Salesforce Slumps, Macy's and the Retail Rout, House Passes Debt Ceiling Bill 6/1/23

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Jim Cramer (0:25)

It's Jim Cramer here. You're listening to the opening bell of CNBC's Squawk on the Street. Don't miss a minute of the action.

Carl Quintanilla (0:33)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber at Post 9 of the New York Stock Exchange.

First day of June kicks off with the debt ceiling bill that does pass the House, moves to Senate.

Big diet of eco data today. ADP runs hot, but yields mostly lower. 10-year 361, lower since mid-May. Our roadmap begins with big tech though, and Salesforce shares under some pressure despite a beat, the raised guidance and this focus on AI.

David Faber (0:58)

Also ahead, the House passes the debt ceiling deal on a bipartisan basis. And two Fed officials are making the case for skipping a rate hike, at least this month.

Plus worries about consumer demand. May ceases cutting its full-year forecast. That news is weighing on that particular stock.

Carl Quintanilla (1:16)

Let's begin with this run for big tech, closing out the month of May in the green. The NASDAQ did post its first three-month win streak since 2021, but we're watching Salesforce today, down on the pre-market, despite a beat for its latest quarter.

CEO Mark Benioff was on mad with Jim last night and broke down the results.

Mark Benioff (1:35)

You're focused on our restructuring, improving our productivity, our performance, prioritizing our core innovations like AI and CRM, and delivering for our shareholders. And Jim, as you can see from the quarter, productivity is up, profitability is up, revenue is up, and Jim, cashflow is dramatically up, as you saw these incredible cashflow numbers.

And we're also increasing our margin guidance for the year to our record annual 28% where it couldn't be more excited.

Carl Quintanilla (2:02)

They do raise the margin guide for the year, quarter guide pretty good on EPS.

Jim Cramer (2:06)

Look, here's what's happening. He delivered on what he said to the five activists. He was gonna go for cashflow, he brought back more shares than he issued, the revenue was good, bottom line was good. What people didn't like was his alleged forecast for this quarter revenue. I tried to pin him down on it, but here's what people need to know who are selling it. This morning, 15 analysts commented on Salesforce.

15 price boosts, not cuts, unlike Okta, unlike CrowdStrike. That means that if you buy the stock down 16, it'll probably go down 17, 18, because these guys like to make themselves look right, you buy it, you don't sell it.

You don't get that many price boosts and think that there's not support underneath.

David Faber (2:49)

Right, and of course the move itself is worth noting.

Jim Cramer (2:52)

Up 68% come to the print.

David Faber (2:55)

And this is a case where, I mean, the activists, I think it was five of them at the end of the day or something close to that. But Mark has, Mark took it to heart. Started with Jeff Smith in our interview last fall, I guess it was early in the fall where we had that interview and Jeff Smith talked about really this kind of, come on, focus on winning in the marketplace and for shareholders. You can do both.

And this is a company also that has been cutting jobs.

Jim Cramer (3:21)

Right. Oh my God, yes.

David Faber (3:22)

And this is an economy in which cutting jobs is not necessarily something that is criticized, broadly at least, because it is seen as perhaps being helpful in bringing inflation down when you do that.

Jim Cramer (3:33)

Well, what he's saying, remember this quarter, okay, so the revenue doesn't accelerate, but remember, he has a big AI meeting coming up in June. He's got dream force. He has this streamlined process where you can get all the verticals with one salesperson now, the A team.

And David, I gotta tell you, take it to heart, the activists. He did something I've never seen anybody do. He embraced them to the point that I think they were sick of them. He called them every Friday night, say what are we doing? It was a new way to embrace activists. He basically said, I love you, tell me more. And then he did it. Isn't that, is that a great way?