My mission is simple: to make you money. I'm here to level the playing field for all investors. There's always a market somewhere, and I promise to help you find it. Mad Money starts now.
Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramerica. Other people want to make friends; I'm just trying to save you some money. My job is not just to entertain you, but to teach. So call me at 1-800-743-CBC or tweet me at Jim Cramer. Wall Street hates nothing more than uncertainty.
If the president would simply explain his plan for Iran, even if that plan includes enduring higher prices for pretty much everything until we somehow win, I think business would be in much better shape than it is. Instead, we have this drip torture where prices seem to go up a little each week, impacting everything we buy at a Kroger or Lowe's or McDonald's, and we have no idea how long we're going to have to cope.
Instead, we have this lack of strategy. So everyone from the heads of households to CEOs of major companies all cringe. The prices have to be raised yet again. And that's how you get days like today, where the Dow dips 347 points, the S&P loses 0.77%, and the Nasdaq drops 0.92%.
I know it's not the kind of thing you do before an election, but if the president would just tell us to prepare for pain, it would provide clarity, although it would also make the Fed chief's job a lot clearer. Kevin Warsh would say, 'Look, we have to tighten until the war ends because we are becoming a guns-and-oil economy, like a less palatable version of the guns-and-butter economy we had under President Johnson during the Vietnam War.' That setup led to rampant inflation.
Eventually, our government gave up on both the Vietnam War and the war on poverty. So inflation slowly subsided for years until the end of the '70s, when it came roaring back. Of course, we don't want any of that. Nor do we want to wear WIN (Whip Inflation Now) buttons like I did under President Gerald Ford after Nixon resigned. 12% inflation back then. A button didn't solve it. Only much higher Fed-mandated interest rates did. That was painful for me as someone who's a stock picker.
The lack of an endgame, with no source of energy and tremendous new sources at least, and tremendous cost being pushed through the system, makes it more difficult to find stocks that are worth owning. That's true. Members of the CNBC Investing Club know I've been resolute, though, that there are opportunities like the two stocks that I've been recommending now for the last month: Intel and Meta. I know it's boring when I repeat the same stocks relentlessly, but without the repetition, it just doesn't get through. And these have been winners.
Why Intel? Why Meta? They fit the moment. That's why. First, the products are in such high demand, one new, one old, that there are no concerns about demand destruction, which is usually the end result when higher interest rates clash with higher prices. Second, they're each in a new product cycle. Meta has Muse, its personal agentic AI platform that could potentially have several billion users. Personal assistants, whether for consumers or for the enterprise, are irresistible when they're cheap. Use is free as long as you don't use it too much.
I think Meta crushed it with this, and I bet it'll have much more market share than OpenAI, which remains niche compared to the house that Zuckerberg built. By the way, we're going to find out all about the impact of this huge new product tomorrow when we sit down with Meta's president, Dina Powell McCormick. You do not want to miss that. Muse, like so many other agentic devices, is a workhorse that runs on CPUs.
There are only three major CPU companies: Intel, AMD, and ARM Holdings. This market is so big that it can use them all. Plus, Intel has a new foundry coming online with great specs, albeit not as great as Taiwan Semi. Intel CEO Lip-Bu Tan has turned his company from a has-been into a force to be reckoned with. Of course, Lisa Su at AMD has left them in the dust. More on that later. But Lip-Bu can see in the dust. And unlike his still-dreaming predecessor Pat Gelsinger, he has a grip on what can be done and, more important, what can't.
Earlier this month, Reuters reported that Intel may be scaling back its Ohio memory chip factory, perhaps sharing it with SK Hynix, the Korean giant, to staunch the bleeding. He's a disciplined investor, comes from his time as a disciplined venture capitalist. I have total faith that his plan to return Intel to greatness will succeed. However, I acknowledge that balance sheet was wrecked by Gelsinger, and the current turnaround only possible thanks to the resurgence of CPU demand. Intel stock dropped seven points today, something we are used to seeing after parabolic moves. It could end up being another good chance to get in.
