The "Force" Is With the AI Trade, U.S.-China Rare Earth Dispute, ChatGPT Erotica Backlash 10/16/25

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Jim Cramer (0:45)

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

Carl Quintanilla (0:53)

Good Thursday morning. Welcome to Squawk on the Street. I'm Carl Quintanilla with David Faber here at Post 9 of the New York Stock Exchange. Cramer's in San Francisco, continuing his Blockbuster Week on the West Coast. Meantime, stocks looking for some follow through as the bulls try to crawl back to last Friday's high. We are heavy on tech chip and AI news today, along with FedSpeak, half a dozen speakers on a day where without the shutdown, we would have gotten PPI in claims. Our roadmap begins with no letup in that AI boom. Salesforce up pre-market after giving a rosy forecast for the next few years and Profit at TSM hitting another record on AI chip demand.

David Faber (1:26)

Plus the back and forth over trade. China blames the US for the global panic over rare earth controls while President Trump confirms, at least in his opinion, that we are in a trade war with China. And Sam Altman is defending his decision to allow content such as erotica on ChatGPT, saying, quote, we are not the elected moral police of the world.

Carl Quintanilla (1:49)

Let's begin, though, with Salesforce up in the pre-market, as we said, the company forecasting revenue of more than $60 billion in 2030, citing some optimism regarding its AI offerings. The guidance was announced yesterday during a presentation at Dreamforce. Jim, you've been all over this. A lot of people talking about a return to double-digit growth.

Jim Cramer (2:07)

This was an extraordinary conference they had last night, where they basically admitted, you know what, we had a lot of customers last year at Dreamforce, we weren't ready, we didn't really know how to do it, but we figured it out and now the customers are coming. It kind of kills the narrative that's been really dogging this company, which is that their old business isn't doing that well as people decide not to take the product and the new business is not inflecting. What we heard was the old business is doing well, people are not canceling the product. The new business is just starting to inflect in the next 12 to 18 months, going back to double-digit, so it will return to be its old growth strength.

That's why you're seeing something as strong as this move, because it really defeats the bearish case. David, this is what's been going on. As people say, you know what, they've got this eagent philosophy, but it's not something that you can put numbers on. What the CFO said last night was, that's untrue. The numbers are coming, it's inflecting within a timeframe that you want to be able to be on the stock, and it's causing the bears to scramble and some of the bulls to come out of their den and say some good things.

David Faber (3:16)

Jim, do they need to change the underlying model or are they? I'm just curious because you've made the point any number of times that the services they sell to the extent they do on a per seat basis, right? And again, correct me if I'm wrong. So, but you're going to have fewer and fewer people because the technology can do more and more.

Jim Cramer (3:35)

So how does that work?

David Faber (3:37)

Do you base it then on a different metric in terms of what the ultimate revenue to you as Salesforce is, in presenting this product to corporations?

Jim Cramer (3:46)

I think you asked the exact question that stalled the stock. And what Miguel Milano said last night, and he's a very trusted guy, he's a chief revenue officer, was that people aren't canceling. They want both. They want the optionality of having the old business and they're paying the same. And they want this new consumption business without hurting their old business. It was something that needed to be said because over and over again, all I have heard from bearish analysts is, you know what, there are other businesses suffering as people fire, people who would be using Salesforce product. They don't need as many people. What it said in this incredible, Jesus, in the analyst meeting was, that's just not true. And those who are saying it are not telling the truth. And I thought that was an extraordinary moment in the analyst meeting, which just said we've had it with that analysis. Now, I've asked Mark multiple times, is this happening? And he said, no, no, no. But I needed to hear it in an analyst meeting, not off the cuff. And they said it. They said, look, our regular business that is done per seat is doing fine.