Mad Money 04/21/26 | Audio Only

My mission is simple: to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now.

Hey, I'm Cramer. Welcome to Mad Money. Welcome to Cramerica. Other people and friends, I'm just trying to make a little bit of money here. My job is not just to entertain, but to do some teaching. So call me at 1-800-743-CBC. Tweet me at Jim Cramer. Tailspins can be mighty nasty.

If you own a stock that's caught in one, it's very hard to hang on. But sometimes the market happens to be wrong, and it's worth riding out the turbulence. That's why after another down day — Dow lost 293 points, S&P dropped 0.63%, Nasdaq shed 0.59% — I want to talk about some successful examples of stocks that have come back to life. Stocks that can rally in the face of even the off-again, on-again peace talks with Iran that seemed decidedly off again. This evening the president extended the truce, so we are back in purgatory. Better to focus on something that can help us make money.

Rather than just endless fretting about what will happen in Iran, I want to use this interregnum to show you, even in these uncertain times, what happens when the facts dawn on stories that have been thrown out or cast into the wind. I'm going to start with a familiar one for some of us. Let's start with CrowdStrike. Here's the premier cloud-native cybersecurity company that has one of the greatest records in the industry. If you recall, there was a major outage caused by CrowdStrike. It was a routine security update put through on July 19, 2024, and ended up shutting down 8.5 million Windows systems globally. Now, lots of doomsayers thought the company would never come back from the hit. Within a month, CrowdStrike stock fell from $343 to $200 and change. It was back above pre-outage levels, though, by mid-November that year, as George Kurtz, the CEO, took it upon himself to have a tour — 100 accounts, 100 days, a little bit more or less. But you know what? The stock never looked back after that until late 2025, when we started to hear that Anthropic was gunning for their business.

We owned the stock for the Charitable Trust. I was mystified why anyone would think that Anthropic would offer cybersecurity for other properties, let alone its own. I know they were working with CrowdStrike to ensure the data was protected. But no one listened to me, and the stock started its steep decline. Now, I had George Kurtz, the CEO of CrowdStrike, on the show several times to explain how Anthropic wasn't looking to directly compete with their kind of cybersecurity. Nobody cared. This stock got pummeled some more.

It only got worse when Anthropic revealed that it has a model, Mythos, which is incredibly effective at spotting software vulnerabilities. Anthropic, an uber-responsible company, correctly recognized that the release of Mythos could lead to real security issues. So, it brought in who? How about CrowdStrike, as part of Project Glasswing, a consortium of organizations put together to study the risk and fix them. But the takeaway remained that with or without Mythos, Anthropic would compete directly with CrowdStrike. You can't make this stuff up. Stock obliterated again. I could not believe this. How could people not see that AI and Anthropic weren't headwinds for cybersecurity and CrowdStrike? They were tailwinds. You need much better security in a world where hackers also have access to AI tools.

Last night, KeyBanc came out and said the same thing I've been saying literally for months. It was a piece of research that said, quote, 'AI tailwinds have arrived and the Falcon platform well positioned. Upgrade to overweight.' Falcon platform being CrowdStrike's nine. The analyst surveyed a bunch of chief information security officers, and guess what they found? The majority felt that Mythos would positively impact cybersecurity budgets in the next 12 months. In other words, these companies plan to invest more in cybersecurity to protect against Anthropic's issue. Now, on a down day with many stocks getting just clocked, CrowdStrike rallies nearly 4% on the exact same thing that I've been telling you for weeks, and no one's cared. Go figure.

At any given time, you might have wanted to bail on this, because every time I said it was good and people said it was bad, the stock went down. Okay? If you thought it was true that Anthropic was gunning for CrowdStrike — okay, you know, gunning for the whole industry — I get it. I get that. But it was wrong. I think this was day one of CrowdStrike's comeback from purgatory. Yeah, I like that. The stock's still down for the year. That's nuts.

Or how about Microsoft? Now, we've been for the CHS for ages. I've been looking pretty silly, frankly. We're aware that Copilot has issues, but we're also aware that Azure cloud infrastructure business is robust. Windows franchise remains second to none. So, we held on to it. Stock's been ugly. Fell from $555 at its highs last summer to $356 at the end of March, where it began a sustained run during which all I heard was derision. And how could you be so stupid to own it? How could I be so stupid to bring in a company that I brought into Goldman Sachs? I don't know how many years — was it '86? Anyway, then today, after the beginning of a nice rumble higher, an incredibly positive Citi piece of research emerges and ignites the stock.

