Mad Money w/ Jim Cramer 10/23/26

NVIDIA

Across the shows: 35 speakers in other episodes, 29 bullish and 12 bearish calls, past 30 days

• Jim Cramer · CNBCBullish

  Nvidia looks expensive on forward estimates but has been cheap in hindsight because earnings keep beating.

  Cramer argues that Nvidia always looks expensive on forward earnings estimates, but its results so far exceed those estimates that looking backward the stock was selling at a remarkably low price. He says this has been the secret to Nvidia since 2012 and that the stock keeps doing it. The case rests on the pattern of earnings beats outrunning the forward multiple, so the stock's apparent expense is a forecasting artifact rather than a sign of overvaluation.

  “NVIDIA is a really great example. Let me tell you why. Because when you look at NVIDIA on forward earnings or the estimates, it always looks expensive. And then it so far trumps those estimates that when you look backward, it turns out that the stock was selling remarkably low price”at 30:59

QuantumScape

• Jim Cramer · CNBCBearish

  QuantumScape was a pre-revenue science experiment whose SPAC-era hype collapsed; a poor example of EV speculation.

  Cramer calls QuantumScape basically a science experiment for better EV batteries, far from anything it could commercialize and sell. It went public via a SPAC deal, its stock peaked near $132 in December 2020, and Wall Street then lost interest in zero-profit names as short sellers attacked it. Four years later it still had no meaningful revenue, and the stock was obliterated by late 2022. He uses it as a cautionary example of the 2020–2021 EV IPO and SPAC frenzy, where many companies with no revenue saw their stocks fall more than 90%.

  “But QuantumScape was a long way from having anything they could actually commercialize and they could sell. Even four years later, these guys still didn't have any meaningful revenue.”at 34:53

The Procter & Gamble Company

Across the shows: 3 speakers in other episodes, 1 bullish and 1 bearish calls, past 30 days

• Jim Cramer · CNBCNeutral

  Procter & Gamble is a recession stock whose shares rally on weak economic data, often through sector rotation.

  Cramer argues Procter & Gamble, like the consumer packaged goods sector, is a recession stock because its earnings tend to hold up in a slowing economy. As a result its stock roars when economic data is weak. He warns that sector rotation into CPG stocks can drive gains that have nothing to do with the company's business, so a rally can be mistaken for proof of a good fundamental call. His point is that investors should understand why a stock is moving.

  “Procter, like all the consumer packaged goods place, is a recession stock. Because its earnings tend to hold up during a slowing economy, its stock roars when we get lousy economic data.”at 40:35

IPOs, M&A & deal activity

• Jim Cramer · CNBC

  IPO waves flood the market with supply, and the cycle ends with exuberance turning to hostility and a broad selloff.

  Cramer says a flood of new IPOs initially pushes many deals higher, but the new stock supply ultimately drags the market down. Investors' enthusiasm for hot IPOs turns to hostility when deals attract less interest, and then the whole market, not just IPOs, gets slammed. He cites 2020 and 2021, when roughly 400 traditional IPOs and 200 SPAC mergers came to market, with about 600 companies listing in 2021. He says the Fed's tougher talk on raising rates in November 2021 caused the new issues to be eviscerated through 2022.

  “That's why you need to be [extra] wary of the IPO cycle. ... they're flooding the market with new stock supply. That supply ultimately drags us down.”at 32:27

• Jim Cramer · CNBC

  A wave of IPO supply tends to weigh on the stock market, so investors should be cautious when deals come hot and heavy.

  Cramer says new supply is one surefire way to wound a bull market. He points to 2021's IPO and SPAC mania, after which hundreds of low-quality new issues were eviscerated in 2022 and many later went bankrupt. He explains the mechanics: active managers who want to buy big IPOs often have to sell existing holdings to raise cash, and index funds, which take most new money, cannot buy IPOs. So heavy issuance drains existing stocks, and the cycle tends to start strong, generate euphoria, then burn out as supply weighs on the market. Caution is warranted when a big wave of IPOs arrives.

  “That's why I came out and warned you about the dangers of the IPO mania in late twenty twenty one. I said there was one surefire way to wound a bull market, and that's by flooding it with lots of supply,”at 36:42

Renewables & clean energy

• Jim Cramer · CNBC

  Residential solar stocks were built on financing, so they collapsed when long-term interest rates stayed high.

  Residential solar stocks soared in 2020 and 2021 and kept running into 2022 even as growth plays were pulverized. Cramer says this was not because people embraced renewable energy or because federal subsidies were generous. Most people cannot afford residential solar systems without borrowing, so the industry was built on financing rather than solar. When investors realized long-term interest rates would stay elevated for some time, the stocks got obliterated in 2023. He cites Enphase's run in 2020 and 2021, when people could borrow for next to nothing, as an example.

  “it turned out that people can't really afford residential solar systems without borrowing money, meaning the whole industry was actually built not on solar, but on financing.”at 42:29