Mad Money 08/31/26 | Audio Only

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Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramer, friends. I'm just trying to make you a little extra money here. My job is to just entertain, but I'm going to do some teaching. So, call me 1-800-743-CBC. Tweet me at Jim Cramer. As August comes to a grinding end, it's hard to believe that the reverberations of a hedge fund implosion could color so much of the month's action. We haven't seen something like this since the downfall of Long-Term Capital in 1998 took the market apart.

Thank heavens this one, Situational Awareness, that was the name of the fund which at one time controlled $45 billion thanks to liberal use of borrowed money, was contained to tech. If it had been bigger, the whole market might have been wrecked. Instead, we got basically a solid month where the Dow finished slightly higher despite today, where the Dow dipped 347 points, S&P lost 0.33%, Nasdaq declined 0.12%. It's kind of a nothing day, and frankly, what I'm willing to call a nothing month. Now, I don't want to say that Situational Awareness, again, that's the hedge fund, has disappeared. The fund still has some assets. Still, the fallout from its collapse does finally seem to be unwinding. Still, when you look at the 10 best and worst performers for the month, they're stark in their themes that include the unwind of the Situational positions. Let's go over the winners first.

First, let's start with a heavily shorted stock known as Mona. Yes, there was a huge bet being made against these guys. Skeptics believed that its technology would never produce the breakthroughs that the bulls expected and were initially promised when the company came public. But this month, that's exactly what we got. See, working with Merck, Mona's developed a vaccine for those who've beaten melanoma once. Now, this, my friends, is miraculous. So, it got a miraculous welcome. Do you know what? I think this could still have a huge potential to go higher. Second is Palantir, which rallied 51%. My take is that Palantir should never have been down to begin with, based on the rule of 40 that we typically use to judge this kind of business. When you add up the revenue growth plus their profit margin, the sum comes to 155. I don't know how you sell something with that kind of profitable growth.

Situational Awareness just despised enterprise software, and Veeva Systems, number three, up 40%, is enterprise software writ large for the healthcare industry. I think it's bounced back in conjunction with all the other enterprise software companies that Situational Awareness believed would be destroyed by AI that haven't been. Once that hedge fund blew up, the whole group came roaring back as Situational was no longer there to put pressure on them. Hey, Salesforce had a similar rally, up nearly 40%. Now, here's one that openly took on the short sellers first with rhetoric and then with numbers, which have not been hurt at all by what CEO Marc Benioff spoofed as the SaaS apocalypse. His blowout quarter obliterated the shorts. I don't think they still know what hit them.

Sometimes stocks go so low that even a little win can produce a percentage gain. And that's what happened with Paramount Skydance, which is trying to buy Warner Bros. Discovery. Deal's been held up by state attorney general, which somehow produced a nice bump for this one. I don't know, maybe Wall Street thinks they're paying too much. Gold has been strong all year, which is why Newmont, number six, rallied almost 35%. Now, I prefer America Eagle. I just think it's got better land, but Newmont's a classic gold stock, and it's viewed as a proxy for the precious metal. That's what people want. Next, oh boy, here we go. ServiceNow, another classic enterprise software stock that was supposed to be crushed by AI. At least that was a Situational Awareness idea, but it's done more than most to integrate AI into its everyday business. And it's done it successfully, which is why the stock's up 33% in August. It's another coiled spring courtesy of Situational Awareness. See, the stock got pushed down two quarters ago, even as it was pretty good. The last quarter was even better. And with Situational gone, the stock could roar with impunity. No one knocking it down, making it look bad when it wasn't.

Now, I don't know how Super Micro keeps coming back, but no matter how much heat it takes for some of its employees helping the Chinese to get Nvidia hardware, it's still up 31% for the month of August. The market has no memory. The authorities perhaps have no teeth. We have been told endlessly that no one could benchmark anything anymore, including tech, except for Anthropic and its Claude. Now, that supposedly made a research and advisory company like Gartner obsolete. Well, the stock was right in the crosshairs of the AI displacement thesis, but apparently their business is not in the crosshairs, which is why the stock bounced 31% to finish ninth. Finally, cryptos had a big comeback this month. Of course, crypto isn't in the S&P 500, but Coinbase is. Coinbase was up 28%. As the bell tolled, though, Sandisk topped the stock, a memory device play, with a 28.9% gain. I'm including both of them because I like the context.