Let's go back, though, to the idea of what can work in an environment when oil's up, interest rates are up, and therefore stocks tend to go down like they did today. You have to see what companies have. They need demand. They need pricing power, and they need scale. If they have all three, they won't be as impacted by higher interest rates courtesy of the war with Iran. Now, that doesn't—I know, I know—it leaves us with a breath problem, and not the kind that can be cured by Listerine. The oil complex represents the only stocks that are truly in demand.
Chevron is the king, with great offshore, terrific Venezuela, amazing Asia and Mediterranean, and extraordinary Permian assets. Best balance sheet, too. Okay, so you got that. You want yield? It's Enbridge with a 6% yield. They bring in all oil from Canada. The president would be unwise to ban Canadian oil, although his disdain for Canada seems to know no bounds. So who knows? Wouldn't be the first time he cuts his nose off despite his face. That concern helps explain why Enbridge has such a big yield.
And I like the nat gas liquids business, which is just crushing America because of all the problems in the Gulf. It's Enterprise Product Partners, EPD, which I read about positively in 'How to Make Money in Any Market' if you want to have one. Now, here's the real irony. I know I should be worried about the breadth of the market. So few stocks are indeed working, the fewest in terms of breadth that we've had since, yes, the blow-up of the dot-com period, and that says we're in real trouble.
But there were so many times in the last two decades that we've been in real trouble that I can't even count them. In these moments, you try to find the stocks that work in the turbulent, negative environment we find ourselves in. You don't abdicate. You don't say, 'You know what, we're in an impossible situation.' You double down on the winners, like we said to do on Meta and Intel.
The ideas are out there. Have you noticed Microsoft, for instance? There's a company that's quietly becoming a force via Copilot. Don't forget Apple. As someone who's buying a second line for the duo, a must with Starlink everywhere, I know I won't be alone. And of course, remember the other one: don't trade stock Nvidia. Today it announced a sound plan based on engineering that could control the run among autonomous agents. We keep hearing about ones unleashed by Anthropic and OpenAI. Many other big tech companies, including Anthropic, have joined Nvidia's effort.
Plus, Nvidia announced a monster $150 billion buyback today. That's the biggest ever. Watchers of this show and members of the CNBC Investing Club know I've been calling for that. Let's hope it's actively managed to take advantage of momentary dips. Here's the bottom line. In every period like this, when it's dark and dawn is not nigh, you have a choice. You can make hay while the moon shines, or you can wait for the sun. Personally, I don't like to wait. I just want to try to make some money. Let's go to Sam in Pennsylvania. Sam.
I am good, Sam. How about you?
I'm good. You know, Jim, in a world of all this AI slop, I think a company like Thomson Reuters should become more valuable given the fact that it's got a good moat around the reliability of the information that they're selling. So I'm curious what you think about Thomson Reuters given the selloff that it's experienced as part of this software apocalypse. But I think this company is undervalued given the moat around that information. It's, you know, it's regulated industries rely on it, and that's not something that can be replaced by AI.
I think that's true. But what has happened is everything that is possibly considered to be replaced by AI has to have its multiple shrink, and this stock still sells at 28 times earnings. Until that multiple comes down and that yield goes up. Of course, this is what happens when a stock declines. It's not a bargain. And that's all. It's just not a bargain. Let's go to Dustin in Oklahoma. Dustin.
Oh, yeah. Jimbo, how you doing, sir?
Good, Dustin. How about you? Thank you. What's going on?
Blessed. Hey, I'm calling you back, my friend, on a company we've discussed before. In the last two-plus months, it's gone from, you know, a 52-week high to a 52-week low. You know, they're in the process of growing a lot, at 185 new stores this year, and possibly a real estate deal that may be falling through with Salad and Go. What are your thoughts right now on Dutch Bros? Because I'm a believer. Every time I'm there, it's busy. I'm ready to roll with it.
