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At the beginning of a new quarter, hope always springs eternal. We almost always get a tremendous rotation out of the winners into the underperformers as people bet that the market has excessively punished the laggards and overrewarded the prized possessions.
Now you can't really see it from the averages. Dow ticked up 14 points today. S&P edged down 2.22%, with that declining 66% right at the end of the day, kind of nasty, but it is minor. See, we need to ask ourselves if this rotation is staying power or if it's going to burn out after a day or two. Historically, the latter is the more likely outcome.
Why don't we do this? Let's start with one of the Mag Seven stocks. Let's start with Meta Platforms. Last night I told you that Meta could make a fortune simply by announcing it would rent out its extra computing power via a cloud infrastructure business like Amazon Web Services or Microsoft's Azure. Today, Bloomberg said Meta is doing precisely that, and the company confirmed it to me.
Now, previously, I said this move could be worth $100 per share. Today alone, Meta's already rallied nearly $50. And you know what? I think it's got more room to run because their cloud business will be instantly profitable.
I don't know if Meta needs to do an equity offering to pay for more of its data center building. I don't. It has countless potential clients and it can snare big business, something it needs because right now Meta is too much of a consumer-oriented advertising company. The enterprise-oriented cloud infrastructure game represents a much better, less episodic business model. Now, Meta's incredibly low price-to-earnings multiple will expand, and the stock will rise proportionally, or in street terms, raising numbers on Meta.
Next up, after cratering all year, the software-as-a-service stocks like Salesforce, like ServiceNow. Oh, they were flying today. Now, these companies have been hurt by artificial intelligence platforms like Anthropic's Claude. I believe AI is cutting a lot of jobs at potential and actual users of their products, and their AI businesses, they're not making up for the lost seats. That's the method of payment for these companies, by the seat. And that's why I'm betting that these gains, they may be ephemeral.
ServiceNow and Salesforce are down so much for the year, though, of 31% and 38% respectively. They are due for at least a couple-day bounce. But it's just a bounce, people, until we see earnings that can tell a different story of this entire enterprise software group. The only one right now that I actually trust is Palantir. This is the fastest grower of the stocks I follow, and it's been crushed. It's down 80 points from its high. Today it finally showed some signs of life. Hey, I don't know if you caught Alex Karp this morning, my buddy, pal, friend. Whoa, smoke show.
How about the gains in the brokerage and private equity stock groups that have been shelled over worries about their private credit underwriting? This morning, Goldman Sachs reported that only 3.24% of its investors chose to exercise the right to get out of their funds this month. Goldman's allowed for 5% cashing out. I think this is a sign that the private equity stocks are at last out of the woods. In short, the move is real because the narrative of private credit chaos and destruction has proven to be phony.
All right, that said, I'd still avoid Blue Owl. Too risky. Go buy Blackstone instead. This scare, pretty much made up by the media, by the way, led to billions of dollars in losses for every soul who was involved in the stuff as the panic was fermented every day. Looking back, it's hard to believe how wrong the doomsayers were.
They knew nothing. What else was today? How about a look? This morning, General Mills, as we used to call it, General Mills reported a blowout quarter and announced restructuring that could cut $3 billion in cost by mid-2030. The stock rallied 8.5%. A bunch of food plays followed right in the footsteps, including PepsiCo. Does that mean the packaged food groups are turning the corner? I think not. You know why? Exactly. There's structural headwinds here from GLP-1 to rising costs, shallow growth. That's not going to change. These up moves, I believe, are ephemeral. You could get another day of them, but the processed food foundation, it has crumbled.
How about these outsized moves in the health insurers and the drug distributors? Oh, I like these. I bet the gains in CVS will be long-lasting. I like UnitedHealth very much here. Your man is doing great. But can I call your attention to what may be the best one in this group? I'm talking about Cardinal Health, which along with McKesson and Cencora deserve to trade higher. Great quarter at Cardinal Health. It was obscured by rotation out of healthcare. Oh, we own this one for the trust. It's been a real stalwart, and I don't think it's done.
Next, I'm looking at the run in the regular insurers, which I never talk about. I'm talking Travelers, Allstate, Chubb. This industry is ripe for consolidation, people. We have way too many insurers in this country. If we get one merger, we're going to get many. Nucor, which had a nice bump, seems fetching, too. I haven't said that in 22 years. The cybersecurity stocks are romping again, too. The US government is allowing Anthropic to sell this Mythos program that needs cybersecurity protection.
