Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramer. Hey, I'm just trying to make a little money. My job is not just to entertain, but I'm trying to do some teaching. So, call me at 1-800-743-CNBC or tweet me at Jim Cramer. The market's got these incredible mood swings.
So, I say let's be careful. That's the best advice I can give you right now. That and hold on tight because we're experiencing one of those moments I mentioned in How to Make Money in Any Market — a moment where we could go down a lot and then rebound like crazy. Down, no down.
It's my job to help keep you in the game so you don't miss that snapback. I don't want you shaking out, even as I don't want you to trade your way into oblivion.
No thank you. And today was a true test of what's ahead, with the Dow sinking 44 points, the S&P declining 0.94%, and the Nasdaq losing 1.02%. A bad day, but we erased a big chunk of our losses from the swoon this morning. How low did it get? At one point the S&P had fallen from 6,800 all the way down to 6,710.
Then we had the furious rally to 6,816. Think about that. Remember yesterday we started lower until opportunistic buyers came in because they were hoping this war with Iran would wrap up quickly. When the price of oil soared and then pulled back, the market got jiggy. So anyone who sold near the bottom ended up kicking themselves.
The house of pain. That's why I've always told you that panic is not a strategy. Today, though, we saw the other side of the coin. The market sagged badly as we recognized that Iran actually had a plan for what to do when their leadership gets taken out. They basically told local military commanders, 'Fire at will,' putting thousands of autonomous drones and missiles in the sky. They're using the cheapest rockets possible to exhaust their expensive countermeasures. The launch sites are everywhere, and Iran doesn't seem too picky about what they hit — whether it's oil, infrastructure, luxury hotels, the Gulf, or U.S. embassies. The coverage got so negative at one point today that I started wondering if the war might take months and as we bring in more ammo, or maybe we actually lose. Yes, it read that negatively. The spike in oil was more pronounced than the day before. The formerly Magnificent Seven had no legs whatsoever.
Worse, the selling in the hottest semiconductors of late — the memory stocks, Micron, Kioxia, Western Digital — was particularly brutal. The culprit? I did some homework on this and it got me the following answer: Black Tuesday is the culprit. Oh, you don't know Black Tuesday? That's what they're calling the sell-off in South Korea last night, with the index, once red-hot, plummeting 7.2%. Two weeks of gains vanished. But don't sweat the Bamir Cosby, people. This thing's up 75% last year, up 37% to date. I mean, even after last night's pummeling. All right, listen. The South Korean market is extremely hot and it's very active.
It's highly concentrated. The two most important stocks, Samsung Electronics and SK Hynix, they make up 52% of the market. Two stocks. Samsung stock fell 9.88%. SK Hynix got hit over the head with an 11.5% 2x4. When we get these kinds of declines, you get a spillover to our stocks here. Some of the spillover might be the selling by Koreans in our market who are trying to meet margin calls in their market. And some of it might be scared holders who watch those two Korean stocks like a hawk and figured something might be wrong. Remember, those two stocks, those companies really do have a corner on memory. I'm going for the margin call theory because there's nothing fundamentally wrong with the memory and data storage core. Nothing wrong with data storage. Everything memory did get crushed. Now, to complete the tableau of negativity, we saw more pressure in the private equity stocks, this time because of redemption jitters from a private credit fund run by Blackstone. Good firm. Plenty more about this pesky negative later in the show. But it's got a lot of the professionals on edge, even if the amateurs have no idea what they're scared of. The only thing green of any note beyond the oil: Target and Best Buy, two once-loved retailers that have provided nothing but worries and headaches about their dividends of late. They both reported strong quarters, and now their stocks are flying.
But as the day went on, once again, the oil markets couldn't hold, and they just can't keep their gains. I'm going to talk about that more later on the show. As we got reports the United States might directly ensure traffic through the Persian Gulf, the president says our navy's going to escort tankers if necessary. Oh, what the heck? Why not? And on the Iranian missile warfare, the president said that Iran's military has largely been knocked out today. A missile strike apparently destroyed the conclave that was supposed to choose their next supreme leader in Iran. I don't know, seemed negative. Well, then there's a swing from despair and defeat to victory. Personally, I think that neither assessment seems realistic, but both occurred today. If you took action in the morning, if you did a proverbial 'get out now,' you didn't have time to get back in once the averages started bouncing from their lows. You never do. But if you sold into the strength at the end of the session, I hope you're swift enough to get back in. If we have a decent opening tomorrow, especially if South Korea finds its footing, I don't know if you'll get back in at all. That's why I keep telling you that so many people miss rally after rally after rally. Now, let's talk about what's truly going on — something that could change the focus of the entire market. You know that the tech stocks have been very troubled of late.