The losers, well, DaVita is the worst. Now, this kidney dialysis company was crushed by a bad forecast. Revenue per treatment for those who need dialysis fell. Commercial mix deteriorated. Patient care costs were high. It was a parade of disappointments. So it lost 27% and had the most negative month of all S&P 500 stocks. Sometimes you see the worst action in the final days of the month, like when Edison International stock collapsed in the face of an intrinsic California legislature that's going to step up protecting the state from wildfire liabilities by putting them on the utilities. Well, that's made the stock uninvestable. Hence why it dropped 23% today. It's down 26% for the month. 23% today is pretty bad. It's a rival to DaVita in the lame category.

Now, Amazon slowed down a company called The Trade Desk, which had been such a huge digital advertising winner over the years. Fast grower, not anymore. I don't know if it can come back. I do know that it seems like the selling seems a tad overdone, with the stock down almost 24%. But I can see no catalyst to return to favor. I don't see Amazon letting up on the gas pedal. In fourth place, well, here we go. PG&E, another California utility that worked so hard to get its stock up while raising money for the wildfire fund. It meant nothing, at least to the legislature. PG&E might owe even more money thanks to the new legislation. Honestly, I am surprised it was only down 24% this month, but this company definitely deserves better. And somehow I don't think it's done fighting for shareholders.

Honeywell Aerospace deserves to be the worst stock of the quarter. It's a brand new alpha where the CEO assured many of us that things were going well. He even told CNBC's own Phil three separate times that things were good. They were actually terrible, horrible, crushed us. And there, I'm including my Travel Trust. I do not recommend this company. Down 24% for the month. It should have been down. There is no credibility here whatsoever. AppLovin is a company that develops technology to place ads. The short sellers believe that it will ultimately be replaced by AI. I don't think so. But the thesis is all that matters, which is why it dropped 21%, sixth performing the S&P. Sometimes it's the outlook, stupid. That's what happened with Aptiv, which fell 16% in one day after it cut guidance.

This company is all things cars: technology for cars, advanced safety features, cars that are electric, and it just plain missed. That's why the stock dropped 17% in one day, down 29% for the month. Sellers saw plenty they didn't like about Tapestry. Now, I think this decline was a pure overreaction. Overreactions are common in retail, particularly last month. I think it's buy now. It's down 19% for the month of August. A well-run shop. Oh, here we go. Energy is a utility, but it's not in California. It was just a pure miss. Earnings $1.49 versus the $1.69 that Wall Street expected. This market's simply not ready for utility. That is high interest expense. Seems a bit of an overreaction to me. But then again, I didn't own it. And watching it sink 15% decline on earnings day, 18% decline for the month, says to me, stay away.

Finally, in the momentum, traders, the journal reported today is fractured. And that's how Western Digital, maker of disk drives, could plummet on a fine quarter, finishing the month down 17%. You know, it didn't help that data centers became political footballs and they aren't getting any better, even as some labor unions are now trying to get utility regulators to become more positive toward them. Very strange that Sandisk could make the 11th best and Western Digital, same business, the 10th worst. But Sandisk has the most aggressive buyback in the entire stock market, and buybacks worked this quarter and this month. Now, these all seem so obvious, right? But the comeback of the software from incredibly depressed levels was breathtaking. The California legislature, forget it, they can't be gamed. Crypto rallies, electric cars falter, and Amazon takes its toll.

Bottom line, nothing shocking here except Mona, which has done something that we've never seen before and no one said could really happen: a vaccine against cancer. If it works and there are others behind it, then the backers of Mona can truly say you ain't seen nothing yet. I want to start with Sam in Massachusetts. Sam.

I like that you paired it back a little. I think you let the rest run. There is nothing that Lisa Su has done wrong here. She's done everything right, and that's why it's so difficult to sell, even though it's up more than 100% for the year. You've taken some off. That's all I'd like you to do. I'm going to go to Frank in New York. Frank.

