Cramer's 'Mad Money' Recap: The Tectonic Shift in Tech (Final)

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NEW YORK ( TheStreet) -- "Why didn't technology stocks take off today," a puzzled Jim Cramer asked the viewers of his "Mad Money" TV show Monday.

With their huge revenue and earnings per share growth, tech stocks should have rallied big today, but instead, they were stuck in the mud, he said.

Cramer said to truly understand what's going on in the tech world, one must take a look back at history. He said the world today is divided between Apple ( AAPL), a stock which Cramer owns for his charitable trust, Action Alerts PLUS , and non-Apple stocks, much like it was divided between IBM ( IBM) and non-IBM stocks in the 1980's.

Cramer explained that in the 1980's, all of the growth was in mainframes, and that meant IBM was the stock to own. But along came mini computers, and stocks like Data General and Wang, quickly garnered all the attention.

No sooner did they jump on stage before Intel ( INTC), another Action Alerts PLUS name, and Microsoft ( MSFT) dominated the landscape and ushered in the PC age.

And so the cycle went through Google ( GOOG) and the Internet stocks, and now onto Apple and the smartphone age.

Cramer said no one wants to pay up for Intel's or Microsoft's earnings anymore, when Apple has all the growth. He said these "old" tech stocks are now deemed as cyclical stocks, and not growth companies, anymore. "Apple has become the defacto king of tech," said Cramer, as rivals like Nokia ( NOK) have lost two-thirds their value since the iPhone debuted in 2007.

In the market's eyes, Apple, and its derivative plays like Cirrus Logic ( CRUS) and Skyworks Solutions ( SWKS), have the mindshare, and market share, at least for now.

Portfolio Still Sweet

"The C.A.N.D.I.E.S. are still sweet," Cramer told viewers, as he followed up on his high growth portfolio, which originally debuted on June 3. He said while the group has underperformed the S&P 500 since its inception, its long-term record is in tact, and he'd still be a buyer on any weakness.

So what went wrong with the C.A.N.D.I.E.S. stocks? Cramer said nothing more than increased interest in cyclical, industrial stocks, which left the great secular growers in this group behind, albeit only for awhile.

Cramer noted that all of the C.A.N.D.I.E.S. delivered great numbers, with Chipotle Mexican Grill ( CMG) growing revenue at a 20% clip, Apple growing its business on all fronts, Deckers ( DECK) delivering a 12 cent a share earnings beat, and intuitive Surgical ( ISRG) growing their revenues by 34%.

That leaves only Netflix ( NFLX), said Cramer. "People are freaking out about Netflix," he said, thinking that the quarter was a disappointment, when in reality, it was anything but. Cramer said Netflix delivered a 9-cent a share earnings beat, on revenue growth of 27%, yet the bears mauled the stcok on a 7.5% decline in average revenue per subscriber.

Cramer said what's important at Netflix is not the revenue per subscriber, it's that the company is growing subscribers at an increasing rate. Netflix now has more than 15 million subscribers, up 42% from a year ago. Netflix is still a buy, said Cramer, as are all of the C.A.N.D.I.E.S. stocks.

Focus on the U.S.

In the "Executive Decision" segment, Cramer spoke with Jack Hartung, CFO of Chipotle Mexican Grill ( CMG), one of the stocks in Cramer's C.A.N.D.I.E.S. portfolio of high growth stocks. Chipotle recently posted earnings of $1.46 a share, seven cents better than expected, on a 20% boost in revenue and same-store sales that were up 8.7% for the quarter.

Hartung said that Chipotle has been providing "food with integrity" for 10 years now, and is constantly working with suppliers to raise healthy food in a sustainable way. He said Chipotle is playing a part in bringing back the family farm, and is the largest restaurant chain to buy naturally raised meat and the largest buyer of locally growth produce.

When asked about the company's lone store in Europe, Hartung said that Chipotle is beginning to build relationships in Europe, and is training a team of future leaders there, but, he noted, the company will grow when it's ready to grow, and not before.

When asked about how to balance growth versus quality, Hartung said that Chipotle has a unique and strong culture towards great food and great people. He said this culture is a lost art amongst restaurants, but Chipotle works hard to maintain it. Hartung said "we won't grow at the expense of our culture."

Finally, when asked whether Chipotle's Mexican theme can flourish in China, Hartung said that China is "not a question we're trying to answer now." He noted that even with 1,000 restaurants in the U.S., the company still has the opportunity to add thousands of new locations, and that is where iit'll be focused for the foreseeable future.

Wall of Shame

Cramer took a few minutes to update his "Wall of Shame" list of the worst CEOs, thanks to the news that it's expected BP ( BP) CEO Tony Hayward will be stepping down soon.

Cramer said while this move could add as much as $3 a share to BP stock, he still wouldn't be a buyer, as the lingering costs of the spill will weigh on the stock for years to come.

Cramer said the top two viewer nominees to fill the vacant spot left by Hayward have been Gerald Arpey, CEO of AMR ( AMR), parent of American Airlines, and Steve Ballmer, CEO at Microsoft ( MSFT).

Cramer said he doesn't think Arpey deserves the coveted "Wall of Shame" spot, as AMR is the only legacy carrier to not declare bankruptcy. He said naturally the company's legacy costs are weighing down the stock compared to its peers, but he's not willing to write off Arpey quite yet.

Cramer said the case against Steve Ballmer is harder to ignore, with shares of Microsoft down 55% since Ballmer took the reigns in 2000. However Cramer noted that while Microsoft shares have flatlined for almost a decade, the company did just post a strong quarter.

Cramer said his pick for the "Wall of Shame" will come in a later show.

Lightning Round

Cramer was bullish on Nucor ( NUE), Skyworks Solutions ( SWKS), Sears Holdings ( SHLD), Chicago Mercantile Exchange ( CME) and Baidu.com ( BIDU).

He was bearish on Alcoa ( AA), Atheros Communications ( ATHR) and Celgene ( CELG).

-- Written by Scott Rutt in Washington D.C.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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For more of Cramer's insights during the Lightning Round, click here .
At the time of publication, Cramer was long Apple, Intel.

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