You know, I tell you, I think this stock's being—I think it's being raided. I'm not kidding. I know the price target's been cut by a couple, but I think it's actually being pushed down. I'm not saying being manipulated. You're allowed to do whatever the heck you want, but this company has terrific growth and it's been just crushed, and I don't think it merits the crushing. But there are people who say you got to short it and go long something else. And that, I think, is a major reason why the stock is going down. It's a very well-run company. Let's go to Robert in New York. Robert.
Jim, thank you so much for having me tonight. I appreciate it very much.
Thank you, Robert. Good to hear from you.
Thank you, Jim. Jim, I was up in Buffalo last week, and it's one question I get from a lot of the young people, and they say, 'Well, how do I make money in the market?' And there's two ways to make money in the market. I say, 'You got to watch Cramer, and you've got to go out and buy the book, How to Make Money in Any Market.' And I tell these young people all the time, Jim, everywhere I go, buy the book.
That's—I mean, I'm trying to get people to understand why a stock—it's why a stock goes up or down. I mean, no one tells you it because no—it took me 200 pages just to describe why a stock goes up a dollar, but it was worth it.
And that's why the young people should buy this book across America, because I appreciate you starting this, Tim. If you started at 23, 24 years old, by the time they get to our age, they make millions of dollars if they start now.
Well, that's what we want. We hope they do that. How can I help you tonight?
We got to get to work. Okay, so this next company operates a chain of fast-casual restaurants serving burritos, taco bowls, etc. They emphasize food with integrity, sourcing high-quality ingredients including naturally raised meats, organic produce. They have a growing digital platform to support online delivery, mobile transactions. They're experiencing strong comparable restaurant sales growth. Now, Jim, they just appointed Sabir Sami to its board of directors. Sami previously held senior leadership roles at Yum Brands, including positions across major global quick-service restaurants. He's an expert, and the guy who's running the company, Scott Boatwright, right, is keeping the boat straight and right. The name of it is Chipotle.
I think Chipotle at 31, it seems to hold that level. I can't say it's cheap, but it's never been cheap. It has been at this price and bounced before, and I think it will do so again. I like the stock down here. Even as the restaurant group has gone completely out of favor, you can make hay while the moon shines. I prefer to do that than just sit on my hands and look at the screen. On Mad Money tonight, AMD briefly entered the trillionaire club. So what or who is behind this meteoric rise? I'm going to take a closer look. Then, as the Fed raises rates, are high-yielding stocks still an area of opportunity? I'm going to investigate. And I'm digging deeper into Costco's latest quarter. Don't miss my take on this club name, and stay with Cramer.
Don't miss a second of Mad Money. Follow Jim Cramer on X. Have a question? Tweet Cramer #madmentions. Send Jim an email to
[email protected] or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com.
Last week, AMD rallied nearly 13%, temporarily reaching a trillion-dollar market cap, although it dipped out of the trillionaire's club today. Still, thanks to the launch of Meta's personal AI agent platform, anything connected to the CPU business caught fire because agentic AI requires lots of high-end central processing units, CPUs, and AMD's arguably become the top dog in CPUs.
Honestly, it's incredible how far this company's come under the leadership of Dr. Lisa Su. She took over as CEO of AMD roughly 12 years ago, and at the time, this company was an afterthought, an asterisk, just a total also-ran semiconductor company, one that spent nearly its entire existence living in the shadow of Intel for decades. I got the sense that Intel was going easy on them. Why? Because if they let AMD go under, well, they might get hit with an antitrust investigation by the Justice Department. I think it was the right call for Intel, but AMD was just in a pitiful state for ages.
When Lisa Su came in near the end of 2014, this was a $3-and-change stock with a pathetic market capitalization of just over $2.5 billion, practically a small cap. And Wall Street didn't like the news of her appointment. The next day, the stock dropped 10%, falling to just below $3. In retrospect, I bet those sellers are kicking themselves. They should be wearing like kick-me signs on their butts. Since Lisa Su came in, AMD's rallied an astonishing 18,433%.
