Mad Money w/ Jim Cramer 2/24/26

What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things. Julia Borsten hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people are friends. Hey, I'm trying to make a little bit of money here. My job is not just to entertain you, but to educate, teach you. So call me at 1-800-743-CNBC. Tweet me, Jim Cramer. Why does Wall Street have to make things so darn hard? Right now, with the entire market turning against the once beloved software companies and the old Magnificent Seven, we got this new silly term to express what investors have allegedly fallen in love with. It's called Halo. which means heavy assets, low obsolescence. Today, the market looked for halo wherever it could find it. And the hunt produced solid results with the Dow gaining 370 points, S&P jumping 0.7%, and Nasdaq advancing 1.04%. Now, today was a recovery where we sold buyers for everything. Why? Because we're getting oversold. Too much buying pressure on halo. Too much selling pressure on the new despised software companies. What's really going on here? Are we honestly looking for companies with low obsolescence? No. Do we really care about heavy assets? Hey, if that were true, how do you explain the strength of the consumer packaged good stocks like PepsiCo, P&G, J&J, and Colgate? They're the hotties. I think the HALO acronym misses the point entirely. What do we really want? Well, we want companies that make things and do stuff that we can understand. And we want to avoid stuff we can't or don't comprehend because you can't get your head around it. That is probably the kind of stock that Anthropic can knock off, can wreck with a simple press release. And you better believe that release will come out because as good as Anthropic is at creating agents that write code, it is even better at writing press releases that target specific industries. It may be the best I've ever seen. I mean, perhaps they're so important that humans write them. Anthropic introduces disruptive press releases in an aggressive cadence. And they make it sound like Anthropic is going to wreck whole sectors, taking with them the investors and the companies and those that lent the money, destroying slap-happy private equity and private lending outfits left and right. Now they're having a spat with the Department of War. I hope Anthropic leaves the Department of War intact. it's useful. Yesterday, Anthropic put out something that sounded like it could hurt IBM, and IBM stock lost over 13% like this. It was one of the worst declines in ages. IBM has the same problem as the hard-hit enterprise software cohort. It's difficult to understand because some of its businesses are complicated. It was an astonishing decline for a company that is actually doing quite well. Unfortunately, all the sellers need to know is that there's a successful software company, or in the case of IBM, a hardware company that sell software. Anthropic will mimic it for less money, but just using its AI. Customers will pause their purchases to see what Anthropic can do, or maybe just ask vendors for shorter contracts for less money. Either way, it's bad news. Could free some IBM business? I guess people think that. Suddenly, once unassailable companies with great moat seem like they might be worth nothing. Yes, nothing. Maybe these software stocks can have periodic bounces, But if you don't know what they do, if you don't know what they make, if you can't explain the business to someone else, you can't own it. The bounces are all relief rallies. A few days or hours reprieved for more selling. They caused the stocks of private equity companies that are invested in disrupted industries to bounce, too. I mean, Workday had a relief rally today, but then it reported disappointing numbers after the close. Ouch. No relief for you, Workday. You should sell the bounces because they're temporary. I say all hail Anthropic, the destroyer of everything. At least that's the storyline that they're telling, and now Wall Street believes in it. Now, let me tell you why Halo is funny, but too abstruse and stupid for us to use. We don't really want stocks of companies with heavy assets and low obsolescence. Oh, give me a break. We want the stocks of companies that make products that are in short supply that people want and have heavy demand. It just so happens that the companies which make the most in-demand products in the world are companies that make memory devices for every kind of technology, especially artificial intelligence. There are four of these, SanDisk, Western Digital, Seagate, and Micron. These are companies that have to allocate orders carefully because they have so little product. Memory prices can skyrocket, and customers have no choice but to pay up because AI data needs to be processed and stored. There won't be a price where these memory and storage products do get too expensive, but we don't know what or where those prices are. How high, how big? I don't know. There's been no demand destruction of any real kind because this stuff is essential. These stocks go up every day before the market opens because the buyers simply can't wait until 930. I've never seen anything like it in my career. Now, someone did put out a report today saying to dump SanDisk. It might give you a good chance to buy some. I am inclined to take it. Watch it start going up at around 9 o'clock. Second most powerful theme, again, a technology theme, the semiconductor capital equipment companies that make the machines needed to boost memory and storage production. There are only a handful of these. Think KLA Lamb. And