What have they been saying? How about what I've been saying? So what the analyst pulled resellers and business is very strong. Many bears have said that Microsoft is going to miss numbers. Citi actually raised numbers, said that the Azure cloud business should have terrific results. This is the first positive piece I've seen on Microsoft since the negatives took over the microphone. Okay. Microsoft's enterprise software is doing incredibly well. Some product lines, sure, some are going to get hurt by Anthropic or even OpenAI, which is their partner, but it's got a fantastic balance sheet. It can improve its AI offering and it can take some hits. For heaven's sake, I am glad we didn't dump it. First day I've said that in a long time. It could have been a big mistake. Stock's back up to $424, up six bucks today. I bet you analysts come out of the woodwork and say, you know what, we really like Microsoft.

How about Blackstone, BX? Okay. Not that long ago, we were reading about how this terrific private equity firm could be crushed by its private credit business line. Now, it had owned a fund that had big redemptions because of fear that the fund's software investments would be destroyed by Anthropic. See the theme? The stock fell from the all-powerful Anthropic — I should say that each time, by the all-powerful Anthropic. The stock fell from the 160s in January to the low 100s. Other private equity firms gated funds or did limited redemptions. Blackstone, what did they do? They actually went to their employees and said, 'Hey, would you like to step in and buy some of the private credit funds to help recover redemptions?' I actually know they did this voluntarily. I was screaming up and down because it was voluntary that you had to buy the stock. Had to buy the stock. Buy the stock. It quickly fell another 10 points. I felt like I was the kiss of death for these guys.

Then the software stocks in the most important software index sprang back to life. Too many short sellers, but not a lot of failures. It looks like Anthropic is not the kiss of death after all. Blackstone stock roars back to 133 at one point today, even though it pulled back in the afternoon to 128.50. The move was worth catching, even as it seemed like throwing good money after bad when the stock kept falling after the employees made their contribution.

Then there's UnitedHealth. This company's long been the cream of the health insurer crop, but it got hit by some serious management missteps. Sure, this was a tougher one to see coming. Steve Hemsley, a tremendous CEO, ran the company from 2006 to 2017, and his company was the best in the industry by far. UNH ran aground not because the business went bad, but because management went bad. I look, I don't need to rehash it. Others say that Hemsley returned to the CEO role in May of last year. He made it clear that he needed some time to fix the company. He pulled guidance, said there was a lot of work to do. I was genuinely worried that UNH might be permanently broken. I was wrong. The balance sheet was good. He was the same old great self. Today the company reported what I think will be the first of many upside surprises. Just like the way Hemsley always used to do, clockwork. You don't just get one good quarter from Hemsley. You get many. Stock shot up nearly 7%. I think it's a buy. I think it can return to its former greatness.

All these — CrowdStrike, Microsoft, Blackstone, UnitedHealth — required faith. Faith in management, faith in the model, faith in the balance sheet, faith in the comeback. All these companies have tremendous leaders. All have immense financial firepower. The first three deserve the benefit of the doubt. And the fourth earned it when Hemsley returned. Here's the bottom line. There are plenty of instances where it might be hard to discern a turnaround. I talked about how hard it is for me right now with Nike. There's plenty of fright in all four of those situations. But I think in a few months' time, we will look back and the doubters will say, 'What were we thinking?' And the remonstrators will say, 'Why the heck didn't we buy them?' The answer: because you let your fears get the best of you. And that's the opposite of what great investors do. Let's go to Sandy in Virginia. Sandy,

Thank you. That's very nice. Thank you. And I'm glad you do. We come to play every day, Sandy, Jeff Marks, and I. What's going on?

You buy Lennar. I read through D.R. Horton's — dear Horton, the largest homebuilder. I read through the comps call today. I said, 'Holy cow, the combination of that fellow who was on the hill today, Wash, and this — you're going to make money in the homebuilders.' I think you buy some Lennar tomorrow, and Stuart Miller will not let you down. Trust me. All right. Look, it's hard to identify the turn in some stocks, but you can't let fear get the best of you when you're dealing with companies that are best to reap good balance sheets and great management.

