Mad Money w/ Jim Cramer 9/16/26

- My mission is simple, to make you money. I'm here to level the playing field for all investors. There's always a more market summer and I promise to help you find it. Man money starts now. - Hey, I'm Kramer. - Welcome to a special West Coast edition of Bad Money. Welcome to Kramerharka. Other people want to make friends. I'm just trying to save a little bit of money. My job is not just to entertain, but to do some teaching too. Call me at 1007 for 3CBC, tweet me @jimkramer. If you buy stocks here, you are now, as of today, officially fighting the Federal Reserve. That's what happens with the Fed decides to raise rates as it did this very afternoon. The first rate hike, a quarter of a percent, creates a lot of confusion. You're off in a quick dive, which is exactly what we saw today. I mean, just. And that produces selling. We aren't sure if there's going to be multiple hikes, which would be really bad for this top market, or we're only going to get one, maybe two. Not so bad for the market. From the looks of things in the harsh words we heard today from the new Fed chief Kevin Marsh, we're going to get many hikes until the job is done. The job being slowing inflation appreciably. And that is why the Dow plunge 631 points just be lost 0.45%, but the Nasdaq fell only 0.01%, and that was a nice comeback more in that in a moment. So even as I'm out here in the West Coast, where these rates mean very little, because tech does thrive no matter what. Let me explain why this decision was right for the longer term, but miserable for the shorter term. And why the stock market may need to take a hit beyond today if inflation doesn't settle down. Big if. First, understand this economy does have a real head of steam, mostly because of the great data set or build out. These behemoths are beast when it comes to capital expenditures, and you know what? I still think they will be. How's the pleasure? When the smoke clears from the rate. See, they're distorting economy, but there's no sign that the data center's strength is slackening, and rates won't impact it all that much. And that's true for tech earnings. The growth will most likely continue, a pace employment is full, which is fantastic for the stock market. Lots of discretionary income. Lots of savings and lots of spending. I know we keep waiting for AI to destroy jobs, but right now this cycle is creating jobs by the second, mostly trade jobs. And economy does keep strengthening. But there's a real downside to the build out too, and that's what we heard today from Warsh. We have an economy that isn't used to working with its hands. Service jobs make up two-thirds of the workforce. When you have the biggest capital expenditure cycle in history, one that involves endless bond sales reference today by the Fed's chief in his speech, and lots of stock offerings, you're going to get hit with too much inflation, and the Fed does have to pump the brakes, and that's what started today. We could probably handle that level of inflation to build out causes. But these are not ordinary times. We already had good, you know, I'd say pretty predominant inflation. We're at three in change. That's way too high historically. Our new Fed chief is a serious person, and he's been on bringing the rate down to 2% by 2029. Even though President Trump picked him to cut rates, well, he knows that we need to keep inflation down to preserve the buying power of the dollar and the net worth of their savings. There are two things making Warsh's life difficult here. The first is man make the relentless line in oil prices. You could say that when the war with the rent and inflation will go down, but who the heck knows what it'll end? If anything longer hire oil prices last, the more likely it embeds itself in the system, it makes everything expensive. Oil prices are passed under you, the consumer. The Fed can't change that unless it raises rates to the point where we can afford to drive as much, or we don't need to drive because we all lose our jobs, or because we don't spend that much. I don't think we're going to reach that point. But the longer oil stays up, the more likely it is that we'll see more rate hugs. And every hike from here, well, it'll be something that's going to knock down stocks. The other spread of inflation is the real bear. The printing press. We're running a distinctly suboptimal budget deficit. You know the President or Congress seems to care, our government has a $20 and it just means a loan. That's hideous. A serious person like Warsh doesn't want the press as the print, because printing money is inflationary. I think he'd smash them if he could, but that's beyond the Fed's control. All I can do is raise rates until Congress and the President gets serious about spending. If they did, book out. That would be fantastic. When you raise rates to the economy slowly, if you can go back to printing presses and help keep inflation down, stocks can go up. But can it keep the President down? I know that Warsh is doing much right. But what happens when the President goes ballistic? He could be about, he might be like a swarm of AI agents penetrating the walls of a hug in the face. In the end, I don't think it matters what the President says because Warsh is such a gamer. He knows what he wants and it isn't necessarily good for business or the stock market. We're serious about this, he said at one point. We're serious about this, I like that. I don't think anyone, especially the President, doubts now. I hope Warsh has skin-like tungsten, because you're going to need it. The wall stock is going down with the Fed tightens it. For many of the stock markets to commodity like bonds, like real estate, like the dollar. When you learn to be a professional money match, you recognize that the Fed can crimp credit creation. Fed chief referenced the hyperscalers as companies that can crowd out a lot of borrowers. You raise rates, you can shut the spikler off. So there are managers who are taught to sell all stocks when the Fed