then there are other companies that test what these companies make. Again, only a handful. I like Teradyne. This memory storage is the most severe shortage I have ever seen in my career. It was not orchestrated by design. It occurred because the CEOs in the supply chain were caught flat-footed by the flood of data and didn't believe that the data center demand could be so insatiable. They had been surprised positively before, only to be crushed when a ton of supply came in online to meet the new demand. Not one of these companies foresaw this data center explosion or the power of AI. Practically, nobody in the industry did, except for, of course, one person, Jensen Wong, the CEO of NVIDIA, which reports tomorrow. By the way, he did tell anyone who would listen that the shortage would occur. Still, I don't blame the memory makers for holding back on adding capacity. They've been burned too many times before when demand eventually dried up. This time it's not drying up. It's an ocean of demand. We want companies that have so much demand that they have to ration out their product to customers. Because there's not enough capital equipment to expand memory production, and these machines take a long time to build, The shortage likely won't end any time. It's just not going to end any time soon. And by the way, it's not about money. It's about time, the time it takes to make the stuff. Many bears say it can't last, and there are a ton of them. The bears always come out of the woodwork when your stocks are red hot for a long time. They're betting that one of the big hyperscalers of the clients will pull back and stop spending. But with big deals like the $100 billion order metaplaced with AMD this morning, you better believe they're going to need all the memory and storage they can get. Now, I keep hearing about halo names. They were supposed to like energy, fine, but there's a lot of energy out there. Hamburgers. I mean, huh? Have you looked at B prices? Steel, not if the tariffs go away. How about health care? Just the distributors. Anything in finance? Right now, we're hearing that finance will be destroyed when white-collar jobs are destroyed by AI. Until we find out that's not possible and people get a little more positive, you've got to stay away from that group. Skip it. What else do we need so badly that we'll pay anything for? Well, how about Caterpillar? We like their stuff. Turbins and GE Vinova. Hey, how about things that move other things? FedEx is good. How about value-oriented companies like Walmart, Dollar General, Costco, Dollar Tree, TJX? They report tomorrow. All those companies make things and sell them cheaper than the other guys. You know what? Johnson & Johnson is good. Colgate, Procter & Gamble, Hershey. Don't think halo. Think understandable things. The bottom line, I know it's a small list, but they all make things and do stuff we can understand. They're all on demand. There are others. I can't think of them right now. That's because the anthropic right now is in my vagus nerve right here. And it's threatening my whole cerebellum right here. So let me get back to you. Let's go to Robert in New York, please. Robert. Jim, I've got to tell you this. It's so nice to hear your voice. And it's so great to be on the number one show in the country, number one business show in the country. And I want to tell the listeners that you made me money again. and they have to go out tonight and buy the book, How to Make Money in Any Market. Kindergarten should have this as a must-read. Business schools should have this as a must-read. I want every listener in America to go out and buy Kramer's book, and you will make money in any market. Okay, Robert, that was the $10,000 one. Can I have the $15,000 endorsement now? Just kidding. I know you speak from the soul. You speak from the soul. All right? Thank you. Okay, let's get to work. Jim, this next stock has been on fire. Year-to-date, this stock is up over 72%, and I think it's going much higher. They're a manufacturer of power generation products for residential, commercial, and industrial markets. Their CEO is very, very solid. But here's the kicker. The potential revenues for generators for the AI, not to mention the acquisition of Enercon, will bolster this company's manufacturer capabilities for AI. The board has announced a new share repurchase program with a buyback of 500 million shares. Now, let's go to the videotape, ladies and gentlemen. Jim Cramer said on September 24th when I called him, Robert, you've got to hold this stock. This is a good company. And it was 167. And you know where it is now, ladies and gentlemen? $235 a share. Generac. All right. Well, blind squirrel finds nut. I got to add that because people say, oh, he's cherry picking. Of course, it wasn't me. I will tell you this. What happened is it was a business consumer company, and people got a little way late because of how much it cost to be able to borrow money. It's become a business to business. When it became business to business, it went to the moon. And I tell you now, it's going to the stars. And I want to thank Robert. That was a touching testimonial. We want companies that make things and do stuff. We do not want halo, halo. We want good stuff. It's in demand. Well, everybody, tonight, SoFi's been taken down with its broader AI sell-off, but is it warranted? Then, we're learning that building data centers is a lot more expensive than we thought, so who could benefit from this development? I'll reveal the name of an energy company that I think you should keep an eye on. And Animal Healthcare, Olonco, struggling