That's right. I'm going to repeat this: 18,433%. It now is a $992 billion market cap, down from the trillion-dollar club after today's beatdown from most of the AI and AI-related stocks, including Intel, by the way. But back in 2014, this future was unimaginable. AMD was in dire straits. When Lisa Su took over, their core CPU business was losing market share in servers and PCs. Now, they bought this thing, ATI Technologies, in 2006 to get into the graphics card game. That deal left them saddled with a mountain of debt. A lot of people thought that there was a risk of this company going bankrupt. Then Dr. Su comes in and turns around pretty much everything.
You know, it was a cold shot. When the stock was at $5, she met me for dinner. She told me she was going to crush Intel, that she'd overtake them, and I better get off the Intel train and jump on the AMD train. At first, I argued, then I shut up because I could tell she was serious and serious about her game. She schooled me. So I got on the AMD train and avoided the oncoming Intel train wreck. Look, an engineer by trade with bachelor's, master's, and doctorate degrees in electrical engineering from MIT, which of course means she's smarter than all of us. Su set out to beat Intel and then Nvidia at their own game by designing high-performance chips for the end markets that AMD could truly compete in.
That meant getting out of markets where AMD was not competitive enough. Things like chips for smartphones and sensors for so-called Internet of Things systems. They gave up on that stuff. They had not enough money in it. Since then, we've seen AMD move surgically from market to market using Italian houses or product lines, which is fine with me, having just returned from Italy. First, they improved in core areas like CPUs for servers and PCs, quickly catching up to and then surpassing Intel. Technically, AMD's market capitalization caught up to Intel back in mid-2022. But the truth is, they've been running circles around Intel for years at that point.
Now, AMD's within spitting distance of that trillion-dollar club that I mentioned. Intel's a $613 billion company. That's after Intel engineered its own remarkable turnaround. Remember last year, Intel had to be bought out by the feds in the form of a $9 billion equity investment. At the same time, AMD became very competitive in graphics cards and systems-on-a-chip solutions for video games. Now, more recently, AMD decided to do something really ambitious, which is to challenge Nvidia in the high-end GPU business that Nvidia dominates. That's AI training and inference workloads.
Of course, look, Nvidia is still the top dog. No one would dispute that. But AMD is making big money, too, and has some really solid products that are more competitive than people think. Early on, Lisa Su realized that AI was the future. There would be enough room for multiple players in the high-end GPU space. Nvidia literally can't make their own chips fast enough to satisfy the demand. Of course, there was room for AMD there, and just a great business decision. Now, look, I don't want to make all this sound easy. Lisa Su took over at AMD and basically never stopped working. The whole time, she kept her head down. The only time she ever allowed herself a deserving break was her commencement address at MIT this year. A terrific victory lap.
By the way, she also made one of the best pitches for AI that I've heard in a while. I'm going to quote it: 'It is not just a tool that can help us do things faster. It is deeper than that. It has the potential to accelerate discovery in every field and help us solve problems we have never been able to solve before.' End quote. Now, that's a much easier sell than 'it'll take all your jobs and possibly destroy the world.' Lisa has a beat on common sense. She deserves our trust. She certainly earned it. I am proud to know her.
But getting to this point took a tremendous amount of hard work for a chipmaker. Product development cycles take—they take multiple years. And it's not enough to have just strong one-off products from time to time. You need to present a clear product roadmap that gives tech customers the confidence to design your chips into future iterations of their products. AMD did exactly that, gradually winning the confidence of both customers and Wall Street. Dr. Su made a huge bet on high-performance computing not long after she took over. And well, for the last several years, it's just been money.