On Mad Money tonight, RTX and GE Aerospace both shot the lights out with their earnings reports. So, why did the stocks sell off today? I'm running through the numbers to find out. Don't despair. Then, I'm no poet, but I'm reading through the stanzas from POET Technologies to see if it could be a fit for your portfolio, as one of you have asked me. And as tensions continue to flare up with Iran, I'm sitting down with the CEO of Flexport to get a real-time read on the situation in the Strait of Hormuz and other factors in trade. So stay with Cramer.

What the heck went wrong with the aerospace and defense stocks today? I've been pretty bullish on this entire group, both the commercial aerospace side and the defense contractor side. But this morning, GE Aerospace and RTX, two of my favorite companies, reported very good numbers. Yet, both stocks got slammed, with GE falling $16.87, or 5.56%, and RTX declining $8.62, or 4.4%.

We know there's tremendous demand on the commercial aerospace side with years-long backlogs for anything that goes into airplanes. We know defense budgets in the United States and in Europe have surged, and now our military needs to replenish its stockpiles after exchanging so many missiles with Iran. You'd think this would be a great moment for GE Aerospace and RTX, two iconic aerospace defense plays. But while these stocks have been tremendous long-term performers, no doubt about it — GE Aerospace up 94% over the past two years, RTX up 84% — they've pulled back substantially from their highs over this year. GE Aerospace has quietly come down 18% from its all-time high in late February, while RTX is down about 13% from its all-time high in March. I was hoping their earnings reports could turn both stocks around. Sadly, that didn't happen.

Let's start with GE Aerospace, which reported first this morning and gave us an incredible set of numbers. Every key line was above expectations, with revenue up 29% year-over-year, operating profit up 18%, earnings per share up 25%. This was a 26-cent beat off a $1.60 basis. I'm calling that pretty darn impressive. At the same time, their free cash flow was up 14% year-over-year. Both sides of the business were on fire, with the commercial aerospace business up 34% and the smaller defense division putting up 19% growth. Even better, orders surged 87% versus last year, and GE Aerospace's total backlog stood at more than $210 billion at the end of the first quarter, with $170 billion of that coming from commercial services. That's going to pay off. Really, there wasn't much to quibble with at all here. Demand is insatiable, and that's true on both sides of the business.

Management's self-improvement plan, designed to fix supply chain issues and improve outputs, is paying immense dividends. While GE Aerospace's operating margin declined a bit, that was expected. The actual numbers still came in above the estimates. I was expecting good numbers, but when I spoke to CEO Larry Culp this morning, I was possibly gushing with surprise. 'Oh my god, that backlog!' But rather than rally in response, the stock tumbled $16.87, 5.6%. Why? Mostly because management decided not to raise their full-year forecast. With the types of beats that we saw for the first quarter and the fact that GE Aerospace has tremendous visibility to the future, a lot of people hoped they'd raise their forecast. I thought that was unrealistic. And yet, raising your forecast after the first quarter would be an unusually unusual move, especially given what's happening in the world, right? I mean, let's, you know, come on, let's be realistic.

In the end, management reiterated every line of its full-year outlook, even as they also noted that they're trending toward the higher end of these numbers. Plus, they clarified that the full-year forecast includes several negative assumptions about the global economy, like persistently high oil prices through the third quarter, a near-term impact from fuel shortages, and a reduction in global GDP estimates. Basically, GE Aerospace gave us a pretty conservative forecast, so I'm not really sweating the fact that they didn't give us a classic beat-and-raise quarter. You can read between the lines and understand that the company's doing extraordinarily well. But management wants to be cautious about the future given all the disruption that we've seen from the turmoil in the Middle East. Given how dramatically this stock sold off on a very good quarter, I'd be a buyer down here. And if it pulls back again, I think you should feel confident about buying more. I thought about putting it in the Charitable Trust bullpen today.