to gain traction following the 2018 spinoff from Eli Lilly, but now it really coming together I going to get the state of play from the CEO himself 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. Houston hosts, CNBC changemakers and power players. New episodes every Tuesday, wherever you get your podcasts. So let us know that I got this call from Don in Florida. Want to know about SoFi Technologies, the digital bank that tends to trade more like your typical financial tech company? Historically, I've been a big fan of this one. I kept recommending it as a quote fire in late 2024 and the bulk of 2025. Eventually, though, the stock got just too hot to handle. So by peak last November and by December, I was telling you to wait for a pullback when it was at 25. And then in January, when the stock ticked up to 28, I reiterated that it just needed to come down more before I tell you to buy it. And you know what? Now it has. It's at $18 and change off about $10 from when I said hold off, dragged down by the broader AI displacement sell-off. We've seen some nasty declines in health management companies because of the stock brokers, too, and former fintech darling. Somehow that's come to include SoFi, which is now down about 30 percent year to date. After that call from Don in Florida last night, I got to tell you, I thought it was worth coming to this one with fresh eyes. Because at the end of the day, SoFi is a bank and banks are not under threat from artificial intelligence. They're consumers of AI, not the prey of it. Think of it like that all times. Ask which they are. It just seems that Wall Street hasn't gotten that memo. When SoFi reported at the end of January, the stock just got clobbered. And it's been falling over since. But you know what? The actual numbers were excellent. 37% revenue growth, 160% earnings growth, both higher than expected. SoFi's overall membership count grew by 35% year over year. 35% to 13.7 million people. Their net interest income jumped 31%. Fee-based revenue was up 53%. I mean, this is a great business. It is practically printing money. Now, SoFi's guidance for the current quarter came in a little light on every single line. But look, these guys have a long history of practicing UPOD, which is under, promise, and over. Deliver. The company has beaten revenue and EBITDA expectations in each of the last 18 quarters. It's reported it's coming public in 2021. And it's beaten the earnings estimates for the last nine quarters in a row. That's not shabby. More importantly, when you look at SoFi's full-year forecast, these numbers are nothing more than sensation. For full year 2026, SoFi expects total member growth of at least 30 percent and with revenue growth coming in at roughly the same level. Adjusted EBITDA, net income and earnings per share three, OK, are expected to grow by 52 percent, 71 percent and 54 percent respectively as gross margins expand. Now, all those numbers were much better than Wall Street was expecting when SoFi issued that forecast about three and a half years, three and a half weeks ago. I mean, that's so no, it's just about three and a half weeks and then they just clobber that. On top of that, SoFi issued a way to call medium term guidance, saying that it expects adjusted net revenue to rise at a compound annual growth rate of at least 30 percent for the next three years. Meaning that through 2028, I love that kind of thing. In that time frame, SoFi also expects its earnings per share to rise at a 38 to 42 percent compound annual growth rate. Guys, these are astonishing. There's absolutely nothing hurting this business right now, which makes it kind of crazy that the stock pulled back from $32 to $18 in the past few months. Again, this is not some throwaway financial technology company that can easily be replaced by AI. It's a fast-growing bank with digital traffic. So I've been recommending this stock all the way back since it was $5. And what caught my attention and why I like it so much, frankly, is its CEO. It's Anthony Noto. I've known him for almost 30 years. when he was a banker who helped bring the Street.com public in the late 90s. Because I think he's made this bank into the preferred financial services platform for millennials and Gen Zers. Nothing I've seen lately has changed that assessment. In fact, I feel like the thesis is just stronger than ever. SoFi has phenomenal product growth in the fourth quarter, largely because of cross-buying, meaning customers take more than one product from these guys. About 40% of new products opened in the fourth quarter were done by existing SoFi members. They're gradually colonizing the consumer banking business. Now, consumers increasingly view SoFi as a full financial services platform rather than just a purveyor of individual financial products. They might come to SoFi initially for a personal loan to help pay off credit card debt. But then they find that they like the company's digital banking platform, too. Then they find out that SoFi Invest, they found this product called SoFi Invest. That's your self-directed brokerage platform. It's pretty good. Or they realize that they might like some of the company's robo-investor or ETF solutions. or they might move an IRA account to SoFi. The company's current success with cross-selling, combined with the robust guidance for not just 2026, but the next three years, I think it tells you all you need to know. Buy, buy, buy! Finally, let's talk about why I think it's safe to buy SoFi right here. Right now, after its severe pullback, the stock now represents good value down here at $18 and change. Management says they can earn $0.60 per share in 2026, meaning SoFi is trading at around 31 times this year's earnings forecast. OK, so let's see. That's not cheap in absolute terms, I know. But you've got to remember that SoFi is on track to grow earnings at 54 percent clip this year and to keep growing earnings about around 40 percent through 2028. Growth-earning money managers like to look at what's known as the PEG ratio, PEG. That's price-to-earnings-to-growth. And SoFi's got a very reasonable PEG ratio or PEG ratio of just 0.6. The lower, the better with the PEG ratio. Paying just over 30 times earnings for a company with a 50 percent plus growth rate is a legitimate steal. Plus, the stock looks outright cheap based on some of the earnings projections for the out years. Looking at Wall Street's earnings estimates, SoFi sells for around 23 times next year's numbers and just under 19 times the 2028 numbers. But don't forget, those estimates, again, are probably too low. If you believe SoFi's medium-term guidance, and I do because I think CEO Anthony Noto does, again, have that habit of beating the expectations, then the stock's really trading about 17 times as 2028 earnings forecast. That's really good. Bottom line. For months now, I've been telling you that SoFi's stock needed to come in a bit. I was concerned it could drop a lot after its enormous gains of 2024 and 2025. Well, that's what happened. It pulled back more than 40 percent from its mid-tovember highs, coming all the way down to 18 and change. And now I think it is too cheap to ignore. The business is strong. The forecast is beautiful. And when you look at what's been dragging SoFi stock down, the AI displacement thesis, the stock feels like the proverbial baby that got thrown out with the bathwater. It's a bank, guys. It has a federal charter. It's not going to get replaced by Claude or OpenAI. Frankly, if I were one of those two and I wanted to destroy the banking sector, I just buy SoFi or at least send out a press release that you plan to buy SoFi. That's all it takes these days. Bad money's back after the break. Coming up, it's still February, but spring may have already sprung for Bloom Energy. Kramer's picking apart the numbers to see if the stock can stay fertile next. What made you confident that you could do something that hadn't been done before? I have no fear of failure. Trailblazing women changing the game. One of my favorite pieces of advice, think about what your boss's boss needs. Leadership can look in many, many different forms. It really does come down to just trusting yourself. Life is short and you just got to think big to accomplish big things. Julia Borsten hosts CNBC Changemakers and Power Players. New episodes every Tuesday, wherever you get your podcasts. Over the last few months, we've learned that building data centers might be a lot more expensive than the hyperscalers were expecting. That's not ideal for big tech, but it's for the companies that supply equipment or keep these warehouses full of servers running. I want you to consider a company called Bloom Energy. We've talked about them. They make solid oxide fuel cell systems that can supply clean energy right at the place where it needs to be the most. Their fuel cells take hydrogen or more commonly natural gas and break them down through an electrochemical process without combustion, without combustion to create electricity. The hydrogen ones are clean and the natural gas ones are ideal for carbon capture because they don't actually burn anything. So, well, you know what? Green still matters, people. Think of it as a perfect backup power generation system for when the grid does go down. That's why the stock is up in astonishing rate. 1,837% over the past two years, including a nearly 600% gain since last June and a 91% gain year to date. But whenever you see a stock rally like that, you have to wonder if the real, is it the real deal, especially when we see this kind of move before, right? I mean, think about it. See, Bloom Energy came public almost eight years ago at $15 and quickly ran up to $38 in September of 2018 before reversing and then spending the next year going lower. Eventually, the stock bottomed $2 and changed in 2019. Then its stock soared during the COVID year, bull market flying to $45 in February of 2021, only to roll over again, ultimately sinking to about $8 at its lows a couple years ago. Bloom then caught fire thanks to the rise of the data center, racking up some magnificent gains. Now, of course, the stock got hit hard when the data center trade cooled off late last year, remember? Getting cut in half. early November through mid-December. Since then, though, the stock's come roaring back and it's now well above last year's highs. Now, I've got to tell you, I think this one's legit. I just don't know if it's too legit to quit. Bloom Energy's latest rally is not like what we saw in 2018 or 2020. This company has announced a series of major deals with a set of very legitimate partners. Data center operators are desperate for on-site power solutions. And this is a test of technology. Walmart, Google, FedEx. They've been using Bloom's fuel cells for years. What's changed is that demand for them is now off the charts. In late 2024, Bloom announced a deal with American Electric Power, the Ohio-based electric utility that operates America's largest power transmission network. AP does electricity better than anyone, and they wouldn work with a company that more of a science project than a legitimate player At the time the announcement AP ordered 100 megawatts