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Jim Cramer: On this panel we've got some great people including my friend Eric who works with me. How are you? Good to meet you. I just get to everybody's background. Eric covers the large cap tech space as well as number of smaller spaces. I think he's the most indispensable tech writer there is in America today, writes with The Street and I say that not just because if I read him every day, I try to read him actually the minute it comes out. But because that's what the CEOs tell me because he doesn't get it wrong. He gets it right. Paul Rodriguez, Managing Director, Arthur W. Wood, he covers enterprise software, has over 20 years of experience in the financial service industry and by the way, his wall street career was preceded by a nine year stint as an actual guy in the industry. Sales and marketing roles at CA Technologies, and one of my favorites, Texas Instruments, CA gets that bid. Well done. And that's because not meeting Chinese approval.

And then Naomi Shah is an analyst from Union Square Ventures. She spends time working on the health care thesis with Union Square's broader investment pieces, but also companies in media, entertainment, education, direct to consumer. Before this she was an equities trader at Goldman Sachs, worked at internet of things group at Intel. Excited about understanding what drives human behavior and harness technology and also Union Square Ventures is the original backer of The Street. Fred Wilson was at one point chairman of our board and I think is a very forward looking organization that reads that even though it's in the East always felt like it better was than the West.

So I'm going to first just start, go right down and ask everyone. I created the term FANG with Bob Lang who also writes from us. And that was an off the charts item, we did it on Tuesday, well I said, Fang sounds like fun, and now many billions and billions of dollars later I want to know, write down, whether anyone thinks, and I'll start with you, Eric, that one of them has overstayed its usefulness and what letter would you replace it with?

Eric Jhonsa: It's a tough question. And I feel like all four are still executing very well in different ways. You know you can make a case, you can add a company like Microsoft in there as well, but I wouldn't say any of them has overstayed its welcome so far.

Jim Cramer: All right. Paul?

Paul Rodriguez: Yeah, for me personally I look at, as we talked about on the phone, the plumbing behind the cloud build out. So I would tell you for right now, it's very tough for Google. You know, they're really trying to play catch up to both Amazon and Microsoft in providing cloud infrastructure so that'd be the one that I would point out.

Jim Cramer: Yeah, it's interesting, Google cloud services, Diane Greene runs it, they've often said listen Jim, we're the up and comer in the cloud, we can talk about the cloud obviously in a moment but, geez, they're really not in the room. And so I totally understand that, I happen to like them for other reasons, our travel trust owns Alphabet, now Google, but yeah, I mean, it's not certainly anything I would reference, their cloud business. Okay, go ahead Naomi, what do you think?

Naomi Shah: That's a really interesting question. I think that I'm more in Eric's camp where I don't think any of them have overstayed their welcome necessarily, however I do think that there are small things that you can point out in maybe Facebook's company that point to, there's a lot of regulation crackdown on it, users are becoming more wary of certain security issues, and if you look at user growth numbers, it might point to a trend that's, it was huge when it started, but maybe not as valuable today as it was at one point, and there are other ways that people are finding that they can have social networks in a more distributed way. Where all their data isn't in one spot.

Jim Cramer: No, I know that you have focused on the privacy issues, political issues, Travel Trust had a huge [inaudible] and Facebook kept some, alongside, and then I pick up another 14 million personal entries hacked, Facebook, trying to figure out whether it's in the stock I'm on, it literally I try to figure out the time, is this hack in the stock, is this negative piece of news in the stock. Where do you think we are in terms of regulation particularly overseas?

Naomi Shah: I think that regulation is just starting to come down on a lot of these companies. And its not only difficult for large companies to tackle these regulatory issues, it's also difficult for start ups in this space that are trying to find their way in the tough regulatory landscape but also trying to figure out where they play with large income [inaudible] like Facebook and Netflix and Amazon and Google.

So especially overseas like the European Union obviously is very outspoken about wanting to distribute all of the data to individual users, and not have it with large organizations that are easily hackable. And Facebook obviously is working on a lot of things to ensure security as are all these cloud companies that are working with small and medium size businesses.

However I think that it's only going to get tougher in the next few years from a regulation standpoint, especially overseas.

Jim Cramer: Okay, Paul, there's a big debate going on and when I came back from Dreamforce, that maybe the data center, and even the cloud, could be slowing. And I found that kind of, cannily I thought it was kind of ridiculous but there can be pauses. What do you think the cloud environment's going to look like out a few years, and do you think that it peaked.

