Latest news with #Homestretch
CNBC
12 hours ago
- Business
- CNBC
We're raising our price targets on 5 stocks — and cutting our outlook on another
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: The S & P 500 is rallying to a new record high on Friday, though the index came off its best levels of the day after President Donald Trump said on Truth Social that he has ended trade talks with Canada due to concerns about digital services taxes on U.S. tech companies. Still, it has been an exceptional week for the broader market. As tensions in the Middle East eased, oil prices plunged, interest rates declined, and stocks surged. Some of the biggest winners this week were in tech and AI -infrastructure related stocks. But the financials had an impressive week, too. We'll see the results of the Fed's annual stress test later Friday. Some Wall Street analysts expect Club name Wells Fargo to be among the biggest winners . Price target changes: We're making a handful of changes to our price targets on portfolio stocks. Apple : We are lowering our price target to $240 a share from $280 to reflect some of our recent concerns that a demand pull-forward from people buying iPhones ahead of tariffs could moderate sales in the quarters ahead. We've also expressed frustration about how Apple is allocating too much capital to stock buybacks, when those funds could be more effectively used to accelerate its lagging AI initiatives. Capital One Financial : We are increasing our price target to $250 from $210. As we talked about on Friday's Morning Meeting, the stock still trades at a huge discount to peer American Express , and maybe it shouldn't since Capital One now also operates a closed-loop network – meaning it issues its own cards and runs its own payment network, just like American Express. Based on 2026 earnings per share estimates, Capital One is trading at an 11 multiple while AXP trades at 18. We're not arguing for parity, necessarily. But if Capital One re-rates to 13 times earnings, still a five-turn discount to American Express, as it proves the benefits of the Discover deal, then we're talking about stock trading at about $250 based on the consensus earnings per share estimate of $19.32. CrowdStrike : We are nudging up our price target to $520 from $500. This higher price target reflects the higher price-to-earning multiple the best of breed cybersecurity companies continue to deserve in the market. Although we are raising our price target, we remain mindful of the run the stock has had this year. This was the main reason why we trimmed this position earlier in the week. GE Vernova : We are increasing our price target to $550 from $500. GE Vernova's valuation may look stretched, but the stock keeps powering higher due to the heavy investment needed to power AI data centers around the world. The robust demand for the company's gas turbines and electric grid solutions should translate to strong pricing power for many years. The company remains a potential winner from future trade deals and should benefit from the Trump administration's push to boost energy supply to power AI. Goldman Sachs : We are increasing our price to $725 from $615. We continue to see Goldman Sachs as one of the biggest beneficiaries of an improving initial public offering market, as well as an increase in mergers-and-acquisitions activity. The big banks could also get a boost from looser regulations , as we wrote Thursday. Meta Platforms : We are raising our price target to $800 from $700. A pair of separate bullish analysts raised their Meta price target above $800 this week, and we want to be right there with them because the social media giant has been one of the best at using AI to generate more revenue. Next week: There are no companies in the portfolio scheduled to report earnings next week. On the data side, it will be a jobs-week, which means we'll see the ADP employment report Wednesday morning, as well as the all-important nonfarm payroll report. The jobs report will be on Thursday, not the usual Friday, because the market is closed on July 4 in observation of Independence Day. A few other key data reports are the Institute for Supply Management's manufacturing and services activity indexes for the month of June. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
CNBC
a day ago
- Business
- CNBC
Tests of all the power needed to run AI chatbots back our case for 3 data center plays
