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Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramerica. Well, do my friends, I'm trying to make a little money. My job is not just to entertain, but to teach you. So, call me 1-800-743-CBC. Tweet me at Jim Cramer. We're witnessing the revenge of the Magnificent 7, and most people don't even seem to know it. Kind of like when Return of the Magnificent 7 came out and nobody watched it. Sigh. We've had some stunning winners of late. I know it's Dell people are looking at, and they're looking at Snowflake, and of course there's Salesforce, and yes, there's CrowdStrike.
I know they're making their shareholders fortunes overnight. You know how much I love that. It's why I endlessly suggest you should own some individual stocks with your index funds. But with the averages taking off today, Dow gaining 624 points, S&P jumping 1.06%, and the NASDAQ pulling 1.4%.
Perhaps you have to go back and pick at the market's old readership, the forgotten Mag 7, because a lot of them have gotten real cheap. That's right. On a price-adjusted basis, they've fallen so far behind the other, I'd say, many more inferior companies that I'm beginning to think that's just plain wrong.
Why the heck am I suddenly willing to stick my neck out and say positive things about these seven stocks that have been written off because they've destroyed their balance sheets for the most part, or lost the momentum, or just become plain ugly ducklings? Simple. As I learned 45 years ago when I worked at Goldman Sachs, we used to say everything at a price. With the sole exception of Apple, these Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla have become four-lorn losers. Actually, I think in some degree perennially disappointing, falling way behind the market. So what I have to say is we are at the price.
More damage. They just aren't interesting anymore. People don't want to hear about them. Not when you could be in a Dell and watch it soar for a second day after magnificent earnings. They aren't going to be sexy like CrowdStrike and Palo Alto Networks. Not in the wake of AI shenanigans and mythos moment cyber whatever. The Mag 7 can't tack on a stunning 17% gain like Snowflake did today. It's breaking out as a way for companies to embrace first the cloud AI. They won't rally 100 points in a matter of weeks like the mistakenly left-for-dead Salesforce or the rocket ship that is Dell.
Six of the seven don't have the horses. That's right. With the exception of the extraordinary gains in Apple, which has not wrecked its balance sheet, what do they have that are just... I tell you, the rest of them, they've gotten, they're in the bargain bin given some changes that impact all of them and some individual traits that make them winners. I say, well, let's just say they could be twice plus. So I'm going to take them down here. I'm going to tell you why these losers are winners. Let's start with Amazon.
Ever since we went out to see Amazon earlier this year, I've been stuck on something that CEO Andy Jassy told me. He said they're going to make an immense amount of money in artificial intelligence. They were going to profit from their gigantic commitment to data centers, and next year will be used for the compute sales. Well, I think it's being pulled forward. I think it may already be used right now. I also remember Andy talking about the $50 billion semiconductor business that's buried in the company. I like the healthcare initiatives. International's inflected. Amazon Web Services doing incredibly well. Their grocery delivery business. Wow. Their advertising business. Reacher. All right. What can I say? All this for a stock that's up just 12% for the year. That's wrong.
Amazon's balance sheet isn't as good as it was a year ago. Enough already. What if Amazon Web Services is able to make four times what it just paid for 2 million GPUs from Nvidia? That ratio, by the way, is what Nvidia CEO Jensen Huang told me companies can expect to get when they buy Nvidia chips. That makes me think that Amazon is cheap. We've all kind of forgotten that there's a reason why a smart executive like Andy Jassy is willing to wreck Amazon's balance sheet like the old days. It's because they're going to make fortunes with the money they spend. And we are getting closer and closer to seeing huge profits for investments that the street has hated. You can't wait until next year to buy the stock of Amazon. And that's why it is a screaming buy with the stock trading at about 20 times this year's earnings.