Paul Rodriguez: Not at all. I think what's happening right now is you're seeing what they call a hybrid environment emerge, whereby you have companies that want to move something to the cloud, they don't want to forklift the whole data center but they want to take, for example, email. Or they want to take an HR application. Human resources. And they want to put that in the cloud, and that's where they start.

And then over time they're going to build on that. But no, I personally from the conversations I have, which are a lot with customers in the channel, I don't really agree with that, that argument. It's just, like I said, you're not seeing the whole forklift upgrade but there's certain components, people want to, or organizations want to move into the cloud.

Jim Cramer: Okay, Eric, you've been writing a lot of really great stuff during this decline in tech. And we mentioned earlier whether Google is as profitable. What I like about your stuff is, you kind of talk about the other businesses that these companies have that we may not like Google cloud but maybe we're overlooking some others and you've been doing a really lot of great stuff about the actual what I almost think is the value package of what we see with technology.

Can you speak to where we are particularly after last week and why everyone is kind of soured on tech but it really isn't something as a unit that you should sour on?

Eric Jhonsa: Yeah, you know, some of the concerns obviously were around interest rates, like FEMA, you know on our team mentioned, when new interest rates go higher you have to apply a higher discount rate to how you value these companies over long term, their future cash flows might have some concerns but you look at how much spending is shifting towards technology, how much value add there is, both on the consumer side and on the enterprise side. I don't feel like it's anything to panic over in the near term.

You know you can go on and on and all these different industries being upended in various ways by these trends such as clouded option or machine learning or IoT or whatever else. So woudln;t feel like it's something to be too nervous about, I feel like it's still a priority for businesses and how consumers spend money, it's constantly shifting towards a lot of these proverbial tech companies, these large cap firms. So I wouldn't be too concerned right now.

Jim Cramer: Do you think that there are levels of cyclicality that we overlooked? The reason I say that is because for instance [Gary Dickerson] came on Mad Money and said applied materials really don't have the old cyclicality, Micron came on and when the stock was at 62 and said, you know this time it's different we really don't have it. Did they get it wrong? Was there just a, there really was just a supply demand imbalance, they didn't see it?

Eric Jhonsa: Yeah, there is some cyclicality in semiconductors and semi equipment that I think was overlooked. At the same time this particular inventory correction might not be as bad as the past ones.

Jim Cramer: Really?

Eric Jhonsa: Yeah, and if you look, just the way it's looking, you have still a lot of demand drivers, whether it's cloud data center spending, automotive chip growth, IoT device growth, it's something like GPU purchasing, there are a whole lot of different factors that are still leading to higher demand overall for semiconductors or, you know, the shift from hard drives to SSDs. And for a company like Micron, their largest business DRAM, it's been consolidated around three companies, you know, Micron, Samsung, and SK Hynix. And those three companies between them have really done a good job of keeping some quiet growth, at restrained levels. Not keeping it from exceeding demand growth to any large degree. So you know while DRAM prices could fall over the next couple, few quarters, to a moderate extent, after you've seen them soar over the last two years, it might not be too bad, relative to past downturns.

Jim Cramer: Be interesting, because five times earnings from Micron.

Eric Jhonsa: Yeah, that's very true.

Jim Cramer: It'd be very, very interesting. Paul, we spent a lot of time on Mad Money talking about what we call the cloud kings. But the cloud kings are onboarding companies, like VMware which we really, we've had Sanjay Poonen on many times or a Red Hat which we think are just these, you could call it the picks and shovels, of the cloud. Which ones stand out to you technologically. Not stock prices, we don't care about that, but technologically as real innovators that may have moats around them.

Paul Rodriguez: Well, the one name I could think of right now, those two names you mentioned are great names. The one I like particular is Splunk.

Jim Cramer: Me too.

Paul Rodriguez: Yeah. Splunk has a lot of man years invested not only in the product but what they've done is they've developed a very neat ecosystem where they can tie in with other vendors. Not only work in the on premise environment behind the data center but they can work in the cloud as well. So that in itself, you take the ecosystem, you take the man years behind the product, that is an amazing technology with a competitive moat.

Now what I would tell you is, I believe Amazon interestingly enough has taken initial steps on trying to compete with them. But they're years behind where Splunk is right now, so that would be one example I would...[crosstalk]

Jim Cramer: ...yeah, where Splunk is a cloud, we have Splunk on a lot and I remember one time talking about tabloid data which is better than it used to be but trying to figure out whether they could challenge Splunk and what I didn't realize is how far ahead Splunk really is from everybody else.

Why don't you just for those who are not as initiated, just say why you would hire, why a company hires Splunk and what they give you.

