Mad Money w/ Jim Cramer 2/23/26

Music Music Music Music Music Music Music Music Music Music Music Hey I'm Kramer, welcome to Mad Money, welcome to Kramerica Hello, Google and friends. I'm just trying to save you some money. My job is not just to entertain, but to put things into context, to do some educating. So call me at 1-800-743-7202. Tweet me at Jim Kramer. Today we got a glimpse of an ugly future, a world where we run out of white-collar jobs because artificial intelligence destroys employment as we know it. That's the principal reason why the Dow plunged 822 points. S&P dropped 104 percent, and the Nasdaq tumbled 1.13 percent. The consumer staples were because they're textbook recession stocks. They're winners in a jobless world. You buy them whether you want to buy the product, whether you like them or not. Frankly, I don't believe that AI will wipe out the white-collar workforce. Let me give it to you straight, though, because I don't think the narrative you're going to hear about today is going away. I think it will hurt the price-earnings multiples, what we pay for a host of stocks, causing them to drop without seeming, well, let's say, anything being wrong. See, yesterday, an outfit called Citrini Research and Al-Op Shah, two sources I never heard of until today, frankly, put out a stunning, well-written, incredibly pessimistic paper called The 2028 Global Intelligence Crisis. The piece starts with a provocative question. What if our AI bullishness continues to be right? And what if that's actually bearish? Very interesting. God, it just drew me right in. What follows was a dystopian tale set in 2028 of incredibly high unemployment and incredibly low consumer spending because the robots will replace us. Apparently, humans are nothing but friction. As AI gets better and better, more and more white collar jobs will disappear. Basically, they're predicting that most of the middle class will cease to exist. Today's stock market declined. It reflected the thesis embodied in this work of science fiction. The worst hit were software stocks, which, according to the 2028 global intelligence crisis, will be all but destroyed by AI that can write code better than they can. This paper argues that software companies will eventually be forced to lay off tons of workers, and the companies instead will invest their savings in AI tools that can be used to maintain their output with dramatically lower costs. And according to these guys, software is only the opening act. The housing complex, banking, retail will all be laid to waste by this white collar crunch as the good jobs disappear. The private equity firms that bought most of the companies that have been taken private in technology, well, they're going to go under, perhaps causing a credit crunch. Unemployment skyrockets. The world as we know it collapses. It does everything but, quote, Billy's famous line from near the end of Predator. We're all going to die. And the stock market today took it seriously. Today we saw one more pummeling of the enterprise software stocks that we used to know and love. Salesforce, Workday, Adobe, and their Acolytes, along with ServiceNow. For some reason, the paper really zooms in on ServiceNow, and it is not optimistic. It talks about how all these companies will no longer be able to charge what they used to because too many of their clients will be able to develop software in-house using AI instead of settling for, let's say, four-year contracts with 5% price increases. Now they're going to balk, maybe ask for two years at no price increase to be sure that they are ready to move to Anthropic if Claude has a competitive, cheaper product. Oddly, the paper didn't spend time outlining the destruction of cybersecurity stocks. The market took care of that itself as CrowdStrike and Palo Alto networks fell for a second day. Truly hideous declines caused by a press release from Anthropic. They said they're moving into cybersecurity, and that was enough just to crush the whole group. I'm going to have more on that later. But for now, I need to say that this vision of global intelligence crisis that destroys the economy, I don't know. I think it's a reach. The screen reminds me of a piece of research during the initial GOP-1 craze, where an analyst was recommending buying the airline stocks because people would all weigh less and save the airlines a lot of money on fuel. Listen, I've been a big believer in AI. You know that, which is why I believe in the pioneers of AI. I believe in Jensen Ma, the CEO of NVIDIA. They report this week. He talks about how traditional software won't be destroyed. It just gets smarter. The new technology will create new jobs that we haven't even thought of yet. It's the fourth industrial revolution, for everyone's sake. And like the previous ones, it'll create a lot more jobs than it destroys. I remember when computers erased a lot of white collar jobs in the 90s, but the computer ended up being a great spur for the economy. These two individuals in the paper, well, the company in the paper, they think that that's not going to happen. They just think jobs are going to be destroyed, nothing else. But, you know what, not that long ago, everybody was wringing their hands about falling birth rates in this country, but also worldwide. The fertility rate has fallen to a historic rate of 1.6 in the country. You need an average of 2.1 children per woman just to maintain a steady population. Heck, remember the labor shortage as we came out of the pandemic? With a huge decline in immigration, we may need all the help we can get from AI automation. We're running out of workers. I thought that was the thesis. Besides, I think the 2028 timeline for