tightens and go into cash. Because you sell stocks when the economy slows. Warsh made it clear that's the plan. That's selling crush us today until tech rallied at the end of the day. But there are other managers who say, "Stay the course." I'm picking the stocks of companies that can do well regardless of what happens with industry. It's like for them. There are other things that can do okay here, like tech. And then there's the rest. Financials, retail, travel, leisure. So many others, all not so hot. The rest before this was small. Lots of stocks go higher, the rest small. But it's going to keep growing and growing and growing. It's the longest in face to ratings and readings. Stay high. So there's, I just say, it's just harder and harder to find good stocks. I hope the Warsh's comments might have commented by a market which has been terrible with race car per levels. Nope. Interest rates were going down before the Fed chief started talking. And then they reversed and went up, "Bad." And again, another thing that gives us fewer stocks to buy. Ultimately I think I like it when the Fed chief shows gumption. But it's not good for the near term for most stocks. Long term, it's essential. Because it prevents one away inflation. For now, they'll look. If you're trying to manage money like I do with my childhood trust, you can follow along at CMC Vestin Club. There are fewer stocks to buy. Fewer to hold. Warsh stocks to sell. Did Warsh want to lose money to it? No. But whereas Compton termed his meeting, he wants his few stocks as possible going higher. For many, yes. Makes it harder to make money and making money with borrowed money. It's going to be a sin from now on if the world already. But there's always a more market somewhere as I say at the end of the show. We just need to find one or two sectors that can thrive, even in this environment. It's harder. But it can be done. I've done it before. I hope we can do it again. The bottom line. I think the buyers will come back. Especially to tech. Because there's not on a rate cycle. It's on an industrial revolution cycle. But a lot of groups simply don't work. As long as Kevin Marsh is on the warpath. And Warsh is definitely on the warpath. Let's go to Jerry and Missouri. Jerry. Hey, Jim. Thanks for taking my call. Absolutely. What's happened? Well, Jim, just wondering. You talked to Michael Intruder often. I was just wondering if you think Coral Eves is going to break out at any time soon. Okay. So Coral Eves got a unit down here. It's borrowing a lot of money. And that's going to be harder now if the Fed starts raising rates. But it's smacking the middle of the great industrial build out. And so therefore, I think it's going to be okay to buy. But it's become more speculative. As the Fed raises rates, it's become a more speculative situation. And you got to think about that because that may not be what you really want. Let's go to Jerry and Florida, please. Jerry. Yeah, hi, Jim. Come to me. I'm wondering about is Raytheon RTX. What's going on with Raytheon? Okay. Here's what's happening. We've been looking at companies that have high high price earnings multiples. And we've been shrinking them. As the Fed raises rates, the multiple the people pay for. We'll go down right now. It's 27 times earnings in a rate cycle where the Fed is raising rates. That PE multiple, which is why I wrote my whole book about PE multiples. That has to come down. And that's why that's why it's going lower. Listen to me. Buyers will come back. But they will come back to the same place. And remember, for now one, we're fighting the Fed. Well, man, that's right. The Cyber Stocks are a unique in position. This market of gold and punk. AI saved you. They're not OK. They're not tensed. They're not tensed to the Fed. I'm just going to palo out with alto networks to find out how the company is staying ahead of the game. Then Arm Holdings is the center of what could be a multi-year chip shortage. I'm getting the latest from the company CEO. And Ogne has finally broken free of the AI displacement fears and is really starting to get a beef on the bad Asians. I've got to see you there. Stay with me. Don't miss a second of Mad Money. Follow @JimKramer on X. Have a question. Tweet Kramer. #MadMensions. Send you an email to [email protected]. Or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com. I came out this afternoon this week. Right as everybody started talking about the need to slow down AI development, prevent Asians from running wild. But in the end, I think this whole issue comes down to great hygiene cybersecurity. And that's why I want to check them with palo alto networks. It's a cybersecurity leader that we know for the travel trust. This week, palo alto's stockluck fire up a quick 14% because Wall Street finally recognizes that you can have powerful AI without equally powerful cybersecurity. Don't take it from me. Let's think deep with Nikeshwar or the chairman, CEO of Palo Alto Networks, and an expert on what's happening right now. And any other things. Mr. Werr, welcome back. - Nice to see you, Jim. How are you? - Good to catch you. Look, we've got Dario. - Yes. - You can trust first name people, Dario. Talking about pacing the frontier. And then we have Neckash talking about the pacing is a ninja move. What does that mean? - Well Jim, I've been listening very carefully to all the rhetoric about what should happen to AI be slowed down and what are the bad effects of AI. AI is an amazing technology. I think what we have in front of us is once in a lifetime opportunity to embrace something that is so going to be so impactful across the board. And I don't see how it's going to slow down. I don't see researchers not wanting to win. As I've said, there is no competitive support where I found people saying, oh wait a minute. Let's all take a break together because we should slow it down. I think the right conversation is how do we make sure all the power of AI can be harnessed for the right reasons and for good. And that's the conversation that should