Something Anthropic tried to play down when it showed the product. Mythos will generate a meaningful amount of business for two charitable trust stocks. CrowdStrike, hey, all-time high today. Palo Alto Networks. Did the stock of Nike deserve to run 5% on a beaten-down quarter? On a beaten quarter with no raise, no raised guidance for the next couple of quarters thanks to a pressured consumer? Maybe it's down so much it looks up to some. We dumped the stock for the travel trust, fully realizing it could rally a couple points, but then I expect it to stall out as there's no earnings bump going forward.
All right, sobering. We lost a ton of money for the trust on Nike. I always tell about the winners. We lost a ton of money in this. See, I was swayed by the big insider buying and the return of an old hand to the tiller. Problem is, the company has so much global competition now that it's just tough for them to get sustainable momentum.
How about the clubbings that we're seeing from the stocks that are on the wrong end of today's rotation? Look at the beat-down of the data center stocks. Some of this decline is pure profit-taking, and some of it is mistakenly done because of Meta's turn in the data center. I like Micron the most. Like I explained last night, the earnings power is there, eight times earnings, but the price-earnings multiple way too low. I like it.
I also think that the declining stock of Corning, GLW, it was off the most of any stock in the entire S&P 500 today. Well, that seems extreme. The fiber could replace copper in all these data centers, by the way, both as connectors and maybe even one day within the chips themselves, ripping out that hot copper. I like AMD on this dip. I know it's not much of a dip really, but you almost never get this kind of opportunity to buy the stock anymore with this combination of GPUs and CPUs, both of which are in high demand.
Now, we recently had Gary Dickerson, the CEO of Applied Materials, AMAT, on the show, and his semiconductor capital equipment business is in a long-term bull market because of the widespread chip shortage we talk about all the time. It'll take years and years to build enough of this machinery to alleviate the shortage.
All right, here's one. How about Walmart? Did you see that Walmart's down 5%, closed down 3.9% today? Do you know it's in the red for the year? The thesis here is that oil's come down and gasoline will follow, so consumers will no longer need to shop at Walmart to save money. I think that's nonsense. I know sometimes it's hard to pay 37 times Walmart's earnings, but this one's now fallen 26 points from its high. That feels excessive to me. How about you? Hey, by the way, the decline in TJX is really excessive.
But the bottom line here: while rotations don't end in one session, they rarely last longer than two or three. You're now getting a chance to sell the losers at a premium and switch to the winners at a discount. So often in this market, you look back and you kick yourself that you didn't take advantage of the breaks in the strongest stocks out there. I bet this is one of those breaks. Don't blow it.
Robert, New York. Robert.
Jim, so happy to be on the show tonight, and thanks for having me back.
I'm always happy to have Robert. I'm always happy to have Robert back on the show. I love it. And when you're ready for me to fill in on your vacation, I'll be there. Don't worry about it. I got it all under control.
Really? I didn't know you were my co-pilot. I hope you're not going to be like Microsoft's Copilot.
Well, we got a lot of things to do. We got a lot of business. So, let's get right down to work tonight.
Jim, this next company is viewed by investors and analysts as an attractive high-growth stock due to its market dominance in the US buy-now-and-pay-later sector. The robust revenue and earnings consistently top Wall Street's estimates. In the most recent quarter, the company delivered a 29.6% year-over-year revenue jump to $1.12 billion, Jimmy, and achieved a strong earnings surprise, beating estimates by more than 76%.
Now, Jim, you have talked about this company, and I know you're going to love this baby because you have made me so much money through the years on this. One time you made me $86,000 two to three years ago when this thing jumped. And this thing is ready to go because Max Levchin is a genius like you. Affirm.
Well, no, he's smarter than I am. I think he's like the smartest guy on earth, and he's my buddy, pal, friend, too. I will tell you this: I think Affirm's going straight shot to $100. I love that last quarter. I think you're dead right. Once again, Robert, how about the 86 G's that he cleaned up on, huh? Robert is, you know what he is? He's money. Hey, how about we go to Annette in New Jersey?
Hi. How are you? Thank you for what you do, you and Jeff Mack do, and thank you for what you do in the investment club.
Jeff is great. Jeff is great.
You are also. Thank you for everything.
You know, Jeff has got a place down there in Margate. What's that? I'm sorry.
Jeff has a place in Margate.
In Margate. Well, you're from Jersey, right? I mean, you know, we all stick together.
Yep. I'm a few miles away from Margate.
Get out of town. Are you in Ventnor or are you in Longport? Longport or Ventnor?
Oh, whoa. Yeah, Ocean City. We couldn't get in there in the old days.
