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Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramer to my friends. I'm just trying to make some money. My job is not just to entertain, but to do some explaining. So, call me at 1-800-743-CBC or tweet me at Jim Cramer. So far, so good. That's all I can say about how the market's taking earnings disappointments and new stock offerings, traditionally huge obstacles to a raging bull.
Yesterday, Alphabet did a gigantic equity offering to fund its AI buildout, at the same time that we learned about two very high-profile alleged earnings disappointments from Broadcom, and tonight's guest, CrowdStrike. But the market shook off the disappointments. The Dow only surging 875 points, S&P jumping 4.1%, and the tech-laden Nasdaq is dipping 0.09%. But it was a dramatic turnaround for what looked to be a miserable session.
The house of pain, house of pleasure. As someone who counts himself very concerned about the new supply of stock that's about to hit the market right as we're getting not-so-hot earnings, well, today's rally was truly a welcome surprise. Earnings disappointments and big chunks of equity flying around usually mean tough times are ahead. There typically isn't enough money in the market to take care of business when business includes the aforementioned Alphabet deal plus the gigantic SpaceX IPO with its worrisome lack of earnings, or Anthropic, which comes under the category of who knows. Yet the market shrugged it all off, even though this is coming at a time when there's still no resolution to the war in Iran and only a paper-thin ceasefire between Israel and whoever the heck is supposed to be running Lebanon. I find that pretty amazing. I don't know about you, especially when you consider the oil companies are just now signaling there's no more inventory to cushion a hefty rise in the price of gasoline. So then what drove today's rally? Well, there are a couple things that could be at work here. Most obvious is that the disappointing earnings may not be as crushing as we think. This is not the first time that Broadcom, which is by the way a gigantic company, has offered a measured forecast only to crush the numbers next quarter. The stock had gone parabolic into the quarter, and as we told CNBC Investing Club members when we sold some stock ahead of this quarter this week, a parabola is never a good sign.
Plus, when we speak with George Kurtz, the CEO of CrowdStrike tonight, I think we're going to get a much better sense of how well the cybersecurity company's doing, and the notion of an earnings or a forecast disappointment may be misplaced.
So, one, the disappointments really weren't all that disappointing. And now let's talk about the delusion deal. Something may be going on with the underwriting process that we haven't seen very often. We just had a phenomenally successful Alphabet secondary priced well by Goldman Sachs to the point that it looked like we had very few flippers and a lot more demand than we expected. It was an outstanding success, just a huge amount of demand.
Then look at this Continuum, which just started trading today. There was so much more demand. This is a company that doesn't make any money at all. There was so much demand than anyone expected that the underwriters had to upsize the deal dramatically twice. The stock was up big earlier today. Although it pulled back at the close, it still finished the session in the black, meaning most of the buyers held on to their shares rather than flipping them. That's nothing short of miraculous. I was prepared to see a sloppy deal that would go up a couple dollars then roll over, bringing the whole market down with it.
It didn't happen. That is a huge load of worry taken off the table.
It suggests that the next couple IPOs ahead of us might be better received than we think, certainly than I thought. The great news for SpaceX, that's terrific, and Freedom, both of which are on the docket. And let's be honest, these companies need the help. We know SpaceX is losing a ton of money, and therefore there's always a fear that buyers will just walk away, even if it is with Elon Musk. Plus, the level of skepticism around AI has become downright toxic these days. I keep hearing that nobody's getting a real return on all that spending except for Nvidia, which makes the chips. Yet the stock, Nvidia, has a lot of I don't know what's coming. The technical term I learned at Goldman Sachs: mojo doesn't have it. The darn thing has been playing a game of shoots and ladders with its shareholders.
