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Today the bulls got a nice reprieve with this softer-than-expected labor report. Just 29,000 new jobs in September. Whenever the Federal Reserve's tightening, we actually have to root for weaker economic data because it can prevent or at least postpone an interest rate hike. At the same time, our government and the rest of the G7 agreed to release 100 million barrels of emergency oil and diesel from the strategic reserves over the next four months. That led to a slight dip in oil, which made it possible for the stock market to rally. Dow gaining 250 points, S&P advancing 73%, NASDAQ jumping 1.19%.
Although the market was much stronger earlier in the day when interest rates dropped dramatically off the weak unemployment data, they subsequently reversed and rates edged higher, blunting the rally. All right, with that in mind, what do we have for next week?
Let's take a look at the game plan. All right. First of all, when we come in on Monday, what do we always be looking at? We're looking to see about oil and a reset perhaps because of the European Union releases of both diesel and oil strategic reserves. The world's short diesel. It's really a very difficult situation for truckers. We need oil in the 80s to see a change in psychology here. Until then, rallies like the one earlier this morning are going to be met by selling. Keep that in mind.
Tuesday starts with a 9:05 speech by John Williams, the head of the New York Fed, who will no doubt comment about the slowing growth and cooling wage inflation that we just got from this morning's number. This past Tuesday, Williams stopped a lot of stock and bond bleeding when he said that there was, quote, 'no need for urgency' when it comes to the next rate hike. I'd like him to repeat that, but I'm a bull. Remember, rate hikes are the bane of the shareholder's existence, at least short term. So his comments ignited a brief rally. Will he do it again after the weak-than-expected non-farm labor report? Wouldn't surprise me, as we've seen a dramatic drop in the percentage of investors who are now expecting a near-term rate hike.
What else? Tuesday may be one of the most consequential days for semiconductors. Why? Because Matt Murphy, CEO of Marvell Technology, holds an analyst meeting. These can be electric. I expect Murphy to lay out a long-term game plan while showing how integral his company has become to the great data center buildout. He has created a genuine powerhouse here at Marvell, and he's now, even though he's a young person, he's an elder statesman in the industry. I bet his presentation will be very strong with big reverberations throughout the hyperscaler world.
After the close Tuesday, we get results from Constellation Brands. Now, this is a totally different situation. STZ is the beer, wine, and liquor company best known for Corona and Modelo. But I have to stress that this group has been nothing short of horrendous. We're watching an amazing thing occur in this country. It's not talked about enough: a genuine contraction in certain liquors and a steep slowdown in beer sales, even Constellation's popular Mexican imports. This stock is now down 19% for the year. Worse, two years ago it was at $255 and now it's just under $113.
What's behind the decline? GLP-1s, weight loss drugs, are part of the equation, but so are the habits of the younger generation who simply haven't been converted into heavy beer drinkers like their parents. I think it's a belief that any kind of alcohol is just bad for your health. I'm an everything-in-moderation kind of guy, but my generation simply drinks more than the younger folk. And you know what it is? I think that alcohol is truly aging out in this country.
Wednesday night, we hear from Levi Strauss, terrific denim company. The stock has fallen from $25 in July to less than $20 today. This decline is typical of what happens in this particular tough market. Because of higher gasoline and higher interest rates, people expect a big slowdown in discretionary spending. They're not going to buy any more jeans. I have no real answer for this kind of situation other than to say that Levi's has to continually, endlessly execute with a high bar.
Speaking of burdens, on Thursday morning, we have one of the most problematic earnings reports imaginable, that of PepsiCo. For years, this company was running circles around archrival Coca-Cola thanks to the strength of its snack food business, not its soft drink. This year, things are upside down. Coca-Cola stock is up 22.5%, leading the packaged food industry, while PepsiCo stock is down 12%. What explains the disparity? Simple: live by junk food, die by junk food. PepsiCo crushed Coca-Cola back in the days when Frito-Lay's snacks business was much stronger than carbonated water or soda. But now Frito-Lay is uniquely in the crosshairs of the GLP-1s and the health-conscious younger consumers.