Still a bull. Still a bull. Still a bull. Let's chase for you, L. I'm a triple bull. Triple bull. I was able to do that. Yes. I think you got to own that. Oh, here we go. Shyam in New Jersey. Shyam.

Yep. Thank you. So considering the contradictory signals that we are getting from the retail segment, like Abercrombie and Fitch skyrocketing after the earnings while Nike still struggling, what are your thoughts on the TJX companies, especially considering the fact that it has lost more than 70% of it? I am aghast. As I told Jeff, I have not seen this stock ever have this kind of move. 170 down to 133. We bought some last week. I think the next move is 130. But I've never seen anything like it. I have to tell you, it did miss the quarter and Ross did make the quarter, but the company just seems like a pitiful, helpless giant. They got to step up to the plate and start doing some buying of that stock and getting better merchandise in the TJ Maxx division. All right. I honestly, I can't believe this, and we made such great money in this stock over the years.

The winners and losers for August, and they seem so obvious, but when you look at the context, the comeback in software was actually phenomenal. On Mad Money tonight, cruise company Viking Holdings has seen a big pullback lately. It's like the TJX of the cruise lines. So, could it be time to take a position? I'm taking a closer look. And as goes the metals, so goes the economy, maybe. I know. I'm going to go off the charts to examine this latest move in copper and see what it's telling us. It's pretty stark. And safety science stock UL Solutions got crushed after earnings. But could that be a buying opportunity when we sit down with the CEO to learn more about what's ahead? It just might be. So stick with Cramer.

You know me, I'm always on the hunt for bargains. And right now, I think you're getting a Costco-level deal on Viking Holdings. It's one of my favorite cruise lines. Specializes in river cruises for older, wealthier travelers. Their tagline is no kids and no casinos, which is a great pitch for a certain kind of customer, right? In less than a month, Viking's pulled back from $110 to 86 bucks and change. Even though posted a strong quarter a couple weeks ago, I think it may be a phenomenal buying opportunity. Maybe the first we've seen since it came public. Keep in mind, Viking's arguably the best company in the industry. Unlike the other cruise lines, it didn't have to borrow insane amounts of money to survive the pandemic. Ever since it came public a little over two years ago, the stock's been steadily chugging higher. It's really up 200% since the IPO. It's great management, too.

Yet, in the last few weeks, the stock has just been eviscerated. What the heck is going on here? Right. Some of this is industry-wide. Viking's down 22% since August 5th, when it was at its all-time high. Meanwhile, Royal Caribbean, Carnival, Norwegian Cruise Lines, they've all come down about 18 to 20% over the same period. The price of oil is up 10 bucks over this period because the war with Iran keeps flaring up. That's something important that this company has zero control over, as you know. At the same time, though, there are also some Viking-specific issues, like worries about low water levels in some major European rivers that must be taken into account. See, after a hot summer, the Danube and the Rhine are both at surprisingly low levels, which is disrupting some of Viking's cruisers. Occasionally, passengers have to load up on buses to get past shallow parts of the river. Then they swap to a different boat. Now, that is a distinctly suboptimal experience. There are concerns about this drought that could start to hurt Viking's numbers, resulting in major cancellations.

But then Viking reported on August 19th, and even though the results were excellent, the stock still got crushed, down nearly 8% in a single session. This is Viking. Why? Let me break it down for you. First, the actual quarterly results were strong across the board. Revenue grew 16.5% year-over-year to $2.19 billion, beating expectations. Viking's earnings before interest, taxes, depreciation, amortization grew 18.2%, also coming in well above expectations. In the end, they posted a 5-cent earnings beat off a $1.26 basis. 32.3% growth year-over-year. I don't know. Viking's net yield, which is a key metric for the cruise lines, similar to revenue per available room for hotels, came in at $645. That's up 6.2% year-over-year, solidly better than the $638 number that Wall Street was looking for. So, what sent the stock into a tailspin then? Okay. Viking doesn't give any explicit forward guidance. They just offer color on their booked position and pricing going forward. And that commentary looked pretty good to me. As of August 9th, for Viking's core products, it had sold 96% of its capacity for 2026. Meaning, meanwhile, look, they're effectively sold out. Okay. Advanced bookings per passenger cruise days for the 2026 season stood at $833. Now that is 6% higher than last year's season at this point. Perhaps more impressively, for the 2027 season, future bookings, Viking already sold 53% of its capacity. It has $4.71 billion of advanced bookings for the 2027 season. Hey, come on. That's 21% higher than what it had for the 2026 season at this time last year. They can't be all that worried about it then. Advanced bookings per passenger cruise days for 2027 stand at $958. That's up 10% year-over-year. These are all tremendous numbers, and everyone knew about the weather.