all this is way, way too quick. Artificial intelligence can't wreck the entire software industry in the next two years. But there's one real problem here. The whole thesis calls into question what price to earnings multiples we should pay for tech and for other stocks. Ultimately, the rest of the service economy, which is two thirds of the total economy, may be under attack. Yeah, but as I explained how to make money in any market, the multiple is the secret sauce. It shows what we'll pay for future earnings. The problem that most stocks in the service economy and the tech economy trade at relatively high multiples. And people simply aren't willing to pay as much for them with these AI apocalyptic spheres floating around. The multiples are too high. We see it in Salesforce reports this week. This company, formerly the king of the enterprise software stocks, which has kept pace with AI by creating its own AI agents. That's good. Has lost 33 percent of its value since the beginning of the year. That's bad. It sells for less than 15 times this year's earnings estimates. That's good. A ridiculously low amount for growth stock. But when Salesforce reports on Wednesday, we will see numbers that reflect the damage in its core software as a service business, where clients pay per user. I'm worried about that. With AI making each user more efficient, the thinking is there could be a real problem here, even if it hasn't shown up yet. How do we need to ask how much of the labor expenses were in stock-based compensation, which makes a stock look cheaper than it is. And then there are the private equity companies like Blue Owl, which you'll hear about more later. Well, like many of its ilk, has been restricting withdrawals from some of its funds. They'll give you some money right now, but you can't pull the entirety of your investment out. Who knows what multiple should be put on them? I'm not a buyer of anything they have to offer. What multiple do you put on banks knowing that if this Saturnine document comes true, their earnings are going to go down big, especially the credit-related companies? Today, the money is piled into the staples in the health care companies. Can that go on forever? I think we need to be more cautious about all stocks because the market was just too easy to take down today. There are too many worries about the power of anthropic and open AI. There are too many worries about the weakness in Blue Owl. Too many worries about a fictitious version of 2028. But I got to tell you, I'm a worrier. Here's the bottom line. There's just too many things that can go wrong if we buy the wrong stocks. Don't I know it? We own some of the wrong stocks from our travel trust. We've made some sales. But I can't help but grow more pessimistic, as you'll hear at the Friday meeting that we have, When I see how easily a piece of science fiction can crush the market as if it's science fact, it's a way more difficult market than many of you think. Let's be more cautious. We have to be after what we saw today. Let's go to Leo in Texas, please. Leo. Hey, Jim. Hey, what's up? For the last few weeks. Welcome back. Thank you. Thank you. I at least got on the morning show a little bit. But yeah, thank you. OK. So my question concerns G. Vranova. I currently hold a position in that stock. And I'm wondering what your take is on whether this stock has room to run still. Well, G.E. Renova is presuming with that price range multiple that will continue to build power plants, that will build nuclear power plants, that will need more energy. It's probably the single most stock that's most positioned for us to any more energy in the country. So I've got to say I still like it. It's a big position for the travel trust. In this market, it seems like there's just too many things that go wrong now, and we're paying too high a price earnings multiple for many stocks. My buddy, tonight, every time an AI company releases a new feature, it seems it takes the whole cohort and the market down with it. I'm surveying the pain in a host of sectors and sharing how I think this self could check out. Man, in recent months, we've heard a bunch of concerns about private credit. I'm sharing with you what's going on and what the potential ramifications could be for you. And BWS Technologies is pretty up to the bell. I'm getting a read on where our country stands in the pursuit for nuclear power with the CEO. So stay with Kramer. Don't miss a second of Mad Money. Follow at Jim Kramer on X. Have a question? Tweet Kramer. Hashtag Mad Mentions. Send Jim an email to madmoneyatcnbc.com. or give us a call at 1-800-743-CNBC. Miss something? Head to madmoney.cnbc.com. Before the show got preempted by the Olympics for two weeks, we were already witnessing a nasty sell-off in any industry that might, well, just maybe, get disrupted by artificial intelligence. And it's not just technology anymore. Like I said at the top of the show, it's only gotten nastier as people ruminate about the future. They're scared. They're worried. First, it was the enterprise software place, which had been weighed down for ages because the chatbot platforms are already very good at writing code. Even though that hasn't hurt sales or earnings for these companies so far, Wall Street simply doesn't have much faith that they can keep putting up good numbers. We do not know what to pay for the earnings of a company being attacked by an AI giant anymore. but you might surmise that it certainly a lower multiple than it has been Then Anthropoc rolled out a major upgrade to Claude Code and this group got hit with another leg down By the end of January the pain started spreading The house of pain. As Anthropic rolled out a bunch