Enough with the Magnificent Seven. We've got this Big Four thing going on: Adobe, Salesforce, ServiceNow, and Workday. These are once-popular enterprise software companies that are widely thought to be the coming victims of Anthropic and something called vibe coding. Just consider it a machine that you can talk to and say, 'I want you to write code that's like ServiceNow except better and cheaper. I want sales up, but I don't want to pay Salesforce's exorbitant fees. I can draw. I don't need Adobe. Workday, one step from extinction.' That's what's going on. Now, I get that narrative. These companies could see their earnings growth slow because of artificial intelligence. There are ways to create products that might be good or better than the Big Four. However, it would help to see some real, actual weakness in the results beyond what we've seen from Workday, which now has a terrific new CEO, the predecessor of the previous CEO, and Neil Bush. Last week, Workday reported what was widely perceived as a disappointing quarter, and the stock still rallied. Salesforce reported what was widely considered to be a not-great quarter. And guess what? After it immediately lost $8, it has U-turned. It's rebounded from $181 to $196.
The other three zoomed today, too. ServiceNow soaring 3.5%, Adobe rallying nearly 4%, Workday up more than 7%. Why does this matter? Because there's so much money betting that so much enterprise software will be wiped out by just a handful of AI companies to the point where it could rock the public markets and really create havoc in the private ones, potentially dragging down some major private equity firms and even some banks alone in that area. Last week you heard that Anthropic could help you write code that might potentially destroy everybody. But at the end of the week, by the way, the Department of War broke with Anthropic. Maybe these stocks are rallying because Anthropic no longer seems invincible.
Remember what I care about. I don't want you acting on a U.S. TKO of Iran. I don't want you to think that everyone's out of missiles except the bad guys. I want you to be thinking that these are companies you're investing in, not trading cards you're shuffling. And if you want to get metaphorical, what retailer would you short coming into the session given the spike in oil? Probably the one that's most hobbled. I bet you would have shorted Target. Yeah, Target was one of today's biggest winners, up 6 and 3/4%, welcoming a new CEO. Here's the bottom line: if you think that you should be taking action on every drone, every missile, go trade in the prediction markets. Get out of our house. That's gambling. I prefer to focus on investing. And that's less connected to the war than you might think, and a lot more connected, guess what, to the performances of the companies themselves.
All aboard. That was easy. I'm going to go to Steve, my home state, New Jersey. Steve.
Hey, Jim. How's it going?
Steve, it's a great day. How about you?
My call. Yep. That's all you have to do.
My call today is about Boeing. Despite record orders the last few months, the stock continues to go down. I was wondering if you could explain why this is happening.
Okay. I think it's going down because of the travel and leisure at possibly the end of the bull market. A lot of people worry, Steve, that there won't be a lot of plane orders because of what's going on in the Middle East. I think that's shortsighted. I think that's wrong. I think Boeing should be bought, plain and simple. Big position in my trust. It's the right stock, right time. All right. Look, it's hard not to get hung up on all the news out of the Middle East. But you got to stay focused and stay invested. Oh, man. Tonight, shares of Cloudflare haven't been immune to the software sell-off. But is this company poised to be a winner from all the AI disruption? I'm checking in with the company's top brass. Then crude oil has been surging because of the conflict in Iran. But is this move sustainable? I'm going off the charts to find out. And Carrier is undergoing a major transformation under CEO Dave Gitlin. And tonight I'll find out if the stock is ready to fire on all cylinders in 2026. Hint: it's cheap. So stay tuned, Cramer.
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Can any enterprise software stock escape that gravitational pull of a market that dislikes the entire group? If there were, it would look like something called Cloudflare, an internet infrastructure play with a cybersecurity kicker. This is not something that can easily be replaced by some piece of code written by the AI platforms. But somehow that still hasn't saved the stock. When Cloudflare reported three weeks ago, it delivered a top- and bottom-line beat. I've got stuff which says it was right, of course, for the Olympics, and it was the gold medal of the period. In response, the stock popped 5%, but then it drifted down, and it's now down 31% from its high four months ago. The stock is pretty expensive on a price-to-earnings basis. Then again, it's holding up much better than many of its other rivals because it has fabulous growth. So, let's take a closer look with Matthew Prince. He's the co-founder, co-chair, and CEO of Cloudflare. Mr. Prince, welcome back to Mad Money.
Jim, thank you for having me.