be had. I think the right conversation is how do you make sure that AI can be delivered safely and securely so we can use it for good things. That's the conversation to have. I think the idea that we should be fearful of AI and we should wait and we should slow down, it's just antithetical and what's going to happen. So it's about time to have the real conversation. - Well is it too cynical to think that perhaps this is like a car race where they wave the yellow flag and no one's allowed to have. - Oh this is a cow's track analogy. We're doing a powel alternator, come on. I saw you do that. - I saw you like me, I got him after crowds, right? - You got the yellow flag that's the wrong guy. - Nothing but at least you're smiling. If this was a conference call to the analysts, I know you wouldn't be smiling. - No, look I think there's enough room in this market. I heard Renee before this and he said there's a lot of room and it's a big market, he's going to make money and Nvidia's going to make money. It's going to work inside of the security as well. - Oh let me pivot a little. So you're doing this. Fed raised his rates today, kind of serious impact on cybersecurity. - I don't think so. Look I think right now, I don't think that an impact of technology. I think majority of the company's spend is going to pivot to technology. For the first time in my career, my finance guys want AI people. My HR people want AI and what are you going to do with them? It's like we're going to make sure our processes are better. We're going to use AI in our business. So for the first time, the demand for technology is coming across the organization from everyone. Whether it's customer service, logistics, security, everybody wants more money from to do better AI. So in that environment, I think technology spend continues to go up. So the demand right now looks like it's infinite. And the more technology you deploy, at least at the enterprise, you're going to have to do it securely. - Well, I think if I were on the board of a publicly traded company right now, when I'd been on them, I would be saying to the chairman and the CEO, if we do something wrong and we heard another company and we do not have Palo Alto with a process, a process that's Palo Alto, we're going to get sued forever. But at least if we call the cash and we bring them in, we'll have been known as someone that I do, do you care? - I think that the fear people have is, for the first time in life, we have a non-deterministic technology. Everything else historically in technology has been deterministic. It's been input and output. And you test for the output and you test it nine years from Sunday and say, okay, I'm 99.9% sure the output is going to be consistent with my expectation. In the case of AI, the output constantly morphs. When output constantly morphs, you cannot figure out whether the agent or AI that you use is going to deliver with the intent that you set up there for. Which is what happened when agents ran away. - Let's talk about the hunting face. Do you think it's worse than people realize that this 1200 agents got together and congregated and became this colony of hate and things? I mean, is it one of those things that we give them human characteristics? - Imagine you create a civilization where you told 1200 people there were no rules. And the job was to go win, what would happen? - They'd stamp you didn't win. - Right, so what have you done? This is a science experiment, okay? It's a science experiment, we say, with no constraints, no guard layers, no governance, no training, no nothing, the only objective is capture the flag. And do it with whatever you see in your training. And the training is the world's knowledge because we train using public knowledge. So the agents know every good thing, bad thing that has been done in the world, they've been trained on it. So they're basically executing to the task. - Well then how can you be smarter than they are? - Well, I think, let's be clear, no enterprise in the world is going to enable agents in their infrastructure without ample governance, guard rails, that's every conversation that I have with every CEO, CIOs, or Chairman. They were saying, great, we'd like to use AI, how do we do it in a way that it doesn't go wrong enough? - But does anyone call you when you say to them, guys you got to slow down, you're going too fast? - No, I think what we say is you have to be thoughtful, you have to understand the expectation, you have to understand the intent of this. For example, you know, we are talking to people who are deploying agents, we like, here's what happens. Agents are created by human beings. Agents take their credentials, run away and start doing things for them. We say, listen, what are you going to do? You tell us what the task expectation of the agent is. What would the agent just the credentials to be able to execute the task? - Right. - If you restrict agents and give them credentials just to execute the task that you intend, and you allow them latitude and they're to be non-deterministic, then there's a higher probability that you can govern them, you can keep them in check. That technology is being built. At this point in time, the AI lab should be chatting with us and saying, how do you put this in place because we have something to contribute, they have something to contribute. Historically, you've never had technology where cybersecurity was not required. It's not like, oh, I have a Dell server, it's secure, but I still have to come in and make sure it's secure. I have Salesforce, it's secure, but I still have to come in and make sure it's secure. - Well, they attacked a country with no defenses. A typical country does have defenses, but let me ask you, if they don't bring you in, I mean, it bothered me tremendously. Oh, no, let me hear me out. I'm not blowing smoke with this. It's all the different commentaries for these people. Why don't they say, you know what, we sat down with the Kesher War, we sat down with our friend George, okay? And we