of new tools for all sorts of professional services, like legal work, finance jobs, and marketing, among other applications. Suddenly, the AI displacement self-spread beyond enterprise software. Thompson Reuters, R-E-L-X, the companies behind Westlaw and LexisNexis, the two big legal databases, saw their stocks just get hammered. The former down 39% for the year and the latter down 25%. Same thing happened to the providers of financial data like FaxCent or Fair Isaac. That's the keeper of FICO. Or the big credit reporting agencies, FaxCent, which we use here on Mad Money, is now down 34% for the year. The pain then spread to S&P Global, which in addition to managing a host of indices also provides financial data and has a big debt rating business. Moody's got it, too. Even some of the exchanges sold off in the NASDAQ and Intercontinental Exchange, the parent company, the NYSE. I can understand the other pullbacks. These are industries that are being targeted directly by Anthropic. But it's insane that the exchange is rolling over. Do people think that Anthropic can create all new benchmarks? It seems doubtful. Of course, it's not just Anthropic. Earlier this month, OpenAI released major upgrades for its own coding tool, and Google's done the same thing with Gemini. In fact, when Google rolled out Project Genie, which effectively lets people use AI to make their own video games, the entire gaming industry got obliterated. Everything from Roblox to Unity Software to AppLovin' and even Take-Two Interactive. Oh, come on. The last independent video game publisher in America. What a buy that is. Now, some of those stocks have stabilized in recent weeks. Roblox rallied after it reported a solid quarter with a strong four-year forecast, although since then it's given up the bulk of those gains. On the other hand, some of the more ancillary gaming plays have gotten hit even harder. App Lovin', which mainly does advertising for mobile games, that stock is now down 44% for the year. And Unity Software, which makes software tools for game developers, seems to sink lower every day. is now down almost 61% year-to-date. Now, if anything happened while we were off-air with the Olympics, the enterprise software cohort caught a break. But we've seen that smaller rolling sell-offs in other industries that suddenly have been deemed potential AI refugees. And I've got to tell you, I think it's gotten a little ridiculous. Two weeks ago, for instance, an online insurance marketplace called Inservify released a new application that uses chat GPT to compare insurance rates. Immediately, the insurance brokerage stocks tanked. The next day, a company called Altruist came out of nowhere with an AI-powered tax planning offering to help financial advisors create personalized strategies for their clients. Immediately, anything connected to wealth management got hammered Charles Schwab, Raymond James, LP Financial. Even the mighty Morgan Stanley sold off a bit, despite the fact that it's firing on all cylinders. The stock of Intuit, which owns TurboTax, has been eviscerated over the past six months. A week and a half ago, a tiny company, too small to mention on air, that used to make karaoke machines before pivoting to freight management, announced an AI platform that had allowed customers to handle much more volume without additional staff. That sent the trucking stocks into a tailspin, even though this doesn't even seem bad for the truckers, and the group had already been red hot until this. Fortunately, they shrugged it off and bounced right back. But it's lunacy that they sold off in the first place. And look, other groups have been hit on vague AI-related fears, even without a specific catalyst. The office streets like BXP, Bernardo, S.O. Green, they've been moving lower of late, chiefly in the theory that businesses will need less office space in a world dominated by AI. CBRE, a real estate service play, was torn to pieces, even though it reported a tremendous quarter. So where do I come out on this? Look, I think you need to take the competitive threat from AI very seriously. And when we're talking about traditional enterprise software stocks, but some of these groups and let's say they're more threatened than others. Cadence Design Systems, which makes design software and Datadog and data monitoring and analytics platform have both been able to rally after it was really good quarters. That tells me there is a floor for some of these, the ones that are more insulated from AI disruption. How about this? Late last week, Claude came after the cybersecurity companies, and the whole group got killed. They got killed again today. Just miserable. I don't believe there's a genuine competitive threat here, but there's a clear and present danger to their price to earnings multiples. That's right. As I say, in how to make money in any market, this is what we have to care about now. Right now, CrowdStrike's very expensive, even as I think the business is unassailable. Like I said at the top, it's all about the PE multiple, but more on that at the end of the show. Today, Anthropic wrote out a product that sounds like it might be a serious competitor, sounds, to IBM, even though we have no surety of that at all. And IBM stock fell 13 percent or $33. That was the worst decline for the companies since 2000. Now, we'll get earnings from some of the largest corporate enterprise software companies this week, Snowflake, Salesforce. And I'm going to be watching them like a hawk to see how they react. At some point, I think they've become too cheap to ignore. I don't know if we're there. But mainly, I feel like we need to start exercising some critical thinking here. Of course, the big