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The greatest story ever told — lower inflation, high growth — got thrown for a loop today, and it crushed the averages. Dow tumbling 785 points. S&P plunging 0.56%. The Nasdaq declining 26. It's easy to see how this happened, though. Earlier this week, Wall Street figured the war with Iran wouldn't do too much economic damage. But today, the price of West Texas crude shot up above $80 again, reaching the low 80s. Now, it did settle back in the high 70s. But this kind of action has people starting to get it — it's just too hard for people, and they're selling even though I'm telling you you shouldn't stay in.
Making things worse, a key leadership group, the semiconductors, got kneecapped today. See, with the exception of China, our government mostly has a no-borders policy for our best chips. They can be sold anywhere. But today we heard rumors that the government wants to interject itself into all the foreign semiconductor sales. They want to gate us before Nvidia or AMD sell any AI accelerators overseas. They got to get permission from the White House. Now, I have no idea if this is true or not. We know the Biden administration restricted sales like this to the best semis to barely more than a dozen friendly nations. I always thought it was stupid, and it sure seemed like the Trump administration agreed with that position. They wanted American chips to dominate. But if the government starts blocking these companies from selling their best chips overseas, I think they're basically handing the whole market to China. That's why this is so out of character. The Trump White House typically doesn't like giving China a leg up, especially when it's something we're so good at, like semiconductors.
Well, I'd love it if Nvidia could sell its chips everywhere. I understand the case against letting them sell in China. I get that. I don't agree with that, but I get it. But blocking them from selling to other countries — that'd be a travesty. This rumor is why the market lost a key leadership midday. Nobody wants to touch the semis if their total addressable market is about to get clubbed by the government. My hope is that this one spiked especially because Marvell Technology reported an amazing quarter this very night. It, along with Broadcom, Nvidia, and AMD, would be ready to soar if the Trump administration says something like, 'No, we're not going to do that. We're not going to let our companies be held back and let the Chinese have to jump on us.' Now, the good news is that the price of oil can come down. That the semis suck — maybe it gets spiked. Oh, that would be so good. And maybe they don't go through with it. The bad news is there is a war on, and it's not a stable setup for a rally as much as we'd like to think it is.
I know there are no do-overs in this business, just narratives of what could have been. So, let me tell you what could have happened if oil hadn't spiked, the administration hadn't been mowing new regulations, or the semis — the best-performing stocks in the year — had kept going. To analyze, I'll tell you one thing: it would have been fabulous. This morning, we had a monster reversal, something that's plagued this market for a while — the awkwardly named HALO trade. HALO means heavy asset, low obsolescence companies. In the mania of search for something, anything that might be immune to AI, money managers seized on industrial companies that face no competition from AI. If anything, this technology will only make them more efficient. So, we gravitated to the Honeywells, the Newcores, the RTXs, any company helping us build out data centers — the HALOs, companies that make tangible things for a profit. It was working, and it felt good. We had so many great industrials running.
But today, perhaps because of the stellar earnings from Broadcom, a gigantic semiconductor company with a software division, a stock that had been hammered until today — maybe it's because of the bounce that we saw on ServiceNow, Workday, Adobe, Salesforce, and now Veeva Systems — it looks like the HALO trade has lost its halo. The five stocks I just mentioned are all enterprise software players. There's been a widespread belief that anything enterprise software can and will be hobbled by Anthropic or OpenAI, the two horsemen of the software apocalypse. I think the rebound in this group is long overdue. Sure, it's absolutely possible these software companies will lose some business to the AI reapers. But coming into today, the enterprise software stocks have been trading like they were in danger of going out of business. That's absurd. These companies aren't run by a bunch of bozos. Their CEOs see what's happening. They're fiercely pivoting to combat any newfound competition from code written by artificial intelligence. It might just be a temporary reprieve, but before the oil rally crushes, these stocks seem like they're headed for a major retracement. And that could help everything from private equity to anybody who actually believes that AI is not going to destroy everything.
In this scenario, you're supposed to sell the HALO names, dump the techs, buy the recession-proof healthcare stocks if things are — if oil keeps going up. But, you know, the healthcare stocks were slaughtered too. So, it's very difficult to see, without oil going down, how we can really make a big move. Look, I think the president's going to have to open the Strategic Petroleum Reserve to push down the price of gasoline, perhaps until the war is over. Those worried about inflation need to hope that the spike is temporary, and the new Fed chief needs to come to grips with the fact that some inflationary inputs simply can't be ignored. Most of all, we need clarity on what the president really wants, both on the semiconductor exports and with the war in Iran. Until then, the bottom line is we have to face the fact that the market's in limbo. I hate limbo, but I accept that there are always a lot of limbo in 2026 so far, and we need to learn to live with it if we're ever going to get to the promised land of higher prices. And you've got to stay in if you're going to get there, too. Let's go to John in New York. John.