Paul Rodriguez: Well I think of Splunk, to the best analogy I would use is, Splunk is like your car dashboard. When you have your computing environment, you want to see what the health ar, what the problems are and how you're getting alerted on the problems.

So Splunk centralizes that and takes care of that a lot for companies and they essentially centralize that. Not to get too in the weeds here but what you have to have is a lot of mechanisms to touch everything, hardware, software wise, and gather all that data. That's incredibly hard to do. So there again, Splunk is a very powerful, what I consider like a dashboard, and you can bring it all together.

Jim Cramer: Naomi, you obviously early stage can kind of pick and choose what themes that you think that you want to invest in. Which of the ones, certainly some of the ones that we've talked about but others that you just see, voice, artificial intelligence, what should investors in this room be thinking of as themes, not stocks, where you're putting your money?

Naomi Shah: Right, so one of the biggest themes that we invest on is network effects. So as the price of communication is driven down, as more people are attached to their mobile phones, we're thinking now every single person is a node in a much larger network. So what are companies that are leveraging these networks where, at a very low cost, you can access this whole network of users and then use those users to make the network even stronger?

That in and of itself is a network effect. And so that's where I think a lot of cloud companies start to become attractive. Because they are moving towards this trend of infrastructure as a service, instead of software as a service, which we all have heard. And this basically means that smaller companies and mediums sized companies don't have to think about how their data is processed, how it's managed, how t's stored, how numbers are calculated, they don't have to think about any of that because someone else is handling all of that, and they become dependent on those companies.

And so I think that a very simple analogy is if you think about how newspapers functioned traditionally, you have all these reporters that are going out, getting ideas, and they funnel up to one central person. The decision is passe back down, you know exactly what to report on. And then you move towards these large social networks, one that we're invested in, or that we invested in early on was Twitter, where now everyone becomes the reporter, and each person has the ability to report because they have access to the internet, they have access to all these other nodes that are people with mobile phones.

So I think that trend in cloud computing, where you're able to distribute all of the, for example VMware I think is a really interesting company in this space, SalesForce provides all these tools for other companies to build on top of. I think that trend of network effects is something that we're going to continue to see, and it's just going to be amplified by the number of users that are on their mobile devices.

Jim Cramer: Excellent. So Eric, Eric does these fabulous, he does the blogs, of what companies report, network, Netflix reports Tuesday?

Eric Jhonsa: Yeah.

Jim Cramer: What are you expecting and also we don't talk enough about the N in FANG but I've always, I've looked at, I just finished binging on an Amazon show, Jack Ryan, I said...

PART 1 OF 3 ENDS [00:15:04]

Jim Cramer: ... wanted Amazon show, I feel like Jack Ryan. I said to myself, "Well, this is absolutely the same as Netflix, but they've got a lot more money than Netflix, but Netflix has always said Reed Hastings welcomes all comers, it furthers the adoption. What do you expect on Tuesday and what do you think about Amazon and Netflix?

Eric Jhonsa: Well, first, I'd say for the earnings, the bar is set a little lower than it was in July. They issued weak subscriber guidance last time around and stock fell, so it's down about 15% from where it was when it reported going into the Q2 report. That makes things a little easier. Also, while they've got a ton of new content coming out now year round, I think their back half content slate's a little stronger, the first half, so that should help out as well. So it's hard to predict for sure how the stock will react post-earnings, but I think the fact that expectations are lower should help them out.

As far as Netflix versus Amazon goes, I think it's worth keeping in mind that Netflix's content budget is still meaningfully higher than Amazon's. I think Amazon's now spending around $5 billion a year on content. That's a substantial amount, but I think Netflix's cash content spend is now around $12 billion. It might be a little more. I think profit and loss base was $7.5 to $8 billion, and just the fact that Amazon relies on Prime memberships to pay for that content spend and they're also supporting all kinds of other things with Prime, makes it very hard to match Netflix dollar for dollar in terms of content spend, because all of Netflix is subscription revenue. It's going into their streaming business into those content investments, and so that's just a major scale advantage. It's also a data advantage for them because there's so much more viewing going on, on Netflix collectively, and they can use that to personalize the experience.

Then, just the fact that you read Hastings and Ted Sarandos and the rest of Netflix's management team is solely focused on streaming. It's very important. Jeff Bezos is barely in. He's got a lot of brilliant people working for them, but Amazon's focused on many different things, whereas Netflix is solely focused, or almost solely focused, for all intents, on the streaming opportunity and that's just very important.

Jim Cramer: Why, Eric, didn't more of these companies see what Netflix was up to? There was a long period where you could have bought Netflix at $10 billion if another company- Apple could have bought it at $25 billion without a problem. Why was it so- or any of the major content. CBS was bigger than Netflix for a long time. Why didn't any of the major content players or technology players understand what Netflix was doing?