Now, the latest leg higher, the one that brought AMD to the trillion-dollar club, has been in part a stroke of good luck. Like I mentioned before, earlier this year, the focus for investors shifted from AI model training to inference and agentics. And it's become clear that demand for CPUs was going to explode because you need more CPUs to run these useful AI agents. Even though I feel much better about Intel these days under new CEO Lip-Bu Tan, who took over last year, AMD remains the leader of CPUs, which is why people have been buying the stock hand over fist.
This one had a big but surprisingly quiet run this past spring, climbing from about $200 at the end of March, roughly $500 by late May, and $580 by the end of June, as the agentic story really started playing out, at least in the enterprise. After taking a breather and pulling back a bit in July and August, AMD caught fire again this month when Meta launched Muse, its consumer agentic AI platform. The stock's now up almost 30% for the month of September alone.
Of course, today we had another increase in oil prices, so interest rates ticked up and stocks pulled back, especially stocks with big gains. AMD sold off 3.6% today, falling back below that trillion-dollar measure. But man, what an incredible run. Thanks to Lisa Su's understated, dogged, and tenacious leadership, she transformed a $2.5 billion company into a nearly trillion-dollar powerhouse. I let the hobgoblin of small-mindedness keep me from owning the stock for its latest spectacular run. I felt the charitable trust already had too much semiconductor exposure, but I've been kicking myself for the entire move. The diversification has cost my trust a lot of money.
Here's the bottom line. Dr. Lisa Su has orchestrated one of the greatest turnarounds in history at AMD, arguably maybe the greatest of all time. And I see no sign that it's going to stop anytime soon. Mad Money is back after the break.
Coming up, should you be turning to high-yield stocks in this dicey market? Not so fast, says Cramer. He's explaining next.
Not too long ago, whenever the economy hit a rough patch, investors parked their money in the so-called safety stocks. And nothing offered more safety than a bountiful dividend. As those stocks came down along with the rest of the market, their yields, of course, would grow even larger. And eventually, that would lure buyers. In those days, a big dividend was like a trampoline underneath your stock.
But lately, high yielders no longer represent safety. If anything, they represent complacency, even danger. Because who cares about a juicy dividend when the 10-year is paying 5.24%, virtually risk-free? When rates are high, dividend stocks simply can't compete with the bond market. Sell, sell, sell.
We've seen this over and over again this year. Just look at the five highest yielders in the S&P 500 right now. We'll go in descending order. Start with VICI Properties, VICI, a real estate investment trust with a nearly 8% bountiful yield. This is a company that originally owned the real estate under a bunch of casinos. But over the years, it started expanding into wellness resorts, bowling alleys, water parks. It became a messier story. Doesn't help that the casino business looks pretty dicey right now. With gas prices skyrocketing this year, it feels like a bad time to go to Vegas.
Meanwhile, VICI Properties has seen its growth slow to a crawl. We're talking low single digits. LSD. Really, the only thing this stock has going for it is its sky-high 7.93% yield. But with the stock down nearly 18% year-to-date, that dividend sure hasn't offered much protection, has it? If you bought it when the stock yielded 6%, well, now you have no idea what to do with it now, do you?
Second-highest yielder, General Mills, the packaged food kingpin, 7.3% dividend yield. Last week, Mills reported a solid quarter, reaffirmed its full-year forecast. The stock initially rallied 1% in response. Makes sense. But then it fell 2.8% the next day, and then dropped another 3.4% the day after. Now, maybe Wall Street didn't like that they failed to raise their guidance. Maybe people were turned off by the company's declining sales and earnings, or the fact that it's being hammered by high input costs. And then there's always the existential GLP-1 concern that no one seems to be able to beat. In the end, General Mills stock fell more than 7% last week. It's down 28% year-to-date. If you bought this one-time safety stock hoping the dividend yield would protect you, well, you have taken a serious beating.
Next up, there's United Parcel Services, UPS, 7%. This iconic shipping stock has spent the past four and a half years working its way lower, lower, lower, torn apart by labor disputes, lost Amazon business, and furious competition from FedEx, which has proven to be a better operator, which is a big reason why we are telling CNBC Investing Club members to buy it down here. As a result, UPS has been seeing falling sales and earnings for three straight years now.