That's wrong. Hey, you want to hate a stock? How about this: Alphabet up just 9% for the year. There's a big-cap stock that's really been left behind. Sure, it's done next to nothing, but when you look at the monster grower that is Google Cloud, you have to wonder, how can you not own the stock? Is it because of Waymo? No, they're doing terrifically. Maybe you don't like YouTube. Wow. Biggest entertainment channel on Earth. Search Gemini. Maybe their AI isn't ready. Oh, maybe it will be. Again, I say everything at a price, and $342 is the price for Alphabet, whether they get it right or not.
Amazing that nobody cares about Uncle Warren buying a lot of Alphabet. All people care about is that everybody's underwater from that secondary offering. They did 13 points higher from your... I say, so what? I don't care where it went. I care where it's going. It sells at plus 17 times earnings. It's the price. Next.
Okay, here's one. Maybe the cheapest of all. Maybe I'm going to walk you through this one. It's a hated stock, but I'm going to walk you through it. It's called Meta Platforms. I'm going to call it Facebook from now on, or maybe Insta, because people are sick of this Meta name. Last week, this company settled a gigantic lawsuit involving teen abuse that was brought by a heavy list of state attorneys general who basically want to crush this company. I know that most, if not almost every single person in the media acted as if this settlement was a big win for the authorities against Meta. Those people are wrong. I could not disagree more with them. THEY KNOW NOTHING.
They settled for a maximum of 18 billion. It could have been less. And they have 10 years to pay it. That's a very small amount of money for this giant company. They make so much money, this company. This teen abuse lawsuit could have been an existential threat to Meta. I was worried they may have to fork over 100 billion. I actually thought that was going to be the number. And then I thought there would be hundreds of thousands of individual lawsuits filed in its wake. I think the settlement takes off the table what I thought was the existential threat. I am saying it was a huge win for Meta.
Is that a reason to buy? Well, wait a second. Meta is the best advertising medium in history. I think WhatsApp could be the most undervalued asset of all time, and the stock's down 7% for the year. You're getting the smartest team who knows how to win for next to nothing. Meta is trading at 19.5 times. These are all below the market multiple, and they're so good. Just watch. The iconic Dina Powell McCormack, president of Meta, is going to show this nation why you want to own a data center. You want it in your own town. They'll offer your town lower prices for everything and perhaps place a junior college next to the data center to teach people trades that will be there after the data center opens and all the other people have left permanent employment. They'll rent out their voluminous compute and make shareholders fortunes.
Meta, it's at the price. How about Microsoft? Look, Mr. Softy is getting religion. They've realized that by giving us more disclosure on Azure, their cloud infrastructure business, we'll find more things to like. They're right. In the end, I come to praise Microsoft CFO Amy Hood, not bury her. They've been very clever getting power for the data centers. Pump it right out of the... They got this deal with Chevron as a partner. I got to tell you, this is monster 2.67 gigawatts. No one's talking about it. It's the cleanest behind-the-meter plan for power I have seen yet. People even, and this is not a stretch, I'm not kidding, people even like Copilot.
Next, I know Nvidia's up 22% for the year, and that would be a lot for every other company, BUT NOT FOR NVIDIA. This is Nvidia for heaven's sake. I'm going to do my fantasy thing next week. You know, we do that thing here. I'm not trying to figure out which player Nvidia should be, but I am leaning right now toward Gibbs. Anyway, Nvidia bought Hugging Face today. I know it sounds like a foreign version of Kleenex, but it's a king of open-source AI. I think it's a brilliant move, and it'll put to rest all the nonsense that Nvidia's technology is only good at training, not inference.
It's foundational. I'm throwing that word around all day today because it makes me look really smart. But what matters is that Nvidia sells at less than 15 times next year. I'm going to say that again. Less than 15 times next year's investments. If it announces tomorrow that it's going to buy back a half a trillion dollars of its own stock and manage that buyback aggressively like I would if I were in charge of it, not on autopilot. It is. But when the stock drops from these ridiculous dips and they're buying, the stock goes up 50%. I am not... Hey, look, I nailed the Dell for 100 points. Give me some credit here. I think this thing goes up 50% if I manage the buyback, or someone like me, like an AI version of me.
