Mad Money w/ Jim Cramer 9/14/26

Mad Money w/ Jim Cramer

Jim Cramer hosts a special San Francisco edition of Mad Money, navigating a volatile market session marked by concerns over AI slowdowns, geopolitical tensions, and rising interest rates. Despite early fears of a

Key takeaways

• AI slowdown warnings from OpenAI and Anthropic may be strategic rather than purely safety-driven, potentially locking in competitive advantages for leading firms.

Main topics

• AI development risks and corporate slowdown rhetoric
• Cybersecurity as a defensive investment theme

Notable quotes

"I don't know how you can get insurance without hiring one of those two companies."

Conclusion

Cramer concludes that while existential AI fears are real, corporate calls for slowdowns may be

Transcript preview

Speaker 7 (0:00) It's NFL kickoff time. Exclusive NFL team valuations with sports business expert Michael Ozanian. The NFL is by far the most profitable league. NFL team valuations now on cnbc.com slash sport. My mission is simple, Speaker 5 (0:17) to make you money. I'm here to level the playing field for all investors. There's always a bull market somewhere, and I promise to help you find it. Mad Money starts now. Speaker 1 (0:33) I'm Kramer. Welcome to a special San Francisco edition of Mad Money. Welcome to Kramerica. I've been with my friends. I'm just trying to make a little bit of money. My job is not just to entertain, but also to teach you. So call me at 1-800-743-CNBC. Tweet me at Jim Kramer. At one point this morning, it looked like we were just going to crash. Speaker 1 (0:53) Oil had skyrocketed 4 % because the savior Saudi pipeline, the one that helped offset the losses from the closure of the Strait of Hormuz, got shut down by a drone attack. There were no substantive talks to stop the war. Interest rates were shooting higher. The yield and the tenure nearing 5%. Iran's allies in Yemen seem poised to shut down the Red Sea. Most important, the biggest theme of our era, artificial intelligence, looked like it was going to be on the ropes because of a self-induced slowdown that could snapshot the biggest spigot of cash in history. Nothing was going right. But as is so often the case with this market, things changed. Oil somehow reversed hard after being up 4 % and closed up 1.5%. The 10-year Treasury hits 5 % and then something happened that's been missing the whole time interest rates have been on rampage. Buyers, actual buyers, came in and decided that 5 % was good yield for 10 years. That's right, not everyone hates bonds at any price. And as we got our arms around the forced AI slowdown that the big guns, OpenAI and Anthropic, talked about, now seem to favor, we decided, hey, maybe it wasn't the end of the AI world. In fact, we left this session convinced that not much in the data center would actually change. Hence why stocks rallied nicely off the lows. Dow finishing off just 152 points. S &P all only declined 0.48%. NASDAQ only down 0.56%. These were remarkable comebacks from these lows. I mean, it was. Pleasure. I don't blame anyone for being confused. First, it's the great AI is the greatest thing in the world, right? I mean, the thing that Dario Amadei, the exciting CEO of Anthropic, has been saying that could cure cancer. So many other diseases made me feel great. Everybody was pitching us the next industrial revolution. Now, though, we're hearing all the Skynet jokes about how I could kill us all. They weren't really jokes. They're genuinely worried inside these places about the possibility of total human annihilation. Kind of a schizophrenic beast when you think about it, huh? So which is it going to be? How about both? I don't know about you, but when I read through the Amadei epistle urging the great AI slowdown, I began to wonder whether there could be something else at work here. Most important, I wanted to know whether there was a slowdown that he urged. It's kind of like to me, like when you go to those Formula One races and they wave the yellow flag, meaning you can't overtake. Doesn't that mean Anthropic has to win because it's making so much money and it can't be overtaken? Hmm. I like anyone who's thoughtful about the wholesale murder of innocents by a swarm of angry AI agents. But I am a little jaundiced that if the majors are advocating a slowdown that could lock them into a position where they can put down $10 billion and make $30 billion per gigawatt, which might be possible for Anthropic to open AI, well, they got the goods. That would put them well past all these hyperscalers we talk about all the time when we try to calculate profitability. Although I don't believe these AI risks are all a hoax, as President Trump assures us, I'm naturally skeptical when these leading AI labs are pushing policies that could make them a heck of a lot more profitable and leave everyone else behind. Now, there were real casualties today. Any company that actually makes or designs or constructs part of a data center got blown out. In an attack that lasted most of the session, market floor was littered with the stocks of companies that make fiber for the innards of these warehouses full of servers. But there were also some spectacular advances led by cybersecurity stocks like Palo Alto Networks. Yes, and like CrowdStrike. Speaker 1 (4:05) Who's still be with us in a minute. They let us for simple reason. When the heads of Anthropic and OpenAI are warning about AI risk, every other company knows that they need better cybersecurity. I don't know how you can get insurance without hiring one of those two companies. I'm skeptical that AI agents will be able to wipe out the human race. Skeptical. But lots of business owners could certainly have their data held hostage by smart but rogue agents. Will we get an actual slowdown of AI expansion? We need to hear from Broadcom CEO Hawk Tan on later tonight. He's going to tell us. Are any of the slapped down stocks worth buying? I would love to tell you yes. But then tomorrow, oil could be back up, rates might fly higher, and we'll be on the verge of a Fed meeting where Fed Chief Warsh might raise rates, much to the chagrin of the president who appointed him to cut rates. And maybe we'll hear about some new AI hack that makes the hug and face incident look like child's play. Bottom line, we wait. We see if the existential threat is off the table. And we remain grateful that despite a hideous setup this morning, the market didn't actually crash. In fact, it was barely down at all. Let's take calls. Let's go to