realized, you know what the process is, and we're gonna be able to do it right with guard rails. Instead, they just say, oh my God, we don't know what we are. People are dying everywhere, and it's gonna be like, go check your trust in the States, where I'm like thinking, come on, grow up. - It's happening, look, it's happening. We are talking to all the people in the AI lab ecosystem. We are working with them. We are building hooks into their products to create security. There's a lag. There's a lag between research and execution. But enterprises live here in execution land. They don't live in research land, right? So yes, research is telling you that, holy shit, we don't pay attention, and we're not gonna kick track of these agents that things can happen. And that's true, it can. It's our job as responsible leaders of cybersecurity companies, or responsible leaders of companies period, to make sure that we deploy AI in a way that it's safe and secure. And that's gonna happen. - And that's why you bought cyberware. - Yes, you bought cyberware, because, you know, you can't-- - Identity. - You can't do stuff with identity. - You can identify these, you can go on. - Well, it means that you know who they are, and what they're gonna do. - Yeah, but the one thing I am scared about, and I'm scared it's the wrong way, I'm concerned. I do, I think in the hands of very smart people in North Korea or Iran, there's some damage that can be done, and there you really have to be thinking on your feet about what is the most nefarious thing that could have. - Look, every technology has both sides. It has a dark side and a good side. And the good news is, the majority of the uses that we use technology far are for good. There is always the opportunity or the chance that somebody's gonna take the technology and use it adversely, and that is what, you know, if you saw the Mythos moment, that was what it was about, right? The fear is not that we will, as good actor as use Mythos, the fear is bad actors will take Mythos and start using capabilities like that and start attacking companies and be able to enter the infrastructure. So we are all aware of it, we're all building capability to block that capability, block the Mythos like behavior, and get ready for time as getting more and more powerful. So I just think the impetus right now is that every company needs to look hard and say, we're moving into a new world. The new world is where you have to be able to do cyber defense at real-time speed because the bad actors are gonna be able to attack you at real-time speed. - And there's no one who knows enough at their own companies, I believe. It might have one or two people who do it with this, but this is about a process of bringing in a big company and those who do it. - Jim, for eight years, I was trying to convince the world to deny in your stuff. - Well, it's been eight years since I joined Palo Alto. It's coming in the year, ninth year now. But in nine years, I've been trying to get people to pay attention to cyber security. And you know what, our friend Dario did it with one thing. He said, he's a much better marketer than I am. - You know, I was funny. If I were back home, we'll show you what it said. Raising numbers, Palo Alto Networks. That's the cash reward. Chavans, you know, how Palo Alto has talked to me on for the trust in Holy Cal, has it been great? And everybody's back in for the break. - Coming up, Kramer's linking up with a CEO of Arm Holdings to get a grip on the chip maker's current status. Next. (upbeat music) - The whole AI data center cohort, Pete and June, then most of them bottom near the end of July before we've had it like crazy. Some of the stocks are still off their highs. Arm Holdings, major chip design company, now also makes its own CPUs. Stocks went to $4.52 in June. Now pull back to just under 244. That's down 46%. But I don't think you should look like that. I think you should look at this. It doubled from the last time I saw our next guest. People are worried about a self-imposed slowdown in the data center, come from the big frontier AI labs, which is why Arm got sent on Monday. But I think we're looking at a mulling your chip storage for Carlos, do not take it from me. Let's check him with Renee Haas. He's the CEO of our moment to get a better in the situation. Renee, welcome back to mid-money. - Thank you, Jim. Great to see you again. - Okay, so you're going to be my testimony for my view at the top of the show. We had a fed rate, I could say, a quarter percent. And what I say is you have to look at companies where demand is so great that a quarter percent really doesn't stop the buyers. And I think demand is so great for your product that it really won't matter all that much whether rates are three and three quarters or four. - I don't know how to exactly link what Chairman Worse did today in terms of our overall demand in terms of percentages. But what I can say, Jim, is that demand for our technology, whether it's at the edge, whether it's an automotive, robotics, and certainly the data center, has never been stronger. And I know if you've heard, you've had a lot of folks on this week talk about AI, but it really is AI because AI is so compute-intensive, right? It requires so much in terms of CPUs, GPUs, memories. And that's the hardware arm is. So yeah, demand for us, it's just never looked better. - I know when you first unveiled your plan for, say, just a $2 billion in business, you didn't have the foundry space. I thought you were a little more, I got to tender a billion, but I thought you were giving us a little more leeway in thinking that maybe you could get some more machines to make what you need. - Yeah, so what we said in the earnings call, I think was May time frame, that we had visibility to $2 billion. And what we said in the last earnings call was that our confidence to achieve that $2 billion number had increased from May to July. Here I am in September, and what I can tell you is, Jim, I'm more confident today than I was on that July earnings