AI platforms keep talking about how they'll be able to disrupt all sorts of industries. They're trying to raise money. But not all of these announcements represent real competitive threats. You shouldn't sell the trucking stocks because some karaoke machine maker says that that's the technology to revolutionize the freight market. I understand the AI threat, but it has to be credible, not just a press release. In the end, you need to think about what AI can really do to these industries. The stock exchanges, I don't think they have much to fear. I doubt the financial advisors will lose much sleep over AI either. Anthropics not trying to wipe out these industries. It's trying to sell them software. Plus, don't forget, so far, nobody's taken a real earnings hit from AI competition. Instead, Wall Street's just become less willing to pay a high multiple for these earnings. And when a seller's driven by multiple compression, eventually the stocks in question will become too cheap. Maybe Salesforce will be too cheap after we see the earnings this week. I don't know. Take Charles Schwab. This is mainly an online brokerage firm, yet it's sold off for the financial advisors. Now it's raised less than 16 times earnings. The cheapest it's been in years. I think it's a steal because the AI threat here is a borderline non-existent threat. But if we're talking about an enterprise software stock with a relatively high P, it's a different story. But we saw also a company like Blue Owl, a financial company with a lot of software exposure, have to gate two funds that apparently had heavy redemptions. That's never a good sign. I am worried about why they had to do that. Why are so many people trying to abandon ship if everything's as good as Blue Owl tells us? Here's the bottom line. For the past few weeks, every time some AI platform announces a new productivity tool for a particular industry, the stocks in that industry immediately get smacked down. But some of these sell offs are a lot less legitimate than others, and they may be creating buying opportunities, which is why I want to circle back to cybersecurity at the end of the show. Ben Money's back after the break. Coming up, what can the case of Blue Owl tell you about the future of private credit stocks? Kramer's explaining why you should give a hoot next. We don't talk about this very often, but for the better part of a decade, there's been this gigantic boom in the private credit space. These are like private equity firms, except instead of buying companies outright, they make loans directly to these companies rather than, say, investing in their bonds. But now we're starting to see some cracks in the private credit ecosystem. The poster child for what's wrong with this group is a company called Blue Owl Capital. These guys are one of the leading players in the private credit market. They specialize in making loans to companies that are owned by private equity firms, especially in the technology space. They've also started to finance a ton of data centers. Now, Blue Owl came public in 2021 through a SPAC merger, and the stock posted some big gains in 2023 and 2024. Then it peaked a little over a year ago as Wall Street figured these guys would clean up under the second Trump administration. The stock managed to hang in there for much of 2025, but beneath the surface, some problems started bubbling up. See, Blue Owl controls a bunch of smaller business development companies called BDCs. These operate like miniature private equity or private credit firms, but tend to be more accessible. Some of them are publicly traded. Some are privately traded through various networks of registered investment advisors. BDCs are like real estate investment trusts and that they're pass through entities. They don't pay any corporate income tax because they have to distribute at least 90 percent of their income directly to their shareholders. As a result, they tend to have pretty high dividends. And that's made it very attractive for individuals. Blue Owl controls a bunch of these, mostly private, but a couple are public, like Blue Owl Technology Finance and Blue Owl Capital Corporation, which both yield almost 13 percent, respectively. Hmm. I bring this up because starting last year, one of Blue Owl's oldest BDCs, a private one called Blue Owl Capital Corp 2, ran into trouble. These things typically have gating rules about how much of the fund can be withdrawn in any given quarter. For Blue Owl Capital 2, it's a 5% limit on redemptions, and they hit that limit in both the second and third quarter. Now, that is worrisome. Then in November, Blue Owl came up with a solution for the redemption problem. They plan to merge Blue Owl Capital 2 with one of their publicly traded BDCs, Blue Owl Capital Corp. So investors who want it out could simply sell their shares in the open market. But, and this is a big but, enough for this, sir, Mix-a-Lot seal of approval. They also are going to ban redemptions from Blue Owl Capital II until the merger closed. Worse. The publicly traded BDC, Blue Owl Capital Corp., was already trading at a roughly 20% discount to its net asset value, what the company says the investments are worth. So shareholders who are trapped in Blue Owl Capital, too, they'll have to take a 20 percent haircut if they want their money back as soon as possible. Oh, man, that went over like a lead balloon. And Blue Owl scrapped the whole plan a couple of weeks later, saying that they'd circle back with a new plan. Last week, we finally sold that new plan. And once again, it raised some eyebrows. Blue Owl announced that it sold one point four billion dollars worth of assets from three different BDCs at 99 percent of the