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Cramer's Mad Money Recap 6/8: Snowflake, Cisco Systems, Okta

Jim Cramer says he doesn't see the economy falling into stagflation. He thinks we just got overheated coming out of the pandemic and now need time to cool off.
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There aren't many dirty words on Wall Street, but stagflation is one of them, Jim Cramer told his Mad Money viewers Wednesday. With stagflation, you get the worst of both worlds, an economic slowdown and rampant inflation. Fortunately, Cramer doesn't see our economy falling into stagflation. Instead, he said, we just got overheated coming out of the pandemic and now need time to cool off. 

That cooling is already starting to happen. Yesterday, we learned that Target  (TGT)  had too much inventory. Wednesday, we saw mortgage applications fall to their lowest level in 20 years. A mortgage at 5.4% is still low historically, but compared to where we've been, with rates as low as 2%, we may be headed towards a housing glut as well.

Adding to Cramer's excitement was news that used car prices may also be beginning to moderate.

If hard goods, mortgages and autos all peak, that only leaves oil and energy to lead the inflation charge. Crude oil is a tough one, however, as prices are skyrocketing from a lack of supply.

The White House could embrace oil producers and oil pipelines, but it's highly unlikely given their hostility towards the industry to date. That means lower oil prices aren't likely to come until demand falls on its own from high prices.

Executive Decision: Snowflake

In his first "Executive Decision" segment, Cramer spoke with Frank Slootman, chairman and CEO of Snowflake  (SNOW) , the data and analytics company that dipped 15% when it last reported earnings, which included a murky forecast. Shares have since recovered much of those losses.

Slootman explained that the historical problem with data has been that it's siloed. The data needed to be loaded into where the work happened. But with Snowflake, the work goes to where the data lives, and data can easily be blended and used to forecast outcomes.

This new model of data processing has allowed drug companies to reduce drug development from 12 years to just nine years. Slootman said that's because data processes can now be run concurrently and data can more easily be shared amongst the many partners drug companies typically work with.

Another growing area for Snowflake is supply chain management. Slootman said retailers can no longer rely on intuition to maintain their inventory levels, they need data being processed in real time to stay ahead of issues and their competition.

When asked about fears of a recession, Slootman encouraged investors to look beyond the 90-day horizon. Snowflake's consumption model allows customers to use their services when they need them and customers can grow with their business needs.

Executive Decision: Cisco Systems

For his second "Executive Decision" segment, Cramer also spoke with Chuck Robbins, chairman and CEO of Cisco Systems  (CSCO) , the networking equipment provider that saw its shares fall 1.4% by the close. Shares of Cisco currently trade for 13 times earnings with a 3.4% dividend yield.

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Robbins quipped that despite reports to the contrary, business is still "alive and well" at Cisco. The effects of the lockdowns in China are only temporary, he said, and they are already seeing positive signs in the supply chain.

Customers still turn to Cisco for innovation, whether that's performance or lower power consumption. Robbins said he still sees value in the market and opportunities for additional mergers and acquisitions.

Robbins said that there are a lot of complications in the world right now, but companies have been through a lot over the past few years. They don't panic and stop spending like they used to at every little hiccup. Companies are far more resilient now.

Executive Decision: Okta

For his final "Executive Decision" segment, Cramer sat down with Todd McKinnon, chairman and CEO of Okta  (OKTA) , the identity and access provider that's seen its shares plunge 74% from highs as tech stocks have retreated.

McKinnon said the fundamentals at Okta haven't changed. Companies still need the right technology for their hybrid work environments and to build new digital products and services for their customers. Identity management sits at the center of those trends.

Okta is helping to pioneer so-called "zero trust" environments, where every transaction is validated to ensure that users only have access to what they should. Gone are the days where security can be left to a firewall, he said, everything needs to be built with zero-trust credentials. 

McKinnon also responded to a hack in March that compromised one of Okta's support vendors. He said the incident was a real learning experience for the company and completely changed how they support their customers. Okta was also upfront, contacting customers directly to inform them of the incident. McKinnon said he spoke to more than 400 Okta customers, a move which only strengthened the trust customers place in them.

Lightning Round

In the Lightning Round, Cramer was bullish on NRG Energy  (NRG)  and Science Applications International  (SAIC) .

Cramer was bearish on Annaly Capital  (NLY)  and Enphase Energy  (ENPH) .

Digitize or Die?

In his "No Huddle Offense" segment, Cramer said there's an undercurrent in Silicon Valley that every company must "digitize or die." And while that might eventually be true, it's also true that in times of recession, long-term themes can go into hibernation, leaving consultants and integrators without customers.

We saw this trend during the dot-com collapse, Cramer said, where everyone that was helping companies get online vaporized. When you're in survival mode, he said, there simply isn't enough money to look toward the future. 

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