Now, of course, PepsiCo sports a 4.7% yield, which is terrific. But when the 10-year Treasury yields 5.28%, you know that risk-free bond competition looks a lot better by comparison. I want so badly to say to you that this could be the quarter when PepsiCo turns things around, but even if I believe that, all you get is a short-term bounce. So the risk-reward is just simply not compelling. Is that too harsh? I don't think so. Campbell's recently had to cut its dividend. General Mills and Kagra missed their quarters. And yesterday, we got a really problematic quarter from former growth gold standard McCormack, the spice company. I can't recommend something if it comes from a packaged food mill and it's just going to bounce. We're not traders on this show.
Friday we get numbers from one of the best-run airlines, Delta. The CEO, Ed Bastian, has been in the news because he chose Amazon's in-flight Wi-Fi over Starlink. Elon Musk, who runs Starlink through SpaceX, has said that Bastian could end up losing his job for picking Amazon over Starlink. I wouldn't go that far, but I do know the Cramer SpaceX has broken out for the upside. CNBC Investing Club members know that I really like SpaceX, even if I think it's maybe too speculative for the trust. It does have a huge amount of compute through its accumulation of Nvidia chips.
And by the way, it finally hit, it broke out, hit an all-time high, but then it came back. So the chart is probably going to hate it again. But anyway, Nvidia could bring in lots of profits given that there's a real shortage of computing power. So if you bought their chips like Musk did, he's making a ton of money with SpaceX by leasing them out, by basically selling the compute power.
Also, on Friday, we have the University of Michigan consumer sentiment. Now, I usually don't care about this one, but you know, we're getting closer and closer to the election. Obviously, people have turned really negative about the economy because of inflation. It doesn't bode well for the incumbent party. In fact, midterms are almost always bad news for the party in power. Then again, we're told that the market produces the best returns when there's gridlock in Washington. I say stay tuned.
Bottom line, we're headed for a quiet week. Don't get used to it. We're on the verge of the earnings deluge, and this time I don't think we'll be getting the kind of strong numbers that we've become accustomed to. Thanks to rising rates from the Federal Reserve, it's determined to bring down inflation. We've got a much more difficult backdrop coming up for earnings season. I'm not saying it's impossible to make money on stocks in this environment, but it's certainly a lot harder than it used to be. How about we go to Roger in Florida to start? Roger.
Hi Jim. How are you doing? Love you. Thank you. Thank you for what you're doing. I would like your opinion on Applied Materials, please, for the next 12 months or so. I'm very much in the money. I just want to know: should I hang on, take my profits, or you know?
I know it's Gary Dickerson. The earnings look like the PE looks like it's expensive. That's because it's probably going to blow away the earnings. I want you to stay with Applied Materials. By the way, Micron was up big at one point today. That you need in order to be able to try to get out of the shortage situation that we're in. You need a lot of Applied Materials machines at a place like Micron or anybody else too. I want to go to Michael in West Virginia. Michael.
Yes. Jim, I'm a first-time caller, but I remember seeing you on Ted Koppel and Cramer then your first Mad Money show years ago.
Well, I thought about that today. So Carl Banks, he was on that program, but go ahead. What's up?
Okay. I've got a very small position that I've held for a long time. I got a 149% gain in it. I've held it for so long, but it's pulled back and I never did get to add shares to it. I'm thinking about adding shares to my Simon Property Group position. I would like to know.
I think you're absolutely right, Roger. I want you to add to the Simon Property Group. You know, I was in Italy and I went to this incredible outlet mall and I said, 'This place is like the greatest place. I can't believe my wife and I were shopping there.' It was a Simon Property Outlet, and I know that the late David Simon told me one day I should visit it. There it was. What a great man he was, and he built a fabulous company, and you should buy more of it. Let's go to Ann in Indiana. Ann.
Hey Jim, I'm a club member. So thanks for your help as we enter this rate-tightening cycle. Just kind of looking at my financials. Yeah, thanks. I'm just looking at my financial stocks. I just started adding to my Goldman Sachs position a little bit. What do you think?
