Tesla's Triumph: Cramer's 'Mad Money' Recap (Friday 12/18/20)

Jim Cramer says Tesla's inclusion in the S&P 500 is a big driver for market gains; plus, he has the game plan for next week.
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Tesla's  (TSLA) - Get Report inclusion in the S&P 500 is a dream come true, Jim Cramer told his Mad Money viewers Friday, and just like the broader market rally, the believers have been running circles around the skeptics.

Cramer said the day's market action had nothing to do with COVID vaccines, COVID stimulus or surging COVID cases, and everything to do with Tesla, the market cap of which, at $621 billion, is so big that the entire S&P index needed to be rebalanced to accommodate it. People love the products and love the stock, he said, and they're betting that shares of Tesla have even more upside ahead as the company meets and beats its targets.

Looking forward into next week, Cramer said his game plan starts over the weekend, when we'll hear news about Moderna's  (MRNA) - Get Report vaccine approval and more about those missing Pfizer  (PFE) - Get Report vaccine shipments. We may also hear some news about the stimulus package, although Cramer said he's not holding his breath.

Then on Monday, Cramer said he'll be watching the S&P 500, which will open with Tesla included. He'll also be watching Nike  (NKE) - Get Report, shares of which rose 4.4% Friday on strong earnings, and JP Morgan Chase  (JPM) - Get Report, which announced plans for a $30 billion stock repurchase next year.

For Tuesday, Cramer will have his eyes on the Carmax  (KMX) - Get Report earnings, expecting them to be strong as people flock to the suburbs from cities. We'll also hear from uniform supplier Cintas  (CTAS) - Get Report and payroll processor Paychex  (PAYX) - Get Report on Wednesday, both of which will provide an update on the small business economy.

The markets close early on Thursday, Christmas Eve, and are closed on Friday for the Christmas holiday.

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Off the Tape: Covid Testing

In his "Off The Tape" segment, Cramer spoke with Dr. Michael Mina, assistant professor of epidemiology at the Harvard School of Public Health, to discuss COVID testing.

Mina said that rapid, accessible and frequent testing is the only way to truly know if you're infected so you can stay home and not infect others. Yet at every level, the U.S. has failed to make this a reality. He explained that in the U.S., we've focused too much on PCR testing, which is highly accurate, but also very slow, rendering tests mostly useless in stopping the spread.

As an alternative, Mina proposed simple, at-home test strips that are similar to pregnancy tests and can be administered at home regularly. He said with a simple mouth swab, people can have tests in just five minutes, and if they're sick, they can stay home and not infect anyone else.

While the paper strip tests aren't as accurate as their PCR cousins, they don't need to be. For a $6 billion to $11 billion investment, everyone in America could test themselves twice a week for a year, Mina said, which would dramatically stop the spread of COVID in its tracks and be a massive game changer.

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EV Companies Are Charging Ahead

The electric vehicle SPACs keep on coming, Cramer told viewers, and the next special purpose acquisition on his radar is Pivotal Investment Corp II  (PIC) - Get Report, which will soon be merging with XL Fleet, makers of electrified drivetrains for light and medium-duty commercial vehicles.

Cramer explained that unlike cars, which are built in their entirety by the manufacturer, commercial trucks are built in stages. The base of the vehicle is built by companies like Ford  (F) - Get Report and General Motors  (GM) - Get Report, but then the partially-completed trucks are sent to up-fitters, which outfit them with specialized equipment. This is where XL Fleet comes in.

XL Fleet currently manufactures electric hybrid drivetrain systems for nine different models of truck and will soon debut a fully-electric version as well.

Cramer said he's bullish on the company's outlook given that commercial trucks can benefit greatly from lower fuel and maintenance costs. He did worry, however, what will happen when Ford begins producing its own electric F-150 truck, as the F-150 is one of XL Fleet's current models.

However, at $15 a share, Cramer said XL Fleet is a steal. He wouldn't chase shares higher however.

Executive Decision: Cloudflare

In his first "Executive Decision" segment, Cramer spoke with Matthew Prince, chairman and CEO of Cloudflare  (NET) - Get Report, the cloud services provider with shares up 391% for the year.

Prince said that Cloudflare's mission has always been to build a better Internet and over the past nine months, the Internet has become more important than ever. Cloudflare's customers have come to depend on Cloudflare for fast, reliable services.

"The Internet really is a miracle," Prince continued. He said it wasn't designed for performance, reliability or security, he said, but it's still possible to retrofit these things onto it decades after it was invented.

When asked about that last point, security, Prince explained that technology is moving toward a "no-trust" architecture that won't give hackers access to the entire network after just a single logon. Instead, users will be compartmentalized, able to only see what they need to see. "The bad guys won't always win," he assured Cramer, there's just a lot of work that still needs to be done.

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Valuing IPOs

In his No-Huddle Offense segment, Cramer said the problem with many of the market's recent IPOs is not their valuation, it's that we don't know how to value them at all.

Data warehouse company Snowflake  (SNOW) - Get Report is seeing 119% revenue growth, Cramer said, and practically every company needs to move their data to the cloud. Meanwhile, DoorDash  (DASH) - Get Report might not just be a pandemic play, it might be something we rely on even after we're allowed to eat inside.

Finally, there's Airbnb  (ABNB) - Get Report, a company that Cramer said is worth way more than its current market value. Airbnb has a virtual monopoly on safe and affordable vacation lodging, he said, and that makes it far from a frothy valuation.

Lightning Round

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

Wells Fargo  (WFC) - Get Report: "I think that one is finally starting to move."

MasTec  (MTZ) - Get Report: "We have a lot of infrastructure needs. This is a good one."

Caterpillar  (CAT) - Get Report: "There are very few industrials. I like Deere & Company DE more than Caterpillar."

Velodyne Lidar VLDR: "I like this one. I like Luminar Technologies  (LAZR) - Get Report too."

Tupperware  (TUP) - Get Report: "I have decided that this stock is too hard to own."

Freeport-McMoRan  (FCX) - Get Report: "Freeport is a pure copper play. I'd hold onto this one."

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At the time of publication, Cramer's Action Alerts PLUS had a position in JPM.