But then CEO Leah Talbot mentioned those lower European river levels in the conference call. She started by noting that this was an industry-wide issue and explaining that Viking is much better able to navigate these challenges than its peers because its fleet was built to handle low water levels. However, she acknowledged that this year the historically low water levels have made it impossible to avoid the problem entirely, the bus ride thing. Then came the next line, which is what torpedoed the stock. Are you ready? Talbot said that in some cases, Viking also issued vouchers. Yes, they're issuing vouchers to certain affected guests. Here's how she put it: quote, 'While we believe this is the right approach from both a guest satisfaction and loyalty perspective, these vouchers will have a financial impact extending beyond 2026 and into 2027 and 2028 as they are redeemed,' end quote. She described the move as quote, 'an investment,' end quote, that will build trust and support long-term loyalty to Viking. Wow. Okay, I think she's right. This is a great way to entice customers long-term. What sets Viking apart is the fact that this company understands its upscale clientele and does everything it can to give them a perfect experience. This is a luxury cruise brand, and its clients want luxury treatment. So if low water levels mess up your cruise, the company will compensate you. If Viking thinks this is the best way to retain customer loyalty, I believe them. But Wall Street mostly cares about the numbers, and these vouchers will cause a hit to earnings in 2027, 2028. Hence the meltdown in the stock. And also, I think there's a sense, wow, I mean, vouchers on Viking. No, look, I think it's crazy that people have been selling this thing in response to one especially hot summer in Europe. Viking put up excellent results. Bookings for the rest of the year and 2027 incredibly strong to me, and that's much more important than the cost of the vouchers they're giving out to people who got disrupted on the river cruise. I don't know. I'm betting the rest of the market will come around to my position here. I like what the analyst at Stifel had to say about Viking. Quote, 'Six months from now, don't blame us when you didn't buy this correction,' end quote. I could not agree more with what Stifel says, which is why I'm telling you to buy the stock into its recent weakness. Hey, by the way, after this pullback, Viking now sells for just 26.5 times this year's earnings estimates. I know that some of you may think that's expensive compared to the rest of the industry, but like I said before, Viking's best of breed, and the stock's always commanded a premium valuation. Plus, the company's growing earnings at a 25% clip this year. Paying 26.5 times earnings for the stock, it's on the low end of what Wall Street's willing to fork over for growth. Here's the bottom line of what is essentially a confusing story. Viking Holdings, like the rest of the cruise lines, has sold off hard this month, down more than 20% from its all-time high on August 5th. But when you dig into the quarter, dig the details, I think they're fantastic. And yes, there were vouchers, but the stock is absolutely worth owning here. What can I say? How about the dip? Mad Money's back after the break.