Hey Jim, thanks for taking the call. A long-time listener, first-time caller. Excited to talk to you. One and two. I just found out I'm having a big — so super exciting day, but my...
Thank you. My question — um, I have a big position. I bought into Uber. Um, and I bought in at the high 80s, and it keeps dropping. It seems to be day by day. And so I'm just curious, you know, my soon-to-be...
Look, first of all, congratulations. I want you to stay in Uber. You got to think really long-term about this because I think this is a company that's taking over the world, and we're having some short-term volatility in it that I think is going to end. The stock is way too cheap. I want you to stay in the stock. Let's go to Cheryl in Iowa. Cheryl.
Hey Jim, this is Cheryl from Indianola, Iowa. I just wanted to get your information from you. So last November, I bought Robinhood stock for about $145 a share, and then it went down to $120, and I thought, 'Wow, that's a good deal.' So I bought more and added to my position, and now it's down to $79, $80. So, um, but at that time, back then, the price target was like $180. So my question to you is, do you feel Robinhood's going to go back to 145 or higher anytime soon?
Okay, let's let's let's let's upend this one, Cheryl. Let's forget where we bought it and think where we think it could go to. If I could buy Robinhood at $80, I'd probably buy some here. If it went to 70, I'd buy it very big. So, the question isn't whether it'll get back to where it was. The question is, would you buy it now? And the answer is a resounding yes. Ralph in Pennsylvania. Ralph.
Hi Jim. Uh, question is about Lam Research, which I heard of from your show at the end of January. Uh, so I did some homework and found out that uh they sell their equipment to the likes of Taiwan Semi, Samsung, and Intel, and their technology stacks up pretty well against their competitors. Anyhow, their PE is kind of high at like 34. Uh, but I pulled the trigger anyway and got in at like 246, the price target at the time.
I want you to buy more. I want you to buy more. Lam has got the best intellectual property of any technology company — I'm not kidding — that is in that industry. And I think that you should average down. I don't care where you paid. I think it's going higher. Let's go to Ray in California. Ray.
Booyah. Jim, thanks for taking my call.
Of course. What's going on?
Well, my question is about ServiceTitan. I purchased it in January. All the...
Can you believe that stock's going down?
I am surprised. I looked at that today.
I think it's ridiculous. This is a very good company. You're getting this like many companies that's been brought down by oil, brought down by a general mess. That is a good company, and I think that you should hold on to it. And if you have any more extra capital, I would put some more money to work in it. They are giving some stocks away right now, and we want to take advantage of the sale. All right, we have to face the fact that the market's in limbo. Someday it's going to go higher again, but you know, you need to have oil stabilized, and we got to figure out what the heck is really going on with technology. On Mad Money tonight: the averages might be in the red so far this year, but Tapestry has been bucking that trend. So, what's behind the comeback in the parent company of Coach and Kate Spade? I've got the CEO to find out. Then, Lloyd Blankfein's new book, Streetwise, hit shelves this week. I'm going to sit down with the former CEO of Goldman Sachs to hear more about his memoir and get his take on the current state of this turbulent market. Plus, put a Gap down. Shares of Gap are sliding after earnings. I got the CEO fresh off the earnings board. So stay with Cramer.
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Even after this beatdown, there are some terrific winners in this market. Take Tapestry, the parent of Coach and Kate Spade. With the stock, it's up more than 84% over the past 12 months, putting up some big gains after the company reported a blowout quarter about a month ago. Earlier today, we got a chance to check in with Joanne Crevoiserat. She is the CEO of Tapestry, at the Coach flagship location on Fifth Avenue. Take a look.
I'm so excited to be in this incredible store. Incredible. And what I see are two things. I see magic, but I also see logic.
I am so glad you brought both of those words up right at the beginning, Jim, because that has been part — you knew Lou Frankfurt, who was a former CEO of Coach. It has been part of our DNA since the inception. Coach has always been a brand that has balanced magic and logic. It takes both to really bring a great business to life. And Tapestry has embodied those concepts. And you're going to hear that a lot today.
Well, this is not a new brand, but it feels new. I don't know whether it feels new because of the charms — a book charm so brilliant — feels new because of the colors, feels new because I don't know — the people who work here make it feel new.
Well, it feels new because we have sharpened our focus and our execution over the last six years. And as we've done that, we've focused on becoming relevant to a younger consumer. And with that specific focus in mind, our whole organization is leveraging brand-building capabilities that we've strategically invested in — those capabilities that help us be more relevant to a young consumer today. And the expression of the brand has never been more vibrant.