I think that's the right idea. It sells now at 13 times earnings. The premier franchise in the industry and only 13 times earnings. That's wrong. A lot of the charts look the same. People think that all these stocks are rolling over. You have to pick at these stocks on the way down. No one knows exactly where to go to bottom. I think you're doing the right thing. All right. Look, next week is quiet and it means you have to pay more attention and do your homework. You want to make some money. This market's going to get much tougher.
Now on Mad Money tonight, how is SLB leveraging its energy knowledge to help with the data center buildout? Who they were involved with? Don't miss my sit-down with the company's top brass. Then you called in about a name that's in the midst of a breakup. I'm looking at the wheat being separated from the chaff and giving you my take, and it's pretty exciting. Of course, there's also the sentiment around AI and data centers shifting daily. How I'm getting a read on what America's really feeling about the AI movement. The consumer data firm 100x. Stay with Cramer.
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It's not just traditional tech that benefits from the AI data center boom. All sorts of classic cyclicals have worked their way into the food chain, like Caterpillar, Cummins for power generators, Pure for battery storage. But it goes beyond the industrials. Take SLB, the oilfield services colossus formerly known as Schlumberger. A couple of years ago, they started making modular infrastructure solutions for the data center. I guess if you can build oil wells in the middle of nowhere, it's not that much of a stretch to help put up these warehouses full of servers. This business has been growing pretty fast, and it's about to get bigger because last month SLB announced a $4 billion acquisition. They're buying Kelvin. That's a heat management company. Don't worry, we'll explain that. It keeps data centers cool. Consider me intrigued. So let's take a closer look with Amy Chua. She's the senior vice president of data centers for SLB to learn more. Miss Chua, welcome to Mad Money.
Hello, Jim. How are you? Thank you for having me.
Of course. I'm so glad you're on the show. First of all, maybe you can give us a little background of SLB's data center business. By the way, the fact that you started out with modular infrastructure, so people understand how you got into this at all.
Sure. So this business is fairly new for us. We started in 2024. That's when we had our first delivery. And honestly, it wasn't that big of a shift. There was a lot of adjacency in terms of our capabilities, right? You know, we celebrated 100 years of innovation in our oil and gas space. But along with that, we also have a tremendous amount of capabilities around manufacturing, around supply chain. Design is a really big one. Being able to take what we do for our customers in our core markets, you know, going into complex environments and helping to solve complex problems. We were able to take all that capability using our engineers, using our platform, and then really leaning in and supporting the data center builds.
Okay. So Amy, you did just make an acquisition. This Kelvin, we mentioned this. This would make it so by 2028, I mean, you're a $37 billion revenue company, so by 2028, it could actually make it so that you could move the needle of your big company with this.
Yeah, we believe so. You know, we are gaining quite a lot of traction with our customers. They like, and then I would like to share a story with you. I think, you know, it's amazing. I was with a hyperscale client just a couple of months ago, and he told me that he doesn't need SLB to be another data center infrastructure supplier. He wants us to be leaning into our 100 years of oil and gas experience. Like, how do we bring the practices, the solutions into making it simpler, safer, quicker, you know, in our modular design, and how we can compress timelines and really, you know, bring the efficiencies of the build for their multi-gigawatt growth.
Right. So Kelvin for us is an expansion of what we'll be able to provide from a total solution perspective. You know, GPUs deliver two things, right? Chips deliver two things. They deliver tokens, but they also deliver heat. And there's a tremendous amount of heat as the AI workloads increase, right? That heat needs to go somewhere. This is where Kelvin comes in. They have the ability with their solutions and their technologies to take that heat and reject it outside the server hall where it doesn't belong, right? So we think we'll have a fantastic opportunity now to combine that capability with what we do in modular infrastructure in providing a system-level design and really impacting the efficiency for the data centers.
Okay. Amy, we had a Meta on this week. You're doing some work with the Meta data center in Alberta, Canada. Can you describe what that opportunity is?