Next, how about RTX? They post an excellent set of results, too, also beating expectations on every key line. Revenue grew 9%, or 10% organically, while operating profit was up 14%, free cash flow up 65%. Earnings per share grew 21%. That's a 27-cent beat off a $1.51 basis. Wow. RTX also said that its order activity, quote, 'remains robust,' end quote, with a 1.14 book-to-bill ratio in the quarter, meaning they're bringing in plenty of new business, and their backlog stood at $271 billion at the end of the quarter. These are astounding numbers. All three of the company's segments, which are fairly evenly sized, beat sales and operating profit expectations. The Collins Aerospace unit grew sales by 5%, operating profit by 6%, while the Pratt & Whitney aircraft engine business and the Raytheon defense business grew sales double digits and saw operating profit up more than 20%.

Unlike GE Aerospace, RTX did raise some lines of its full-year forecast. The company ticked up its adjusted sales outlook by $500 million, taking it to the $92.5 to $93.5 billion range. They raised their earnings guidance by 10 cents to the $6.70 to $6.90 range, but they left their organic sales and free cash flow outlooks unchanged. Maybe that partial guidance raise is why RTX held up a little better than GE today. But still, they reported an amazing quarter and the stock got clobbered anyway, probably because investors were hoping for even more of a boost. That's unrealistic. Unrealistic.

As I mentioned before, much of the focus for RTX is about what the company's doing to grow its capacity, especially for the defense side of the business. That was still the case today, as RTX mentioned that it has increased its maintenance, repair, and overhaul output for a key Pratt & Whitney engine model by 23% year-over-year, and that its Raytheon unit had ramped its total munitions output by more than 40% year-over-year. I mean, that's exactly what we want to see. Now, don't forget, RTX should have years of upside here as one of the nation's leading producers of missiles. So, it's worth noting that the Raytheon unit had $6.6 billion in awards just in the quarter. Management also said they're working with the Department of War to accelerate munitions production. And so far, that's going well. RTX has already reached deals to boost production of certain missiles like the Tomahawk, the AMRAAM, and the Standard missiles that have been burning through in the Middle East. Holy cow.

The company's CEO, Chris Calio, talked about huge demand from around the globe, not just the US. I was incredibly impressed. One last point: RTX spent a lot of time on his conference call talking about its Coyote counter-UAS system. As we've been telling you, drones are playing an outsized role in modern warfare, and the Coyote from RTX is one of the leading counter-drone systems that's been developed for our military. On today's call, RTX management discussed new types of Coyote counter-drone systems, including lower-cost non-kinetic versions and more mobile versions that can be recalled and deployed elsewhere. This is exactly what we need to deal with countries like Iran that love to lob tons and tons of cheap drones at us and our allies.

Long story short, GE Aerospace and RTX are both doing extremely well, even if their stocks got hit today because they didn't give the investors the kind of full-throated guidance raises that the bulls were hoping for, but I felt was just ridiculously unrealistic. Bottom line: after today, the earnings estimates for GE Aerospace and RTX should be going higher while their stocks went lower. And guess what? These are exactly the kinds of stocks that get cheaper as they go lower. I think we're looking at some incredible bargains here. And as I said at the top of the show, sometimes winning investing doesn't occur immediately. But when we look back at the prices of these stocks that you're going to get over the next few days, I think you will wish you did some buying. Mad Money's back after the break.

Last week, BK in Massachusetts called in to ask about POET Technologies, which is an optical play that sits right in the middle of the AI data center buildout. Because I wasn't familiar with it, as always, I said I'd circle back and give a more informed answer. Now, we've seen a bunch of winners in this optical space. Like we've had these companies on Coherent, Lumentum, which I mentioned earlier this week. Photonic computing is becoming core to the AI buildout because as data centers get bigger and more power hungry, you just can't use copper to move data around. That's what we're using right now. Most data centers, it absorbs too much heat. Instead, you need to transmit signals through light using fiber optics. Remember that term, which brings me to POET Technologies.

This stock shot up nearly 20% today because the CFO fired back at a short seller's report from last week, and now it's up more than 72% in the past month, 175% over the past 12 months. So what exactly do these guys do in the optical space, and does it deserve really to be up this much? Okay, POET is a packaging platform. Their silicon-based technology is designed to replace a lot of traditional manual assembly with semiconductor-style automation. It combines electronics and optics onto a single chip without wires, with the goal of lowering cost and improving power efficiency. While other companies make individual parts, POET's focus is on the stage that holds those parts together and helps them connect more efficiently.

