Competition. It's great for consumers, but it's bad for businesses and the investors of these businesses, Jim Cramer told his Mad Money viewers Thursday. If you're an investor, you want the fast growth and rising gross margins that comes from little to no competition. That's something tech stocks often can deliver, Cramer said, but you can't get complacent.
For years, the financial technology space was beloved on Wall Street. These companies would grow like weeds, with huge opportunities and almost no competition. But now it seems fintech may have reached the end of the line, with upstarts like Affirm (AFRM) - Get Free Report taking on the former upstarts of Square (SQ) - Get Free Report and PayPal (PYPL) - Get Free Report which were already taking on the legacy players Visa (V) - Get Free Report and Mastercard (MA) - Get Free Report.
Then there are the EVs stocks, which for years only comprised Tesla (TSLA) - Get Free Report. Seemingly overnight, we now have Rivian (RIVN) - Get Free Report, Lucid (LCID) - Get Free Report, along with efforts from Ford (F) - Get Free Report and General Motors (GM) - Get Free Report, and a host of battery companies and charging station networks, all vying for your investment.
Even the gambling stocks have seen increased competition, with DraftKings (DKNG) - Get Free Report now battling with Penn National Gaming (PENN) - Get Free Report as well as the legacy casino operators.
Meanwhile, in retail, we're seeing the best of both worlds. Chains like Home Depot (HD) - Get Free Report and Lowe's (LOW) - Get Free Report own the home improvement market and can both put up excellent earnings. Walmart (WMT) - Get Free Report, on the other hand, is choosing to voluntarily keep prices low and crimp their gross margins in order to preemptively stave off competition and remain the king of retail.
Before you buy stock, consider the competition, Cramer concluded. And if there is no competition, don't expect things to stay that way forever.
Executive Decision: Twitter
Segal said that Twitter's passion is all about the conversation. The company's mission is to attract the best people and conversations to their platform. Despite Apple (AAPL) - Get Free Report recently changing their privacy and advertising policies, Twitter was still able to grow revenue by 41% in their most recent quarter and their audience grew by 13%.
Segal added that Twitter is also laser-focused on monetizing. They're experimenting with new features, like the ability to leave tips for your favorite content creators. Those tips can even be paid in bitcoin. Twitter's goal is to have a 50/50 split between brand advertising and direct response revenues.
Finally, when asked about Twitter's ban on former President Donald Trump, Segal said there are no changes to their policies and those policies are clear, transparent and consistently enforced among all their members.
Cramer said shares of Twitter are worth a lot more than they currently sell for.
Executive Decision: Macy's
For his second "Executive Decision" segment, Cramer also spoke with Jeff Gennette, chairman and CEO of Macy's (M) - Get Free Report, the retail giant that posted a huge earnings beat that sent shares up 21.1% by the close. Shares of Macy's have soared 324% in the past year.
Gennette said that Macy's is in a healthier place than before the pandemic thanks to its digitally led, omnichannel strategy. The retailer is welcoming lots of new customers in new categories, then using personalization to enhance their shopping experience.
Macy's also announced a partnership to bring installment payments to the company. Gennette explained that younger shoppers have been asking for buy now, pay later and they're happy to accommodate with lots of new ways to pay.
Macy's is also launching a new curated digital marketplace platform. Gennette said during the pandemic, shoppers were asking for products and brands that Macy's didn't carry, and the new marketplace will bring thousands of new items to their digital stores.
Executive Decision: Workday
In his next "Executive Decision" segment, Cramer also sat down with Aneel Bhusri, chairman and co-CEO, as well as Pete Schlampp, chief strategy officer at Workday (WDAY) - Get Free Report, the workforce software platform that just announced strong earnings that included 20% accelerating revenue growth.
Bhusri said the cloud is alive and well, and with labor in short supply in many industries, Workday is proving to be a critical tool for many companies.
Workday is extending its reach with the acquisition of VNDLY, a workforce management service that focuses on external workers. Schlampp noted that with VNDLY, Workday can now manage both internal and external workforces to deliver a complete package.
Bhusri added that with the "great resignation" underway, companies are utilizing Workday's software to gauge sentiment to keep their best employees happy, improve their skill sets through online training, and of course, recruit new workers using the company's recruiting platform.
Best to Step Aside
In his No-Huddle Offense segment, Cramer said when big institutions decide to sell a stock, the best thing to do is step aside and wait for them to finish.
Case in point, Walt Disney Co. (DIS) - Get Free Report, which has seen its shares fall more than 9% since reporting earnings. Disney was supposed to be the great reopening stock, with theme parks and cruises poised to welcome back guests post-pandemic. But a funny thing happened during the pandemic, Disney launched its Disney+ streaming service and that's all institutional investors seem to care about.
So when growth at Disney+ began to slow this quarter, institutional investors were quick to give the order to dump their multi-million share positions. That left trading desks scrambling to liquidate as quickly as possible, while also trying to do as little damage to the share price as possible.
Cramer said there's likely half a dozen institutions all selling right now, which is why shares continue to drop day after day after day. These large positions can't be sold all in a single day, he said, which is why all individual investors can do is step aside until the selling is done.
Here's what Jim Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Thursday evening:
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