call. - Oh, that's terrific. That's an inflection, you know that, say that. - Yeah, and we're feeling good about it. We're feeling really good about it. - Okay, so now let's take a head on Dario and these issues involving potential slowdown. I mean, to me, what these companies are gonna be, I'm gonna come in the Gents in Wong School for the most of it, because I think you taught me to be there. But I think Gents is saying, listen, these companies are gonna be response, we're gonna do the right thing, they'll be guardrails, but it's gonna continue advance a pace because the demand's so great. - Oh, of course, you know, you know, it's interesting, some of the things have come out this last week. My view on it is that ultimately, any company that's putting out a product needs to stand behind the quality, reliability, and safety. I mean, that's a kind of a fundamental table stakes issue. Companies need to get it right. Governments don't get it right. 15 companies don't get it right. It's kind of the hygiene of what you're doing building a company. I think what's different here is that number one AIS got this mystical quality about it that people get really afraid about. And secondly, these are young companies. These are young companies developing products really, really fast, and the advancements are taking place very, very quickly. All that means is as a product company, there's the hygiene you put in place through engineering, quality, reliability, safety, they'll figure it out, but the answer is not, let's all collectively tap on the brakes, because I don't even know how one product solves that versus another. It just doesn't really make a lot of sense to me. - But I would tell you, there was something that happened this weekend, which is that, I mean, I would tell people exactly what you said, 'cause it's a common sense view, but they will come back as a gym. These people wouldn't say we're all gonna die by 2030, if they weren't true. (laughing) - You know, ARM delivers tons of products, thousands of products, three and a fifth, five to billions each. - What is everything? - In everything. Quality, reliability, we have to stand behind it. Can you imagine if we had security issues or safety issues that caused our products to burn on fire? - Well, I'd tell you, I'd tell you. - I would see it. - And if we had an intern who worked at the company six months and looked at the quality process we had and then came out and said, all of our products are gonna blow up and everyone's gonna die, it's just irresponsible. So I found sort of the knee jerk to all this, a little sensational, but not grounded in logic. - Okay, I think that's, you come down where I am. Now, I wanna talk about robots for a second and self-driving cars. How many CPUs do these things really need? If they're gonna be good robots and good self-driving cars? - A lot, and it starts with the distribution of where the CPUs are. You've got CPUs that are the brains of these machines. So literally in a robot, you'd have a couple of very large CPU clusters and when I say CPU clusters, these are chips that could have 10 CPUs, 20 CPUs, 60 CPUs. And then you've got multiple brains. In other words, you may have something in the head, you may have something in the torso. And then when you go out through the limbs, the sensors, the controllers, things that can do the perception, their CPUs there, hundreds and hundreds of CPUs and robots. And similar in an automobile, literally hundreds of CPUs. - Well, that's gonna be the big gating factor, then. We can't make enough CPUs to do all that. - Demand is off the charts as we talked about earlier and the big constraint is going to be supply. And supply is around wafers for building the logic chips, but it's not just the wafers gym, it's the substrates, it's the testers, it's the memory, it's the entire supply chain. So we are looking at some really complex supply chain issues, I think, for the next number of years. - So I was initially worried when you said this, we're gonna go in and make our own, and we also make 'em for everybody else. I mean, you're the world's largest. I mean, I should have said that from the very beginning. You're by far the world's largest. But it sounds like there's so much demand. No one is gonna say to you, Renee, you can't come in against this. They're gonna say, can you please help us? - Our problems have been far more the latter than the former. When we were having discussions about this internally, we were thinking about, how do we respond to the questions that say, gosh, why are you doing this? You're infringing on my space. The questions we get is, can you make more? Can you deliver them faster? When is your next generation coming out? And there's plenty of room for everybody. I mean, Jensen builds a CPU based on ARM. He's talked about fantastic demand for Vera. So the world's pretty big, and there's a lot of space for all of us. - Do you think there's still people who remember your company is really a cell phone company, and maybe that's why I still think it's incredibly undervalued? - It's possible, that's the history of the company, but in a very short time, data center is gonna be our largest business, and that we've seen double digit growth in that or the last number of years. Really, the thing about ARM is, we are the compute platform for AI. Every AI application is gonna run through ARM, one shape or another. - Now, I will say this to our viewers. You said this many times, you would come on squawk on the street, I hope you could do so. And it would be like 140 going down to 120, and you would have to be very frustrated, 'cause we knew that the man was insane, but I think it took a little while to people to realize what you've done with the company. - We've been very conservative traditionally, about how we talk about the numbers, and I'm very, very confident when I tell you that, things were better in July, they were in May, and they were better in September in terms of how they look in July. I hope people take that to the bank, because we