Sonny in Massachusetts. Speaker 5 (5:07) Sonny. Speaker 5 (5:09) Jim, Speaker 8 (5:10) I just want to thank you, Regina, Jeff, and the entire crew for everything that you do and making me a better investor to the club. Well, thank you. Okay. My first question is, when are you going to make some Kramer pasta sauce with all the vegetables that you make? And two, what are your thoughts on Tesla? Speaker 5 (5:26) Well, I made 120 jars this year, so that's spoken for. I'm sorry. Tesla, I wish I could make that. do as well as the sauce. At $3.58, Speaker 1 (5:37) I don't know. I mean, I think that it got some approval in China. I thought it was going to bounce today. Right now, my only solution to it is that SpaceX has to buy it. Period. End of story. But maybe they will. On May Money Tonight, I'm Keen of a Big Week West with some of the most important voices in Silicon Valley. Broadcom's AI, their business is booming, but the stock isn't. I'm going straight to the source to get some answers from where we stand. Then, could self-driving cars be friend or foe to a company like Lyft? I'm sitting down with a CEO to get an update on the business. Plus, this weekend's Anthropic CEO issued a stark warning about the speed of AI development, as I've said, so I'm checking in with CrowdStrike's CEO to find out if we have the capacity to defend against rogue AI agents. So stay with Kramer. Speaker 7 (6:23) 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. Speaker 7 (6:47) It's NFL kickoff time. Exclusive NFL team valuations with sports business expert Michael Ozanian. The NFL is by far the most profitable league. NFL team valuations now on CNBC.com slash sport. Speaker 5 (7:09) Well, it's a tough time to come out to San Francisco, a day when the whole AI complex is getting hammered because Speaker 1 (7:15) anthropic and open AI seem to be, I don't know, pulling in their horns. Actually, I think there's some real bargains in this group. Take Broadcom, the maker of chips, network equipment, and tech infrastructure and software. With a stock that's down more than 10 % over the past month. At the beginning of this month, Broadcom reported a strong set of results. It showed a spectacular multi-year forecast. But their guidance for the current quarter was, I don't know, viewed by some as in line. The stock got slammed. I think Broadcom is still on track to put up some incredible growth because they're at the heart of the AI ecosystem. Because the company's never let us down in all the years my charitable trust has owned it. And down here, roughly 150 points below its June high, stocks may be too cheap to ignore. Don't take it from me. Let's check in with the legendary Hawk Tan, Speaker 5 (7:55) president and CEO of Broadcom, to learn more. Mr. Tan, welcome back to Mad Money. Good to be here, Jim. All right, so, Hawk, you laid out a forecast that was so fantastic, $350 billion Speaker 1 (8:05) in the next two years, and you sounded very certain. Is there anything that's happened in this whole debate about the AI slowdown that would give you pause to that prediction? Speaker 3 (8:15) No, not in the least. We see the demand for compute infrastructure for AI development or AI frontier models and inference for the products that they feed to the world as continuing to be very strong and, I believe, very durable. Okay, Speaker 1 (8:36) now you are also an expert in finance, and you've been able to get some really great companies to work with you to create. creative sources of finance. Do you need, say, OpenAI or Unity Anthropic to do an IPO soon? I know OpenAI is saying they're going to put it off. In order to have some perfect surety, because I know I'd be worried if they don't do an IPO or they have a hard time doing it that I might not get paid. Speaker 3 (9:05) That's a fair question. And we have six customers, only six, but they are all creating frontier models, ILMs as we know it. Because my view is the real value to be created out of this phenomenon of generative AI and the compute that goes with it comes from the companies, enterprises who are creating their own frontier models. Speaker 3 (9:34) Two, OpenAI and Tropic are ones that are what I consider cash flow poor, but they are valuation rich because they have great technology. And we are creating very good products for these guys to enable them to continue to improve their frontier model development. So what we've done, given their performance, and they have shown they have been very successful so far, particularly in dropping even open AI. We are creating a platform by bringing in strong financial partners, not your traditional finance partners, but partners who are willing to look at these companies. And in a way, like the credit and the potential these guys have, and are willing to extend them credit. We're just enabling them, creating a platform. And companies like Apollo, Blackstone, who loves this sort of opportunity, stepped in because the rates. are better than going treasury for sure. And Speaker 1 (10:39) they create some confidence. Even if, say, OpenAI goes out and says, listen, we're not going to do an IPO, those two companies, which, by the way, I know are very hard-nosed, they are willing Speaker 3 (10:50) to lend. Absolutely. They are. We're finding out that it's not difficult at all to find these kind of financial partners willing to come in and fund. The infrastructure of these guys, even as the demand from these two guys, is just huge over the next few Speaker 5 (11:12) years. Perfect. Now, let's talk about that last quarter. Speaker 1 (11:16) I cared a lot and we said it to club members. Look, what he's saying, Hoctan is saying 27 and 28 are going to be amazing. He's always been money good on his projections. If that's the case, I think you could earn as much as $20 a share in 2028. I know you said in your communicopia talk, we will make judgments over allocations and what to do with capital in December. But if you know that you're going to do that, tell people why it isn't a good idea to be really big right now and buy. Speaker 3 (11:43) Well, the way we have been conservative in judging the number for 28, we're putting out there that just on AI revenue alone, which is the custom AI accelerators we are providing for six customers, the networking that goes hand in hand, we are a chip company. We sell those chips that goes into their infrastructure. We believe we will... Okay, $230 billion alone for a DOS product in 28. That plus our existing non-AI business in software, semiconductors, I indicated