Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramer. Other people make friends. I'm just trying to save a little bit of money here. My job is not just to entertain, but to educate, to explain days like today. So, call me at 1-800-743-CNBC or tweet me at @JimCramer.
Goodbye, February. You will forever be known as a heartbreaker. You demolished software. You minimized hardware. And then you took apart the king, Nvidia. And you decided that the winners were these prosaic companies with popular brands like PepsiCo, Hershey, Procter & Gamble, Colgate, or terrific drug companies J&J, Novartis, AbbVie, or earth movers like Caterpillar and Deere. Everything else, most likely, February didn't ain't got nothing for you. Okay, including today when the Dow plunged 521 points. S&P lost 1.43%. Nasdaq lost 1.92%, with some of the biggies really getting killed. It was a month of indecision because inflation's running hotter, but it was also a month that should have been better thanks to falling interest rates. The rates are really getting low again. On the other hand, it was a month where it dawned on people that obscure terms like private credit could spell real trouble if something goes wrong. I'm looking at you, Blue Owl. I don't know if you are ready for this amount of scrutiny. Will the negativity continue into March? We might find out this very weekend as the president seems eager to go to war with Iran. The markets haven't been rattled by his saber rattling, although oil's up 17% year to date. And when I spoke to Carl Quintanilla today, oil's become such a big part of the inflation story that, well, people are getting nervous. Now we are washing oil, so let's not freak out, please. That rally came entirely from predictions that Iran would shut down the Strait of Hormuz, and that's the most important oil artery on earth. Tomorrow, we'll find out what a Buffett bulletin sounds like from Berkshire Hathaway. That's right. I'm betting the new CEO, Greg Abel, will opt for a much more low-key style than his predecessor. We'll listen for words of wisdom, though. Maybe we'll get some. I think he's a business person trying to make as much money for you as he can. Look out. Norwegian Cruise reports on Monday, and the activists at Elliott Management are after this company to start performing a little more like the standouts, Royal Caribbean and Viking Holdings. Elliott's had some real wins of late: Honeywell, Southwest Air, Texas, J.M. Smucker. The latter true shocker, given that it includes Hostess brands, a junk food that was supposed to be obliterated by the GLP-1s. My suggestion for Norwegian Cruise: sell yourself to Disney, which is desperate for ships as there's a big ship shortage. It's an $11 billion company, this Norwegian. Disney could write a check like this and sell the smaller ships, refurbish only the largest ones, and make the cruise line a much bigger part of their business instantly. That matters. Disney stock is stuck in cable TV purgatory. It could soar if it finds a way to build itself as more of a vacation paradise company. I know it would be radical, and it might take some time to retune the fleet to Disney standards. By my count, there are at least 10 Norwegian ships that could be made over as Disney ships right now. Disney has seven ships, soon to be eight. They're more upscale than Norwegian, but they can be fixed. I think it's a smart move, as ordering a new cruise ship takes about five years. It's the time that's the problem, not just the money. Now, time is right for Disney if they do it. You know why? Because the new CEO, Josh D'Amaro, well, he's run the cruise ship business. So, I say we buy Norwegian and put the emphasis on entertainment and not linear TV, which is now would be behind us. David Faber and I talk about linear TV all the time, and we know how terrible it's doing. Tuesday morning's back to retail. Target's got a new CEO, Mike Fideli, and I imagine we're going to start with him holding him accountable instantly, even though he just got the job. His predecessor, Brian Cornell, took matters into his own hands immediately when he became CEO and shed the money-losing Canadian division, which was just crushing Target. It was a gutsy thing, and people loved him immediately. Target's situation is a difficult one. It lacks the scale and reach of Amazon, Walmart, or Costco. Mike's going to have to reinvent to stay relevant, I think, and he's got to do it quickly. Best Buy reports. Now, this is a tricky one. We keep hearing that they'll be punished for having too many devices that are going up in price because of the cost of memory. The cost of memory, like those little semiconductors, really seems to matter these days to even the PC business or the gaming business. After the close, CrowdStrike reports. Now, this is an incredibly skilled outfit that protects a huge number of clients from cyber criminals. Its CEO, George Kurtz, is a maniac for stopping cyber terrorism, and they play offense all the time. CrowdStrike's an expensive stock, though, and its price-to-earnings multiple got compressed when Anthropic, the very aggressive business-to-business AI platform, last week invaded its turf with something that can help make AI agents safer. Look, in reality, CrowdStrike doesn't actually compete with Anthropic, like partners for heaven's sake. So, it shouldn't have been crushed like that, but the stock hasn't stabbed back either because these days investors simply don't want to pay up for quality merchandise. I stand by CrowdStrike, which is why we own it for the Charitable Trust. One day soon, expertise will matter again and the stock will go higher, but maybe not in time for CrowdStrike's quarter. Wednesday morning, we're going to hear from a real tricky one, too. A lot of tricky ones next week. Brown-Forman. This is the maker of Jack Daniel's. I know the liquor market's gotten tough because of pesky young people who don't like to drink much and instead like to work out, and plus there's this GLP-1 issue. But why is the stock up more than 10% year to date? Could there be something going on here? Something good? Something that's not good to its competitor, Diageo, which is doing really badly. After the close, Broadcom reports. $1.5 trillion company, makes semis and software, really doesn't get enough attention given its size. Now, some of the chips