The business was finally supposed to stabilize in 2026, but then we got hit with the Iran war that sent oil prices through the roof, and now the Federal Reserve's hitting the brakes on the economy. The stock's down 5% for the year, and that 7.1% dividend yield? Cold comfort. How about no comfort? The fourth-highest yield in the S&P. Brutal. Edison International, the California-based electric utility, 6.8% yield. This one's down 26% over the last month, although nearly all of that's from what happened with the California legislature, which killed a plan to partially protect utilities from wildfire liability.
That's not Edison International's fault, but I think you'd have to be crazy to bet on a California utility right now, no matter how big the dividend yield might be. You can't trust that legislature in California did the reasonable thing for everybody.
Finally, the fifth-highest yield in the S&P 500 is intriguing to me. It's Kraft Heinz, another iconic packaged food company, 6.8% yield. Of all these dividend stocks, I do think that Kraft Heinz actually has the best story because it's now run by Steve Schiller, the man who broke up Kellogg and made his shareholders a fortune in the process.
I actually think you can do the same thing at Kraft Heinz. Although he wants to get the core business stabilized before even thinking about a breakup. Schiller's spending heavily on advertising to breathe new life into his brands, but this could put a little pressure on the bottom line there. At the end of the day, I'm optimistic about Kraft Heinz. It's dropped 8% over the past month, though. Hey, what exactly is that 6.8% yield protecting you from anything? There's simply no safety in these so-called safety stocks.
Why is that? Like I mentioned before, a lot of this comes down to the fact that dividend stocks are sinners in the hands of an angry bond market. Right now, the 10-year is paying you more than 5.2%. And Wall Street seems pretty convinced that Treasury yields are going to keep heading higher. That's brutal for higher-yielding stocks because bonds are their natural competition.
Let's say you like—I'll give you a good one. Realty Income. It's a fine retail-focused real estate investment trust. Pays a monthly dividend. Yields 5.9%. That yield offers an attractive premium versus the 10-year for the moment. But if you think the 10-year is headed to 6%, then Realty Income is not worth a second look. No wonder its stock is down nearly 10% so far this month. And it's a good company.
The other issue is that many of the high yielders just don't have enough growth. And some have developed reputations for cutting earnings estimates in recent years. That's especially true for that packaged food stock. But they're not alone in this. Who cares about a high dividend yield if the earnings estimates are coming down? If things get bad enough, the company might even, yes, cut the dividend. And that's something that doesn't happen with Treasuries.
Of course, anytime you buy a high yielder, you need to worry about the possibility of a dividend cut. Often, super-high yields are a signal that the payout simply can't be maintained. They are true red flags. But lately, that abstract concern has become more real as several high-profile companies have indeed slashed their dividends, including some that I think really were on record as never wanting to do it.
The Campbell Company was the latest, cutting its dividend by 36% earlier this month. Before that, the stock had been yielding 6.6%. I thought that dividend might be sacrosanct. Another packaged food company, Kellanova, was yielding north of 10% before it cut its dividend in half in July. With very few exceptions, a double-digit dividend yield is a major red flag. Whirlpool has struggled for years amid a tough housing market and suspended its dividend entirely in May. Every time something like this happens, it calls into question the safety of high-yielding dividend plays and reaching for yield, which is something I never like to do.
So here's the bottom line. There was a time when high yielders were the ultimate safety stocks, but that's no longer the case. Instead of safety stocks, these have become some of the most dangerous stocks in the market. Safety first, I say. In this case, safety last, and buyer beware.
Lou in Florida.
Hello, Mr. Cramer. Thank you. Thank you. And thank you for taking my call. I appreciate it. I love your show. You're fantastic.
Thank you, Lou. Thank you.
I've been watching you for years, over and over, and it's just entertaining. It's fabulous. The energy—
