Jan 30, 2026 · 44 min
Cramer weighs AI growth against valuation and yield risk
Mad Money w/ Jim Cramer 1/29/26
The episode offers a practical test for separating durable demand and recurring revenue from momentum, expensive software, and risky income plays.
- 1Cramer sees Eli Lilly delivering more convincingly than Novo Nordisk, which he considers a hold after its decline.
- 2Royal Caribbean and Otis illustrate how strong demand, pricing power, and recurring service revenue can support growth.
- 3The lightning round reinforces valuation discipline, favoring Rio Tinto and Carrier while warning against Armour’s high yield and weak software stocks.
Don't miss
Judy Marks connects Otis’s aging global elevator base, modernization opportunities, and service revenue to its capital returns and growth outlook.
The brief
Jim Cramer opens by framing markets as irrational but ultimately decisive, then applies that philosophy across pharmaceuticals, travel, technology, and industrial services.
Novo Nordisk remains a company Cramer likes, but its decline makes it a hold; Eli Lilly’s stronger results give it the clearer edge in GLP-1s.
Royal Caribbean CEO Jason Liberty describes strong bookings, pricing power, and optimistic 2026 guidance, making demand the centerpiece of the cruise case.
IBM and Palantir represent different ways to approach AI-era technology: established software strength on one side, volatile expectations and valuation pressure on the other.
Otis CEO Judy Marks makes the service business the standout, linking maintenance, modernization, aging elevators, and recurring cash flow to a durable industrial model.
The lightning round closes with a valuation lesson: favor businesses such as Rio Tinto and Carrier, while treating unusually high yields and falling software stocks cautiously.
What was said on this episode
49 statements · 37 positive · 7 negative · 1 mixed · 4 neutral
Meta’s AI investments produced strong returns and drove a major stock rally.
“Meta, which had been written off as a company that spends way too much on AI just last quarter, could rally more than 10 percent today as those investments paid off in spades.”
Listen at 1:22
Microsoft is allocating insufficiently or incorrectly toward AI demand.
“Microsoft, perennial rock, isn't spending enough to meet the demand for AI, or at least in the right places, because it seems to be putting its resources behind the wrong stuff.”
Listen at 1:37
NVIDIA currently makes the most money from artificial intelligence.
“The company that's making the most money from artificial intelligence is obviously NVIDIA.”
Listen at 1:59
AI data-center chips require dozens of new power facilities to sustain operations.
“They consume enough power that we need dozens of new nuclear power plants and natural gas plants and solar farms to keep everything running.”
Listen at 2:18
Caterpillar’s generator-business earnings drove its stock higher.
“The earnings from its generator business sent the stock soaring 3.4%.”
Listen at 3:00
Meta’s generative AI advertising will persuade users to purchase advertised products.
“And you will buy what they advertise because generative AI is finally that powerful.”
Listen at 4:32
Meta’s stock will continue rising.
“It's not done going higher.”
Listen at 4:40
Microsoft is earning less from AI than expected despite substantial investment.
“Unlike Meta, Microsoft may not be making all that money on AI, even after all the massive investments and open AI and all that stuff.”
Listen at 5:46
Microsoft can recover from its setback by making difficult adjustments.
“Microsoft can do the same. It's just got to kind of have to bite the bullet here.”
Listen at 6:31
Microsoft could outperform in the next comparison with Meta.
“I am betting that next time around, Microsoft could come out on top.”
Listen at 6:38
Cramer recommends buying Tesla.
“I want to buy, buy, buy.”
Listen at 7:03
Tesla is a promising cybersecurity and humanoid-robotics company.
“I love it as a cyber cabin, humanoid, juggernaut.”
Listen at 7:09
Apple’s iPhone sales reached $85 billion in the reported quarter.
“The number came in at $85 billion.”
Listen at 7:26
Investors should own Apple rather than trade it.
“how about own it, don't trade it?”
Listen at 7:41
Alphabet may emerge as next week’s AI-search winner and out-earn Meta from AI.
“AI search winner. Alphabet may be next week's rock, and it may be even making more money from AI than meta.”
Listen at 8:02
NVIDIA occupies the strongest position in the AI ecosystem.
“They aren't playing a game at all. They're running the game. They're the house.”
Listen at 8:16
Eli Lilly’s strong results and forthcoming pill form support its position.
“as long as Eli Lilly and David Ricks are putting up those numbers and they get that pill form soon”
Listen at 9:30
Novo Nordisk should be held rather than bought.
“I think that Novo is a hold, not a buy.”
Listen at 9:35
Royal Caribbean issued an exceptionally strong 2026 forecast.
“their full-year forecast for 2026 was spectacular.”
Listen at 11:13
Royal Caribbean’s brands, technology, and loyalty program are driving higher-priced bookings.