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Market moves: Stocks were trading higher again, and the S & P 500 was nearing its record close of 6,144 from Feb. 19. The Nasdaq 100 – an index made up of the 100 largest non-financial stocks listed on the Nasdaq stock market – has already hit record highs, powered by the recent surge in stocks tied to AI infrastructure and technology. Club stock Nvidia closed at a record high Wednesday and was on track to do it again. With only days left in June, Nvidia is our best month-to-date performer with a gain of more than 15%. Outside of tech, Club name Goldman Sachs ' over 14% monthly gain is a close second. AI power needs: Joanna Stern, technology reporter at The Wall Street Journal, wrote a fun article exploring the energy demands of AI prompts run on large language models like ChatGPT. Her process included visiting an Equinix -run data center in Virginia, which houses a "SuperPod" of Nvidia H100 graphics processing units (GPUs). The story mentions some rough estimates on the watt-hours used to execute a text, image, and video prompt on some models. The main takeaway from the story is that data centers are being built at an accelerated pace to keep up with demand, and those are going to require a lot of energy sources. The power needs aren't just from running the prompts – technology to keep the temperature of these GPUs cool is another major need. The story does a great job contextualizing why the data center power generation theme has been one of the strongest in the market over the past few years, and we're playing it in the portfolio through GE Vernova for its gas turbines and grid solutions, Eaton for its electrical power equipment, and Dover as a maker of thermal connectors used for liquid cooling. Private markets: BlackRock 's private market solutions are finding their way into retirement portfolios. On Thursday, the company announced it was selected by Great Gray Trust Company to provide an investment strategy across both public and private markets within target-date retirement funds. While the news isn't entirely surprising, it does offer further validation of CEO Larry Fink's long-term strategy. As we've noted before, BlackRock has made a major push into private markets through a series of multibillion-dollar acquisitions. With investors continually seeking ways to enhance returns, BlackRock believes that incorporating private market solutions into target-date funds could boost annual portfolio performance by 50 basis points over the lifecycle of the fund. That's a meaningful lift when projected over a 40-year horizon. For BlackRock, private markets also command significantly higher fees than traditional index funds — underscoring the economic appeal of this strategy. Shares of BlackRock have had a strong week to date, gaining more than 5%. The market's return to its highs may have something to do with it. Higher values in investment accounts translate into more fee income. Up next: Nike reports after Thursday's close, providing a look into the health of the consumer in both the U.S. and China. There are no major earnings reports on Friday morning. On the data side, before Friday's opening bell, we'll get the Fed's preferred inflation gauge in the personal consumption expenditures (PCE) price index. Later in the morning, it's the final read on June's University of Michigan consumer sentiment survey, looking at their feeling about the economy and inflation. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
CNBC
3 days ago
- Business
- CNBC
Abbott jumps on RFK Jr. health push — plus, reviews of ELi Lilly's obesity drug data
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Stocks were rallying for the second day in a row as geopolitical tensions in the Middle East eased and oil prices plummeted. The S & P 500 rose more than 1% on Tuesday and was around session highs in late afternoon trading. Technology and financials were the two big sector winners of the day, with chip stocks surging and banks picking up steam ahead of a few highly anticipated regulatory events later this week, including the release of the Federal Reserve's annual stress tests results Friday. Obesity trial: Eli Lilly 's experimental weight-loss drug, designed to help patients preserve muscle mass, did not wow Wall Street. That was our takeaway from the analyst notes we read Tuesday, a day after Lilly presented mid-stage trial data on the drug, known as bimagrumab, at the American Diabetes Association's annual conference. As GLP-1 obesity drugs like Lilly's Zepbound and Novo Nordisk 's Wegovy have boomed in popularity, some observers have expressed concern about the amount of muscle mass that patients lose in addition to fat. The current ratio is usually around 70% fat and 30% muscle, "a significant burden for patients," according to Bernstein analysts. On this question, the bimagrumab data released Monday was generally viewed positively by the Street, with Leerink Partners saying it showed "compelling efficacy." Patients who took the highest dose of bimagrumab alongside the obesity drug semaglutide lost more fat than those who just took semaglutide – about 93% fat mass compared with 71.5%. Semaglutide is the active