Lasers have to be aligned very precisely, often by hand or by expensive robots to lay fiber. POET argues that its optical interposer can simplify the process by using semiconductor-style etching and automation. That would be terrific. Basically, this is a company trying to make optical packaging cheaper, smaller, and easier to scale. And look, that's when you think about the niche role in the stack that this has. Well, you know what? You have to go back to what Nvidia CEO Jensen Huang would tell you about the need for better packaging integration. It will only grow as the fourth industrial revolution keeps rolling. That sounds exciting for POET. In plain English, the pitch is that POET can make light source products smaller, cheaper, and easier to scale for data centers. That's why the story gets people so excited. It's a potential enabler that can scale with the industry. But maybe the word 'potential' is the operative one.

And look, it's not like POET came out of nowhere. They've been at this for decades, but the stock caught fire last month when POET entered into a strategic collaboration with LITEON to design next-generation optical communication modules for AI data. They expect prototypes by late 2026, with high-volume production likely coming next year. Then POET said it was expanding its partnership with Luxshare. That's a South Korean optics outfit to deliver high-end optical transceivers for ultra-fast AI network connectivity. I know all the buzzwords you want to hear. That makes POET Technologies more relevant to the hyperscalers like Microsoft, like Google. In a world where data rates keep climbing and power efficiency matters more every quarter, anything that gives you faster connectivity at a lower cost could be a real winner.

Still, while I like the story here so far, let's not get ahead of ourselves with these recent announcements. POET's got a joint development agreement. They're not producing this stuff at scale. I'm calling it early. The stock's trading like they're already in mass production, and that bothers me. Just look at the numbers. POET's financials make it look more of a science project than a business. In the fourth quarter last year, they had $341,222 in revenue, admittedly up big from around $29 grand the year before, but those are rookie numbers, easy compares. For the full year, they did $1.1 million in revenue and they posted a net loss of $63 million. Hard to make that one up in volume. In other words, with a market cap of more than $1.5 billion, POET's trading at nearly 1,500 times last year's sales. And that is hard to take seriously.

But then you look at the growth estimates. The company's projected to grow its revenues nearly tenfold to $10 million this year, meaning it's trading at over 150 times this year's sales. And analysts expect eight-fold revenue growth in 2027 to $80 million. At which point the valuation no longer makes me want to puke, at least figuratively, because literally I've had an upset stomach all day and the Tums just ain't working and I need some Pepto. Maybe not that salient to you, but it is to me.

Anyway, you really have to understand the full stack and the complexities of optics before diving into one of these plays when they trade at such rich valuations. These are not simple stories either. If you don't know exactly where a company fits into the data center, what part of the bottleneck it's solving, it's very easy to pay too much for something you don't understand. That's why I have a hard time telling, say, a conservative investor to chase this thing after the move's already made. I said something similar about Lightwave Logic last week. The stock's become one of the market's favorite speculative ways to play photonics. This is a small-cap company trying to prove it belongs in the all-important AI supply chain. Some would award this POET meme status. I don't know if it knows it. That means the upside can be real, but only a POET can pull off the execution.

With a company like this, the challenge is never just whether the technology works in a lab demo. You got to figure out if it can be manufactured consistently and shipped at what we call scale. POET's talked about manufacturing progress. It has a Malaysia assembly relationship and it says it's moving toward production, but none of that changes the fact that the company is still in the pre-revenue stage. The road from an interesting platform to a durable AI supplier is a long one.

Now, let me give you more insight into last week's big short report. POET recently responded to a report by Wolfpack Research. It's a short-selling firm claiming that investors are on a collision course with the IRS by accumulating so much cash through dilution while generating so little operating revenue. The short-selling firm also wrote that the company has spent significant amounts of capital on questionable promotional activities and characterized POET's journey from solar to photonics to AI optical components as evidence of serial strategy failure. The company's CFO, Thomas Mik, responded by saying, I'm going to quote you here: 'They called us a promote company, which we're not. We're a real company with real products. I just don't think they understand that in the technology space, it takes a lot for a company to get started and face the challenges that we have faced over the past 10 years.' End quote.