Well, you had to get in in the old days, and you helped me out.
Well, it was quite a feat if we tried to get in in the old days. Whoa. Hard to explain that one. Go ahead.
Thank you so much for everything you do. And today I'm just wondering about NextEra. I don't have it, but I'm wondering what you think about NEE, the energy company.
I happen to like NextEra very much. I would use this decline to about a 3% yield to jump in NextEra. And you know what I have to say about you, Annette? Annette from Ocean City, you got horse sense. I like that one. All right, listen to me. I think this could be one of those breaks in the stronger stocks that you got to take advantage of. And don't forget, it's okay to get rid of some of the losers into the strength.
Tonight, as the market rounds out the first half of the year, has the flood of new IPOs overwhelmed demand yet? I'm taking a look at where things stand in the deal space. Then, the dollar's moving higher, but that doesn't necessarily spell good news for stocks, does it? I'm going off the charts to look at the potential impacts. And don't forget, it may impact gold and oil. Then, Moderna, it's the only non-tech stock to crack the top 15 in performance this year. So, what does this biotech company have going for it right now? I'm digging deeper. May I suggest you stay with Cramer.
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All year, I've been warning you about the risk of an overheated IPO market. Once we get too many deals, sooner or later the new stock supply overwhelms the demand and the bull market gets sent to the slaughterhouse.
So, now that we've turned the calendar to the third quarter, how serious is the IPO deluge? If we're talking the number of deals we've had, 82 IPOs this year, down 17% from the first six months of 2025, hey, we're cool. But some of these deals this year have been enormous, like SpaceX. According to the IPO experts at Renaissance Capital, total proceeds from this year's deals stand at nearly $115 billion. That's up 636% from the same period last year.
To put that in perspective, back when the IPO market was booming in 2021, we had total IPO proceeds of more than $142 billion. That was for the whole year. Holy cow, have we been inundated? Of course, more than half that space is SpaceX, though, which officially raised $75 billion in that shattering IPO last month. Holy cow. Although when you include the cut for the underwriters, it's closer to $86 billion.
But even without SpaceX, Renaissance Capital said the second quarter would have been the best quarter for IPO fundraising since 2021. Maybe that means it's the worst quarter for the rest of the market. Most of the IPOs have been holding up pretty well. The Renaissance IPO ETF tracks the performance of roughly 50 of the largest, most liquid, newly public stocks, and it climbed 42% on average in the second quarter, beating the major averages. At the same time, we've had plenty of cautionary tales from the IPO market.
Take Cerebras Systems, please, which makes enormous semiconductors that are used to handle AI workloads. Now, this was the second-largest deal of the year. It was priced at $185. Listen to this: the stock opened for trading at $350. It surged to $386, and at its intraday high, well, let me just say it had doubled the price of the deal. Now, that was bad. Cerebras had fallen to $311. I warned you to stay away from this one. It seemed too hot when it got all the way up there.
Now, since then, well, it's pretty historic. The stock's pulled back to $221. In fact, last week it briefly sank to the $160 level, at the $160 bottom in that group after Cerebras reported just an okay quarter, disappointing gross margins. Now, it's been able to rebound from those lows, but the point stands. See, if you tried to get into Cerebras on the first day, it blew up in your face.
Buying hot stocks right after they come public tends to be a recipe for disaster. We tell you that over and over and over again because we want to protect you from this nonsense. We saw a slower version of the same trajectory with SpaceX. Now, I was worried the stock would spike to absurd levels right out of the gate, but it didn't happen. I'll tell you why. The underwriters did a great job of managing the deal. SpaceX came public at $135. It opened at $150. It finished at $161, just a little bit under that.
But then it gradually charged up to $225 and change a few days later as memesters tried to walk it up in the middle of the night. I used to get up and watch it happen. Bunch of chuckleheads thought they could manipulate higher a trillion-dollar stock. No. Since then, the stock's given back most of its gains. And those gains were on very light volume.
Regardless of how you feel about SpaceX, the business, or Elon Musk the visionary, this stock is now hostage to the mechanics of the market, specifically the lockup on insider selling. Those shares will unlock gradually starting around the time of SpaceX's first earnings report as a publicly traded company. If the stock reaches $175.50 by the time the earnings come out, which is up 30% from the offer price, well, that unlocks an additional tranche of stock. That's what I'm worried about.