of fuel cells from Bloom Energy with the option to buy another 900 megawatts if they wanted to At that original announcement, an Ohio regulator greenlit a project among AP, Bloom, and Amazon Web Services last summer. And just at the beginning of the year, AP disclosed that it's buying the full thousand megawatts of fuel cells from Bloom for $2.65 billion. I mean, talk about an endorsement. Now, last July, Bloom Energy announced a deal to deploy fuel cell technology at select Oracle data centers. And it's got a great partnership with CoreWeave, too, getting back to 2024, when CoreWeave was a company most people hadn't even heard of. They really are one of the best at building data centers around. So their endorsement, CoreWeave's endorsement, carries a lot of weight. What else? Last October, Bloom announced a $5 billion partnership with Brookfield Asset Management. Now, that's an investment firm that specializes in major infrastructure products, including data centers. That is a huge endorsement. Brookfield might be the savviest of data center creator financiers. I really have come to really like these guys. If Brookfield says they're good, they're good. Of course, this story is not just about contracts. It's also about sales earnings. I wouldn't be so confident about Bloom if the numbers weren't excellent. Bloom Energy first turned profitable. It's profitable in 2024, reporting 28 cents of earnings per share. Then last year, their earnings tripled to nearly tripled to 76 cents. We found out that the final result for 2025, about two and a half weeks ago on Feb 6, when the company delivered a stunning set of fourth quarter numbers. Bloom posted a massive revenue beat while their earnings came in at 45 cents per share. I mean, the analysts were looking for 31. More importantly, Bloom's new full year forecast was much, much better than anyone expected. They got it for $3.1 to $3.3 billion in sales. Wall Street was just looking for $2.55 billion and said to expect the earnings to go to $1.33 to $1.48. You know, people are looking for $1.11. This may be one of the best beats of the year. In other words, after Bloom turned profitable in 2024, then their earnings nearly tripled last year. They should roughly double again this year. The stock's been flying because of that big AEP purchase order and this unbelievably strong quarter. All that said, while Bloomberg Energy has become a phenomenal growth story, that doesn't necessarily mean the stocks were buying here. We got to just we got to like suss us out a little. But when I first covered this story back in September, I admit that I said the same thing. Wait for a pullback. But that turned out to be way too cautious. The stock was only 73 at the time and you would have more than doubled your money if you bought it there. I heaped a ton of praise on the company, but the stock had already run so much that I was afraid to pull the trigger. Still today, Bloom rallied another 3.7%. And 166 is trading 118 times the midpoint of this year's earnings forecast. If you're willing to use the estimates for the out years, the stock sells from 57 times to 2027, 36 times 2028. That's more reasonable, but it's not what anyone ever called cheap. Besides, a lot can happen between now and 2028. Plus, don't forget, Bloom is an incredibly volatile stock. I mean, there's a pretty good chance that we get another pullback here. One that gives you a better, more palatable entry point. Sure, the stock's had a stunning rally over the past few months. That was in part because of short covering. And at this point, I'm betting most of short covering is on its course. At the same time, it'll become harder and harder for Bloom to surprise the upside, simply because when you keep beating the numbers, the analysts finally get YC and they take the numbers up really big. Last time, Bloom had a big pullback in the final month of 2025. The stock fell almost 50 percent in a course of 5-0 in just over a month. Of course, I don't think you can bank on that happening again. But if we get, say, evidently a 20 percent pullback, I would feel a lot more comfortable recommending this one. Bottom line here. If you're questioning whether Bloom Energy's fundamentals are real, I got to borrow a line from the legendary Terry Hatcher in Seinfeld. They're real and they're spectacular. Oh, Jerry in Florida. Jer. Jim, I saw your interview with the CEO of Aero Environment and invested in AVAV. I'm curious now how serious the radar problem is and what kind of impact that's going to have on their bottom line, their revenue and their backlog that they have with the government contracts that they hold. Well, look, it's a great question. I think that they, look, I think that in the end, this is a company that's loved and provides a valuable service and they're going to fix it. You know, I like this company from when it was literally like a teenager. And then when it was like 100, I said, buy it. I can't back away from it because of that problem. I think that this company is a very good company, very well run. The data center build out has been terrific for energy players like Bloom. And you don't have to question their fundamentals either. Now, there's much more money ahead, including another winner. Mike, we're going to talk to the CEO of Elanco Animal Health, moving higher today on earnings and humanization of pets theme, back in fashion. I'm going to sit down with the CEO. Then the enterprise software space has been disrupted by AI, as I keep talking about, but I've got to get you on my page here. So I'm going to give you my forecast on how I think things