Mik also offered the company's current product line as a counter. He stated that POET now holds a $5 million production order for its 800G optical engines and has invoices from Celestial AI, which was acquired by Marvell Technology earlier this year. There's a good brand. The stock was trading over $7 before the report. It came down about a dollar and now it's at $10 and change, thanks in part to that rebuttal. They also clarified a way around the tax issue. So where do I come down? Look, I like the theme a lot. You know that the scramble to secure lasers, transceivers, optical integration technology — it's all happening. POET has a more interesting story than the average speculative small-cap tech name. But I'm not ready to recommend chasing here. If you want to play the theme, I'd still rather you own the more proven companies like Lumentum, like Coherent, both of which have Nvidia's endorsement and money.

So, the bottom line: while I can endorse speculating on POET Technologies given how much the stock has run, it has a lot of potential and it's definitely worth watching. If you really like it, though, I'm begging you to wait for a pullback before you pull the trigger, as I don't think you can consider yourself to be early to the story, and that's sometimes what matters the most. Let's go to Young in Pennsylvania. Young,

I'm from Springhouse. I'm good. Nice to see you, neighbor. What's going on?

No, no, look, you're right about it. I look, I think the world of Matt Murphy. I've liked him ever since the stock was in the 20s. My problem is we had a big hit in it, then we didn't come back in time when it fell. We did have him on. I'm proud that we had him on talking about that he's the signal, not the noise, and that he bought a lot of stock. And I'm glad that you bought it sometime. Look, we own a lot of stocks. I try not to have more than 30 stocks. I didn't pull the trigger in the bullpen. And you know, like I was talking to my wife the other day and she said, 'Jim, people really hate you on boards all the time.' I said, 'I don't read any of those.' But I'm always willing to admit when I screw up. I should have pulled the trigger. I didn't. We bought some other stocks. Fortunately, they were good, too.

Look, I can't endorse a new position in POET Technologies right now, given how much the stock has run already this year. But it's intriguing, but it's run too much. Much more money, including my sit-down with Flexport. The private company plays a major role in managing supply chains around the world. I'm getting an update on the situation straight from the CEO. And I got to tell you, there's so much that this guy can tell us. We got to stay on top of it. Tim Cook announced yesterday that he will step down as Apple CEO later this year. So tonight, I'm taking a closer and personal look at his legacy and the lessons every CEO can learn from his incredible leadership. Of course, all your pulse rapid-fire tonight. Lightning round. Stay right here.

Between the Supreme Court overturning most of President Trump's tariffs and Iranians closing the Strait of Hormuz, it's been one crazy year for companies with a global supply chain and significant shipping needs. That's why we got to check in with Flexport, the privately held company that uses technology to help its clients coordinate global logistics. The company gave us a lot of insight back during the COVID-induced supply chain crisis. Now we got a different kind of supply chain crisis. So let's take a cold look at what is happening all over the globe with Ryan Peterson. He's the founder and CEO of Flexport. Get a better sense of what's happening. Mr. Peterson, welcome back to Mad Money.

Booyah. Back. All right. Listen, I got to tell you, Ryan, as between what's going on next to Iran and what's going on with the tariffs, how do companies get by? Because to me there's just so many things that are going wrong. I almost want to only invest in domestic companies.

Well, but at the same time, I listened to the president speak this morning to the gang of Squawk Box, and he's talking about how he'll remember, how he won't forget the people who don't file for the money, which to me means he will remember the people who do. What size do you think he will remember? I doubt if some toy company that imported some $5 million is going to get in trouble, but do you have people say, 'Listen, do you think that the president's going to spot what I do?'

Oh, absolutely. I wonder. I mean, Costco was the one that really was very visible. It's a position for my trust. I don't know. Maybe look, they're going to do what's right for their customers, for the card members. They're not sitting there trying to figure out whether we anger the president.

Yeah. Well, that's what I'm waiting for. I'm probably one of the biggest ones. I'm all set for that. Now, let's talk about what's going on with this Strait of Hormuz. When you see this and it's on again, off again, on again, do you just come tell people who come to you and say, 'What should I do?' Do anything but go there. Go to the Panama Canal, which apparently is also a problem. Go around the Cape of whatever. I mean, what's your suggestion to people?

Holy cow. Well, I mean, how much of things are determined by insurance?

What do you do with companies like, we've been applauding Tim Cook? Okay. He's been known as a logistics genius. What is a logistics genius? What does that person do that sets him or her apart from everybody else?