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Cramer Remix: Cloud stocks aren't finished giving investors big profits

The recent weakness in tech stocks made many investors question the true strength of cloud stocks, but not CNBC’s Jim Cramer.

“The answer from pretty much everyone in the industry is the same. It’s simple: the idea that the cloud has reached saturation is absurd,” the “Mad Money” host said. “If anything, given the prevalence of older forms of storing data — expensive on-premise servers that are more costly and have less analytics horsepower than the cloud — I bet we could have years of growth ahead of us.”

Cramer said that only 10 percent of U.S. companies have adopted the cloud, which proves that the industry is nowhere near saturation. In China, cloud adoption is more like 2 to 3 percent.

“After all my canvassing, I come back and say that while there might be some speed bumps in cloud adoption, we’re still very much at the beginning of a massive long-term shift, one that’s growing faster than anything else in tech, which is why I like so much Amazon, and I like so much Microsoft, and I like so much Alphabet,” Cramer said. That’s why I’d use the weakness to buy every one of those and nearly everything else in the cloud food chain.”

Cramer knows that part of smart investing is learning from everyone.

So when Carlyle Group co-CEO David Rubenstein said that the only thing he’s worried about for the next two years is some sort of unexpected geopolitical event, it got Cramer thinking.

“The only thing we have to worry about, I think, in 2018 and 2019 is some unanticipated geopolitical event, the so-called black swan,” Rubenstein told CNBC’s Net/Net dinner in Washington, D.C. on Tuesday.

While Cramer doesn’t like the phrase “black swan” because he wants to be ready for anything and everything, he did compile a list of 10 concerns he has going into 2018.

“A black swan is the thing you don’t see coming, but we’ve got more than enough concerns that can be anticipated,” Cramer said. “Let me tell you what weighs on me every day.”

When “momentum stock” Autodesk lost its mojo after a less-than-perfect quarter, Cramer knew he had to take another look at the software company’s business to vet the decline.

Autodesk, which makes computer-aided design software for an array of industries from architecture to entertainment, posted a small earnings beat on Nov. 28. Cramer didn’t find many negatives in the report, but after it was released, the stock tanked 16 percent.

“When you see a market darling turn on a dime like this and get slammed, you’ve got to circle back to the story and ask yourself a simple question: are we dealing with a broken stock or a broken company?” the “Mad Money” host said. “In other words, did Autodesk merely hit a speed bump, or did it crash into a retaining wall at 80 miles an hour?”

As he rounds out his last few months as CEO of the now-private Panera Bread, Ron Shaich told CNBC that one of his biggest worries is the “pervasive short-termism” of the public market.

“The greatest competitive advantage Panera had, the reason we produced these results we did, is because we could think long term,” Shaich told Cramer on Wednesday. “And the reason I took our company private is I’m increasingly worried about our ability to do that in a public market.”

Shaich, who co-founded Panera and remained at its helm for two decades, highlighted a sea change he’s noticed in his 26 years as CEO of a public company.

After issuing and watching the results of more than 100 quarterly earnings reports, the restaurant industry veteran said that traders, not institutional investors, increasingly run the show in the stock market.

US Concrete’s project roster includes high-profile names like Toyota and Facebook. The common thread? Many of these corporate giants are setting up shop in the Lone Star State.

Bill Sandbrook, the industrial conglomerate’s president, CEO and vice chairman, told CNBC on Tuesday that Texas is becoming a hotbed for big infrastructure projects.

“Texas, and Dallas specifically, is very business-friendly and a lot of corporate headquarters are coming there that we partake in,” Sandbrook told Cramer on Wedensday. “There are no income taxes in Texas, so it plays right into our hands, absolutely.”

And as passage for the GOP’s tax reform bill becomes increasingly likely, Sandbrook said that his company will undoubtedly benefit from the corporate tax cuts set to come with it.

“There’s going to be more disposable income. We’re going to have more money to spend on growing our business to buy more trucks and to expand our markets,” he told Cramer. “We’re not going to dividend back and we’re not going to do buybacks. We’re going to re-invest in our business to grow our EBITDA through what we do as a business.”

In Cramer’s lightning round, he shared his take on some callers’ favorite stocks:

Shake Shack: “No. I’m a McDonald’s guy, not just because I like [McDonald’s CEO] Steve Easterbrook, because I also like [Shake Shack founder] Danny Meyer. But that stock is too expensive for me on a unit basis. I say hold off. It’s had a nice run, though, on a short squeeze.”

Kratos Defense & Security Solutions Inc.: “Look, it’s a defense stock. It goes up and down. It trades really badly, but I like the business very much and that’s what matters.”

Disclosure: Cramer’s charitable trust owns shares of Alphabet.

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Source: Tech CNBC
Cramer Remix: Cloud stocks aren't finished giving investors big profits

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