par value meaning nearly full price At the same time though they changed the way they handling redemptions Blue Owl Capital II, the BDC where many investors want out, is returning 30% of its capital to all investors, even the ones who want to stick with it, and suspending all other redemptions. That generated a lot of negative headlines about Blue Owl holding redemptions, even though it's more complicated than that. But the really worrisome thing here is that Blue Owl got nearly full price for the assets it sold, even though many of these assets came from publicly traded BDCs that are selling for huge discounts to their net asset value. There were some accusations of cherry picking, dumping their highest quality holdings to raise cash, and leaving shareholders stuck with the worst stuff. Management denies this, okay? Unequivocally denies it. Wall Street's not buying it, though. Plus, while Blue Owl's been cagey about who bought the $1.4 billion worth of assets, Bloomberg reported there was three pension funds and one insurance company, Cuvert. That just so happens to be Blue Owl's subsidiary. Right. Now, on Friday morning, Blue Owl's co-president, Craig Packer, came on squawk of the street. You know what? I thought he did an admirable job explaining the point of view. Shareholders clearly disagreed. Blue Owl, the parent company's stock, dropped nearly 7% on Friday and another 3.4% today. The stocks say something's wrong here. Stocks are now down more than 60% from its all-time high 13 months ago. And their two publicly traded BDCs, Blue Owl Capital and Blue Owl Technology Finance, are down 28% and 48% from their 52-week highs, both trading at massive discounts to their stated net asset value. Wall Street simply doesn't believe their holdings are worth what Blue Owl says they're worth. It's just a kind of a mismatch here. Now, I'm not trying to pick on Blue Owl. I went through all this because we keep hearing that it might be the canary in the private equity and private credit coal mine. I don't like that hackneyed phrase, but I see why people are concerned. If you look at the largest publicly traded private equity firms, many of which are also heavy hitters in private credit, their stocks have been obliterated. Really good companies. Apollo Group, Aries Management, Blackstone. You know, I like the Carlyle. I like them. KKR. TPG, they're down anywhere from 28% to 41% from their highs. Again, this whole industry has a lot of exposure to the tech sector, especially the beleaguered enterprise software space because of AI. But it's just that Blue Owl is the most extreme. According to Barclays, something like 20% of the loans held by BDCs were made by software companies. Too high. At the same time, it's hard to get a clear valuation for those loans because they're hidden within a panoply of business development companies. But judging by how the publicly traded BDCs are holding up, investors seem very skeptical. Now, I don't think it's the end of the world for private credit. If you listen to the biggest alarmists in the group, they act like these software investments are all doomed. I know it's bad. I don't know how bad. However, I need you to understand what's happening in the private credit space, because the bottom line is that things just seem to be getting worse here, not better. And if any of these BDCs start blowing up, there's going to be a lot of negative pin action. And that will not be good. who allows a case study because it seems like the most vulnerable. It really is the canary in the coal mine. But for the moment, the canary is still breathing, even if it's not exactly healthy. The situation seems fraught. And Mad Money viewers know I am a seller, not a buyer, of fraught situations. Sell, sell, sell. Don in Florida. Don. Hey, Jim. Thanks for taking my call. I've been a longtime watcher, and I have an interest in SoFi. I think that I like the company. I've bought some, but it just keeps going down. What should I do? Well, I'll tell you, at 26, I don't know, in January, I said I thought that the stock could keep going down. It was too high. I now look at it and I think, wait a second, given its growth rate at $18, I didn't like it in the high 20s. $18? Let's do it down 30 percent. I say let's look at it again. I thank you for your allegiance, and we will know more about SoFi. Let's go to Donald, New Jersey. Donald. Hey, Dr. Kramer, how are you? I am good. How are you? I'm doing fine. All right, neighbor. My stock is Robinhood, Jim. Okay. Here's my problem with Robinhood. It sells at 30 times earnings, but it has way too much business that I think is crypto. and until they get so that the balance is less crypto and more, say, equities and bonds, I think it's going to be too volatile and it's going to trade like Bitcoin. All right, guys, Blue Owl is the canary in the coal mine of private credit, and the canary is still breathing, but it's something we must monitor, and it worries me. Now, much more mad money than it, including my post earnings to choose it, but something that doesn't worry me, BWX Technologies. Nuclear power is a buzzy term on Wall Street, but could this company, which is one of the most storied in the industry be the best way to play the theme? I've got the CEO. And Anthropics clawed as haunting cybersecurity and enterprise software stocks. Are the concerns warranted, or is it the price derries multiple that matters? I'll give you my take of all this pain in tech. And then, hey, by the way, we got rapid fire, of course, tonight's edition of the Lighting Round, so stay with Kramer. This has been a very good market for the defense contractors and the nuclear energy place. So what about a company that's in both of these