Eric Jhonsa: Yeah, it's hard to say. There was a very competitive environment for a time, or at least people felt it was. There was Hulu, there was Amazon, and Netflix, when it came to these large media companies like Disney and CBS and whoever else, they were offering them a ton of money for their content and they felt like this was free money. Netflix is making, growing [inaudible] profits, but they didn't realize they were creating a monster.

I feel like Disney's attempt to launch their own streaming service, they announced that last year, it's going to launch toward the end of next year. It's kind of like trying to pull the plug on Skynet after it's a little too late. Now Disney's service could still be successful, given all the brands they have, given all the intellectual property they have, but I really doubt it's going to put a major dent into Netflix's growth going forward.

Jim Cramer: Okay, Paul, one of the things that I find when, they don't say it on air, but a lot of the companies have come on, the SaaS companies, but pretty much anyone, hardware or software. When I say, "What unites you, or what are your common visions," they always say that Oracle is the common vision because they're the common enemy. Now, Oracle is a company that is a gigantic company with an unbelievable balance sheet, a visionary founder, smart people who are co-CEOs, and I'm trying to figure out whether- They dropped the lingo about what the cloud growth was, was the last quarter, but where do you think Oracle is and why are they, that it's not collegial among Oracle and the rest of the players?

Paul Rodriguez: Well, first, Oracle's, I mean, if you look at, we talked about Google earlier trailing those other two guys. I mean, Oracle's even behind them. They got a very late start in the cloud infrastructure business and the reason is they have to protect all that legacy they have. As you know, they spent a number of years gobbling up a number of companies in the app software space. So the problem is, what do they do with these customers? How do they handle their transition, and they sure as hell don't want to lose them to Microsoft or Amazon or someone else.

Look. It's common in the IT world where you kind of get sick of your vendor after he's jammed you on cost, jammed you on terms, and you're just thinking, "How am I going to get rid of this guy?" You went through that period with Oracle and now, as you say, there's a bunch of SaaS companies who are Workday or whatever that are lining up to kind of go in there and replace Oracle in specific silos.

Look. They've got a presence. They are a behemoth in the space, but on the other hand, I think there's got to be another act two here for them, because I see the cloud infrastructure guys, Amazon and Microsoft and those types, they're going to be targeting Oracle and having increased success over time.

Jim Cramer: Could Oracle ever be digital equipment? Could it be Wang?

Paul Rodriguez: That's a great question. You know, I think, yeah, obviously they could be if they don't get their cloud infrastructure story together. It's a very powerful story, as we're seeing with the growth of AWS and Microsoft. Absolutely.

Jim Cramer: All right. Naomi, we haven't talked about the fang, Apple. There are a lot of things that- again, you care about healthcare, but I have the old watch. I have the 2. I want to get the new one because my cardiologist says get the new one. I've never had a cardiologist advise me on jewelry before. Where are the new products with Apple? Do they matter? We always hear that nothing can move the needle, Apple, and even the service revenue stream can't move the needle. Do you think that's true, or do you think that these innovations actually are additive to EPS to the point where it might expand the mold?

Naomi Shah: I think the latter. I think that these, for example, like the newest watch that was released, it enables so many things that can potentially follow on. The fact that now you have the ability to do remote monitoring. While we don't invest in wearables, I think it enables something that's a lot bigger, which is this idea that healthcare in the US is an extremely broken system. How do we move towards telemedicine, remote monitoring, people interacting with their doctors over voice, text, and these types of wearables are offering structured data. You can talk to a doctor over asynchronous chat. The control is in the user's hand, and I think that's going to be a huge movement. It'll kind of take some time to rip out what's currently existing, and for doctors and users to actually make that behavioral change, but I think that it's very much possible with these types of technologies.

Jim Cramer: I know Tim Cooks personally. I understand that, but do you envision a world where insurance companies will say if everybody wears the watch, we're going to lower your corporate rate?

Naomi Shah: Totally. I think it lowers downstream costs of healthcare enormously by, it makes it more preventative, you're trying to keep people out of hospitals. All of the emergency room and emergency vehicle costs will become as low as they can go. I think that that's a huge perk for insurance companies and something that a lot of tech companies are becoming more aware of. They want to start collecting all this data so that they can then arm users with data so that they can make more informed decisions, become more educated about their healthcare, and it's a huge space of growth, I think.

Jim Cramer: Right. Eric, what do you think about that?