It gets better. This morning, the worries over private credit started all over again. Remember when all the intelligent told how bad that was going to be with the talk of redemptions by individuals who didn't know the risk of these funds? Blackstone, a gigantic private equity shop, limited redemptions of a flagship private credit fund during its regularly scheduled opening. Normally, that kind of news, oh boy, it would cause a lot of fear and send the entire market plummeting, as it regularly did not that long ago. Instead, the market just chose to overlook it. And in a sign that even the bears are wary of this yarn, Blackstone stock jumped 7.5% today. It was the best performer in the entire S&P 500. Two months ago, it probably would have been the worst performer in the S&P 500. The doom-mongers would have just taken this one to town. KKR and Ares Management, two more private equity firms that have been inflicted by redemptions, also rallied nicely. In fact, they were among the top 10 performers in the whole S&P 500, too. Now, I don't want to get ahead of myself. For one thing, tech didn't lead today's market, but it got broad. And a respite when we saw of the endless data center stocks running, guess what? We saw a host of non-data center stocks do well today. Let me go over a couple of welcome signposts. First, the banks went up. Well, glory be, the banks went up. The financials are arguably the most important sector of the year and sector out there, and they've been the worst performers of the year. Goldman Sachs and Morgan Stanley are both winning big in the hyperscaler stock derby, running away with the honors and deals, but they have been in a club of their own. Today we saw something like real life in real banks like JPMorgan, PNC, Citigroup, a bunch of the other large banks. A sign that the economy may be healthier than we think. Now we're on the eve of the monthly employment numbers, so perhaps people are betting on a bullish labor report tomorrow morning, meaning decent hiring, low no inflation. Either way, the left-for-dead bank showed some real resilience, and it was a welcome sign.
Healthcare had been a total no-fly zone for the last few months, other than Cramer-favorite Lilly. Now, this time we saw a host of drug companies and health insurers rally, something that shows there's a pulse away from tech. Oh, and this market saw a standout performance in a trucking company. We just featured FedEx Freight, an outlet we had on the show earlier this week. An unhealthy market is not led by a trucking company. Just like the banks, the transports make for great leaders. I'm not a dreamer, though. I know that if the Alphabet deal had gone poorly, you could expect the big institutions will be less inclined to buy the money-losing SpaceX. And you can't pull off the biggest IPO in history with just the little guy. You need the big money, too. And yes, we're unsure of the capital needs of the hyperscalers, but if Anthropic's growing as rapidly as we hear, maybe those worries are misplaced, too. All right, enough. I've thrown a lot of pangloss at you. All I can say is that at 4:00 a.m. this morning, we seemed to be on track for one of the worst days of the year. But at 4:00 p.m. this afternoon,
All aboard, we left here thinking, how did the bull run over the matador in a tremendous display of power despite Broadcom, despite CrowdStrike, despite a surprise gigantic equity offering from Alphabet that did so well? Alphabet bought back $45 billion worth of stock. In the first quarter of this year, it snapped up another $15 billion. So, it's last year $45, this year $15. Now, it is selling similar volumes. Can you believe that? Sold it. All the stock they bought last year. Wow. Here's the bottom line. The word I have to use to describe this market is appetite. Right now, ahead of some gigantic underwritings, this market has a huge appetite. One that could shrug off a bear with a gigantic GLP-1 hypodermic needle and still be hungry for more. Let's go to Jim in Wisconsin. Jim,
Hey Jim, love your show. I love your book, How to Make Money in Any Markets. Fabulous.
What a gent you are. Actually, I was with a CEO today who read it and said, 'I finally understand what a price-earnings multiple is.' How can I help you?
It makes you make it understandable. My question today is on Uber Technologies. I bought it back in January of last year for about $63. I sold it in December for $83. Now I've been watching it since February of this year. It's been ping-ponging in a small range of about 72 to 77 with much movement. Now I know there's competition. What's your read on this reasonable growth and scale in the next year or two? What do you feel?
I think the next year or two you want to buy this stock. It's settled down. I like a stock that's come down heavily that is still doing well. I think you got horse sense. But listen, this market's still got a huge appetite for all this new supply getting thrown at it. So, I'll take today's rally as a welcome surprise.
On Mad Money tonight, CrowdStrike sold off today despite a top- and bottom-line beast. So, is Wall Street getting something wrong here? I'm going straight to the source, CEO George Kurtz, to find out. Then, shares of Honeywell spin-off Quantinuum started trading today. So, should you be looking to start a position in this quantum play? I'm sharing where I come down. And Timken might seem like an old-school industrial, but it's entering a new age amid the reshoring effort in the US. I'm learning more about this company from its top brass. So stay with Cramer.
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Last night, CrowdStrike reported what I thought was an excellent quarter, but the stock got hammered today, mainly because the cybersecurity company didn't beat the estimates by as much as we've all come accustomed to. The guidance was strong, too, and they even announced a 4-for-1 stock split, which shouldn't matter in theory, but in practice tends to attract more individual investors. And I think this is a buying opportunity. But don't take it from me. Earlier today, I had the chance to speak with George Kurtz, the founder and CEO of CrowdStrike. Take a look.
George, welcome back to Mad Money.