Tesla. All right. Tesla needs one thing to happen: the SpaceX buyout. Okay. A stock's down 60% for the year. That seems wrong. Remember my supposition: if the rest of the market was doing nothing, then it would be fine that the Magnificent 7 is doing nothing. But the bottom line is that's not the case. The market pulled ahead of the Mag 7. We got sick of them, right? I mean, the group's about to reap the profits finally of spending all that money, and we now decided that we're so close to 2027, and we're not giving you ANY CREDIT. THAT'S WRONG. THE STOCKS ARE CHEAP. I THINK IT IS TIME to buy.
Foundational. Bobby in New York, please. Bobby.
Hey, Jim. Thanks for taking my call.
Um, I read your new book and I highly recommend it as a must-read.
Well, thank you. Thank you very much. You're a nice guy. Thank you.
No, thank you. In your book, you urge investors to know the purpose of every stock they own.
I've owned this Dow blue-chip dividend aristocrat as a safety net since 2005. What's your current opinion on Procter & Gamble?
Okay. This is something Jeff Marks and I from the club kick around, and we're both kind of heartsick about it. We know that Procter has no growth. So being at 21 times earnings with a 3% yield is not enough to attract people. They have to shake things up at Procter. They really do. It just doesn't have the growth that I would have expected at this point. That's why we took a small profit and we headed off to the sunset. I'm not recommending the stock right now. It's got to get down to 19 times earnings before I'll take a shot at it or invest in it, to use a more foundational term. Andy in Florida. Andy.
Jim, thanks for taking the call. And please... over the last couple of years, it turned out well.
My concern is about their wind business, though. It's constantly in the red, and I think their projection this year is to lose about 400 million. So my question is simply this: Should we lighten up on the stock, given that there are other forces coming into play like Elon Musk getting into the generator business and geothermics?
I think Elon's doing it for his own businesses. The wind business has been a disappointment. We all know that. That stock's like the worst head-and-shoulders chart I have seen in a long time. However, I think the orders are going to continue. I think that the hyperscalers are going to find a way to be able to make it so that we like a data center next to us by maybe making our rates go down. And I am not that worried about GEV because it has fallen so much from its high. Maybe another hundred, and we'll keep buying. Let's go to Jerry in Arizona. Jerry.
Mr. Cramer, I listen to your recommendations and I'm getting mixed results from you. I don't know whether to buy, sell, or hold my Intel.
Okay, now let's own this right up front. I got too excited about Intel because I knew it was going to have a good quarter. It had an unbelievable quarter, and the stock went down anyway. I continue to believe it's safe. Here's the problem: the government has a huge position in it, and they're supposed to be able to sell it if they want to. And we're all waiting for the government to sell the stake, and that's why the stock's been going down. And I have been saying, listen, I may just have to go in and buy more right here, get a better average, and have it come back. I understand it is mixed, but my belief in Intel is 100%. I just need to see the government get out of the stock, or just go buy it anyway. I am going to go to Ben in Nevada. Ben.
Yes. Hi, Jim. First-time caller. It's an honor to talk to you. I'd like to ask you about Walmart. You know, the so-called experts say that Walmart is a better investment than Target. But Target's taken off and Walmart's lagged behind. So, what do you think?
Yes. Well, Walmart now down 3%. I want to buy Walmart. But Target, see, a new CEO came in and he just kind of energized the place. Cut prices on 10,000 items. That's what they needed. They needed price cuts. The stores look absolutely terrific. Walmart's just Walmart. And when you have one in a situation where it's just a continually good company, no one gets excited about it. I don't care. Buy some Walmart and put it away, and I'll be very happy with it. So will you.