Eric Jhonsa: Yeah, I'd agree. I think Fitbit has struck a lot of deals with enterprises where they deploy their devices on a large scale to employees, and companies feel like it's a way to lower their healthcare costs. I think Apple's done some deals like that and they'll certainly do more. Just given the cost of the devices, it's very reasonable. You might be paying $300, $400 for the Apple watch. Might have to pay a little bit more to people to manage all these devices, but if you're cutting down heart attacks, you're cutting down on employees running up these large healthcare bills, then there's clearly a long-term payoff.

Jim Cramer: Right. I want to just put this one out to everyone. When I was out at Dreamforce, each year it gets worse. Actually, four years ago, it was actually pretty good. There's an axis developing, or ally in axis, Microsoft Adobe against Salesforce and arguably maybe everyone else who's a platform. Workday's a platform, that's their buddy. Amazon web service, you could say that they have a great relationship with them. What do you think? Is Microsoft Adobe a formidable one, two, and do you see them as being one way to go and then Salesforce? Because I look at that last Adobe acquisition and I think that was squarely trying to take Salesforce business away. What do you think about that axis ally situation? Anyone want to take a shot at it?

Eric Jhonsa: Me.

Jim Cramer: Sure.

Eric Jhonsa: I guess I think Adobe and Salesforce have kind of been going at it for a little while. It's intensified now with the Marketo purchase. Earlier this year I think Adobe bought a company called Magenta, which encroached on Salesforce's turf as well, like e-commerce software, and I think the big trend here is the fact that IT spending is shifting towards CMOs. They're accounting for more of it. I think someone mentioned on an earlier panel companies want that 360 degree view of a customer. That's a factor as well, and Microsoft, they do have some areas, some ways that they can kind of join forces, but I feel like a bunch of companies can profit from this. Salesforce is very well positioned and have the send-in platform around CRM, and I feel like there is probably room for multiple companies there. Microsoft, so CRM products more used in the mid-range than with all these large enterprises, so I think that's worth keeping in mind as well.

Jim Cramer: I was interviewing someone a couple weeks ago, and at the bottom of her resume it said, "Fluent in Salesforce."

Naomi Shah: Wow.

Jim Cramer: Is that where we are?

Naomi Shah: I mean, I think so. I think at this point it's like so many companies use it that it is a skill that you could put on your resume and it's a very hireable skill. Kind of echoing what Eric was saying, I think that part of what I see as a trend in cloud companies is that people want to use multiple platforms, and it's a trend that we've seen as the Internet has developed, is that things kind of move into these niche fragments, and I think the same thing is going to happen in cloud computing. There isn't going to be one or two allies that can kind of own every single part of cloud computing. I think we'll see fragments, and within those fragments, companies will win the majority market share and they'll be really good at what they do, and because they're really good at what they do, they can offer it at a lower cost to people, and that will continue to make them more and more attractive for companies to use them.

So I think that there is going to be natural competition within these companies, and I think because of that natural competition, being extremely vertically aligned and doing one thing really well, for example, Salesforce just focusing on CRM and that relationship management, I think, is going to be huge and that's what's going to create winners in each of those categories within the cloud companies.

Jim Cramer: Do you agree?

Paul Rodriguez: I would just caveat with one thing. If there's one takeaway from anything I'm saying today is watch what AWS and Microsoft are doing in their own ecosystem, in their own infrastructure. They've been developing tools themselves for the last several years. Some of those tools are better than others, but you've got to be conscious of what they're doing because there's this argument. I agree exactly with what Naomi says. The one thing I would stress is this. There are situations where customers look at these tools from, let's say an Amazon. They say, "Good enough and the cost is right, and so I don't need to go out and buy that third party vendor because that's expensive. That adds another training and cost associated with that."

So you have to be ... Look. Nobody wants to go back to the Microsoft days where they just dominated the hell out of one platform, but on the other hand, like an Amazon or Microsoft, these guys have very sophisticated ecosystems they're putting in place, so you've got to know what they're doing. As you're looking at another investment or you're a customer buying the software, because that's very important these days.

Jim Cramer: Well, for stock pickers out there, that's not the advice you give, but how do we know what they're really up to?

Paul Rodriguez: Well, I mean, if you go, for example, on the AWS website, you pull up on the Amazon website and you go and you look at, for example, the Amazon web services page, they list all their categories and all their tools out there. So even the average investor can go on and say "They're in security," or, "They have a database in which they're competing with Oracle." So it's able. You could track that. Microsoft, Google, the same thing. They list all those tools out there and you can kind of monitor that.