could shake out. And, of course, all your calls rapid fire in tonight's edition of The Lightning Round. So stay with Creeper. I love a good comeback story. Right now, there's a great one playing out in Alonco Animal Health. That's a veterinary medicine company spun up by Eli Lilly all the way back to 2018. Stocks struggled to gain traction for a long time, but it's now up 137% over the past 12 months and almost 70% since the start of 2026. Teo Alonco rallied another 6.6% after it reported a very strong quarter, 12% revenue growth driven by strength in both pet health and farm animals, and a two cent earnings beat off 11 cent basis. At the same time, management gave a very solid full year forecast. This is a growth company, people. I want to know if it can keep running. Let's check in with Jeff Simmons. He's the president's CEO of Elanco Animal Health to find out. Mr. Simmons, welcome back to May of Money. Great to be here, Jim. Thank you. All right. So, Jeff, when we first met each other, we met each other on the floor of the exchange. I looked your company over and I said, wow, Eli Lilly really did not want to own Elanco. There's a lot of things that have to be done. You have to get some growth. You have to clean up the balance sheet. I was worried about animal health. You had a division about aqua. I don't know. You changed everything. Congratulations. Hey, thank you. Yeah, we just reported a great historical year. And as I've told you from the beginning, it's been about growth, innovation and cash. And that's where energy's been. And Elanco has transitioned into a sustainable growth company. And it's been a two and a half years of consistent growth. And we're excited. We've committed, Jim, in our future, the next three years, to mid-single-digit revenue, high-single-digit EBITDA, and low-double-digit EPS. And we're excited. And our investors have had a really good time with us focused on this growth, innovation, and cash. Let's do this. Let's consider you like a human health company because I think that the people will then be as excited about Alonco as I am. A human health company, we know they come up with new drugs. The drugs are big. They try to come up with blockbusters all the time. They grow the total addressable market. They go overseas. Your company does look like a typical human health care company. So maybe we look at it like that. Well, look, I think we have the best of pharmaceuticals. We have a regulated business. It's science based. There's a high bar of entry. No question. But we also bring this brand element, Jim, that I think makes us when things go up patent, they continue to grow. We have that in farm and in pet. And so there's there's pet owners and protein companies are also brand loyal. and we're a cash market, so not a payer market. So it makes it very durable. And I believe that, you know, that's what sets us up to be such a compelling industry. And really, yes, innovation does matter. And Elanco is at the cusp of something very historical. We have six blockbusters approved in major markets. And these are major markets. We've got best medicine and we're taking share. And I think that's what got people excited about the fourth quarter in 2025 for Elanco. Give us a couple, because those of us who are pet owners may be using this stuff. And I know that I think you're absolutely right. We know the brands. We don't know the brands that we get for humans, but we know them for our dogs. Yeah, the biggest one is parasiticides, right? That is the big market. So that's the tick, flea, heartworm. And guess what? That oral pill, that's the fastest growing segment. It's growing at 30%. We took the most market share last year with Cordelio Quattro. Quattro because there's four active ingredients. It's got four dimensions of differentiation. We got broader coverage, faster tick kill, and pet owners and veterinarians have resonated with that. And I'll point to one index that even your pet owners will understand, and that is we are winning the puppy. The puppy index is more vets are putting puppies on Quattro. Why? Because of the confidence in it. And I always say if you get the puppy, you keep the dog, and that's a key one. I like that. The second area, derm. Okay. An itching dog can break the bond of a pet owner, right? $2 billion market. Probably what's the number one reason people go to the vet is an itching dog. We've got a product, Zenreli, it's in 40 countries. We've got 40% market share in year one in Brazil. It's acting like a first to market product, Jim. And then we just got approved and are going to launch next quarter our second Derm product, Bufrena, that will go after the monoclonal antibody market. So, you know, parasiticides, derm, we're coming with pain. And then, look, we reported today a $200 million brand that broke over $200 million in the beef market. Right. And this protein revolution is real. It is here and it is key. Well, let's talk about that. The accelerating global animal protein consumption projected to grow up 5% annually in the U.S. alone. GLP-1 usage, muscle retention, aging population, overwhelming consumer demand. And you are doing something to meet that demand. Yeah, we are number one right now in the U.S. in beef and in poultry and in swine. We took a lot of market share. Our U.S. business grew 17% in farm animal. I've spent a lot of time the last three months in boardrooms talking to protein owners. There is a protein revolution going on. You're exactly right. The dietary guidelines can more than double the use. You know, there's going to be 20% more people over 60 years of age. I think