The Magnificent 7 finally are cheap compared to the rest of the market. And I think it's time to buy. Why? Because everything at a price. Oh man. Tonight, Five Below is known for selling those viral squishy dumplings. We got hundreds of them. I had a couple last night for dinner with a little hot sauce. But after today's drop, the toys aren't the only thing getting squeezed. Could today's move be your chance to buy? I'm going to give you my take. Then the test that's helping change the way we detect and monitor disease. You brought my look, I had this on Mad Money Diversified. You brought it to my attention. We've done the work. I'm very excited about it. We're going to take a closer look. And so far it's been fighting its way back after months of turbulence. Can this fintech favorite keep the rebound going? I got to see you in person. So stay with Cramer.
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Last night, we got the latest in a series of strong quarters from Five Below, which is like a slightly higher-end dollar store with more of a focus on kids. This was a stock that shot up 7% just after the open today. But then it cooled off, and we finished the session down more than three bucks. Now, I think that first move was right. I think the selloff was a mistake. And now you're getting an incredible opportunity in a long-term outperformer that periodically does give you these kinds of opportunities.
See, ever since CEO Winnie Park took over at the end of 2024, I have been a believer in Five Below. I wasn't a believer in previous management. Unfortunately, though, I pounded the table on this one in March when the stock was close to its highs at 235, then pulled back to the 170s. Geez, by the time July came around, most because Wall Street was worried about higher oil prices putting the squeeze on the consumer. Five Below kept putting up great numbers, though, but for months that didn't seem to matter. Then the stock bottomed at $173 in July. Do you know it's been roaring ever since, going all the way to $263 and change last week before pulling back to $240 again today because oil spiked.
Now, last night it reported really it was a superb quarter, and now the stock's getting zero credit for it because people are so worried about the price at the pump. The numbers were excellent, though. Five Below put up 14.1% same-store sales growth when the analysts were only looking for 10.4%. Their revenue was higher than expected, and their earnings exploded higher. Five Below delivered a 28-cent earnings beat off a $1.40 basis. That's 107% earnings growth year-over-year. Hey, by the way, these numbers don't even include the tariff refunds. If you bake that in, their earnings per share would have been up 418%.
Look, at the same time, management gave encouraging guidance for both the current quarter and the full year. So they're talking about 8 to 10% same-store sales growth this quarter. Wall Street's expecting 3.5%. Now they say they'll do $1.10 to $1.30 per share in earnings. The analysts only want to see 85 cents. Wow. Five also raised its full-year forecast substantially across the board. The analysts thought that they'd earn $9.29 per share. Management says it's going to be $9.83 to $10.31. Again, that's without factoring in any tariff, because I could not believe this stock did not finish up big today. Put it all together, and it was a terrific quarter. So it does drive me nuts to see the stock actually down.
I thought Winnie Park and her team told an encouraging story in the conference call, too. See, Five Below is, to use a kind of hackneyed phrase, laser-focused on their core customers, specifically kids and their parents. And that's what's driving these magnificent numbers, even in the face of some pretty strong comparisons. A year ago, they had 12.4% same-store sales growth. This past quarter, they generated 14.1% growth on top of that, thanks to robust traffic growth and increased customer engagement. And do not get us started on the curious viral phenomenon known as the squishy dumpling.
Under Park's leadership, Five Below has gotten very good at identifying new trends and then making big bets on them at the store. They had a great summer, and so far they've been killing back-to-school season. This is a company that understands its young customer base extremely well. They did a great job picking the right merchandise and an even better job of marketing that merchandise on social media. At the same time, Park keeps improving the store, creating a better shopping experience. Layout really matters with this company when you're trying to figure out how to keep young children happy. At first, Five Below moved its higher-priced products from the back of the store. Now, they're spread all over the whole store, each in their own category.
So, what was the issue? What happened that caused the stock to give up all its gains and then some today? Look, I'm not going to spend too much time arguing a point that I don't really believe in myself. One thing I've seen both in the June quarter, that was a negative catalyst, and this most recent one, is the idea that Five Below passed the peak when it comes to its same-store sales growth. Last quarter, Five Below printed a quarter with above 20% same-store sales growth and then gave updated guidance that implied a significant deceleration with the remainder of the year. This time around, the idea was confirmed when their same-store sales were only up 14%. But man, most retailers would kill for 14%.