Hey, how about the other two mega IPOs waiting in the wings? Anthropic and OpenAI. At one point last month, there was some speculation Anthropic could actually come public by the end of this month. But now we need to worry about government intervention in that AI business. After the US government previously forced Anthropic to restrict access to its newest models, Claude Fable 5 and Claude Mythos 5, on June 12th, the company announced last night that the export controls on these models have been lifted. That's good news for the company.
Now we just need to worry about whether that two-and-a-half-week hiatus, that snafu, had made some sort of impact on Anthropic's numbers. The company was on such a roll earlier this year, and it may have already started turning a profit. Even if it didn't do that much damage to their sales and earnings, government interference will always scare some investors away.
And this is not just a problem for Anthropic. Last Friday, we learned that the US government is forcing OpenAI to limit the release of its latest model, GPT-5.6. According to the New York Times, OpenAI is now leaning towards delaying its IPO until next year. They looked at how the big AI stocks got hammered last month and figured this may not be the best time, especially with the large losses it is said to be generating.
From the perspective of the broader stock market, I certainly hope OpenAI can wait until next year. That will give us enough time to digest all the new stock supply from SpaceX and perhaps Anthropic. But man, it's pretty discouraging for the AI space. Keep in mind, there are tons of enormous companies like Oracle, CoreWeave, AMD, Broadcom, Cerebras, whose estimates include major orders from OpenAI.
Even though the company raised $122 billion over this year, the largest private fundraiser in history, Wall Street was hoping that the IPO would help them pay these bills. Don't forget, last fall people were openly wondering whether OpenAI would be able to pay for all the infrastructure commitments, and we don't want to go back to that situation. There's too much on the line here.
Now, my belief, by the way, is that OpenAI doesn't come public this year, and if it doesn't, a merger with Microsoft, which has a big stake in the company, could be possible. That's my view, my speculation. Putting it all together, the IPO market still looks pretty good, and we haven't yet reached the tipping point where it's unsustainable. Even as there have been a few deals that came in way too hot.
But the bottom line, okay, we've still got Anthropic on the horizon. That's gigantic. And now I'm really torn over OpenAI possibly delaying its IPO because on the one hand they need the money, but on the other hand I don't know if the market can handle all this new stock. Definitely something we need to keep an eye on. Remember, a bull can be killed by excess supply, and we don't want OpenAI playing matador. Mad Money's back after the break.
Coming up, the dollar is beginning to tick higher. So, could this shift the state of the market? Cramer is going off the charts to find out next.
It doesn't get a lot of attention, but lately the US dollar has been on a roll versus other currencies. Historically, Wall Street tends to root against the strong dollar because it's bad for American exports. But right now, everybody's worried about inflation. And when your currency is rising, imports get cheaper. Tonight, I want to think through the implications of this incredible dollar rally, which is why we're going off the charts with the help of Carly Garner. She's that brilliant technician who's senior commodity strategist and broker at DeCarley Trading, as well as being the author of the DeCarley Perspective newsletter.
Garner points out that the dollar ain't what it used to be. There was a time when our currency had a huge impact on how much most other assets were valued around the globe because pretty much everything was priced in greenbacks. Now that is no longer entirely the case. Garner blames American monetary policy for distorting the currency markets. She thinks the Federal Reserve has been too eager to print money for the better part of 20 years while Treasury has been too willing to spend big on stimulus.
But I think the other angle here is more important. Between sanctions on Russia and sanctions on Iran, our government has basically forced our enemies to buy key assets in their own currencies. When China buys Iranian oil, I mean, they're not paying in dollars. As a result, Garner notices that the usual pattern where the dollar tends to move in the opposite direction from most commodities and risk assets, it no longer holds true.
She thinks that could change now that we've got this new Fed chair, Kevin Warsh, who seems perfectly willing to remove liquidity without necessarily raising interest rates. But for the moment, the dollar's been bouncing off its lows, and that hasn't had the impact you might expect. Now, I want you to take a look at this monthly chart of the dollar index, okay? Which measures the greenback against a basket of foreign currencies.
From Garner's perspective, this paints a pretty tame picture with the dollar pulling back to the low end of the 20-year trading range earlier this year. Once that level held, we saw a significant rebound. And if it's any guide, this is just the beginning. As you can see from this chart, when the dollar index has previously bounced off this key level, we've had some enormous, enormous rallies. Look at this. Geez. We see it in 2020, 2014, 2008, often following on the heels of big pullbacks.
When Trump was sworn in the first time, that was followed by a 15% decline in the index. When Trump was sworn in the second time, well, you know, the same thing happened that took the dollar index to pretty low levels earlier this year. It's just that once we got here, the dollar repeated a pattern that we've seen many times before. It bounced.