are sold to Alphabet, which is a big buyer. That said, Broadcom needs to get new clients. Right now, it's caught in the software decline stemming from AI fears. I think the client's wrong. You don't get to $1.5 trillion for doing nothing, right? But you know what? This is one of those that's just too hard to own right now. And I know that, and I sensed that today when we had our monthly meeting. Now, we're going to listen to Okta, the company that protects identities. I'm sure that CEO Todd McKinnon will do a good job. I just don't know, once again, if it matters because this market seems to have decided that anything Okta can do, a chatbot can do better. Next, I have a special place in my heart for Costco. I stop every time I see one. I'm on the road. They're almost always exciting and different. You need to go aisle by aisle to get the goods. I grab my own cart. My wife gets a different cart because we don't like the same stuff. We do end up at the register and try to merge, even though others don't like that because we get in front of them. I don't mean to really cut like that. She has the credit card, not me. I try to go on an empty stomach so I can eat the samples. Never go to Costco on a full stomach there. If you only take one thing away from the show, it's that. All that said, we want to see how many people re-up when their Costco cards expire. That's the key number now, the key metric. Lately, the number hasn't progressed. In fact, it's gone downhill. What is that about? I think it's largely younger people who fall out of love with Costco, and they do e-commerce. They don't know what a bargain looks like if they hit them over the head anyway. They're silly. Marvell Technology reports on Thursday, and people are expecting big things because of its partnerships with several hyperscalers, most notably Amazon Web Services, which is selling out of its chips. The demand is so big here that it was mentioned by name in today's when everyone was talking about it. Marvell CEO Matt Murphy does a remarkable job. I think the stock's a buy going into the quarter. That's right. I'm actually recommending buying Marvell ahead of the earnings. Now, also on Thursday, very exciting, Caterpillar is part of a fireside chat at CONEXPO. That's that annual construction trade show that you and I probably don't go to, but sounds like a real hoot. There's CEO Joe Creed, a total straight shooter. Might talk about how people are using Caterpillar generators to power data centers. All very exciting. I kick myself daily for not getting to that one. And I don't know if they'll let me out for my job here to go attend CONEXPO. Maybe next year. Finally, on Friday, we get the Labor Department's non-farm payroll figures. We all keep waiting to see the impact of AI on employment. We haven't seen it yet. But you know why? I think it's because the affected firms aren't really laying off anyone. They're just hiring fewer people or none at all. Bottom line, this was a bruising week capping off a bitter month. Let's hope March doesn't come in like a lion or a bear. But I can't imagine how we're going to see a steer and how they'll ever find this miserable place after this week.
Hey, how about we go to Cordell in Ohio. Cordell.
Thank you, Jim, for having me on today. Good evening.
Oh, I'm thrilled you're on the show. Thrilled.
Okay. Thank you. I appreciate everything you do for the investors that invest with you and also that call in to your show. And I just want to thank you for all your information.
Thank you, man. You know, we try so hard, and it's great when I hear it because it makes it all worthwhile. Thank you. How can I help you?
Well, I'm calling in about a company that's currently up for the year, and I was just wondering due to multiple expansion and pricing for products, and I know that I believe this company has a pretty solid management team. What other headwinds will face a company like Starbucks due to tariffs that came up?
That's a great question. Okay, here's the other things that can really hurt Starbucks. And you know, I'm a big believer in a big position by the Charitable Trust. What can hurt them is the inability to be able to close all the stores that aren't doing that well and then put the money towards the ones that are doing well. And that's how you have to get same-store sales. And it's very difficult for Brian Niccol to say, 'Okay, that store closed, this store open.' We see a lot of it in New York, by the way. He has to get the Starbucks into the middle of the country. They're underrepresented in the middle and they're overrepresented in the coast. And I think he's going to take care of that, but it just takes time. I want to go to Ned in Ohio. Ned.
Hello. Professor Cramer, it's been great to hear you back on the Mad Money program this week, sir. How are you?
Thank you. I am fine, thank you. How are you?
I'm doing well, sir. By the way, I want to wish you a belated happy birthday.
Oh, thank you. I remember your birthday because it's one day ahead of mine.
Oh, well, there you go. He's Feb 11.
Isn't that terrific? Same day, same as my best friend David Hoss when I was growing up. All right. So, how do we go? Let's work together. What do we have?
Well, I want to ask you about KeyCorp. I've held it for a while, and it's appreciated over time.
I think you should continue to hold it. Just continue. You got that 4% yield. You got Chris Gorman doing his job. You've got a $20 stock down a dollar today. I actually would advise people if this stock fell to 19, I think you pull the trigger. I am a big backer of KeyCorp. All right. February was a rough month. Let's hope March is a little better. Too much to ask. I'm out tonight. Companies that build things are hot stocks right now. So is now the time to build a position in one that you were is going to knock your socks off. It's called Sterling Infrastructure. Don't miss my sit-down with the company's top... And Flutter shares have been dropping out of the sky lately. What has got going on there? I'm taking a close look at the gaming industry, and you probably don't want to hear anything about it, but we're still going to learn. And we held our investing club monthly meeting today, and we had so many great questions from members. We decided to take a few more tonight so you get a feel about what the club's all about. So stay with Cramer.