While sure, mathematically Five Below's same-store sales are indeed decelerating, but come on, I mean, that's just the law of large numbers. These comps were much, much, much, much, much better than expected. 14% when Wall Street was looking for 10%. I don't know how anyone looks at that and sees a sign of weakness. And yes, for the full year, Five Below says to expect 10 to 12% same-store sales growth, which represents another deceleration versus the first two quarters of the fiscal year. You see why the stock went down, but they're also lapping increasingly strong numbers. So, let's not forget the company has started to develop a reputation for underpromising. They underpromise, then they overdeliver. With Winnie Park at the helm, ever since she took over, Five Below has beaten the comps in six out of six quarters.
So, here's what I'm focused on. Five Below just raised its full-year earnings outlook by 14% at the midpoint. Yet, its stock actually went down today. Suddenly, this thing's gotten a lot cheaper. Yesterday, Five Below was selling for 27.5 times this year's earnings. Now, it's selling for less than 24 times this year's earnings. So, it's back on market multiple, but it's such a better stock than the average stock of the market. Now, with the midpoint of the new higher earnings forecast implying more than 50% growth versus last year, that strikes me as an incredibly fair price to pay. Honestly, I'm calling this one a steal.
So, let me give you the bottom line. Last night, Five Below reported yet another extraordinary quarter, the latest in a string of them under new CEO Winnie Park. I think her strategy is obviously working, and the stock simply not getting much credit at all because Wall Street's worried about higher oil prices putting pressure on the consumer. And I just think people are just finding endless reasons to quibble over an objectively great set of numbers. Stock deserved to jump nearly 7%. It shouldn't have been a head fake that it was, and these insane gains that they evaporated. You know what I say about that? I say buy, buy, buy. Yes, I think that Five Below is a buy, buy, buy. Everybody's back. Everybody.
Coming up, you put Cramer to the test with a call about Natera. Now he's ready to deliver his results. Next.
Last week, during Am I Diversified, Summers in Pennsylvania stumped me with a stock called Natera. Now it's hot, and I simply haven't been following it closely enough to give a good answer. So now I want to circle back because it is an intriguing story. See, Natera is a diagnostics company focused on genetic testing for everything from cancer care, prenatal screening, and organ transplants. Their technology lets them analyze tiny fragments of DNA that circulate in the blood rather than having to scoop it out of a cell, which lets them detect information early, especially when we're talking about embryos.
Now, originally, Natera was a women's health company with non-invasive prenatal tests. It just draws some blood from the mother rather than going right in with the big amniocentesis needle. Remember that scary thing? But gradually, well, unless you're involved right now, but gradually they've taken their DNA testing platform and then pushed it aggressively into cancer screening, which is a lot more money. They can help detect microscopic traces of cancer that are too small to appear on traditional imaging. So, let's say your cancer goes into remission. Natera's blood test can quickly let you know if the cancer is coming back.
The company published fresh lymphoma data this week that was very strong. Their test was a much better way to spot cancer than PET scans or CT scans. If you look at the analyst research, solid tumor molecular residual disease could be a 20 to 30 billion dollar business. And right now, these guys only have a small fraction of that. Now, Natera also has this organ transplant test to spot early indicators that the transplant is being rejected. Medicare now covers this for kidney, heart, and lung transplant recipients. Who wouldn't want to? If you're in one of those situations, believe me, you want to take that.
Put it all together, and this prenatal testing company has turned itself into what I would consider to be a precision medicine platform. And that's why the Natera stock is up 55% over the past three months, up 95% over the past 12 months. If you look at the other players in genetic testing, they've also been cleaning up too. Some of that's because there's been this rotation into healthcare stocks I keep talking about, especially the ones with the highest growth. But some of it's company-specific. See, about a month ago, Natera reported a phenomenal quarter with much better-than-expected revenue, surging gross margin, and a total test volume up 22.4%.