businesses? I'm talking about BWX Technologies, which makes nuclear reactors for submarines and aircraft carriers. Here's a stock that has more than tripled over the past three years, up 100 percent over the last 12 months, 15 percent since the beginning of 2026. The Pentagon's budget never stops growing. And at the same time, their commercial nuclear business has been cleaning up. After the close today, BWX reported a terrific quarter, a top and bottom line beat with 95 percent sales growth from their commercial vision. We got to look into that. Even better, management issued a very bullish full year forecast. Can this stock keep climbing? Let's check in with Rex Jeveden. He's the president and CEO of BWX Technology. Mr. Jeveden, welcome to Mad Money. Thank you, Jim. Thanks for having me. We're thrilled to have you, sir. You know, we just explained your terrific business in nuclear propulsion submarines. but it is your first time on. So I want to give you a chance to be able to talk about how you're positioned, not just with defense, but also with commercial. Sure. Thank you. Yes. You know, BWXT sits at the interesting intersection of national security, energy security, and certainly AI in the future. And we're sort of sitting at the center of that Venn diagram, and we're extremely well competitively positioned in both of those markets. So we've got a government operations business. It's about 70 percent of what we do, national nuclear security. And then about 30 percent of it is our commercial business, which is for commercial power reactors and the like. And we've got strong growth characteristics in both businesses and certainly good, really good competitive positioning. Now, the commercial business, you sold 95 percent year over year revenue growth. What's happening that you can have that extraordinary growth? Well, lots of different things are happening in commercial power, certainly refurbishment projects are happening. We had some acquired growth in there. We bought a beautiful business called Conetrix. And so we're seeing growth in engineering services and growth in fuel refurbishment projects. And then new builds, we're starting to get some growth around those as well. All right. So, Mr. Durbin, one thing I want to point out, there are a lot of nuclear companies that come on air and they've been in business for a couple of years. And I think that's terrific that people want to move into nuclear. But I don't think people understand your long background and what you guys have done. And maybe they don't understand the history of BWX technologies. Can you tell us that? Yeah, I certainly can. So BWXT goes back to Babcock and Wilcox, which was formed in the middle 19th century. So we've got 170 years of industrial history there. And we've been doing nuclear for literally 70 years, starting with naval nuclear propulsion back in the 50s. And so we get a super long legacy. Now, BWXT itself didn't become a separately traded public company until 10 years ago. But even though we have that sort of old school industrial history, I think it's pretty interesting that in the 10-year history we have as a public company, a separate public company, we've tripled literally the top line of the business. And we've also tripled the bottom line of the business. So old school industrial company, but we're exhibiting, I think, high-tech growth characteristics. And I think because of that history, we had a 30-year shipbuilding plan, which was finalized in March of 2024, and you're very integral to that. Yeah, we absolutely are. So BWXT, our primary line of business is that we make all the nuclear reactors for the nuclear Navy. So for literally every submarine and aircraft carrier, Virginia-class submarines, Columbia-class submarines, means Ford-class aircraft carriers. We manufacture the fuel. We manufacture the reactor itself, the pressure vessels, the steam generators, pressurizers, control rod drive mechanisms, literally just about every bit of mechanical equipment in those compartments other than pumps and valves, and we're the only supplier to do that. So that 30-year shipbuilding plan is super meaningful to backlog visibility at BWXT. Well, I'm sure that has to be appealing to the companies that are doing AI-driven demand growth for data centers, correct? Yeah, I think that's right. So you look at the characteristics of growth around BWXT. I've said they're kind of three layers to the cake on the commercial side. Certainly, there's decarbonization, the desire for clean baseload power, which nuclear will deliver. There's electrification of everything. Transportation, industrial processes are moving from behind the meter to on the meter, so to speak. And then you've got AI data center demand out there in the future. On the government side, it's a different set of growth drivers, right? We've got recapitalization of the nuclear triad, reconstitution of what I'd call Cold War capabilities, and then sort of new domains of application for nuclear power and propulsion for government missions. So there's really quite a, there's quite a demand that we see on both sides of the business. And how about National Nuclear Security Administration, that enrichment contract? Yeah, so that's what I was referred to in that second layer of growth in the government business. You know, we sort of laid down our arms in the early 90s, 35 years ago, and stopped doing things like enriching for naval nuclear propulsion and making high-purity depleted uranium. A lot of those uranium products we really just stopped making and now we depleting those stockpiles and we have to do them again So BWXT is a natural company to do that because we understand uranium processing and we have