the new disease is muscle retention. And yes, even linked to our old parent, GLP use, we're seeing 40% to 50% more protein consumption. How does that relate to our business? It comes back to, hey, protein has never been more valuable. Look at dairy. Dairy grew 4% in the fourth quarter alone as an industry, and they invested $10 billion. From shakes to cottage cheese to cheese, it's changed. Farm animal is $25 billion of this $40 billion industry, and we're going to grow to $60 billion as an industry. $20 billion more, farm animal will have its share of that. But, Jeff, I keep reading about how small the cattle herd is and how high the cattle prices are. Can you still grow if the cattle herd is steady and not growing in our country? One of our six blockbusters is Xperia Xperia is used in the beef industry in US and Canada It grew 80 last year What it does Jim is when you have less cattle numbers you got to actually make the most and maximize the cattle you have So the health matters, the efficiency matters, and cattlemen are actually making money with a shortage of herd here, but we're helping them make sure they can produce as much protein as possible, and that's been demonstrated with this innovation. And, you know, we also announced today, you know, continued acquisitions and growth of our dairy side of the business, because dairy is, I think, another extremely fast growing protein that is going to show show great growth going long term. Some of the people in my office want to know about Punch the Monkey. I felt that that was not appropriate, but I know you long enough to think you actually know something about Punch the Monkey. I'll stick to our business and the basket of innovation and what we've got going on. But look, I think that's a shrewd choice. Yeah. Well, look, I think, you know, the message that we've been, you know, really focused on with our investors is these are major markets, as I mentioned, cattle, both, you know, dairy and beef, the parasiticide and derm market. And I'll come back to something you and I've talked about, the humanization of pets. You know, we are getting to what matters most to consumers. The consumer is shifting. And, you know, we hit it, you know, from diets to dogs. And the protein shift has happened that we just talked about. On the pet side, the humanization of pets is globalizing, Jim. 70% of puppies is actually outside of the U.S. So the globalization, a global company like Elanco is capitalizing on double digit growth outside of the U.S. in the pet market. And then convenience. A big statistic right now is 40 percent of pet care is under subscription. And Elanco took five years ago and said, hey, we are going to build an omni channel business. We can reach more pet owners where they want to shop at the price point they want to shop at with the acquisition of Bayer. We're best positioned for this trend. The pet owner wants convenience, and the pet owner is globalizing. And to me, we're best set up as any company to take advantage of that. Well, I know because of you, I actually, we asked for Alonco products. We switched, by the way. I'm not going to, you know, I don't mean to throw the other guy under the bus, but we switched, and I don't know the dogs seem happy. What do I know? But it's better than an unhappy dog, and it's better than an itchy dog. I want to thank Jeff Simmons, president CEO of Alonco Animal Health. Fabulous turnaround, sir. Thank you for coming on the show. Thanks, Jim. Thank you very much. Matt, we'll be back after the break. Coming up, you've got questions. Kramer's got the answers. Get charged up for a fast-fire lightning round next. Before we start the lightning round, a reminder, don't miss out on our President's Day special. Join me in the CNBC Investing Club to get access to our morning meetings and key market insights you don't want to miss. Something else you would have special VIP access to? Our world-famous monthly meetings. They really are helpful. People love them. It's a market masterclass. In fact, we've got a big one coming up this Friday at noon. How do you get involved? Scan the QR code or head to CNBC.com slash Kramer Club to become a member now. I think you'll love it. And now it is time. And then the lightning round is over. Are you ready? Skate. Time for the lightning round. We'll start with Mark in Wisconsin. Mark. Dr. Kramer, thank you for taking my call. I'll get your call. I don't know what I got here, whether this is a value stock or a value trap. What do you think of kicker KD, Kindrell? Okay, Kindrell had some accounting issues this quarter. I therefore have to put it in the penalty box. We have to see what happens next quarter. It's too early to recommend the stock. That was a very tough quarter. Let's go to Rebecca in New York. Rebecca! Hi, Mr. Craver. I want to know I miss you so much for the past two weeks. I decided to read your book. I love it. Thank you. You are a great writer. I feel like it's supposed to let you talk to me. Thank you. What's that? It's Novo Nordisk. Is that Novo Nordisk? Oh, no, you don't want to be Novo Nordisk. You want to be Eli Lilly. Novo Nordisk is really good at cutting prices. Eli Lilly is great at making drugs. Let's go to Bill in Florida. Bill. Hey, Jim. Booyah. Booyah, Bill. Thank you. We miss you during the Olympics. My stock is IT Gartner. Okay, not a great quarter, and people are worried about that it's going to be anthropic, that people can go after them too easily. We're going to have to say no to that. Let's go to Jim in Illinois. Jim. Jimmy, booyah, from the land of Lincoln, where we love Kramer a lot more