Their oncology tests, cancer test volumes, were up 57.2% year-over-year.
While the company's not profitable, which does bother me, it's headed in the right direction. It lost 47 cents per share, 2 cents better than expected, much smaller than the 74% loss they reported a year ago, but they're losing money, and I don't like that. But Wall Street sees Natera turning profitable in 2028 with tremendous earnings growth from there through 2031. The balance sheet gives management plenty of room to keep investing. They finished the quarter with roughly $1.09 billion in cash equivalents against only $80 million in debt. Now on top of that, management raised its guidance. Natera increased its full-year revenue forecast by $100 million at the midpoint to between $2.85 billion and $2.91 billion. That's a lot. And they see their gross margin coming in between 64 and 66% with positive free cash flow. That combination is exactly what we want to see. It's what's really drawing the buyers. This product pipeline adds another layer here. Signatera, which is their cancer test, has achieved significant regulatory milestones. Medicare coverage expanded for their kidney transplant test. International expansion starting to matter too. Their cancer test has gotten some big approvals in Japan. Now, Natera has some major backers. One that jumped out to me, Stanley Druckenmiller. He's the big-time hedge fund billionaire. Absolutely loves the stock, at least as of a few months ago. His family office had an $865 million position in this company at the end of June. Natera alone represented close to 20% of the portfolio and nothing else comes close to it in terms of scale. Now, look, you got to take these 13F forms with a grain of salt. I know Stanley's saying, 'Jim, come on.' But I'd never buy a stock simply because Stanley Druckenmiller owned it as of a filing a couple months ago. Filings are backward-looking. Still, it does tell you that Druckenmiller had a lot of conviction in Natera at the end of June. When one of the most successful investors of all time has such a large stake in a single company, you better believe that catches my attention and I get the appeal. But there are real risks here. Natera is not cheap and it's certainly not undiscovered. Stock trades at roughly 16 times this year's expected sales, not earnings, but sales. Even as the company's losing money, and its shares are already up 43% year-to-date, the industry itself comes with plenty of uncertainty as well. These tests require continued clinical validation. Competitors are spending aggressively on liquid biopsy and cancer monitoring, insurance reimbursement matters, and regulatory standards can change. At this kind of valuation, even a modest slowdown could hit this stock hard. So, I'm not telling you to chase Natera, but I am telling you that the caller who brought it up and Stanley Druckenmiller are probably on to something. In the end, I think this is a promising story. Natera is doing incredible things with its DNA fragment blood test, and their business is on fire. I think it represents a major facet of personalized medicine, something I care tremendously about because I think it is the future of healthcare. Bottom line, I would put Natera on my watch list because it's moved so much. I think it's just run to the point where I can't justify chasing it, but it is definitely worth waiting for a pullback and then doing some buying. Let's go to Bill in Massachusetts. Bill.
Jim, I'm trying to diversify out of some of the AI theme and I missed Johnson & Johnson and I missed Cardinal Health, but I was thinking about doing one of our other club stocks and adding to my Eli Lilly. What do you think?
Well, I'll tell you, Bill, I think it's always good to look at Lilly as a stock that I think has a lot of things that are going well, but I want to wait. Well, actually, you know, tell you the truth, Bill, it's pulled back. I think you're fine. I think you're fine to add some. I'm going to okay that. And I understand J&J's moved a great deal. It's been a great club hit and Cardinal has been terrific, too. So, thank you for referencing those two really good ones. Let's go to Ann in Indiana. Ann.
Hey, Jim. As a club member, thanks for steering us through these, I guess, more defensive times.
Oh, thank you. Yeah, you know, we have to look, we can't be whole hog when we don't have the Fed on our side. That's the big problem. Today was a brief. How can I help you?
Does UNH have enough profitable growth to consider it for my portfolio?
Yes, the answer is it does. It does. You know, I've got to tell you, I thought that last quarter was very, very good. The stock market did not like the quarter as much as I thought it would, but the stock's making you stand here. I think that UNH is good to buy. I want to go to Anthony in New Jersey. Anthony.