Okay, so Matthew, I'm checking your Twitter file. Whatever may come next from Iran, Cloudflare is well aware of their techniques, not worried, and fully prepared to defend our customers. Tell us about your interaction, what you know about Iran, and what you can add to what's really happening behind the scenes.
So Iran is one of the big cybersecurity players along with Russia, China, North Korea. They launch cyber attacks all the time. They're really good at it. We are good at defending against it. What's interesting is what you usually see in these kinetic conflicts is right before there's a conflict, you'll see a spike in cyber attacks. And so on February 27th, sure enough, we saw a spike in cyber attacks coming out of Iran. What was interesting, though, is usually those cyber attacks stay high in these kinetic conflicts. That's not what happened here. We're actually down 90% from those peak levels, below what baseline levels are. And what that indicates to me is actually the kinetic war — the bombs being dropped — actually disrupted the command and control infrastructure inside of Iran. And that's affecting even their ability to launch cyber attacks.
Wow. Okay. So it looks like the anti-Iran faction may even be aware of this kind of thing.
Yeah. And I think that we shouldn't count chickens. They can rebuild, and I think they will use cyber as a way to strike back against the West. And from some of their affiliates or other groups like Hezbollah, we're still seeing an increased level of cyber attack. So they're there, and Cloudflare is incredibly good at stopping this. But what I think is the most interesting is where in most of these sorts of conflicts you see an elevated set of attacks, in this case we've actually seen a significant drop in what's coming out of Iran.
Now I know in your 58-page, very thorough, very thorough Cloudflare threat report — thorough and also a little scary, frankly — there is the Muddy Krill, the Convolute Krill, and the Crusty Krill. They sound funny, but they're not, are they?
Well, once upon a time we would give attacker groups names that made them sound really kind of ominous and scary and fearsome. We tried to take a different way of making them sound absurd and small and like insects or bugs or bad things. What we're seeing, though, is that around the world cyber is being professionalized, where they are actually taking the attacks and focusing very much on how can they get a return on investment. How can they actually make sure that they're making money from these attacks? And that's what's happening over and over again all around the world today.
Well, it's funny when I read it, Matthew, I was saying, you know, look, these could be a clumsy toad out of China, the Pony Toad. I mean, I would buy shares in these things. I mean, they're businesses, aren't they?
They are absolutely businesses. And in some cases, they've actually professionalized, where they've got someone who actually hacks into the account, then somebody who will run the campaign to encrypt all the data within a customer, and then someone who actually runs the ability to extort money out of these companies. So these have become very professional organizations. At some level that's bad news, but at another level that means we have ways of disrupting them and we have ways of actually striking back against them, targeting various aspects of how they're doing it. And every single day the Cloudflare team is on top of these security threats and able to stop them, and we're really proud of the enormous percentage of the internet that we protect.
Well, you should be. You got a $42.5 million annual volume. I mean, one of the biggest — has to be one of the biggest contracts ever.
Annual contract volume. That's a huge contract.
Yeah. And again, I think what we're seeing is that more and more of the people who are building and protecting what has to be key online — and in this case, it was an AI company, one of the large AI companies that wanted to make sure that they could stay safe whatever they were doing online — they're turning to Cloudflare to do that. We see that over and over again across all kinds of enterprises, not just from a security perspective, but increasingly because we have this infrastructure that spans the globe. When people are building the future, they're building it on Cloudflare. And so no matter what, in the future there's going to be more code than there was yesterday, right? And what that code is, increasingly where people are building that is they're building it on Cloudflare. They're deploying it on Cloudflare, and we can make sure it's fast, secure, reliable all around the world, whatever audience you're in.
You should tell people what percentage you are of this because it's so unbelievable.
Well, we've said for a long time that we're more than 20% of the internet sitting behind Cloudflare. And we don't want to sort of say exactly how big it is, but we've continued to grow, and we just think it's so important to see that. And one of the things that gives us that ability is that it's not only an ability to make sure that we can keep everything online, make sure that the developers of the future can deploy code and get the advantages of our network, but we also have the best sensor network, being able to see what those threats are. And so one of the things that's really amazing is we're starting to experiment with giving our customers actually AI systems to look through their code, find the vulnerabilities, and then we can automatically protect in a bespoke way from the individual vulnerabilities that an individual customer has.
And that's something you do. I know Anthropic says they can do, but I'd rather have you be the 360 the whole way, be able to look in. I don't want to hand it off to Anthropic.