At the same time, Garner points out that the dollar tends to rally as we get closer to the end of the year. I did not know that until we did this because that's when multinational corporations repatriate. They bring their cash home both for accounting purposes and to pay bonuses. Put it all together, and she believes the dollar will continue to move higher.
Remember, that's a headwind for most commodities and most stocks, particularly, of course, the companies that are international in their commerce. Now let's talk about the flip side of that: oil and metals. And it's oil that, of course, I'm focused on, but she says, listen, we got to focus on gold, too. Garner has mentioned before that the run in oil reminds her of the big energy spike in 2008, not long before the financial crisis.
Lately, the price of crude has come down hard thanks to diplomacy with Iran that's partially restored the traffic through the Strait of Hormuz. Take a look at this. This is a monthly chart of West Texas Intermediate crude going into the war with Iran earlier this year. A lot of people insisted this would be the largest oil supply disruption in history. Remember that? Make it almost impossible to overcome, at least in the short term. I never bought into that argument, as you know.
Sure enough, Saudi Arabia and the UAE built emergency pipelines to get around the Persian Gulf. A ton of new supply from Venezuela came online earlier than expected. Our own country started pumping even more. And of course, our government temporarily lifted sanctions on Russia and Iran in order to get their plentiful supplies of oil in the market. And that's why it was not able to exceed this. And oil quickly peaked. It's only come down harder once we got serious about negotiating with the Iranians.
At the same time, even though the negative correlation between oil and the dollar isn't as strong as it used to be, a rising dollar tends to represent a massive headwind for the oil market. In 2008, the dollar bottomed in March and started to make a run in August. Back then, that's when oil peaked, okay, at $150, a few months after the dollar found its footing. What came next was a stunning decline straight to the low 30s. God, I remember that. It was incredible.
Garner points out that this year we've seen an almost identical reversal in the price of crude right after the dollar bottomed in March. When you drill down on the daily chart of oil, you can see, I know it's a little confusing, bear with me, the recent decline in more detail. Garner points out that the relative strength index down here, that's an important momentum indicator, has now reached oversold levels, meaning oil's possibly come down too far too fast, leaving it vulnerable to short-covering rallies.
At the same time, some of the leveraged oil ETFs like the USO have very substantial net short positions. In fact, for the USO, which is the one that's most commonly traded, the short interest stands at nearly 150%, meaning that the short sellers outnumber the share count. Garner thinks that's very dangerous. If something happens in the Middle East, if someone decides to torch the oil market, either literally or metaphorically, then crude's going to get hit with the mother of all short squeezes.
Still, with West Texas crude in the high 60s, Garner thinks any oil rally is going to still cap at 80, maybe 85, unless the war with Iran really heats up again, in which case she wouldn't rule out 105. Now, if prices keep coming down, she sees a powerful floor of support at 57. If crude breaks down into the mid-50s, that could potentially lead to much lower levels. And you know, that's what I'm looking for.
Finally, let's talk about precious metals. When charting the dollar against gold futures on a weekly bar basis, you can see that in 2022, gold quietly put in a bottom while the greenback reached a parabolic move. Go back here. Okay, parabolic. Almost four years later, Garner says we're seeing the inverse of that. While gold was making a blowoff top earlier this year, the dollar seems to have put an unceremonious bottom.
Garner points out that when gold sells off, it tends to sell off hard. Look at the daily chart here. Gold's now down over $1,500 from its highs, but the relative strength index, well, here we go, has reached oversold levels and even made a higher low. That tells Garner we could be looking for a relief rally to 4,300 or maybe even 4,545 right here. This is a key level if we get a pullback of the dollar.
So even if there's a bounce, she believes we're looking at a bear market in gold. Sell your gold. The 200-day moving average comes in again near 4,545. This is also the line that Garner identifies as the insanity pivot price. She calls it, I love that, the insanity pivot price. When you have an unusually volatile market, that pivot line is very important. Above that line, price action tends to behave bullishly. Below that line, it behaves bearishly.
So I'm telling you, I'm with her. Sell the gold. Okay. And the dollar is absolutely bottoming, and oil is a bear market rally, and if you get it, you got to sell. The charts, as interpreted by Carly Garner, suggest that oil and gold might be due for a bit of a bounce. But as the dollar continues to strengthen, she thinks those gains will be short-lived and not worth trying to get your hands on. Keep that in mind because I know a lot of people are thinking, how can oil be so low? People, it is going lower, even if we have that short squeeze. I want to speak to Elijah in Idaho. Elijah.