Hey, Big Jimbo. How you doing today?
Not bad. How are you, Anthony? What's going on?
I'm doing all right. A big booyah to you, $50.
I bought all your books and you signed them all for me. The question I have for you today is about big pharma. Which stock is best to buy? Is it J&J, Pfizer, or Eli Lilly? And is it?
Okay. So, let's take them. J&J is best to buy. AAA balance sheet, 18 drugs. No loss of exclusivity. You're not going to have any expiration problems. Okay. Lilly has one huge drug that we know is going to be a franchise for many, many years. I do like a diversifying pattern more. And Pfizer starting to creep up and is playing catch-up, but I need a reason to recommend it. So I'm going to say J&J and Lilly, and then Pfizer. And thank you for the kind words and for the buying of my books. All right. Now if you like Natera, I'm actually giving my blessing to put a... Yeah, look at it pull back a little bit. You can put a position. I really like the story. I just don't like the losses. Much more Mad Money had, including my sit-down with SoFi. How is that stock faring in the current rate environment? It's very rate sensitive. I've got the CEO. Then the market's taking its cues from the bond market, but is there enough money on the sidelines to keep stocks running? I'll explain in a positive light, though. And all your calls rapid fire in tonight's edition of the lightning round. So stay with Cramer.
What do you make of the action in SoFi Technologies, digital bank of choice for the younger generation? I've been a longtime believer in this one. And by the way, last year my faith was rewarded as the stock ran from $8 to an all-time high of 32 bucks and change in November. Unfortunately, so far it's spent the last 6 months bouncing between 15 and 20. Even though it reported a really solid top and bottom line beat in late July, the stock actually sold off 9% in response. I didn't understand that. Since then, though, it's been rallying hard to the point where it's now up more than 10% since that quarter. So can the stock keep rebounding? Let's check with Anthony Noto, old friend, CEO of SoFi. Well, Anthony, back. I can't believe you're here. It's great to see you in person.
Okay, so Andy, I got to tell you, your revenue expected to be up more than 30%. Even earnings per share expected to go more than 50%. I'm trying to figure out why the stock might be stuck here given the fact that the fundamentals are clearly stronger than people expected.
Sure. As you said, we've seen revenue growth of more than 40% in the first two quarters of this year. Record margins, really strong profitability, strong credit performance, diversified revenue, 60% lending, 40% non-lending. What I think happens is the following. If investors are confident where interest rates are going, we get credit for our fundamentals. When they're not certain about where the interest rates are going, we get less credit for our fundamentals because it creates more uncertainty about the future. The fact of the matter is over the last 5 years we've delivered 20 consecutive quarters of more than the rule of 40. So more than 40% revenue growth plus margins. In fact, last quarter was 70, which is astronomical.
Doesn't that tell you, I mean, other companies have had very similar and it hasn't correlated anymore. It should correlate. Both you and I know it should and historically will correlate. Do you think it'll come back and start correlating again sometime?
As soon as there's some certainty around interest rates. We have the Fed meeting in September again, in October. We report results late October. I think as we go in the back half of the year, we'll have some important indications on inflation, important leading indicators as it relates to interest rates. And as long as there's certainty on interest rates, either they're going down or stable, the fundamentals really start to play through. What we've seen over the last two years, as you mentioned, is the stock was up over 144% because interest rates were relatively stable after going up for 3 years. So I think we're going to enter a time period again where there's stability in interest rates or a declining interest rate environment. Both of which really help us get benefits from our fundamentals.
Look, I mean, to me, I've always looked at the story as a growth story primarily. Growth in accounts, growth in offering new products that more accounts come from. And yes, I'm going to say it. The SoFi name is, it's one of the only times I've ever seen the naming of a stadium bring in more people. And the right people, too, who are very interested and they take a lot of your products. So why isn't it considered more of a, let's say, a tech company than a fin company?