On Friday's Jackson Hole speech, new Fed Chief Kevin Warsh said the Fed might not be done fighting inflation, meaning we could very well be looking at a rate hike in the not-too-distant future. Now, I've been hoping that wouldn't be necessary. You know, there are whole big chunks of this economy that could really use a boost from rate cuts. And there I'm thinking housing. But even though inflation's been cooling, it's still much higher than we want it to be. It's hard to solve as long as we're fighting with Iran, that is, which pops with the price of oil, as we saw all day today. Plus, from some angles, the economy is pretty strong. Sure, we had 1.5% GDP growth in the second quarter. That's 86% of the stocks in the S&P 500 reported better-than-expected earnings for the second quarter. This is something you can really see when you look at the metals. That's the fastest way to judge the real strength of the economy. That's why tonight we're going off the charts with the help of Bob Lang. He's the founder of ExplosiveOptions.net. He's also the author of Know Your Options. In order to get a better read on the metals, I want to start with copper, or as it's commonly known on Wall Street, Dr. Copper, because it's the only metal with a so-called PhD in economics. The price of copper is just that good at predicting the trajectory of the global economy. Lang points out that when you look at the price of copper this year, you could easily conclude that the economy is on fire. Copper prices are up more than 18% year-to-date and 48% over the past 12 months. That's really strong. Keep in mind, copper's used everywhere from construction to manufacturing to technology. A lot of this comes from the great data center buildout because those warehouses full of servers need all sorts of wiring, unless they're using fiber, which is increasingly a factor. Since late 2023, Lang notes that copper's made an incredible run. Look at this. Okay. From about 355 all the way to 668, which is an all-time high. It's the best three-year run in nearly two decades. We know demand for copper's off the charts, so there could be more upside. How do you play it? All right. The biggest and best of the copper miners here in the United States is Freeport-McMoRan, which gives you exposure to copper, gold, and even some oil. Now, the best-positioned name globally is Southern Copper. That's the biggest miner in Peru. Lang also likes Hudbay Minerals. That's a major Canadian miner I don't follow. All three of these stocks have pulled back recently, but Lang thinks they're poised for a big run into the end of the year. Let's take a look. I want to start with the daily chart of Freeport-McMoRan, which had a monster run earlier this month before cooling off a bit last week. As Lang sees it, this is an outstanding chart. And if you want to look at the chart, you just look, this is the real chart, okay? And look at this. It's got a series of higher highs and higher lows, a steer that we like so much. While Freeport broke out earlier this month, cruising past its June highs, it did so on strong volume. And here's the volume right here. And that's what he's talking about. Volume is like a polygraph. When you're looking at the charts, strong volume means the stock's telling the truth. That means this rally is the real deal. When you look at the moving average convergence divergence, or the MACD line here, we're looking at this. Okay. It flashed a buy signal earlier this month where the black line goes above the red, and you can see that right there. Okay. I know it's a little faint, but that's it. This is one of the most reliably bullish patterns out there. Then there's a new one for me. The TTM squeeze down at the absolute bottom. This is an indicator created by a fellow named John Carter of Simpler Trading. It helps spot low-volatility periods of consolidation in order to help traders predict big moves. It's basically an amalgam of other technical indicators. Long story short, red dots on the zero line means that we're in a period of consolidation. Okay? And green dots means that we're looking at a period of expanded volatility. Now, that could lead to explosive moves. Right now, the TTM squeeze says that Freeport's in explosive volatility mode. Wow. Okay, I'll take that. When you look at the RSI, which is up at top, the relative strength index, it's come down a bit from overbought levels. You see it's just kind of come down a little bit there. From Lang's perspective, he sees this recent pullback from the highs as a nice buying opportunity. Pull the trigger right here, says Bob Lang. Now, over the past couple weeks, Freeport's made what's known as a bullish flag pattern. Okay? That's basically where you get a big, basically a vertical move higher followed by a sideways period of consolidation. Usually when you get to the end of the flag, which is pretty close to where we are, you get another move higher. For Lang, this is, if 75 and change can break out, it goes to $80. That would be terrific. 80-odd. It's smooth sailing then to $100. From my experience, that's usually how things work. He's also spotted strong call option buying in the October 90s and 95s. Stock's already up 49% for the year. But if Lang's right about the chart, then Freeport may not be done, and you're going to see $100 in the stock. All right, next up, check out a very powerful company. It's the daily chart of Southern Copper. That's the biggest copper miner. It's in Mexico and Peru. Largest reserves in the world. This one's been a consistent mover, steadily making a series of higher highs and higher lows. The MACD flashed a buy signal earlier this month. Couple buy signals here. Back in July, Southern Copper tested its 200-day moving average and a floor of support, and then ripped higher. Okay. And you can see when you look at the 200-day, that's this line, and this, that's the test. Okay. And then it ripped higher. It's now got this bullish trading channel. Lang also points out that the TTM squeeze indicator is extremely bullish. Southern Copper is already up 50% for the year, but Lang thinks it's got more room to run. In fact, this is his favorite of the copper stocks. While the option volume isn't as heavy in this one, there's been healthy interest in the October calls at 210 and 220, as well as the January 220s. Right now, Southern Copper is a $28 stock. If it can break out above 220, Lang thinks it's going to $250, which would really be fantastic. Finally, how about this Hudbay Minerals? This is a Canadian mining firm with projects in Arizona, Peru, and in Nevada. This chart shows a modest uptrend of higher lows. In July, Hudbay bounced off its 200-day moving average. Red. Okay, look at that. Just bounced right off it. Woo. Then it blew through its 50-day moving average and just kept running. Now the stock's trading sideways just under its June highs. Once that level gets taken out, call it 44 and change, Lang sees a straight shot to 50. I like that one. Meanwhile, the MACD is on a buy signal. The relative strength index that's up here is pulling back after getting close to overbought. So, that's pulling back right there. So, he likes that. And the TTM squeeze indicator is very positive. Put it all together, and there's a lot to like in this chart of a stock that I don't know at all, frankly. Here's the bottom line. Say what you will about the global economy. The charts, as interpreted by Bob Lang, say we're in very good shape, even if it might not feel that way to the consumer. And that's why I like Freeport-McMoRan, Southern Copper, and my new favorite, Hudbay Minerals. Let's take some calls. Let's go to Frank in Texas. Frank.