Jim Cramer: Eric, do you think that Amazon Web Services, buried within Amazon, is undervalued? In other words, that the AWS business is so good that when yous tart seeing some of the parts analysis that say 2,500, 3,000, that they're not fanciful?

Eric Jhonsa: It could be. I mean, I think it's certainly more fairly valued now than it was a couple years ago. People have much better understanding. It's a business that might be producing close to $30 billion revenue this year. It's getting there, at least. You value that at eight times sales or something, like some other fast-growing cloud companies, that's a $240 billion company there. Different people come in with different valuation estimates. I wouldn't want to say this is exactly how much AWS is worth. It's very difficult, but certainly a business with that kind of scale, with that kind of growth, it's still grown over 40%, that has that kind of ecosystem, that kind of mode, that's upending so many other companies over the next 5 to 10 years. It's very high valuation, no matter what the specific number someone comes up with.

Jim Cramer: Right. I think it's always-

PART 2 OF 3 ENDS [00:30:04]

Eric Jhonsa: It doesn't matter what the specific number someone comes up with.

Jim Cramer: Right, I think it's always different. We talk about this all the time for action alerts, which is that Amazon's never been cheap, so what you have to count on is that Besos has thought about something that you haven't, and that when you buy it, there's just kind of ... We know Amazon Web Services and we know Amazon Prime and we know Amazon advertising. When you're buying it at 1,800 or 1,700, you're buying it because there's a fourth thing that you don't even know about. I was doing some work with my wife who's on the board of Bucknell, and we were talking about the excellent work that Geisinger does which is a really fabulous healthcare insurance company in the middle of Pennsylvania, and the person who runs it is on the board of Bucknell and they're talking about does rate and healthcare cost them what they do. They need to be reigned in. The person people are looking at is Besos. And by the way, it's not Jamie Diamond they're looking at even though he's part of it and if even though he has huge advantage versus the other banks, and it's not Buffett.

There's a belief that Besos has a really fabulous health care system coming up, and I know that he's brought out some of the best minds. And therefore maybe that a pillar for. We don't know.

Now, Naomi you mentioned, I remember when Fred - I had dinner with Fred at Union Square ventures, and we had created this thing called Columnist Conversation For Real Money if you were a subscriber. And it was very because he said, that was the original Twitter. And that as about three years ago that I saw him. I now feel when I read the stories - I look at the stock of Twitter, I look at the stock of Facebook, I look at the stock of Snap. If you didn't know any better, you would think social media has peaked. True? False?

Naomi Shah: I don't know if social media is ever going to go away, so I think that social media will continue to exist. In what context it will exist? Whether it's Snapchat, Facebook, I'm not sure. I don't think that as a whole it can peak, though. So, I think that people will continue to want to know about each other, and the world through these large platforms. I know that like Snapchat is actively working on like expanding their product offering. Because maybe like images that disappear after 10 seconds aren't enough for people. So now they're expanding into AR, VR and spectacles and they're trying to like get a larger audience base than just millennials for example.

And then with Facebook, most of their revenue comes from ads and so once you've - I think like Q1 2017, Facebook number of users was growing at like 17% or 18%. Q1 2018, it's growing at like 2-3%. So it's still increasing - more users are joining the platform. But at a much slower rate in the U.S., and overseas in Asia, Europe, other places. So I think the number of minutes that people are spending on social media won't go down. But the distribution will change because people's attention spans aren't as long as they used to be. So they want short content and quick content, so there's going to have to be a shift in the way that content is generated and distributed. So, social media will still exist, but maybe the platforms need to shift in order to accommodate new types of media.

Jim Cramer: I had lunch with a major consumer packaging stock company earlier this week, and the executive was saying ... I said, 'well, where's your ad budget going? The ad budget's considerable.' And they said, 'well, obviously still toward internet, still toward Google, and still toward Amazon.' But that she said that she had put a huge bet right now on Instagram Stories because it just by far produces that best return on investment.

Naomi Shah: Totally.

Jim Cramer: And I said, but yeah half of your stocks ...

And she said, 'look, I don't know anything about the stock. If I want to give a dollar to social media to get that customer, I have to go to Instagram. And I said, I would shift everything to Instagram if I had my way.'

Naomi Shah: Completely. I was at a consumer brand conference recently, and everyone was talking about selling through Instagram because there's this huge movement to where it's influencers. Everything is driven by likes and retweets, or now you can shop through Instagram. And kind of on this idea of Netflix... things are moving toward subscription models. All of these direct-to-consumer brands are trying to get users hooked through places like Instagram and Snapchat to subscribe so they become long-term users. So now there's this word called subscription saturation. People are never going to let go of their Netflix subscription. So it's like, out of the next 10 subscriptions down the road, what's going to get cut. Because people can't afford to pay for 10-15 subscriptions per month. So I think, I completely agree. I think Instagram is an extremely valuable social channel right now.