the licenses and regulatory relationships for it So we won three point three point one three billion in new contracts with the National Nuclear Security Administration in the third quarter to do both high purity depleted uranium and defense fuels. Now, where do you think we really are with nuclear in the country? I know that when I speak to G.E. Vinova, who does nuclear, they're saying, look, you've got to be realistic, Jim. It's really if you wanted to build a new nuclear reactor, even a small module, you really shouldn't expect any success if you broke ground now until 2031, 2032. Is that, do you think, too conservative? I think that's about right. But that's that's the you know, that's the end point for a new plant. In the meantime, there's a lot of business to be had. I mean, we are right now manufacturing a microreactor for the government that will deliver next year. That's generating revenues for us. In the case of GE, which you just mentioned, BWXT is making the reactor pressure vessel for that first reactor that's going into southern Ontario. We're manufacturing that. We've bought the forgings. We're doing the cladding and integrating that vessel right now. So for a company like us that makes pressure boundary components and is involved in long lead materials, the revenue shows up pretty early, actually. Wow. Okay. I know we're trying to get up there. That's an extraordinary story and a hopeful one, I think, for our country. Well, for Canada, but I really want us to have nuclear power. It's been my bias for a long time. I want to thank Rex Juvedon. He's the president and CEO of BWX Technologies. Rex, it was great to have you on this show. I hope you come back. God, I'm so happy to be here. Thank you. Thank you. Before we start the lighting around, there's a special offer to join the CNBC Investing Club going on right now that I do not want you to miss. Get all my exclusive insights and market takes when you scan the QR code behind me or go to CNBC dot com slash Kramer Club to join today. And now it is time to start for the lightning round. Chris, Robert, goes on the same as stocks that are buy by buy. So, of course, I have done my step for doing play the sound. And then the lightning round is over. Are you ready? Okay, that's on the lightning round. Let's start with Terry in Washington. Terry. What's that, boy? It's Jimmy from Seattle. Nice. Action alerts member. Oh, excellent. Thank you for letting me retire at the age of 57, Jimmy. God bless you, buddy. Thank you. Thank you. Thank you very much. I got a question regarding the data center, Jimmy. What's the best play? I got Vertiv. Do you think of, like, Ebernova? Well, Vertiv's the best one. No, Vertiv's the best. I love Vertiv. That's, of course, the chairman of that is Dave Cody. It just had a very big jump, so it might pull back because the market's gotten ugly. But just be aware, it's a very good company. Let's go to Dave in Illinois. Dave! Dr. Kramer, how are your and Lisa's recoveries coming, my good man? Mine is ahead of schedule. Lisa's is behind schedule. Thank you for that. Great. Jim, this $16 billion company is a one-stop shop for all things military ships, including build, rebuild, and overhaul. Jim, your thoughts on Huntington Ingalls. Huntington Ingalls has been a buy, Dave. It's been so right for a very long time. And you know what? It's going to continue to be right because it's not that expensive a stock. And you're absolutely right. It is the best thing we have when it comes to the Navy. Let's go to Bill in Texas. Bill. Booyah, Jim. Booyah. Proud club member, long-time listener here. Excellent. Thank you. You're the man. Oh, thank you. How can I help? I just wanted to see if it was time yet to maybe dip a speculative toe in the water on Supermicro. No, I'll tell you the truth. I mean, I would rather have you, if you're going to do that, buy Dell, although Dell is about to report on the 26th. But Supermicro is still my no-fly zone. I'm sorry. Let's go to Eddie in Virginia. Eddie. Hey, Jim. Eddie P. Newport News. Booyah. Oh, yeah. Booyah. Back. What's happening? Jim, I'm looking at a stock. No tariff fears. No AI disruptions. Printing money like the Fed. EDPW. A little known name. What's your thoughts? Yeah. A pawn stock that sells at 15 times earnings, it really is just a credit company. I don't think there's anything wrong with that. I think it's a very good stock. And it's a company I have not had to use them. But, boy, I'll tell you, it's a well-run company. How about that? Let's go to Sam in Pennsylvania. Sam. Jim, I hope everyone is safe there in New York digging out from the snowstorm. We got hit pretty hard here in Philadelphia. I just wanted to highlight that. I know. Wow. Quite a story. Anyway, I'm calling Dave. I'm an interesting company. The company is Rambit. They make memory interface solutions. No, Rambles has not kept pace. It's not kept pace with the others. I think it could. In that space, I do prefer Texas Instruments. I think that they are a better buy, as is analog devices. Let's go to Brian in Pennsylvania. Brian. Yeah, Jim, thanks for taking my call. Of course. What's up? Listen, I'm glad you're back, even though I enjoy the curling. Thank you. Jim I've owned Chevron since the early 2000s When they bought out Unical So my cost basis is really low The stock has run up quite a bit recently So I'm wondering if I should take some profits Or do you think it's going to run up a little bit more I think it can go up a lot I think that Chevron has the 3.85 yield They've always been a big believer in that In making that dividend big Mike Wurst is doing really well I would hold on to that And that leads up a conclusion of the Lightning Round The