Well, you've got a finance background, but you also know a look. And to me, I see here what we would call, if we were doing a tech story, the TAM is big — the total addressable market — and where it starts for you, and where you hook them, and where they stay.
We've done a lot of disciplined work that has led to where we are today. And I do want to share that because this doesn't happen overnight, right? The discipline to really understand where's our authentic place in the world, our authentic place with Coach — it's such a great brand with so much history, 85 years of history with this brand, right? And that authenticity comes through as a timeless, classic, genuine, well-crafted product. It starts there. But we were asking ourselves, how do we become more relevant to a modern young consumer today? Right? What makes the brand relevant? And the only way to do that is to really understand your target customer. So, we have spent hours, hours and hours talking to young consumers and understanding what's going on in their life, what are the tensions they're feeling, how are they thinking about brands, how are they thinking about just their lives and how they spend their time, and then connecting that with where we authentically live as a timeless brand. And so our target customer, the timeless Gen Z customer, tells us that they value self-expression and they're trying to gain confidence as they grow in the world. And so we've honed in on expressive luxury as a way to help our young consumer leverage their own self-expression as they build confidence with our brand.
Okay, so the numbers for here are just nothing short of spectacular. How about Kate Spade? And you do the same thing. I see when I go and look at TikTok and look at Insta, it's a little bit younger. Uh, maybe that is the right way to go. What is your thinking?
Well, Kate Spade is an iconic brand and it has cultural relevance. If you go back to 1993 when Kate Spade started the brand, she started the brand because she didn't see anything in the market that appealed to her, right? It was differentiated from the very beginning. So, how is Kate Spade differentiated? Well, Kate Spade has always been feminine and had color and joy and optimism. And in the day when the brand was created, Kate said, 'I, you know,' — and women were in the workforce in the '90s, right, wearing shoulder pads and suits. And what she was looking for was a brand that spoke to her and her personality. She wanted something with a little more femininity to show her own personality and with a touch of cleverness and wit. And so from its very beginning, Kate has had that differentiated position. It has that differentiated position in the market today. And the work we're doing is building off the learnings and the brand-building capabilities that we've built and that are evident at Coach, and applying those, yes, to Kate Spade to be relevant to a young consumer today.
All right, that'd be great. Now, accessible luxury — deemed a category by the federal government, of which if you had merged with Capri you would have dominated and monopolized. What was that about?
Well, the truth is, and as you and I know, Jim, consumers have lots of choice, and in fact today they have more choice than ever. And we're building the capabilities to make sure that we cut through with consumers and build brands in a relevant way. Um, you know, we have incredible momentum at Coach.
And we're just getting started. You mentioned the TAM opportunity. We see tremendous opportunity to grow with our Coach brand. You know, the way we look at the market, we have less than 1% share globally. So, we have an opportunity to continue to drive growth at Coach and reignite growth at Kate Spade with these capabilities that we've built. And as I said, the reality is the consumer has a lot of choice. So our job is to make sure we can cut through and build our brands and be relevant to that consumer in a sea of many choices.
No, this is a stock show, and you made it accessible luxury, and at the same time you did an accelerated share repurchase that may have been one of the most timely things I've ever seen. How did you know?
Um, how did we know? We knew that there were many outcomes of that potential transaction, and like any business, we're disciplined and looking at all of the possible potential outcomes and making sure we're prepared to compete whatever those outcomes or whatever the macro environment presents. And at that moment, we had an opportunity to make a strategic pivot. Um, I would say first, we never lost focus on our organic business. And so we continued to build that business, and at the moment that we were presented with a change in circumstances, um, we made a big bet on Tapestry because we see the opportunity to grow durable long-term growth and value creation even today into the future. So we just had an investor day in September. Our model is tremendously efficient. We throw off a lot of cash, and we're returning a lot of that cash to our investors. We have a very compelling value creation story, including our capital allocation story of four billion of cash returned to investors over the next three years.
Now, talk to me about iconic. I mentioned Tabby. What does it mean?
Tabby is a great story and a tremendous icon that is a Gen Z recruiter. Gen Z loves this bag.
And you know, our business and our growth engine is driven by new customer acquisition. So, our focus is on, as it always has been, bringing more people into the market. Young consumers today think differently about luxury, and we're making sure that we meet them where they are with great product and great innovation. And Tabby represents that great innovation. In fact, at one time, Tabby almost went away. Tabby was, you know, we introduced the bag, it had great reception, but after a while, it started to fade. And this is a perfect example of bringing magic and logic together in our business. It was right at the beginning of our transformation when we were talking about the need to attract young consumers to our brands. And it's really making sure that all of our people throughout our organization have the tools and the data to make different decisions. So when you bring magic and logic together, a merchant or a designer in our business had the data that said, you know what, Tabby is resonating with a Gen Z consumer. Why not, rather than mark it down, why don't we amplify it? Why don't we animate it? And from there, an icon was born with tremendous innovation, animation, and this is what our consumers are responding to.