ingredient in Wegovy. Tirzepatide is the active ingredient in Lilly's Zepbound. However, Leerink and other Wall Street firms expressed some reservations about the tolerability and safety data, and what that means for its commercial prospects down the road. For that reason, Leerink and Jefferies analysts both said their financial models for Lilly continue to not include any sales contribution from bimagrumab. While Wolfe Research maintained its outperform buy rating on Lilly stock, the firm said "the safety and discontinuation rates keep us on the sidelines for now." More data is needed for both doctors and investors alike "to get a better sense of the commercial opportunity for this class of muscle preservation drugs," Wolfe Research wrote. The general sense is that bimagrumab wouldn't be broadly prescribed, but most likely used in more targeted populations where loss of muscle is a more pressing concern. In a note to clients on Tuesday, Bernstein said that could include elderly patients, as well as perhaps some patients who need to shed fewer overall pounds and simply "rebalance body composition." "Regardless, there's still much to play out," the analysts wrote, echoing Wolfe in saying that data from Lilly's ongoing trials for the drug will be necessary. For us, we agree with the Street on bimagrumab — and are much more focused on the development of Lilly's daily obesity pill orforglipron. Late-stage trial data for orforglipron is expected out in the third quarter. Wearables: Health & Human Services Secretary Robert F. Kennedy Jr. said Tuesday that his department plans to encourage the use of wearable health devices. "My vision is every American is wearing a wearable within four years," RFK Jr. said at a House Energy and Commerce Committee meeting . His comments sent shares of Abbott Laboratories and other continuous glucose monitor (CGM) device makers higher. We'll have to see the full details when the campaign comes out, but Abbott is well-positioned to benefit from the increased adoption of these devices. Not only does it have the best-selling CGM for diabetes patients in the Free Style Libre, but it also has a CGM available without a prescription in Lingo . Up next: FedEx reports earnings after Tuesday's close. General Mills reports before Wednesday's opening bell. On the economy, there is a slew of housing-related data out on Wednesday, including mortgage applications, new home sales, and building permits. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
CNBC
4 days ago
- Business
- CNBC
We're adding a new name to the Bullpen. It's a cheap way to play the AI boom
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: The S & P 500 was up around 0.7% in afternoon trading, in what's been a volatile session filled with geopolitical headlines. Shortly after the opening bell, stocks traded modestly higher, brushing off concerns about rising tensions in the Middle East after the U.S. over the weekend bombed Iranian nuclear sites. Despite concerns that we'd see a big market sell-off and surge in oil prices following the U.S. attacks, the rally was broad based. But shortly after noon ET, the market began to reverse course. Gains faded amid renewed concerns about how Iran might respond. There were initial reports that Iran attacked a U.S. military base in Qatar . But what made the intraday pullback particularly interesting was that it came as oil prices dropped significantly — a move that would typically suggest de-escalation, not rising risk. However, as more became known about the Iranian attack — most notably that the missiles were intercepted and there were no reported deaths — oil accelerated to the downside and stocks mounted their rally. The market is viewing Iran's response as not as bad as feared. Ultimately, the market volatility underscores how fluid and unpredictable the situation in the Middle East remains— the kind of uncertainty markets dislike in the short-term even though the long-term impact may be limited. Outside of geopolitics, interest rates fell after Federal Reserve Governor Michelle Bowman said she would be in favor of lowering interest rates at the Fed's next meeting in July if "inflation pressures remain contained." This is the second Fed member to voice the possibility of rate cuts at the next policy meeting. Later Monday, Chicago Fed President Austan Goolsbee said at a speech in Milwaukee that rate cuts are appropriate if the tariffs do not lead to a bump in inflation. The Fed cutting rates by a quarter percentage point in July is currently an out-of-consensus view, according to CME Fed Watch . As of 2:45 p.m. ET, there was only a 22.7% probability of a 25-basis point rate cut at the July 30 meeting. Bullpen update: We are officially adding Cisco Systems , the networking equipment powerhouse that has made big strides to improve its