have, essentially, beat every single quarter since we've been public. - Well, that's why one people don't understand just, 'cause the Fed raises rates doesn't mean it's the end of the world. There's some people have such strong demand that their stocks continue at pace. That's Ray Haas, CEO of Arm Holdings, please look at this. The trust had a great position. We made so much money, candidly, and then we took profits, and that was a big mistake. Then money's back up to the ring. (upbeat music) - Coming up, is Octa positioned to lock down gains as we enter the agentech era? Kramer's investigating with the CEO. Next. (upbeat music) Now that everybody's reading their hands over the risks of AI, I'm gonna drill down the cyber security place that I think can help mitigate the risk. Take Octa, a major player in identity verification that reported a phenomenal quarter in late August. Stocks now have 140% 144 over the past six months. And part because it's long been held back by AI displacement worries. Turns out artificial intelligence was never gonna make Octa obsolete about it, and their security suffers more essential than ever now that you've got AI agents roaming around the internet. - So let's take a closer look at the top. We can open to the show, hope that our CEO of Octa will learn more. Top, welcome back to Man Money. - It's great to be here, Jim. - All right, so Todd, I've got an interview that you did. September 9th before what happened, okay, these incidents. And you're very pressured. You predicted that this could happen, but you said that these things have identities. And basically, if you have an identity, I can stop you. - Well, here's the deal. AI agents, they're a powerful new identity type. So I used to just be, you would have some software and you would integrate it together. And now these AI agents can make decisions on their own and to make them more powerful, you have to do one key important thing. And that's give them access to more data, more tools, more actions that they can take. And that means that you have to give them an identity so that you can control and monitor and have visibility into that data and those actions and those, and that gives you insight into the potential negative repercussions and so you can prevent it and control it. - Well, I think this is really important. We had a lot of people discussing in some pretty fiery language, what could go wrong. And then when I read what you do, and I think, wait a second, look, there may be a lot of these. They may seem nefarious, but as long as they have an identity, even if they are nefarious, they can still be stopped. - Yeah, we think the key is visibility and control. So open AI and hugging face. Everyone's heard about this problem that happened where an open AI model jumped containment and went after this company hugging face. Now open AI said that their model was not connected to the internet. Now, turns out that it was connected to the internet. So by bringing visibility and control with something like Octa, you actually know what your AI is connected to. So it's not gonna be a magic thing. Fix for all this but the foundation of the fix is visibility and control and once you have that in place Then you can take the right actions then you can have a good risk assessment of what's actually happening? So you're offering as you say the blueprint for the secure Agentic enterprise. It's very important when I talk to customers But what you probably talk how many customers I'm on I'm on a plane every week Getting out there in the world and talking to customers and they ask about competition investors ask all the time about competition What's your competition? And they expect me to talk about maybe a platform pair confusion and confusion is the yeah I read your stuff because every every every every vendor is going to the customer and saying we have the answer to everything We can do it all and it looks to the customer's mind It's a bunch of overlap and a bunch of confusion So we're trying to work with the industry everyone in the industry and say here are the elements you need to be successful You need this plan for your real-time visibility your plan for identity and we're focused on the identity and we're going to fix that It's universal director of identity. That's what you needed a company. It's you have to have a system of record of your AI agents But you can't you have to have a central repository of your agent So you can see what they're doing and see what they're connected to well, it's the foundation for control Okay, so like many other people this isn't one of those issues that transcends stocks So I mean first is I just howling my wife. I was going to see you she knows that I talked you and that you've got a real solid head And she goes well, I mean like unless everybody uses your friend I mean isn't everyone going to die and I said oh god, no And she's well, then you just want your friend out. I said you taught I cover taught for a long time But maybe he's just a rational person off for the solution I think I don't one of the things we don't do is we don't oversimplify We know that there's tremendous potential in AI technology and the way you make it more powerful is you give it more data You give it more connections you give it more power you give more capability and I want that to happen and I want the benefits to Accrue to everyone's company and everyone organizations. I want America to win I want the world to win but the only way to do that while also mitigating the risks is visibility and control and and we're in a Perfect put situation because the key to visibility control is identity You have to know where these agents are. You have no 1200 in a swarm that are coming That's like a stampede. How do you stop a swarm? Well the systems that contract this stuff are quite big and quite powerful We have a lot of computer science and a lot of sophistication on the defense as well as the office Don't you still aren't you saying oh my god to your team here comes 1200 I mean what do you do? Well, I