The answer is absolutely. I think you're dead right. But it does have, remember, this market is not favoring companies that are losing a lot of money, and that company is losing a lot of money. But I like your idea, and I think as a spec it works very well. Let's go to Leslie in California. Leslie.

No, you want to buy some. Jeff and I talk about this constantly. We think that the spin-off, it's finally getting, it's shaking off all the stock that people didn't want when they, if they own FedEx already. We started a little early. We thought that it was going to, we thought it was going to bottom earlier, and it hasn't. But I really, really like the stock, and I think it's just kind of consolidating before it has its big move. Okay. The copper charts, as interpreted by Bob Lang, say we're in a good spot. He likes the copper stocks here. You know what? So do I. And a lot of it is because I think the charts are pretty compelling. Much more Mad Money.

Wraps up his last day as CEO. I'm taking a look back at the 15-year legacy at the helm of this company and giving you my biggest takeaways from his tenure. And all your calls rapid fire tonight, the lightning round. So stay with Cramer.

We have a real conundrum on our hands here with UL Solutions. That's a safety science company, handles all sorts of product testing. Earlier this month, the company reported a seemingly strong quarter, yet the stock fell 14% in a single session, and it's kept getting hit since then. Although the headline numbers were all solidly better than expected, there were some real issues when you check under the surface. Management only reaffirmed their organic revenue growth forecast rather than raising it. Their free cash flow came in light, and UL Solutions raised its capital spending outlook from 7% of revenue up to 8.5% of revenue. Perhaps incentive compensation putting real pressure on margins. These are all hard for me to figure. That's why the stock did get clobbered, even though the core testing business, which was what I was looking at, was very strong, especially for hardware related to the data center. So could this be a buying opportunity? Let's take a closer look with Jennifer Scanlon, who is the president and CEO of UL Solutions, to find out more. Ms. Scanlon, welcome back to Mad Money.

Oh, thank you, Jennifer. I'm glad you are on the show. We want to try to figure out what's going on here. I mean, organic growth was pretty good. I know that free cash flow may not have been up to stuff for some. Industrial margins were kind of good, but people didn't like these. Can you tell, let's say, put to rest some of the concerns so we can talk about what UL Solutions really does?

So, I mean, the analysts were talking about margin pressure. Those margin pressures, would you regard them as temporary?

Okay. Well, let's talk about the data center now that we've kind of cleared up. And some people, some analysts might regard what you said as being a little too positive, but I think what you said is pretty much what I saw. How about that? So, why don't you tell us about the data center opportunity, because it's probably the biggest I've ever seen for you.

All right. So, tell me, you certify the devices, the device itself, or do you certify each device?

Now, are you someone who could say, 'Look, I think that you're doing air-cooled. Perhaps you should do water-cooled. I think you'd be less susceptible to fire.'