artificial intelligence and cybersecurity offerings, to our Bullpen watchlist. Cisco fits into the AI puzzle through its networking equipment that connects all of the powerful computers at the heart of the AI data centers. As increasingly powerful computing equipment is being created, new, sophisticated networking equipment is required to make it all work. Cisco shares popped nearly 5% in mid-May after the company reported strong quarterly results and issued better-than-expected guidance. The company saw a huge surge in orders — up 20% year over year, or 9% excluding the Splunk acquisition, and reached its target of $1 billion in AI infrastructure orders from webscale (also known as hyperscale) customers one quarter early. Better serving the cloud-computing market has been a big strategic focus for Cisco, in a bid to counter the momentum of rival Arista Networks . Historically, Cisco had been known for serving enterprise customers. Since earnings, the stock has continued to drift higher thanks to positive news around its AI infrastructure business. Two weeks ago, Cisco announced a number of new innovations for AI data centers that the company says will allow it to deliver "secure, scalable AI infrastructure to drive growth and enable new use cases." The stock has also benefited from Deutsche Bank upgrading Cisco to a buy rating on June 15. In explaining their upgrade, analysts said they have improved visibility toward durable mid-single-digit growth thanks to AI tailwinds — from both webscale and sovereign AI deployments. Cisco's valuation also is attractive, Deutsche Bank argued at the time. The firm noted that Cisco was trading at only 15 times estimated 2026 earnings per share, which it said represented at 25% discount to the S & P 500. Cisco shares have had a great 2025, rallying about 13%, outperforming the S & P 500's more modest gain of about 2%. Although the stock currently trades at its new 52-week high and we typically don't like to chase stocks after a big move, this one has caught our attention as an inexpensive way to play the AI buildout. We also like the company's ongoing transition toward subscription software revenue, which provide higher margin revenues, and its strong track record of returning cash to shareholders. In the most recent quarter, Cisco paid out approximately $3.1 billion in dividends and buybacks. Up next: After the closing bell, we'll see the quarterly results from the homebuilder KB Home . Carnival reports before the opening bell on Tuesday, offering a checkup on discretionary travel spending. On the economic data side Tuesday, we'll get the FHFA House Price Index, the Richmond Fed's manufacturing index, and the Conference Board's monthly look at consumer confidence. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
CNBC
20-06-2025
- Business
- CNBC
Home Depot eyes a deal — plus, casual dining shines and TikTok ban is delayed once more
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: The S & P 500 was modestly lower Friday as investors mull over the latest news from the Israel-Iran conflict and consider the Federal Reserve's next monetary policy move. Fed Governor Christopher Waller said that policymakers could lower interest rates as early as July. "That would be my view, whether the committee would go along with it or not," Waller told CNBC Friday morning. Meanwhile, shares of chip stocks — including Club holdings Broadcom and Nvidia — were under pressure after a Wall Street Journal report indicated that the U.S. may revoke waivers that major semiconductor manufacturers rely on to use American technology in China. Elsewhere on the geopolitical front, top European diplomats were set to hold talks with Iranian officials in Geneva on Friday. It comes after the White House said that President Donald Trump will decide within the next two weeks whether the U.S. will directly join Israel's attacks on Iran's nuclear sites. Home Deal-po?: QXO is not budging on its unsolicited $5 billion cash proposal to acquire GMS Inc. following Club name Home Depot's own bid for the building products distributor, Bloomberg News reported Friday afternoon . A QXO spokesperson told Bloomberg that $5 billion is the company's full offer. On Thursday, The Wall Street Journal reported that Home Depot made a submission for GMS — raising the specter of a bidding war with QXO, the latest venture of billionaire businessman Brad Jacobs, a frequent guest on "Mad Money" over the years. Home Depot and QXO are competing for a bigger share of the construction supply market targeting professional contractors. Home Depot made a massive move in that area last year with its $18 billion acquisition of SRS Distribution. RBC analysts said Home Depot's bid for GMS might be perceived "slightly negatively," arguing it could further gross-margin dilution and delay