mean first of all we give the tools to our customers to track them and control them and block them and The whole world is becoming agentic this part of this part of the narrative is probably underhyped We talk about agents everyone talks about AI But the reality is is that everything is turning into an agent your phone's going to be an agent your TV is going to be an agent your car is going to be an agent So it's about visibility and control across all of technology. That's the stakes But one of the things that bother about this whole incident Todd when I first heard it I said What are they talking to people like Todd or are they talking to people like George hurts a crowd strike? Because that's who they should be discussing things with they shouldn't be going on Twitter and say and we're all gonna die like a bad Hollywood movie I think a lot of times they're trying to do the right thing there there are risks and there are Things that everyone's worried about the problem is is that it's gonna take the ecosystem as you said It's going to take the model companies is going to take the SaaS application is going to take the security infrastructure That's why this concept of a blueprint is so powerful this blueprint that can get everyone Coordinated in in the right lane working together to take what is really the future of technology and making sure we balance off the potential with the risk and get the right outcomes Maybe Dario's letter would have been better and there's he's a small guy I'm not gonna tell him what to do But if he had said this and we need time to do exactly what you did It's supposed to say we got to go slower because ghost slower worse interpreters being as hobbling yourself But time to be able to do the things you're talking about I think seems well sir I think that I think the right discussion is not about speed I think the right discussion in companies. It's always about priority. What's the priority right? So it's not about slowing down because you want to go slow It's about prioritizing the things we have to do as an industry to keep it safe Well, if that's the case, that's a little more like what Jenson Wong's doing I hit the idea that there's like, you know, some sort of zero something to me You're offering a legitimate pragmatic way to be able to get it under control Regardless of how long it may necessarily take. Yeah, it's if we have the right priority as an industry The timelines will work themselves out because we're not we won't as Jenson said We're not gonna shit products before they're ready. We're gonna make sure we prioritize the right controls and safety And for us that all starts with this visibility and control concept, which is so important But I would tell you that when I really, I mean you Constantly mention that that if I if something went wrong and my business was hurt by this I would sue these guys to see if they did what you should just talked about if they didn't have that process Their business will probably go under this really matters Well, it matters to the companies to put the right controls in place and our advice to the companies using AI Is make sure as you connect it to more things and as you give it more data And you open it up to your data warehouses and your applications and you rework your business processes Make sure you have the right blueprint in place to get that visibility and control and that starts with identity And we're here to help you with that boy. Ta-da. I don't know you've taught me identity I remember the first time he told it to me and I thought it was like, you know some sort of Card but we you've certainly explained it used to be. Yes. Well, look, I think you have always been a Clear-headed rational person and it sounds like we need you more than ever. Thank you. Thanks for having me Todd McKinnon is the he's the co-founder and CEO of Okta. They have money's back in for the bread. Thank you 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 to go right back to the matchroom. My problem is you have to buy buy sell search if they're new. Of course, that was it. That was good for you. When is that And then the lightning round is over. Are you ready Steve? That's a lot of questions. I'm going to start with Douglas and Alaska Douglas Let's get to work expanding operations in New Jersey, Pennsylvania and Texas Partnerships within video and Google 16 networking data center build-ups and AI defense systems Doctor Kramer. What are your thoughts on Nokia? I like Nokia very much. I'm glad you brought it to our attention I think it's a terrific situation and I would be a fire right here right now. Let's go to Chris and Marilyn Chris Hey Jim, this is Chris from an Atlas Maryland Nice. I'm calling in about the Nasdaq ticker F-H-I-P ship Full transportation full transportation is the one fire. I think it's a terrific situation It's non-expensive stock and I think the yield is safe. I'll be a fire. Let's go to Kirin Arizona. Kirin Hello, Professor Kim. How's that going? It's actually going excellent. Thank you. How about you? It's going good for me. Yeah, perfect. Perfect. Oh, yeah, yeah. I'm doing good. Yeah. All right. I want to get your thoughts on Husker With everything going on with the company and the transportation sector. Do you think the fuck is a fire right now? That's a tough one That's a tough one. If there's JB 100 announced bad numbers listed, I have my fellows. This is a small position in trucker And I've got to tell you it's going to be rough going for a little bit. Got to wait to oil comms down and then we're okay Let's go to Quentin, Georgia. Quentin Who are you, Jim? Jim, this company has $8.4 billion in backlog To each exposure to the US nuclear navy and growing advanced reactor opportunity Yes, the stock is near 52-week low at this valuation isn't ZWX technology a maker buying opportunity right here No, I take the problem with the WXT. The price turning is vulnerable. It's 30 just too high. I think it's a great company I mean really terrific, but it's too expensive even though it has