Jim Cramer: Paul, a lot of people tell me, 'Okay, Jim. You have to earn artificial intelligence stocks.' And I always say to people, 'Okay, tell me what artificial intelligence really is, and who is doing it, and then I'll be able to tell you about the stock.' Artificial intelligence is bandied about as a force. And yet when I ask people they say, 'Yeah, we've got it figured out.' But they don't seem to even know what it is.

Paul Rodriguez: Right, well it's an emerging category that you know is affecting numerous industries. You know, not only my industry which is a software... but it's affecting the semi-connector industry, as well. As you're seeing companies like Nvidia and those types line up to develop hardware for it. But look, I agree. Right now to me, it's still a lot of talk. Not a lot of action. I couldn't sit here and tell you one pure play where I could say, 'hey, there's a way to play that right now in the marketplace.' What I would tell you is this though. The one thing it is doing is it's ramping up the need for computering resources. So, when I look at AI and machine learning, which are normally mentioned together, I look at that as a great indicator for something like AWS or a Microsoft or a Google - their businesses - as a driver.

Jim Cramer: Well that's important because a lot of people are always trying to figure out what's the next secular trend. Maybe there isn't one. I know because I'm close to Nvidia that Nvidia's very involved in it. Doesn't necessarily mean go buy Nvidia because there's lots of different dynamics here, but I think if that you're not ... that these companies are in the mix constantly. And if you're not in the mix, you're not in the investible world.

Which brings me, Eric, to a real conundrum I have. IBM reports this week. IBM tries to hard to be in the strategic and prioritive business, they talk about their version of the cloud and how, 'Jim, it's much bigger than you realize.' Yet, I saw a piece of research this week from MoffettNathanson and I - No, I'm sorry, I forget which firm... it started as a sell. Where do you think when IBM reports this week that is it just there and nothing else? What are they going to say?

Eric Jhonsa: I think with IBM you have to look at the fine print when they report their cloud revenue. For their total cloud revenue, they'll report things like related software sales and sometimes related hardware sales. You know, even some of the services revenue you can debate how much you know qualifies as cloud. I mean, they do have a cloud infrastructure business. It doesn't seem to be in the same league in terms of the features, in terms of the ecosystem as you know the Big Three, as Amazon, Google and Microsoft. So, you know, it's been challenging for them in a lot of ways because at the same - while they have some meaningful cloud growth, various older businesses are also getting disrupted by cloud infrastructure adoption. Whether it's hardware, whether it's on premise databases, a lot of other things. I think, you know, while they do have some interested assets, they're also in a tough spot. And I think the performance of their stock has reflected that.

Jim Cramer: Was there anything they could have bought that would have changed their... I always think, and I look at them, and I know they made all these acquisitions, but they made all these small acquisitions. And I keep thinking that they had a shot. I keep - I am concerned about IBM. I think it's a really great American company. But the slower businesses are slowing down so quickly. That no matter what they seem to do with the faster business, it's not enough.

Eric Jhonsa: I mean, I feel like in cloud infrastructure it's not a winner takes all game. But I feel like the Big Three are going to keep taking shares giving all their competitive advantages. And that will put companies like IBM and Oracle and various other smaller players like Rackspace in a tougher spot. So, it's a difficult thing. As far as acquisitions, I do wonder if they went harder into the like the SAS space when it was still growing earlier, even invest in some of these like cloud app platforms... the past providers a little more, maybe they could have a bigger presence. But it's difficult for them right now for sure.

Paul Rodriguez: They actually did acquire Softlayer.

Eric Jhonsa: Right.

Paul Rodriguez: If one remembers a couple years back, you know, unfortunately it's like everything else in technology. You lose your way and somebody else outmaneuvers you and out-hustles you.

Jim Cramer: Naomi, you're Eastern. I always think one of the problems when they ask me about IBM, I say, 'Look the problem is, they're Eastern. They can't recruit as well.' Do you guys see that bias? And is it a real bias? Is it harder to get talent here? Because IBM I think is handicapped that they in New York.