So it's a 1-gigawatt build. It is the first time Meta is building in Canada, and so we are so thrilled to be selected as a delivery partner. This is a case where we will own the design, the engineering of the designs that they have, to building the off-site assemblies, to the installation of it when it goes to the campus, and then actually commissioning it, right? So it's a whole package, and we own the full value chain, if you like. I think this is a tremendous amount of value for Meta because we are going to be focusing on every part of that value chain, making sure it connects, making sure the interfaces are right, and that, you know, the project execution and the project management of it is as smooth as possible.
Now I did not know you had a long-standing relationship with Nvidia.
We do, we do. It goes back multi-decades actually, from when we were first a client of Nvidia, and my CEO Olivier talked about it previously, right? So maybe I'll expand what we are doing now in terms of our partnership expansion with Nvidia. You know, we are a design partner for modular infrastructure for the DGX reference design. This means, you know, working with them on requirements, specifications, and really trying to set the standard for the industry so that other builders can go faster. It is all about the time to token, and whatever is defined, you know, with the clarity helps with that solution, getting to the solutions, right? The other things that we are working with Nvidia on is just being a more participative and involved partner in their partner network. So Nvidia does a good job in terms of building that partner network and building an ecosystem that is very supportive. We are a big part of that, and, you know, I'll give an example where in West Texas there is a builder that has the land, that has the power, but doesn't necessarily have all the pieces that go into building a data center and generating tokens, right? So it's about putting together those pieces of value in that value chain and going faster together.
All right. So, Amy, let me ask you. Your CEO knows I am a huge believer in your company and have been. I mean, I applied to your company. I know I got rejected. It was four years ago. It's okay. But I do want to ask you, do these customers come to you? Like, let's say you're in the Permian. I mean, everyone trusts SLB. Do they say, 'Hey, listen, I've heard about this division you have, and we're trying to put up a data center quickly, and time to tokens, everything. Can you help us?' Is that starting to happen?
Yes, we get a lot of phone calls. We're having a lot of conversations with the customers. I do want to take a bit of time and explain what we do that is differentiated. Okay. You know, one of the biggest constraints in building, it's not AI demand, right? It's getting to the compute and the tokens. And in between the grid to the chip, you have everything from the power to, you know, the slab and shell to the substation to building that whole campus, right? So what we bring that is differentiated is the idea of modularity. And this is not stick building, which is traditional. When you build a data center, you stick build, most people or some people, I would say, and this is still the practice in some cases where you will take what you stick build, maybe draw four blocks, four boxes around it, and say, 'I'm going to take it off-site.' Right? So there is a version of that understanding of modular. So you prefabricate it off-site. What we like to do with our customers is have this upfront conversation around the design principles for constructability, for transportability, for configurability, right? And what this allows us to do for our customers is just the velocity. Now, this word velocity is another word that another hyperscale client uses with me, right? Like, how do you go faster? And it's not just to go faster for the sake of that. It's to do it with the reliability, with quality, and so that when these modules do end up at the site, we can install it faster, more seamlessly, and with higher reliability. So you are not spending time trying to troubleshoot the issues because things don't come together, right?
Okay. Well, that makes a ton of sense, and I'm glad. I mean, look, I think SLB alone is a terrific company. I love what you're doing. We've seen it happen with CAT. We did see it with Cummins. We see it with Eaton. These are just great American companies that have reinvented themselves, and you are right in that same zone. That's Amy Chua, senior vice president of data centers at SLB. Thank you, Amy. Glad you came on.
Thank you. Thanks for having me.
Okay, everybody's back after the break. Coming up, should you be looking to harvest shares of Vor after its spin-off from Corteva? Cramer's digging in next.
