Cramer: Hot play on the driverless car

Dinesh Paliwal, CEO of Harman.
Adam Jeffery | CNBC
Dinesh Paliwal, CEO of Harman.

As Jim Cramer turns his attention to the next generation of technology, he circled back to his long-time favorite Harman International Industries.

What the heck just happened to it?

Harman is the maker of high-end audio equipment for car stereos and professional grade gear. But its core business is producing automobile infotainment systems that integrate everything in the car from navigation, safety solutions and smartphone connectivity to media and software that lets the car run.

"When you think about the connected car, you think of Harman," the "Mad Money" host said.

When Harman reported on Thursday morning, the numbers came in below Wall Street's expectations. The company was the victim to the strong dollar, with revenues dropping substantially once currency was factored in.

Additionally, Cramer suspects that this is a case of analysts getting too excited about a company. Harman blew away the numbers when it reported back in January, and it sent the stock soaring. As a result, analysts raised estimates aggressively.

With the car industry leaning more toward connectivity, could Harman's stock ride back into the land of profits? To find out, Cramer sat down with Harman's CEO Dinesh Paliwal.

"Harman is all about leading the connected car, the automotive space. Nothing had changed. The auto sector is very strong, we came in very strong," Paliwal said.

Paliwal explained that most of the headwinds came from the fact that 20 percent of the company's business is in professional audio, which has dollar-denominated pricing. Additionally, it does a lot of business in high-infrastructure based countries such as Russia, China, India and Brazil, where economies have underperformed.

However, the CEO says the company has taken actions to address these headwinds going forward and will continue to focus on automobiles, including the driverless car. Paliwal recently saw research that indicates that by 2016, there will be 220 million cars that are totally connected.

"We need to make safety as the No. 1 parameter, and that is what we provide. We provide smart infotainment security," Paliwal added.

One step that Harman recently took to bring it closer to being a major player in the connected car movement was when it acquired Symphony Teleca.

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Frankly, Cramer scratched his head on that one. Why would Harman buy a software engineering and product development company?

According to the CEO, this was a strategic decision made that will allow Harman to be competent in areas that it traditionally did not service. It will now be able to provide updates to car software via the cloud and provide cloud analytics.

"I am very comfortable, because I've done a lot of services business in my former life. But there's a tremendous synergy with what we do," the CEO said.

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