Naomi Shah: No, that's completely a trend we see. It's actually getting increasingly hard for SF companies to recruit talent because things are just so expensive there. Like I think - we're consistently publishing data about how it costs to recruit talent in SF both from compensation and from options in the company. And the price you have to pay there, you need to be making 30% more than a company in the middle of America or somewhere else in the U.S. in order to retain the top talent in SF. So I think that being out of the Bay Area, might be a benefit in fact. However, the valuations of companies in the Bay Area are extremely high. So I think there's a trade-off there in terms of recruiting talent, but also being very close to where all the money is. And there's just so much money that's being given to companies in the Bay Area right now. Just because of proximity to lots of VCs and private equity firms. So I think that there's definitely a trade off, but could certainly be a disadvantage.

Jim Cramer: Okay, in the few minutes we have left, I just want each one of you to talk about some trend or theme that we should be looking out for. And then I know later in this week - I, with Eric - will try to figure out ways to profit from it. But just broader themes. Because I love a panel like this. Because [inaudible] here is sitting, saying, listen should I buy Zoor or not? As much as I love that, that's not necessarily how you're going to make the most money. So, a theme that I'm missing. A thrust that I should be talking about. That we should all be thinking about. Go first?

Eric Jhonsa: I guess one area just because so many chip stocks have declined, and I mean, there are these cyclical concerns, is automotive chip growth. There's so many ways in which the semi-conductor content within cars is going to keep growing within the next several years. Electric cars also require like several hundred dollars more worth of semi-conductors than a traditional IC-based cars. Then autonomous driving is another big growth driver for Silicon content. You need very powerful processors. You need a lot of memory. The creation of these more powerful infotainment systems within cars, that's another driver. And also, if you look down the line and as Level 4 and Level 5 autonomy take off, people are going to have more free time inside their cars. That could drive the creation of these more powerful computing systems within them. So, all that I think will drive that additional growth within semi-conductor content within cars. And a lot of the companies that are going to be servicing that growth, you know like NXP, Texas Instruments, Analog Devices, Cypress Semiconductor - they've seen fairly sizable haircuts over the last few months. Just because of cyclical concerns about semi-conductors. But there's still a pretty large growth opportunity there over the long run.

Jim Cramer: Thank you. Paul?

Paul Rodriguez: Love the convergence of cloud and security. You got security companies using the SAS subscription model, going in and replacing all these hardware appliances that have gathered over the last 10 years. You can throw them out, get down on cost, rise in functionality. Great model.

Jim Cramer: Thanks. Naomi?

Naomi Shah: I think distributed computing is a big one. So we think about things in terms of infrastructure and then apps that are built on top of the infrastructure. So figuring out in this world of artificial intelligence and distributed computing, what are going to be the big infrastructure players that will then enable more apps to be formed. And that's where you want to invest because those are going to be there to stay.

Jim Cramer: Alright, I want to thank Naomi Shah, analyst from Union Square Ventures, Paul Rodriguez, managing director Arthur W. Wood Company, and our own Eric Jhonsa, technology columnist at Street. Thank you so much.

The term 'FANG' was coined by TheStreet's Jim Cramer.

And, so, it should be no surprise that FANG and Cloud Kings were highlights at Jim Cramer's recent Boot Camp: How to Invest Like a Pro in New York.

Cramer asked his expert panel "I want to know... whether anyone thinks... that one of them has overstayed its usefulness and what letter would you replace it with?"

The Panel of Experts Respond.

  •  Technology Columnist, TheStreet says "It's a tough question. And I feel like all four are still executing very well in different ways. You know you can make a case, you can add a company like Microsoft in there as well, but I wouldn't say any of them has overstayed its welcome so far."
  • Paul Rodriguez Managing Director, Arthur W. Wood Company added, "Yeah, for me personally I look at, as we talked about on the phone, the plumbing behind the cloud build out. So I would tell you for right now, it's very tough for Google. You know, they're really trying to play catch up to both Amazon and Microsoft in providing cloud infrastructure so that'd be the one that I would point out."
  • Naomi Shah Analyst, Union Square Ventures says "That's a really interesting question. I think that I'm more in Eric's camp where I don't think any of them have overstayed their welcome necessarily, however I do think that there are small things that you can point out in maybe Facebook's company that point to, there's a lot of regulation crackdown on it, users are becoming more wary of certain security issues, and if you look at user growth numbers, it might point to a trend that's, it was huge when it started, but maybe not as valuable today as it was at one point, and there are other ways that people are finding that they can have social networks in a more distributed way. Where all their data isn't in one spot."

The panel tackled a range of topics from why investors have soured on tech to Why Netflix Is Jim Cramer's Least Favorite FANG and 'Amazon's Never Been Cheap", Says Jim Cramer.

Speed Watch! Videos from other panels at the Boot Camp:

Want more of Action Alerts Portfolio manager Jim Cramer and his Boot Camp for Investors? Click here.