On Monday, Ken in Texas called in to ask about Corteva and its new spin-off, Vor. I said I'd get back to him. Remember, Corteva was one of three companies created by that massive Dow DuPont merger breakup. They got the ag business. We know Corteva has done very well from the Dow DuPont breakup. It's more than tripled since it was spun off. Remember the two components. I remember when it was the lag of the three. The new ones are Dow, new DuPont, and of course Corteva. But now they're trying to repeat the magic, spinning off their seed business as Vor. It came out yesterday. It was weird because Corteva's stock seemed to lose a whole bunch of points. It was because of this. The remaining Corteva is all about crop protection. Vor is genetically modified seeds and their patents. They have many of the same customers, but the economics are very, very different. Specifically, genetically modified seeds are a high-tech, high-margin business. Crop protection is more of a commodity. That's why Frank Mitch, who is my favorite chemicals analyst, he's at Firmium, says Vor is the cream of the crop and Corteva has become a show-me story even if it has great management. Now, that's a good reason to orchestrate a breakup, right? Because Vor should be able to get a much higher valuation as a standalone asset.
Morgan Stanley made some interesting points in its initiation report, which assigned Vor an $85 price target. Keep in mind this is a $67 stock. There's nothing particularly rare about a chemical company like Corteva, which makes pesticides and herbicides. But a pure-play genetically modified seed company? We haven't had one of those since Monsanto sold itself to Bayer eight years ago. Now it's buried within a broader conglomerate. In other words, Vor has scarcity value.
That's it. It's the one that I'm more excited about. Vor makes incredibly resilient seeds with high prices. Even during difficult periods for farmers like 2015 through 2020, those prices held up. These guys get 71% of their sales from corn, 18% from soybeans. The vast majority of their business being done in the Western Hemisphere. And in terms of the best seeds, corn and soybeans, this is a duopoly. The market's dominated by Vor and Bayer. You need an insane amount of genetic research and regulatory approvals to ever be able to break into this industry. Which is why I'm not worried about competition using AI to vibe-code new crops.
And because these companies never stop innovating, they don't have to worry too much about patent expirations. By the time old varieties go generic, the new ones are so much better that farmers have no choice but to keep paying up. Now Vor also has this big research business where they develop seed traits and then license out the genes to other producers in exchange for royalties. According to Mitch and Firmium, their licensing business is growing like a weed. It should hit $500 million in revenue next year and reach $750 million by 2030.
At the same time, Bayer's got a great pipeline. Management plans to launch, this is, yes, it's like a drug company. Management plans to launch 12 technology platforms over the next decade. Seven in corn, four in soy, and one in wheat. They're using gene editing to improve disease resistance. Hybrid wheat could eventually become a third major crop franchise with initial launches beginning next year. I like that. Over the long haul, management's very optimistic about this business. They're also thinking about roughly $1 billion in annual share repurchase from 2027 through 2029, excluding major acquisitions, alongside a modest dividend. Mitch expects Vor to roll out a repurchase authorization covering three years sometime in the fourth quarter. Regular viewers know that I like buybacks and I cannot lie. Now, what are we paying for this thing?
Frank Mitch initiated Vor with a buy rating and a $75 target using an earnings before interest, taxes, depreciation, and amortization multiple of around 17. Morgan Stanley's Vincent Andrews is more bullish with an $85 target based on the stock deserving to trade at 18 times EBITDA. That's the earnings that I just mentioned. Same kind of metric that implies about 26% upside from here. I think that sounds really good. If you go purely on an earnings basis though, the stock ain't cheap. Selling for more than 30 times this year's earnings estimates, more than 25 times next year's numbers. I love the business, but it's not a super fast grower. So I'd argue it's already priced at a relative premium. I think it deserves that premium. However, that means they have less margin for error.
Okay. So how about this remaining Corteva for crop protection? Trades at 21 times this year's earnings estimates, 19 times next year's earnings estimates. But there's a reason for that. Corteva is the stagnant part of the business. Management's talking about 3% annual sales growth from this year through 2029, 6% EBITDA growth over the same period. The challenge is hitting these numbers while Corteva gets hit with lots of generic competition, especially from China.
Now, the company's been working very hard to shift towards differentiated products with less competition. That's now 65% of their sales mix, and they've been jettisoning lower-margin products for years. But even with all that, Corteva is on track for low-single-digit revenue growth because the rest of their business is under so much pressure. Older products face lower prices, lost registrations, and replacement by newer offerings. Management says it can meet its plan without a favorable pricing cycle. I'd like to see some evidence for that in the numbers. This is why Mitch calls Corteva a show-me story, and I think he's right. Corteva needs innovation and efficiency to overcome the competitive environment versus older chemicals. Now for Vor, they need to keep innovating to fend off the competition from Bayer, but that's a much easier situation because they have an effective duopoly.
