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Cramer's Mad Money Recap 11/9: PayPal, Nvidia, Advanced Micro Devices

Jim Cramer says he thinks he knows why the markets are rallying despite rising inflation.
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It's impossible to make sense of this market, Jim Cramer admitted to his Mad Money viewers Tuesday. The sooner we all acknowledge that fact, the better. Until the market makes up its mind, all we can do is hurry up and wait, Cramer said. When the market finally makes up its mind, we can make up ours.

Normally, when inflation rages, the money manager playbook says to sell Treasuries, along with any stock with a high price-earnings multiple. That's because future earnings are worth less in a high inflation environment. But in this market, none of those strategies are working, and that has everyone confused.

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Cramer had some theories as to why the markets are rallying despite rising inflation. First, he said the U.S. bond market is still very attractive, relatively speaking, and continues to attract money from around the globe. It's easy to forget that as bad as inflation is here at home, overseas, it's a lot worse.

It's quite possible that the bond market is wrongly indicating an economic slowdown. They could instead be signaling what we all expect, that most of the inflation we have is transitory.

So while Cramer expects Wednesday's consumer price index number to be outrageously high, he's not worried, as these estimates are riddled with problems and don't accurately reflect what things really look like in today's economy.

With all of these mixed signals, all we can do is wait for clarity. Today's downturn in PayPal  (PYPL) - Get PayPal Holdings Inc Report would typically be a buying opportunity. But in today's market, Cramer wasn't willing to recommend buying. So too with Nvidia  (NVDA) - Get NVIDIA Corporation Report and Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report, two stocks Cramer loves, but wasn't willing to recommend in such a mixed market.

Executive Decision: DoorDash

In his first "Executive Decision" segment, Cramer spoke with Tony Xu, co-founder and CEO of DoorDash  (DASH) - Get DoorDash Report, the food delivery service with shares up 8.3% after reporting strong earnings. Shares of DoorDash are up 88% over the past year.

Xu said business is as strong as ever at DoorDash, even with the return of in-store dining. His company is seeing growth accelerating internationally, while domestically, three million Dashers earned more than $2.8 billion last quarter alone.

There's a lot going on at DoorDash, Xu continued. The company remains the No. 1 delivery service in the food space, but they continue to enter new categories like convenience stores and grocery and they just partnered with Wolt to boost their international presence.

DoorDash's mission continues to be helping to make local businesses successful, while taking care of all of the company's stakeholders, he said. That was clearly evident during the pandemic, when DoorDash focused on the health and safety of their drivers while simultaneously lowering commissions for restaurants to help keep them alive.

Executive Decision: Roblox

For his second "Executive Decision" segment, Cramer spoke with David Baszucki, chairman, president and CEO of Roblox  (RBLX) - Get Roblox Report, the online gaming platform that saw its shares soar over 42% Tuesday as investors completely misjudged the company's earnings potential. Shares of Roblox have risen 57% so far this year.

Baszucki said the Roblox platform continues to grow, even with people getting back to their normal lives. The platform now hosts over 50 million users every day that are learning, working and playing together in their online worlds.

Roblox started with younger users, Baszucki explained, and that's why it's completely committed to the safety and civility of the platform. It had a great foundation to start from and has been building great experiences for users ever since.

Roblox is about a lot more than just players, Baszucki added. The company boasts over two million developers that are making money inside their rich virtual economy. Roblox has been building the Metaverse for over 16 years and has the ability to leverage trends and memes in just days and bring them to life.

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Executive Decision: Avnet

For his final "Executive Decision" segment, Cramer checked in Phil Gallagher, CEO of Avnet  (AVT) - Get Avnet, Inc. Report, the electronic components supplier that trades for less than eight times earnings despite being in demand by just about every manufacturer.

Gallagher said he's been in the industry for a long time, but this time, it really is different. He said the combination of increased demand coupled with COVID-induced supply disruptions have created incredibly complex supply chain issues.

It only takes one part to disrupt an entire assembly line, Gallagher noted, and some components are now seeing lead times of up to 40 to 50 weeks.

When asked if component suppliers are ramping up to meet the challenge, Gallagher said that many factories are indeed running 24 hours a day and many others are making big investments to expand their capacity. Unfortunately, new factories can take up to 24 months to produce meaningful outputs, so we still have a ways to go.

Why GE's Breakup Makes Sense

In his No-Huddle Offense segment, Cramer offered his thoughts on today's breakup announcement from General Electric  (GE) - Get General Electric Company (GE) Report.

If you were starting a company today, you'd never put aerospace, healthcare and power under the same roof. It simply doesn't make any sense. And that's why the GE's breakup does make sense.

Conglomerates just aren't getting the love they used to on Wall Street, Cramer explained. For an analyst to cover a stock, they need to understand the company, and that's a lot easier as a pure play rather than a complicated conglomerate.

Cramer said CEO Larry Culp has been very smart. He first cleaned up GE's balance sheet, which will leave all three of the new entities in terrific financial shape. That means when the breakup occurs, shareholders will be rewarded for their patience.

Lightning Round

Here's what Cramer had to say about some of the stocks that callers offered up during the Mad Money Lightning Round Tuesday evening:

Poshmark  (POSH) - Get Poshmark Report: "They missed the quarter badly and that is very disappointing."

Tandem Diabetes Care  (TNDM) - Get Tandem Diabetes Care, Inc. Report: "They are doing very well, and I continue to support Dexcom  (DXCM) - Get DexCom, Inc. Report."

Innovative Industrial Properties  (IIPR) - Get Innovative Industrial Properties Inc Report: "This is the way to play the cannabis industry. "

Big 5  (BGFV) - Get Big 5 Sporting Goods Corporation Report: "They hit the ball out of the park. Dicks Sporting Goods  (DKS) - Get Dick's Sporting Goods, Inc. Report is also doing well. Sporting goods is on fire."

Nokia  (NOK) - Get Nokia Oyj Sponsored ADR Report: "I like Nokia. They are making a comeback and are doing well."

Vale  (VALE) - Get Vale S.A. Sponsored ADR Report: "No, I'm not buying iron ore this late in the cycle. I'll take a pass on Vale."

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