nuclear. We have to hold on. Let's go to Bruce and Illinois. Please Bruce Jimmy Chille. I'll start in the minion energy and they're supposed to merge with the next-year energy If the merger is approved, my shares of the minion will be converted into shares of next year What are your thoughts of next year? Take the money and run. Take the money and run honestly. I mean, I just think you take the money You've won don't fool around. That's not a good stock to own versus the one that you are. Let's go to Chris in New Hampshire Chris Hey, Jim. What do you think of our DW red wire? Uh, we're in a rate tightening cycle and a rate tightening cycle cycle we cannot buy companies That are losing money left and right. It just won't work And that ladies and gentlemen's inclusion of the lightning round The lightning round is sponsored by Charles Schwab Coming up Kramer's making the case that you can still buy the AI stocks even if the companies do slow things down next Tomorrow kick off the trading day with swac on the street Live from post-9 to the NYSE Even the swarm turned out to be smart turned out to be nefarious and I worry about North Korea to ran I'm not worrying about you unleashing a swarm. You are the least of my worries Good. I should be. What's that? There's a compliment Hey, I'm failing not your bitch. Let me tell you That's a worries. Hey, I'm favor. It all starts at 9 a.m. Eastern When I look at what's happening with the AI, since the big open AI-hugging phase incident, it feels like nuclear power all over again. If the three mile island really blew up in 1979, we stopped building nuclear plants for decades, even as it proved over time to be the cleanest and relatively safest form of power at scale ever invented. When we learned that open AI launched powerful AI agents that were meant to test vulnerabilities, and somehow they coordinated a joint attack on a hugging phase, totally separate company, it redefined the safety debate. If these agents could basically anthropomorphize into enemy agents as a team hiding themselves, lying to open AI, covering their tracks, just like real bad guys, then we have to say some reason to worry. It's like through a mile and all over again, the regulation in its way could be quite stifling. The worry was well articulated by Adario Amade, he's the CEO of Anthropic, talking about how this kind of thing isn't existential issue for humanity, not as bad as the extant anthropic researcher who said humanity faces an AI death sentence, four years from now. But still pretty bad. The solution to his eyes is slow down an AI development, lots of intervention you do things safely because we need to ensure that this kind of intrusion won't happen, slacking the pace basically. Now I've got two hats on this one. First is my stockpicking hat where I wanted to help you try to make some money. From that perspective, I worry about how an AI spending slow down could hurt all sorts of companies like Nvidia, Intel, Micron, among many others, those are ones that the club owns. Call me nutritious, but I have a job to do, help you save money. Second though, there's my human being hat and I'm a top priority right here, but when these companies are talking about an existential threat to the human race, it's something I can't ignore. Now that I've studied this issue, that's what's a lot of times I spend out here, I believe that some regulation and guardrails are necessary here. But if these entities feel like they have to slow down spending, hey, they don't need the way for the government. Stop the slow down. I'm going to say, if Microsoft open AI and Anthropical worry, the nation should slow down. They understand their own issues, and if we want some sort of combination of the National Highway Traffic Safety Administration, the atomic energy commission, and maybe a watch show with the international atomic energy, cut me in. Otherwise, I stand with Nvidia's Jensen want, who argues that these execs are responsible, they'll do the right thing to prevent the throng of unauthorized agents. I think we'll do it if only to protect themselves from mass tort litigation, lack of any willing to, who's going to ensure them? What I'm not so sure of is, what happens if a foreign enemy unleashes its own swarm of AI agents? For that, I have to rely on Palo Alto, Octo, CrowdStrike, and others to be one step ahead of the enemy. Historically, it's been a safe bet. I like what I heard from these companies this week. Now, how about my first hat? The investing hat that worried about data center spending, I think the spending will proceed to pace. Anthropics, just making so much money and opening eyes not far behind. You get them $10 billion with the gigawatts and they can make $30 billion. They're going to slow down the important parts of their business. Honestly, I doubt they'll slow down much at all because there's just too much money to take for them to stop now. They will be prune and they will welcome regulators, but they're going to keep building. That's why I think after the Fed follow-up base of these companies that make components for the data centers, I think they're all buys. You can have some big companies slow down while others remain responsible and confident without slowly and are using the right cybersecurity tools. That's why these cybersecurity stocks make so much sense to me. From octana-crowstrike to Palo Alto, it's why we own two of them, Crowstrike and Palo Alto for the club. I asked every exact ad here if they're getting ready for the death sentence in 2030, although I did it with a little more subtly to certify because she works at OpenAI, with a commotion originated. And I came by thinking we have some time to fix things, but let's understand each other. We have to fix them no matter what. I'd like to say there's always a more market summer. I promise to try to find it just for you. Right here on MetBuddy, I'm your clamor, see you tomorrow! All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet or another medium. 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