All right. And I want to tell you that everything resonates when you go to your wife and she says, 'Oh my God.' Okay, my first bag when she gets out of college, and then my bag, which of course she has in this because it's never changed. That was her first evening wear because she could afford them as a salesperson, okay, of raising money for college and then selling pharmaceuticals, and this is it. And she says, 'I still wear them.' That's you.
That's exactly who we are. And that is what drives the passion behind our business from all of our associates, our team members, and our customers. One of our team members, we were talking to Cristiana, said one of the reasons that she stays with this brand for 20 years is that she knows that we're selling a customer a product they're going to treasure for a lifetime. And in fact, many lifetimes. We have products in our assortment that we give second lives to, that we remake and refurbish. We've kept over 14 — almost 14,000 handbags out of landfills because we keep them in circulation.
Well, there's 100,000 on eBay right now, and I urge her never to do that. She said, 'Don't worry. These are going to be my children's — her daughter's — after we do this.' Joanne Crevoiserat, thank you so much.
You're welcome. CEO of Tapestry.
Coming up, when the market is as turbulent as it is now, few guides are better than the experience of those who've been there before. Don't miss Cramer's sit-down with Lloyd Blankfein. Next.
During this crazy, sometimes terrifying moment for the market, I want to check in with someone who has a lot of experience handling market meltdowns: Lloyd Blankfein, who served as chairman and CEO of Goldman Sachs from 2006 through 2018. Basically, he took over right before the financial crisis, handled it better than any other financial institution. This week, he's published a new book, which I love. It's called Streetwise: Getting to and Through Goldman Sachs. This is a fantastic read. The parts on the financial crisis are really priceless. Don't take it from me. Mr. Blankfein, welcome back to Mad Money.
Mr. Cramer, thank you for having me.
Thank you, Lloyd. Lloyd, it's a fabulous read. And one of the reasons it's a fabulous read is I feel I'm in the room. I feel I'm in the room when you get partnered — I feel like I'm in the room with Jon, and I feel like I'm in the room when the country's melting down. What did it feel like?
Jim, for about half the book you were in the room because we overlapped.
Yes, we did. And you were my rabbi in school. I was two years behind you everywhere. But you were incredibly helpful to me because that's just the way you are.
Well, you're easy to be helpful to.
Well, okay. So, tell me, it looked like that when everybody was called in at the Federal Reserve that you weren't in charge at that moment. It looks like Tim Geithner was bossing you around. And at one point he told you, 'Listen, I think maybe Wachovia.' You said, 'Wachovia, go.' And how about Citi?
No. After Lehman went, they had us on Friday, that next Friday, and all day Saturday, we were merging with Citigroup, right?
Told us to merge with Citigroup. That got cancelled. Funny stories. Not a lot of time.
It turns out that Vikram Pandit was very flattered by your call.
Vikram flattered said, 'Hey, I'm very flattered that you're calling to merge with Citigroup.' And I said, 'Well, I'm not calling to flatter you. I'm calling because Tim Geithner told me to.' By the way, the regulators — you know those Star Trek episodes when Kirk is on the bridge and somebody else is threatening to turn off all the life support systems, so they have to do whatever they want? Well, the regulators controlled all the oxygen. We had to do whatever. And by the way, they did a pretty good job under difficult circumstances. So, I'm not taking shots at them. It was a very tense time and nobody knew. But I would say if Friday and Saturday were merging with Citigroup and that didn't work out, by Saturday night and Sunday they had us merging with Wachovia. And so this kept on our friend Bob Steel. You get the idea. It was crazyville. But people under very difficult circumstances made quick decisions. Normally they would have spent a year analyzing something; they had no chance to do it. I think people performed very well. They'll never get credit for it because it's like in a James Bond movie when the bomb is ticking down — 007 — and goes down 09, 08, 07 — when it finally gets him, he defuses the bomb. Nobody ever appreciates that he saved the world because it never blew up, and it never blew up.
Well, the reason I bring it up is because every time we have market turmoil, people say it could be worse than 2008, as if because oil's going up and there's a war in Iran and we have some problems with some private credit. Are these things even remotely like that moment?
No. But everybody always thinks whatever you're living through is worse. And there's good reason for it. Anything that's already happened is resolved on the shelf, can't hurt you anymore. Anything that's still pending could get worse.
And so everybody's kind of extrapolating. And so it's just human nature to think, well, we got through that. How bad could it have been in hindsight?