“what that's driving is high quality demand that is supported by a great and new loyalty program that's keeping our guests inside of our ecosystem, resulting in more reps, which is why we're seeing strong booking volumes at higher prices.”
Listen at 12:37
Royal Caribbean retains at least a 15% value advantage over land vacations.
“that value proposition to land-based vacation is still at least 15%.”
Listen at 13:57
Royal Caribbean’s river-cruise demand has exceeded expectations.
“Demand that we have seen has really been well above our expectations.”
Listen at 14:40
Royal Caribbean expects strong demand for its elevated river-cruise experience.
“we have full confidence that we're going to generate high quality strong demand for an elevated river experience.”
Listen at 14:58
Royal Caribbean’s Discovery-class ship will transform its market segment.
“this will be a game-changing ship in this segment.”
Listen at 15:43
Royal Caribbean has strong visibility and confidence in its 2026 trends.
“we have great visibility into the quarter. We have great visibility in the year. And we feel very encouraged by the trends.”
Listen at 17:19
IBM uses its own AI products internally as a customer.
“IBM's not just the vendor, it's the client.”
Listen at 23:47
IBM is an AI beneficiary trading at a relatively low earnings multiple.
“IBM's the rare AI winner with a fairly low price earnings multiple.”
Listen at 24:10
Investors should buy IBM shares.
“I say buy some IBM if you don't already”
Listen at 24:52
IBM below $300 would represent an attractive buying opportunity.
“it would be a gift if this $309 stock were to fall below $300.”
Listen at 25:00
Palantir’s current price offers a strong buying opportunity.
“If anything, I would say it's a great opportunity to buy Palantir.”
Listen at 25:52
Palantir remains acceptable despite being more expensive than IBM.
“I think it's fine.”
Listen at 26:09
Otis’s service and modernization businesses position it strongly for 2026.
“Repair, maintenance, and now this emerging but really growing, fast-growing demand for modernization and refurbishment of older elevators and escalators really puts us in a strong position for 2026.”
Listen at 28:10
Nine million elevators over 20 years old need refurbishment.
“nine million elevators are over 20 years old and in service today in need of refurbishment in the window.”
Listen at 29:12
Otis refurbishment orders increased 43% in the fourth quarter.
“Our orders in refurbishment were up 43% in the fourth quarter”
Listen at 29:24
Lower interest rates improve developers’ apartment-building economics.
“When interest rates go down, the math works a lot better for developers.”
Listen at 30:39
Otis is bullish on U.S. demand entering 2026 across service and construction.
“We're really bullish on the U.S. right now. We've got a great backlog coming into 26. It's refurbishment, it's maintenance, it's repair, and it's construction.”
Listen at 31:29
Global data-center construction is generating demand for Otis elevators.
“So we are seeing a nice demand signal. Data centers build out, not just here in the U.S., but across the globe.”
Listen at 32:08
Otis refurbishment and modernization will grow well above the teens for years.
“Refurbishment, modernization is part of that. And that is going to grow synchronously well above in the teens. for years to come.”
Listen at 34:50
Investors should own Rio Tinto shares.
“I just think you should just go in and own it.”
Listen at 36:16
Armour Residential REIT’s 15% yield is a warning, not a bargain.
“it yields 15%. That is worrisome for me. That is not a bargain.”
Listen at 36:47
Investors should buy and hold Carrier.
“I think you buy it now and put it away.”
Listen at 37:45
Per-user enterprise software models worked well when customers had many employees.
“This is an industry where clients pay you per user, which was a great business model back when their clients had lots of employees.”
Listen at 39:42
AI may reduce ServiceNow’s profitability as customers operate with fewer users.
“The market's saying his company's going to hit a wall, that AI will ultimately sap all of its profitability as clients learn to do more with fewer users.”
Listen at 41:30
ServiceNow traded at 65 times forward earnings at 2024’s end.
“At the end of 2024, ServiceNow traded 65 times forward earnings.”
Listen at 41:46
ServiceNow currently trades below 28 times earnings.
“After today's meltdown, it now trades just under 28 times earnings.”
Listen at 41:55
ServiceNow’s valuation multiple is likely to decline further.
“And it looks like to me that it's headed lower.”
Listen at 41:58
ServiceNow will continue delivering earnings.
“The question isn't whether ServiceNow will keep delivering earnings. I think it will.”
Listen at 42:20
ServiceNow and Salesforce will trade as non-growth stocks despite strong growth.
“These stocks are going to trade like they're no longer growth names, even as their growth remains strong.”
Listen at 43:03
ServiceNow and Salesforce may become worth buying after their multiples bottom.
“these may be worth buying because we're dealing with great companies.”
Listen at 43:22
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
Books & mentions
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