Yeah. Well, and again, I think Anthropic is a terrific partner to us and someone that has been a great customer to us. And what we see is that as they succeed, we succeed as well. But we want to make sure that no matter who you use — whether you're using Anthropic, you're using our own solutions, you're using a great company like CrowdStrike or SentinelOne, whatever it is — it gets fed back into the Cloudflare network, and that we can be that first line of defense to be able to protect you whatever comes.
I feel like we've given short shrift to something that I personally take very, very seriously, which is that you're a protector of journalists. There will be no journalists if these major sites, the AI sites, can just scrape everything. You are the way that it could be stopped.
I think that's exactly right. And we think that there's actually good news in the journalist and content creator space, where we know that there are willing buyers. The AI companies want as much data as they can get. What we need to make sure is that they can't just get it for free, and we're helping that. I'll tell you the thing that I'm the most worried about, though, and I know this is something you care a ton about: I'm worried about what happens to small businesses, because what I think is going to happen is more and more the way that we interface and buy things online is going to be through our AI agent. You think about your small businesses that you do business with — you do it because it's convenient or because you have a personal relationship with them. Your AI agent doesn't care about any of those things. And so I think it's going to be this massive consolidating effect. And so what we're thinking about is how can we partner with great companies like Mastercard, Visa, PayPal, Shopify, to actually — how do we create that toolkit where small businesses are not only going to be able to survive but thrive in this world that's coming? And that's key to what we have to do.
Well, the small business is the most easily blackmailed. They might have something that the threat actor could put online and wreck their business. Totally. And that you're the only way it can be stopped because most of the people don't know, they're not sophisticated enough to stop the threat.
Yeah. And so I think that's why so many small businesses use us. But now as we see this new threat coming from AI, where again it's this massively consolidating force — I go back and watch old reruns of the Jetsons, the old cartoon show, and you ask where did George Jetson get his information? The answer was Rosie the helpful robot. And he would say, 'Rosie, go buy me some eggs.' Rosie didn't say, 'I'm going to support the local bodega down the street that's always been nice to me and has great eggs.' Rosie's going to say, 'I'm going to go get eggs from wherever it's cheapest or fastest or whatever is best.' And over time, that could be major consolidated forces. We need to make sure that that local bodega has the ability to say, 'Hey, Rosie, you should shop from us, too. We need to support small business.'
Boy, do we ever. Because if it's just Costco and Walmart and Amazon, there's really not a lot of chance for advancement in the country. That's very good that you do that. And we didn't even get to talk about what you do with elections. That'll be next time. Moldova, which is a place I know very well. I mean, I don't know, I thought that they almost had to be corrupt elections, but you kept them from being that way. That was terrific. That's Matthew Prince. He's Cloudflare co-founder and co-chair and CEO, and it's not going to be beaten by some bot. It just doesn't work like that. Money's back after the break.
Coming up, oil prices are rising as the war in Iran continues. But will the high prices stay if the conflict ends? Cramer's going off the charts to search for answers next.
What do we make of the surge in oil prices in response to the war with Iran? We've seen this kind of spike before, haven't we? Even if the current conflict is a lot more intense than our bombing run against Iran's nuclear facilities last summer. So to get a better read on the situation, we're going to go off the charts with the help of our resident commodities expert. She's been very right on oil. Her name is Carly Garner, a brilliant technician who's a senior commodity market strategist and broker at Carly Trading. She's also the author of the Carly Perspective newsletter. And her view is pretty simple: if not for the military action in Iran, she thinks oil would be in the 40s. While the price of crude has rallied now that we're in a shooting war with Iran, Garner points out that we've seen multiple rallies like this since oil peaked in March of 2022, each one accompanied by the threat of supply disruption. But in reality, not many barrels of oil were ever really taken off the market. This time we've got the additional wrinkle of Venezuela, which is upping production in a way it simply couldn't do before when it was under heavy sanctions from our government. That's why, to Garner, the recent run in crude is all about Iran. And whenever oil rallies on bloodshed in the Middle East, that tends to be about fear more than facts. Keep in mind, Iran's also spent decades under heavy sanctions. If they wind up with a pliable government, a regime that we may like, this war may end up increasing oil production by a lot. Even if there's no real regime change, these oil spikes tend to be temporary. Garner points out that in May of last year, oil rallied from a multi-year low of $55 a barrel as our government was quietly planning those strikes on Iran's nuclear program. But by the time the world learned of the strike, the oil market was in the process of peaking and eventually gave back all of those gains. When you look at the — let's look at a weekly chart of West Texas crude. Garner said it's broken through the same trend line that it rallied above last summer, and even tested its 200-week moving average of $76. Right? There's the test. Okay.