In the end, Vor is a business with defensible technology, valuable customer relationships, and an attractive route to improving profitability through licensing and better seeds. I'd be comfortable building a position in this one, and do it gradually. But this thing, I'm confident Wall Street's going to continue to pay up for Vor's scarcity value. Just remember, it's not that cheap. For Corteva, I'd stay on the sidelines for now. Management has a reasonable plan, but I want evidence that new products and cost savings can overcome the tide of the generic. Here's the bottom line: I really want to thank our viewer for bringing the Corteva spin-off Vor to our attention. This is exactly my kind of breakup. In this case, I think Vor is the one to own. Corteva needs to prove itself before I'm willing to get on board a crop protection play. I like this Vor right now. Let's speak to Dean in Ohio. Dean.
Hi Jim, charter member of the investment club, and thanks for all you do.
Oh, thank you. And I know, remember, you get a book if you sign up. All right, go ahead. What's up?
Yep. Texas Pacific Land Corporation had a solid 2025 and is doing well this year. Is it a buy, sell, or hold?
You know, when it comes to oil, I'm being very limited. I say you have to do Chevron. Because Chevron's got Venezuela, Chevron's got the Gulf of Mexico. He calls it Gulf of America. He being Mike Wirth, and it's got really great Asian properties, and it's terrific in the Permian. So we're going to stick with that one. I don't want to have too many going. Let's go to Stafford in California. Stafford.
I'm doing great. Stafford, how you doing?
I'm doing okay. Hey, I wanted to get your thoughts on John Deere. I know the price of corn's up about 20%, but I know corn's had a couple of bad years for the price of it. So I want to know if you think commodities are bottoming or what your thoughts are. Thank you.
I think Deere is sensational. Not just good. I think it's sensational. They're not promotional. They don't come on TV, but it has been an unbelievable company. I first started buying it in the 1987 crash, and it's been just one of the best performers. And also, of course, anyone who has a John Deere, we got two of them. Unbelievable machines. Let's go to Bill in Massachusetts. Bill.
Hi Jim. Thanks for taking my call.
Of course, Bill. What's going on?
Listen, I was looking around a little bit with this blockade of the Hormuz. Do you think there could be any play in NTR for some fertilizer?
The fertilizer trade. You know what? I think that trade has come and gone. I think people got real excited about it. They made some money and then they've left. It's not an expensive stock, but I don't like that kind of catalyst. That's too hard a catalyst-driven for me to be able to get behind it. But thanks, Bill. Appreciate it. In the Corteva spin-off, I like Vor, B-Y-L-O-R. I actually think that the spun-off company is the one to own here. Not much more Mad Money. How should companies react to America's waning opinion of AI? I'm crunching the numbers with 100x. And Nike's at a 14-year low after yet another abysmal quarter. Can anything be salvaged from this shoe company? I'm focusing on one bright spot. And of course, all your calls rapid-fire in tonight's edition of the lightning round. So stay with Cramer.
Every now and then I like to check in with 100x. That's a privately held consumer insights company that collects data based on purchase intent, not past behavior. Turns out just asking people what they want to buy can be a very effective way to spot big trends before they take off. And that's what we need to have in the stock market, right? 100x donates money to nonprofits and other causes in exchange for users' participation. Hey, recently crossed $40 million in cumulative donations. Congratulations. All right. Tonight I want to devote a full segment to what 100x is seeing on the AI front, both in terms of individual platforms and broader feelings about the industry. So let's dig deep with Rob Pace, the founder and CEO of 100x. Mr. Pace, welcome back to Mad Money.
All right. Now, this is fascinating because I don't know anybody who has this kind of data except for you. And I'm going to ask a question that I think we all are kind of figuring out. Do people think that AI is even useful at this point?