Lightning Round is sponsored by Charles Schwab. Coming up, is Anthropix Claude AI really coming to bury every industry? Kramer's not sold. And he's drawing his line in the sand. Next. So a guy stops while I'm checking into my hotel last night because of the blizzard and all that shut down traffic in Manhattan. I recognize him. Executive bank. Great friend. We shake. And immediately, like a complete lunatic, I say, you know what? Maybe there has to be a line drawn somewhere. I mean, some line where we can't just say, that's it. I'm not going there. I'm not going to say that such and such an American industry is going to be destroyed by Anthropic. You know when you get lost in thought but are actually talking to someone? I mean, I don't know. Maybe you don't. Doesn't matter. I'm not bothering to read the room here. I just keep going. I mean, like it's 2008 all over again, except it's tech and private equity, a whisper, a short seller, a fearful person who just wants to get things rolling. That's what's happening now. It's happening. It's happening. They could take down anything. Then I had this brief moment of self-awareness and reflection where I apologize for going into this rant out of nowhere. But of course, I wasn't done. You see what's happening right now, don't you? Right now, Anthropic, which just raised money and is working, doing an IPO later this year, can put out a press release about anything. And anyone in that space is finished, done, stick a fork in it. I think he may have nodded. I don't know. He really wasn't paying much attention. I kept going with the my log, though. They put out a release about cybersecurity and how they can protect anything, and that's it. That's the end of those stocks. Every software company is so easily taken down. It can't be owned anymore. I'm not playing that game. And then at that point, I said I was sorry. And I tell him I think I'm kind of lost in thought. He wisely made his mistake, his escape. He probably wished that had happened earlier. But even though I sound like a crazy person here, a total lunatic, This is where we are. I know Anthropics Claude will disrupt a bunch of different businesses, but not everything because some missions really are critical and require human touch. I know George Kurtz from CrowdStrike, whose stock was pummeled by Anthropics cybersecurity release for two straight days now. He put out a cogent retort on LinkedIn yesterday called, Did Claude Just Kill Cybersecurity? Kurtz runs with one of my favorite bits. He asked Claude directly, Can Claude Code build me a tool to replace CrowdStrike? The answer, quote, I appreciate the ambition, George, but I have to be straightforward. Building a replacement for CrowdStrike isn't something I can do here and wouldn't be responsible for me to suggest otherwise, end quote. Immediately I thought about the half dozen people who told me the exact opposite and urged me to sell CrowdStrike as if it's some non-proprietary hack software as a service business that merely analyzes your data and makes some recommendations. George explains the distinction best, quote, Claude code security finds bugs in your source code before they are exploited, proactive, development-stage security, end quote. CrowdStrike, on the other hand, detects in response to threats as they happen. Very different missions. The CEO of CrowdStrike is not in denial about Claude's strength. He goes on to say that, quote, AI is powerful. It's transformative, and it absolutely makes security better. But AI doesn't eliminate the need for security. It increases it, end quote. Now, I don't expect everyone to read some CEO's LinkedIn post and change their minds. Short sellers have made a ton of money rumoring down software companies, and they're not going to change their playbook for something as pedestrian as the fundamentals. But let me just say, the issue here isn't what Claude can or can't do. Claude won't even try to do what CrowdStrike does. They're not trying to replace the cybersecurity industry. They're trying to sell tools to the cybersecurity industry. The real problem is that Claude's very existence does attack enterprise software. Most of the people who trade the enterprise software stocks have no idea what these companies really do. They're just traders. They all claim to be mission critical. They all claim to save you money. They all have something called annual recurring revenue, and they're all expensive. Those stocks are all way too easy to take down because the price during these multiples are still much higher than the average stock. Maybe they no longer deserve the premium. That's what's going on. I don't want to be part of the takedown. I want to draw a line in the sand. Of course, who the heck am I to do anything? Well, maybe I'm a guy who didn't try to rumor down every bank in 2008. Maybe I didn't want to say gold was worthless because of crypto or that quantum would destroy every form of computing. And now I'm a guy who says that AI won't destroy the cybersecurity business, even if it puts a lot of pressure on most enterprise software stocks and causes me to act like a crazy person because I just don't want to rumor down good companies that will thrive, but with lower stock prices. I like to say this always. Bullmark, it's all my problem to find just for you, RadioMitMoney. I'm Jim Cramer. I'll see you tomorrow. All opinions expressed by Jim Cramer on this podcast are solely Cramer's opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by Cramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Cramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Cramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit CNBC.com forward slash Mad Money Disclaimer.