Mad Money

Cramer compares 2 tech winners that have a history

2 tech winners with a history
2 tech winners with a history

As the onslaught of earnings continues, Jim Cramer turned to two tech players that reported after Wednesday's bell to analyze the possible winners of one of earnings season's busiest days.

"When I look at ServiceNow, the cloud-based software company ... that's literally replacing outdated patterns of work, particularly involving crucial customer service or hard-to-manage but consistent problems of human resources, I can make a strong case that that won the night," the "Mad Money" host said.

Now only did the software name see 41 percent overall growth and 43 percent growth in year-over-year subscription revenues, it is up 50 percent from two years ago.

Watch the full segment here:

Cramer compares 2 tech winners that have a history
Cramer compares 2 tech winners that have a history

Under the leadership of both former CEO Frank Slootman and his successor, former eBay CEO John Donahoe, ServiceNow grew from a $93 million company to a $1.4 billion giant.

But ServiceNow had a formidable challenger. Online payment company PayPal delivered a stellar report, with 6 million new customers, bringing its total to over 203 million accounts.

"That's PayPal's best organic growth in three years, showing a phenomenal acceleration in this hugely important key metric," Cramer said, adding that Venmo, PayPal's millennial-friendly peer-to-peer cash delivery app, saw a 114 percent increase in growth.

In addition, the company's transactions per account ticked up, as did revenues, and the payment player generated a massive $603 million in free cash flow.

"That give this company a remarkable flywheel effect and it allowed PayPal's fabulous CEO Dan Schulman to announce a $5 billion buyback," Cramer said. "The darned thing is a digital cash machine for its shareholders."

Best of all to Cramer was PayPal's move to bolster some of its key partnerships, including with Visa, to expand operations into Asia, Alphabet's Google, to be incorporated into Android Pay, and Wells Fargo, to boost services at point of sale, among other personal finance names.

Once, those potential opponents were considered by the market's bears to be PayPal's fatal flaws and a reason to sell or even short its stock, Cramer said.

"Now, Shulman has convinced those companies that their best bet is to work with Paypal, not against it, especially if they want to win over the hearts and minds of millennials," he explained.

The ironic twist here is that these two winners have a history. ServiceNow's Donohue, with some pressure from legendary investor Carl Icahn, made a series of decisions that set the stage for eBay and PayPal to split.

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