than the idea of the first moving to Indiana. I'm so glad, because I think that I am a little more popular than that. that idea. What's going on? Okay, the stock I've got for you today is the Davis Center Infrastructure Services Play. I bought it for $172 on May 23rd, nine months ago. And after 214% of upside, I want to know what to do with Powell Industries. I want to know what you tell me to do. Man, if you nailed Powell there, we did like the stock. I want you to take off one third of it, then you're playing the rest of the house's money and don't ever touch it again. And that, ladies and gentlemen, is the conclusion of the Lightning Round. The Lightning Round is sponsored by Charles Schwab. Coming up, Kramer's zeroing in on the situation in software stocks and analyzing just how much more pain AI can inflict on the sector. Next. For over a decade, we loved enterprise software companies, companies that made other companies more efficient, made them better. These outfits made themselves integral to the workplace. They seemed to do well in both good times and bad. Secular growers, we called them. I always viewed these software companies as a bit ethereal, hard to understand. What did Workday do to make human resources so much better? How could ServiceNow go from helping with onboarding to piloting the entire ship? Could Salesforce's exciting agent force make up for a decline in seats for the rest of the business? Most investors simply saw these companies save their clients money and made a fortune for the shareholders. When we had most of the non-revenue generating parts of an office automated, new companies were created that showed you how to use your data more efficiently. They prosecuted the data. and we needed to protect the data the companies generated, so we bought very expensive cybersecurity stocks. These companies would try to get long-term contracts, maybe four years, with almost automatic price increases, and they rarely got any price pushback. Why? Well, because the cost savings remained impossible to ignore sticky revenues, virtuous circle for all. Of course, these software stocks were never cheap by traditional metrics. They were rarely valued on earnings per share. They traded more on things like Rule of 40, where you judge a company on its revenue growth rate, Plus, there's profit margin, usually the EBITDA margin. And if they add up to more than 40, well, you got a winner. We look at how much annual recurring revenue they had. We looked at their total addressable market and how they were attacking it. We looked to see if this kind of company was really sticky, didn't have a moat. Often, they paid their employees with stock, which meant that if they were turned profitable, it might be because of the mirage of stock being paid instead of cash. As long as their share prices were going higher, I mean, who cared? No problem. The faster these companies grew their revenue, the more we were willing to pay for them. There seemed to be an endless new supply of these things, too, and they were often lapped up by funds that feasted on the fastest secular growers. A whole host of funds would pay anything for these enterprise software plays the same funds over and over. Oh, and if the company stumbled, we had these private equity firms that loved acquiring the fallen angels. Companies like Toma Bravo, Vista Equity Partners, who figured out how to package these software outfits, merged the companies, and ever at least find capital effortless. when they brought them public again, they were more polished. The stocks would pop right out of the gate, maybe because these IPOs were so small. It was a can't-miss situation, and the whole cohort was almost always a market leader. And then out of nowhere, we got Accelerating Computing and Artificial Intelligence. All these software companies were based on writing code, but the AI platforms can write code themselves. It's the one thing. Look, they do it great, better and faster than we can. It costs a lot less than software engineers. In a year, everything, the whole edifice was attacked. And even those enterprise software companies that have continued to most report good numbers, except for workday this evening, well, the clients are no longer so confident or receptive to order long-term deals. One AI company in particular, Anthropic, as I said at the top of the show, decided to go after every one of these businesses. And that's what's happening now. Anthropic caused the clients to ask for shorter contracts so they can try Claude or only shift over to something else that might be better. Right now, the managers of enterprise software and the venture capital and private credit and private equity firms that back them, they're all in shock. They hope Anthropic doesn't come after them, because if that happens, their stocks will get crushed. In the end, there's way too much money in the enterprise software space and way too many companies. Now they're being disrupted by AI. You know what it is? It's a Humpty Dumpty situation. I don't know where it goes. I do know that Alphids have specialized in lending to the software companies that have gone from public to private are being obliterated. I have no answers about what will happen to the enterprise software players or their financiers. I do know this. My forecast for all is pain, and the losses are far from over. So use this bounce to lighten up. I like to say there's always a bull market somewhere, and I promise you to find it just for you right here on Mad Money. I'm Jim Cramer. See you tomorrow. 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