A surface-to-air missile shot down a U.S. military drone over the Strait of Hormuz, a U.S. official said Thursday.World Politicsread more
President Donald Trump has publicly blamed the Federal Reserve's interest rates hikes for holding back U.S. economic growth.The Fedread more
China's President Xi Jinping arrived in Pyongyang on Thursday morning for a state visit to North Korea — the first by a Chinese state leader in 14 years. Experts say the move...Asia Politicsread more
Gold prices spiked in the afternoon of Asian trading hours on Thursday after a dovish U.S Federal Reserve opened the door to further rate cuts, and the 10-year Treasury yield...Metalsread more
The Fed came very close to promising a rate cut Wednesday, and now markets are focused on a possible July rate cut.Market Insiderread more
Waymo has signed a deal with Renault and Nissan to develop self-driving cars and trucks for use in France, Japan and possibly other countries in Asia, including China, the...Autosread more
It's crucial to note that the culprit behind attacks on two commercial tankers last week has not been conclusively proven.World Politicsread more
"No U.S. drone was operating in Iranian airspace today," a U.S. Central Command spokesman said, according to NBC News.World Politicsread more
The Fed left interest rates unchanged at its monetary policy meeting. The U.S. central bank did, however, drop the word "patient " from its statement and said it would "act as...Asia Marketsread more
As the presidents of U.S. and China near a highly anticipated meeting on trade, the gap in both sides' expectations regarding a deal remains wide.World Politicsread more
Markets had expected the central bank to keep its benchmark interest rate steady while setting up a cut at the July meeting.The Fedread more
CNBC's Jim Cramer has concluded that running a profitable, growing business in this market is kind of like walking a tightrope, with value investors who want to see cost-cutting on one side and growth investors who want to see spending on the other.
What tipped him off? Google parent Alphabet's Monday night conference call, in which the technology giant's management team went over its fourth-quarter earnings report with shareholders and Wall Street analysts.
"Multiple analysts excoriated them ... for spending like a drunken sailor with no end in sight," Cramer said Tuesday on "Mad Money." "However, what really threw me was a question tossed out by a very good analyst, Brent Thill from Jefferies."
Thill, a top tech analyst, asked management what they planned to do with the company's huge cash hoard. He pointed out that it "has doubled in the last five years to $109 billion" despite Alphabet's deal activity being much lower than that of its peers.
"Alphabet was circumspect with its answer, but I think Brent's question cuts to the core dilemma of being a big, profitable growth company, because, in a way, all of that cash can be a curse," Cramer said.
Because Alphabet's value-driven shareholders want the giant to cut back on its spending, it ends up sitting on a "huge mountain" of cash with nowhere to put it, he explained.
"First, you need to understand Alphabet gets little to no credit for its cash hoard because the money's not doing anything for them — they collect a little interest, big deal," the "Mad Money" host said. "While the company announced a $12.5 billion buyback, that's small change, simply not enough to move the needle for a $790 billion business. "
Worse, anything that Alphabet might consider buying is likely very expensive, especially considering how much Alphabet is already spending on research and development.
But spending the $109 billion could put Alphabet in an even tougher spot, Cramer said, pointing to the carnage that happened in IBM's stock after it acquired cloud computing company Red Hat.
"At first, the market loathed this deal," he said. "Stock got crushed. Didn't help that this happened in the fourth quarter, when everything tech was falling apart. Lately, though, IBM's come roaring back, especially after reporting a better-than-expected quarter a couple of weeks ago. Hey, maybe the Red Hat acquisition was a good idea after all, but the punishment for taking this kind of bold action was so upsetting that billions of dollars were lost instantly."
Apple has a similar issue, Cramer continued. Growth investors and bold analysts at the likes of J.P. Morgan want to see the iPhone maker make a flashy acquisition in entertainment despite the fact that it already has some "incredible offerings" in the space, he said.
As for Amazon, a hint of margin weakness in its most recent earnings report tanked the stock despite other divisions like cloud and advertising, where the e-commerce giant spends a lot of money, being strong, Cramer said.
"So what should these tech titans do with all of their cash? I don't really have any answers here, but I do know that they shouldn't take their cue from the short-term gyrations in their stocks or the analyst critics," the "Mad Money" host said. "My advice? You can't please everybody, and in the case of Alphabet and Amazon and Apple, I think it's a mistake to even try."
Disclosure: Cramer's charitable trust owns shares of Alphabet, Apple, J.P. Morgan and Amazon.