Unlike last year, the current strike on Iran has been well telegraphed. But Garner expects it to play out the same way as long as the ceiling resistance at $76.80 holds, which it has so far. She says the bear market in oil remains intact, and long-term she sees it heading to $44 per barrel. Simply put, absent a prolonged conflict that threatens oil production across the region, she's betting the oil spike plays out just like the last six. How bullish would that be? Garner says you need to watch a couple of key...
Levels: $67 and $65. Okay. The former would represent a retest of the trend line breakout, and the latter tends to be a really pivotal price here. If we get a breakdown below $65, okay, then she thinks that there's a high probability of oil heading to the 40s. That would be incredible. Of course, if oil can break through its ceiling of resistance at the 200-day moving average, Garner thinks that would be a sign that we've entered a new bull market. She's not expecting that kind of move, though. But if it happens, oil might see 90 to 95 before it stops going higher. That's where we go if this random war drags on much longer than expected. And that's why people are so worried about a bear market from what's going on. What makes Garner so confident that oil remains stuck in bear mode? All right, check out this chart of the oil futures with data from the CFTC Commitments of Traders report. The green line, okay, this is the big line. It tracks the net futures position of so-called large speculators, meaning money managers, and they've been buying oil rallies with less and less conviction. You can see that's not really going that way. It's not spiking as if you really felt that they were right. I mean, if they were making a big bet. By the way, this is exactly the kind of behavior we saw from large speculators shortly before the price of oil collapsed in 2020. They were buying dips but buying fewer contracts each time until eventually the bottom fell out. Definitely not bullish that we're seeing the same pattern. That's why I'm not as concerned about that $90 target, which I really don't want to come true. One more point on oil. Take a look at the weekly chart of the dollar index, which measures the greenback against a basket of foreign currencies. Over the past nine months, crude oil and the dollar have maintained a negative correlation of about 50%. When the dollar goes down, oil goes up, and vice versa. Why does that matter? Because Garner thinks the dollar has finally started to bottom here. Can you imagine? After a prolonged downturn over the last year, we got a triple test of the lows, and it's already started rebounding, with the dollar index possibly headed to 100 in the near future. Again, a stronger dollar translates to weaker oil prices. In fact, it's bad news for nearly all commodities. And you know, we've seen spikes in a lot of commodities. While we're on the subject of commodities, let's talk about the volatility in precious metals and cryptocurrencies. In Garner's view, volatility in one area often bleeds over into others. Gold and silver had both been flying, but now they are starting to pull back hard from their highs. It's really pretty remarkable. Lots of people bought these metals with borrowed money, and once they start getting margin calls, they often end up selling more stable assets like stocks in order to raise money. I talked about the Koreans selling our Micron and our Western Digital and our San at the top of the show. We saw the same thing when crypto broke down last fall. Now, last time I mentioned that Larry Williams, legendary market historian, was calling for a bottom in Bitcoin. He sees it running into May or June. You know, I like that call a lot. But when Garner looks at the weekly action in Bitcoin, she feels a lot less sanguine than Larry. If we look at what happened when Bitcoin peaked in 2021, so we go back all the way to here, it already sold off hard until it found a floor near $15,000. Remember, this used to be dramatically lower. This past October, Bitcoin made the exact same double top pattern we saw in 2021. Double top. And if we see a similar decline, then Garner thinks it could fall all the way to $30,000, meaning there's a lot more downside here. This is her target. From where she's sitting, the moment Bitcoin collapsed below $78,000, the bears took control, and they're still in charge even after yesterday's rebound. Then again, if you look at the decline in 2022, early that year, Bitcoin rebounded like crazy for most of the first quarter before resuming its downtrend. Garner wouldn't be surprised if we get something similar. Maybe it makes a run at $78,000 to retest its two resistance levels. That sounds reasonable to me. She's betting that rally fails and the selloff comes right back. I have been a longtime believer in Bitcoin, but I have to admit that all things crypto pretty much trade alongside the market's appetite for risk. That's the only thing it really correlates with. I used to think it correlated with trouble, correlated with the dollar. It didn't correlate with anything other than risk. It's a pure bet, an animal spirit bet, which frankly is hard to predict in times of turmoil. It's not what I thought it was. Here's the bottom line. The charts interpreted by Carly Garner suggest that the war with Iran is the only thing propping up the price of oil. And if history's any guide, she doesn't expect that to last very long. In her view, this is just a temporary reprieve from the oil bear market. She's not feeling too optimistic about Bitcoin either. Let's go to Blaine in Maryland. Blaine.
Hey, Kramer, pleasure to speak to you, sir.
