profits for your company? >> It does, yeah. I mean, our co-sidial, as I said, we're super excited about this. We've done about 1200 acquisitions. That's one every two weeks for over 50 years in context, right? So, you know, and a lot of it stems from places like this. You take TILCOM here in New Jersey, you know, the president who runs TILCOM, he has a mandate to go out and grow the business through M&A. We tried to foster that entrepreneurial spirit at a local level. So, last year's a very good example. We did 38 deals in 25, 30 of them, bubble-dupped from locations like this. You know, if you're a family business selling your business, we don't change the name. We've a tremendous record of integrating family members into our own senior leadership team and that's very significant. >> And that's true. That's a lot of exclusive looks. >> But you're still quite as independent around the country when you see these big holes. It might be owned by you one day. >> In fact, only, yeah, the top 10 owners of Rock Only Account for about 30% of total production. So, it's still a very fragmented industry across the U.S. >> Well, you know what I think we want to do. I think that we should blow some stop-ops so you can tell us what happens when we do. >> Let's go have a blast. >> All right. Thank you Jim Inter, CRHC. >> We're going to do here Jim. When we give you the 10 second count down, you're going to turn this key here. >> Okay. All right. Yeah. >> And then you're going to hit the on button. >> All right. >> And you're going to say, >> No, don't press it now. We'll go. >> Fire in the hole. All right. Here we go. >> All right. >> It's my second siren. It's one bendos. >> It's tires. It's tires. >> Fire in the hole. >> Coming up, he's the fastest mind on Wall Street. So we're putting him to the test with your help. Bring on the lightning round. Next. >> It is time. >> He's having a little worried. >> I'm going to shoot the right corner. Of course, he's sitting there and I'm stuck. I'm going to tell you about my wife. So, I'm just going to throw it in the corner. >> I don't know. Of course, I'm going to tell you. >> My step is to grab this in the fight. When you hear this sound, then the lightning round is over. Are you ready? >> Yes. >> I'm going to go to my house. >> I'm going to Rachel in New York. Rachel. >> Hi, Gim. Love your show. >> Oh, thank you. >> My question is about Saribras. Take their symbol of CBRS. >> All right. >> The last week, the right chose Saribras to power their real-time self in AI detection. When George Kurt's vouchers leave you on different seats, is it time to stop reading Saribras like a post-IPO trade? >> I think that it's certainly reasonable to say, you know what's down so much in the P-Mobile, it's not that high. I don't want to buy a lot of tech. The only one that I'm currently buying is Intel, which I think has better prospects than Saribras, but I like your logic. Let's go to Bill and Masters' Bill. >> I just want to do an honorable mention about Regina Gilligan. When you invited me down to the monthly meeting with the gentleman on the CEO of NVIDIA, I love to imagine how high the show was to produce. Nothing but respect that you want her. I'm interested in a regional bank first to rise, I'm pretty sure. >> Well, first I'm going to tell you the truth. This show doesn't work without her, okay? And that's what you saw. It doesn't work without her. Now to your question, first to rise in, I think it's a terrific stop for you. Expensive, and I think you should buy it. Let's go to Mary Ann in New York, Mary Ann. >> Hi Jim. I love to get your thoughts. >> Hi, how are you? >> How are you doing? >> Good, good. I love to get your thoughts on Nike. >> I think that you're okay. >> Okay, I mean the problem with Nike is it's trying so hard to get things burned around. But there's a lot of competition. I think it's just okay. We sold it for the travel test because it's just okay. And we don't want to own just okay. Let's go to Will and Colorado, Will. >> Hey Jim, I need to bottle you a better house in the scale with all this market volatility now. I gotta give that a try at some time. But one of the things about a camper insurance can PR. >> Well, first of all, you should try to pull it forward to kill what you want. >> And Will and Caroline's wedding was done. I like this week. Yes, my steps are fantastic. I need to say to you right now that camper is not a stock one of them. I don't want one that 4% yield. I need growth. I don't have growth. So I'm not going to stick with it. But I will stick with Kramer. >> The lightning route is sponsored by Charles Schwab. Coming up, Kramer is issuing a dire warning about data center stocks. You would be wise to listen. Next. [MUSIC] [MUSIC]
[MUSIC] Hey, how much of your business is a data center? Any time I met a CEO pretty much, any CEO except for the obvious service companies, I always wanted to know the percentage of their business that flowed back to the greatest building of the Golden Age, the construction of these multi-billion dollar behemoths that generate all that compute for a long time was an undenegative positive. That's why I asked the question. These days though, I have to know how much of a company's business is data center, not because of the growth, but because it needs to diversify away from the data center. So many companies are involved in building these projects, there's something that goes to rise, some customer, maybe a hyper-scaler, decided it doesn't want to keep spending, or can't afford to keep spending, then that company stock could be in tatters. Today I asked the CEO of a rock company, how much did you think data center business is? It's any small amount, it helps, but his stones primarily end up in roads. You can't let the roads run down, we all know pothole theory. You need CRH to for the stones to resurface roads so the potholes don't break your car. Yes, it provides the rock can be at the base of a data center, but it rock can be at the base of it. He bridges office complexes, semi-ductor fountains, the interverse pipe, because there's a gap in the market. At this moment, we want smart. Look, I run a child will trust, we own positions in data center plays where the pain is immense right now, but we've taken profits in so many of them that I sometimes feel like we're playing with the house's money. Other stocks we don't like app or beneficiaries of all this computing, because they never spent big on AI. They're reportedly paying Google $1 billion to use their AI model, just to fraction the 20 billion or so, that Google pays to them, as to be the default search engine on their iPhones. Well, first stocks are getting steam again, because they are more oriented to, well, AI, and their stocks have come down so much. I told people this morning that once again that we want tech, but not the kind of big tech investors used to buy, we want materials tech. I mean, one science tech. I saw a guest on the show earlier today, it said a huge amount of the market is data center, but there's not much else to buy. I say, come on. You just got to hunt a little for it. That doesn't mean it's a terrific market, but it's a market of stocks, and there's some that's going to go higher. Look at the data. I talk about this endlessly and how to make money in any market, because the kind of market well that we have is exactly what I was writing for. Now, if you own terrific tech stocks and you're not on margin, you could be fine. Assume you can handle a little pain. If you don't margin, get off it. I know you're fuel, you're going to get out alive. If you're speculating, I know many of you are, then make it so you're speculating only one or two stocks spending on the size of your portfolio. Listen, when I see what's happening in tech, I can't help think of what happened when I bought a.com company, company in 1999. So many.com companies and Jason companies were so confident that they do well in that environment. They were paying for things with basically free money, or they thought it was. They were giving vendor financing so everybody had any customer could afford to keep paying for the product. Summary of what we're hearing right now with some of the big dogs, it all seemed terrific. Then in March of 2000, the market turned on a dime. By April was obvious that the companies that looked like great credit risk were going to go undur. Where the 300 and 30 of them did. Could it happen again? I don't know. I say maybe, but it won't be growth health companies or growth materials, companies or growth retailers. These are easy to find. If you can't find any, join the CBC Investing Club. If you are borrowing money to buy something related to the data center, okay, here's what you're going to do tomorrow morning, 9/3 AM, sell it no matter what. You will not regret it. I'll let you say this. Always a bull market somewhere. I promise I'll find it. Just for you right here, Matt Money, I'm Hugh Pramer, see you tomorrow. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of C and B.C. or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet or another medium. You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable. And either C and B.C. nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Divute the full Matt Money Disclaimer, please visit CNBC.com/MattMoneyDisclamer.
PodcastTranscript AI