share repurchases because the company's debt load remains above its targeted levels in the wake of the SRS deal. Casual shining: Darden Restaurants' fourth-quarter earnings report Friday showed that consumers are still opening their wallets for casual dining despite high levels of economic uncertainty — an encouraging sign for portfolio name Texas Roadhouse . Darden's leading chains — Olive Garden and LongHorn Steakhouse — saw same-store sales rise 6.9% and 6.7% for the quarter, respectively. LongHorn Steakhouse, a direct competitor to the Texas Roadhouse chain, reported a 9.3% increase in total sales, which includes the performance of 16 new locations. "Consumers are figuring out that casual dining is a great value. And so, they're coming to casual dining more," said Darden CEO Rick Cardenas "We're seeing that across our brands and some of the industry. And so, without commenting on what's happened in other places, we think that's a big part of it. Consumers want to go out and spend their hard-earned money. And we think we're taking some wallet share from fast food and fast casual." Added Darden CFO Raj Vennam: "Pretty much every household income is growing in casual dining except for the ones below $50,000." For its full-year fiscal 2026, Darden expects total inflation in the range of 2.5% to 3% — including both labor and commodities like food — and same-store sales between 2% and 3.5%. Executives also doubled down on their commitment to affordability, saying they expect menu price hikes this fiscal year will "still likely be below total inflation." In general, what we heard from Darden, particularly on the overall consumer interest in casual dining, bodes well for Texas Roadhouse. It comes after analysts at UBS were upbeat on the Club name in a note earlier this month . We took some profits on Texas Roadhouse in May to lock in some big gains on our purchases in April during the tariff-driven market turmoil. While the stock is up less than 2% since that trim, it is our best-performing name this week, gaining around 6%. Clock keeps ticking: Trump signed an executive order Thursday granting another 90-day extension to the deadline for ByteDance, the Chinese parent company of TikTok, to divest the social media app's U.S. operations to an American entity. This is the third time Trump has extended the divestiture timeline for the short-form video platform, which is the chief competitor for Club name Meta . The deadline for ByteDance to complete the sale or face a ban in the U.S. is now set for Sept. 17. From an investment perspective, it would be a clear-cut positive for Meta's stock if its main rival in the U.S. went dark — forcing its users and advertisers to redirect their attention and dollars elsewhere. But, at this point, we're not holding our breath for it to happen, given Trump's stated desire to "save it." Meta's actions suggest that CEO Mark Zuckerberg isn't betting on that happening, either. Instead, the Facebook and Instagram parent is putting its full financial force behind its AI investments to keep attracting and retaining users, and to further improve revenue and profits in its core advertising business. As we recently wrote , the AI-first tech giant keeps improving its AI tools for advertisers to create personalized ads with diverse text, backgrounds and images at a low cost. To stay ahead, Zuckerberg is on the hunt for top AI talent. CNBC reported Thursday that Meta is planning to hire AI investors Daniel Gross and Nat Friedman and partially buy out their venture capital fund, NFDG, which has invested in AI startups like Perplexity. Thursday's news comes after Meta recently invested $14.8 billion for a 49% stake in data-labeling company Scale AI. And, according to a Bloomberg News report Friday , Meta held discussions with Perplexity about a potential takeover before making its Scale AI offer. Ultimately, Meta's AI advancements and top experts in the field will allow it to better compete should TikTok remain as a competitor in the U.S. Meta stock is down about 1.6% Friday, to roughly $684 per share. It's up around 17% year to date. Up next: Starting after the close Friday and continuing into next week, Club name Eli Lilly will be presenting a slew of trial data at the American Diabetes Association's annual conference. Meanwhile, there are no Club holdings reporting earnings next week, though we'll be keeping an eye on results from the likes of FedEx and Micron . KB Home also has earnings in what will be a busy week of housing news, most notably the National Association of Realtors' existing home sales report on Monday morning. The biggest economic event of the week is the Fed's preferred inflation gauge, the personal consumption expenditures (PCE) index, which is due out Friday morning. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