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I want to talk about one of the hottest stocks out there that you maybe never even heard of. It's called Sterling Infrastructure. Now, this is an engineering construction firm that pivoted from old-fashioned highway work into high-margin mission-critical infrastructure like data centers a few years ago. That's why this stock is up a staggering 1,800% over the past five years, including a nearly 250% gain over the past 12 months and a 40% gain year to date. Now, two nights ago, Sterling reported what I thought was a strong quarter. Robust top and bottom line, 51% revenue growth, a stunning 78% increase in their backlog. Even better, management has a higher-than-expected full-year forecast. They're talking 25% revenue growth and 26% earnings growth. Yet, the stock has actually gotten dinged a bit in response to these numbers. Opportunity. What's going on here? Let's check in with Joe Cutillo. He's the CEO of Sterling Infrastructure to find out. Mr. Cutillo, welcome to Mad Money.
Thanks, Jim, and thanks for having me.
All right. Well, your company is an incredibly exciting company. It wasn't when you got there, but you have made it into probably what would be a fan favorite from everybody who listens to all these things about data centers without any of the overruns in a plant that they may have. Tell us about the transformation that you did with Sterling and how it's doing now.
Yeah. So, you know, when I came in, our business was about 90% low-bid, heavy highway work. Not a market that's really great. Super high risk, super low reward. If you're the low bidder, you win. Doesn't matter your value, your capabilities or anything along those lines. And more so than that, we had a change in philosophy. The company was focused on revenue growth, assuming profit would fall through. And our focus shifted to margin growth and cash flow. And what that does is that drives you away from those markets that are very volatile, very low margins, into areas of high growth, high value propositions, and where you can really put a service or offering to a customer that no one else can.
But if you're going to do infrastructure work and you're a company your size, where do you get the people? Because the stuff that we're talking about, at least when I talk to CoreWeave, is really, really difficult, and very few people actually even know how to do it.
Yeah, it's certainly a challenge we have as a country, right? We as a society have downplayed trades, and trades are absolutely critical to everything we do. We've been very fortunate. We have two parts of our e-infrastructure segment. The site development side, which is that heavy yellow iron. We do literally build cities underground that they can build facilities on top of. That labor, we have a very good track record of getting... We tend to pay more. Our guys work 60 hours a week. And we have the biggest and most powerful toys in the industry, right? So we can attract that talent. The electrical side of our business, which we recently added here last year, that's more challenging. The electricians aren't as readily available as machine operators. So we've got training programs. We have our own university in place. We're out recruiting from some of the trade schools. A multitude of things to keep up with the pace of demand that's coming at us.
Okay. So, when we hear about a $30 billion data center, what kind of stuff do you do if you get the call?
So, if you step back, a $30 billion data center is probably a 300-400 acre site. And what people don't understand is these aren't data centers anymore. They're data campuses. There's...
Okay, that's a really important point.
Yeah. There's multiple buildings on these, and there's multiple years of build-out. So we will come in with a virgin piece of land. We'll put in all the underground infrastructure, take a mountain and a valley, make it flat, and then they're ready to pour the pad and start the building. In addition to that, now we'll do all the outside electrical running into that building. So the duct banks, the power from the substation into the building, and then the building's ready to be built. Once the building's up, then we will start doing the electrical package inside the building at that point in time. So on that type of project, the exterior, the site development package on that would probably be $300 to $400 million. The electrical package on each one of those buildings is about $500 million. So if there's seven buildings on that, you can do the math, right?
Well, okay. So, but you're the first person who's ever broken this down for me. See, I've always, when I hear these numbers, I just think, what the hell? Why is it so much money? But to find the people, the electricians to put all that in is not like doing a home. It's not like doing 20 homes.
No. And the thing that people don't realize is when we're doing the electrical work on a data center, we're not doing all those buildings. Each one of those buildings takes 300 to 500 electricians just to do one building. So you multiply that by seven. There's usually multiple of us. And the way our customers tend to do it is one company will get building one, a company will get building two, and then you'll get building three when that gets built, right? So they have enough capacity and certainty that they'll get it built on time.
Okay. You've also done some M&A that I think was critical to the stuff that we're talking about. Correct.
That's right. We bought a company in Dallas called CEC, and they do the electrical. They started in the semiconductor world and still have a nice piece of semiconductor. So for us, we had great presence in data center. We're pulling them strongly into data centers. We can marry the outside electrical package with the site development package. We can actually take months of lead time out of the project for our customers. And at the end of the day, what we deliver is a project on time every time, faster than anybody else, because you got that $30 billion project. An extra three months of time to build that is significant cost to the customer.
Well, Joe, did you ever think that your stock would have this kind of run?
I'm pretty optimistic. This might be a little higher than when I started in 2015.
