The difficult situation in the Iran war continued this week as well. The S&P 500 and Nasdaq each closed at record highs on Friday after being swayed by developments in the Middle East throughout the week. Oil prices also soared after Iran and the United States closed off the Strait of Hormuz, a key oil shipping route. Nevertheless, record gains led to another positive week for the S&P 500 and Nasdaq, up 0.6% and 1.5%, respectively. The Iran war was not the only focus. Corporate earnings and the split between hardware and software stocks also caught our attention. Here’s a breakdown of the three themes that have rocked Wall Street over the past five sessions. War Headlines Monday was a down day for stocks after little progress was made in last weekend’s peace talks. Tuesday wasn’t much better after President Donald Trump told CNBC that the United States is “ready” to bomb Iran if no deal is reached by Wednesday’s cease-fire deadline. The tide changed on Wednesday, with the S&P 500 and Nasdaq closing at record levels after President Trump announced a two-week extension of the ceasefire. Just as the market finally found its bearings, another reversal occurred on Thursday. Stocks came under pressure and oil soared after President Trump said he had ordered the U.S. Navy to “shoot every ship” that was laying mines in the Strait of Hormuz. Still, stocks managed to end the week on a strong note. Investors are betting that peace talks will resume soon. On Friday, the S&P 500 and Nasdaq rose 0.8% and 1.63%, respectively. To new highs. We will have to wait and see if peace talks take place this weekend. U.S. special envoys Steve Witkoff and Jared Kushner are scheduled to visit Pakistan, possibly to meet with their Iranian counterparts. All war developments have reminded us of one thing. The key is not to make big deals based solely on the Middle East conflict. There is too much uncertainty and volatility that is not based on the fundamentals of the stock. We have been saying this since the war began on February 28th. Binary opposition in technology The buy-hardware, sell-software trade is back. Investors bought tech stocks seen as supporting the creation of AI infrastructure and exited stocks seen as threatening its implementation. This week’s biggest winner? chip stocks. The group rallied for its 18th consecutive session on Friday, buoyed by Intel’s explosive earnings report. Great news for those of us who are invested in Nvidia, Broadcom, and most recently Arm. On Monday, we initiated a position believing that Arm stock will be a winner in the AI agent era. Since then, the stock price has increased about 33%. For the week, Nvidia rose 3.2%, ending Friday’s trading at a record high, while Broadcom rose nearly 4%. Broadcom posted another profit on Friday, locking in gains from the stock’s recent parabolic rise. Broadcom ended the week at a new high. The other side of the deal was software. The group took a beating after gains from IBM and ServiceNow. Investors were disappointed that IBM did not raise its guidance despite beating revenue and bottom line estimates. ServiceNow’s profit margins were a concern, as was subscription revenue growth, which was depressed by the war. The result was a cascading decline in software stocks, which meant a bad Thursday for Salesforce and Microsoft. For the week, Salesforce fell 2%, while Microsoft rose 0.4%. Our cybersecurity companies Palo Alto Networks and CrowdStrike were unfairly classified as losers, but each managed to gain about 6% for the week. Earnings IBM and ServiceNow weren’t the only quarterly earnings that caught our attention. GE Vernova and Dover showed the importance of building AI, while aerospace was key in the Boeing and Honeywell reports. The insatiable energy demand fueling the AI boom was a financial windfall for GE Vernova and Dover. GE Vernova stock rose nearly 14% after Wednesday’s impressive profit. The club raised its price target for GE Bellnova from $1,000 to $1,300. As hyperscalers pour billions of dollars into building data centers, orders for the company’s large natural gas turbines show no signs of slowing anytime soon. “This could be forever,” Jim said during Wednesday’s morning meeting. Dover stock rose nearly 6% after Thursday’s results. It was an impressive quarter that reminded us why the company is in our portfolio. Increased PT from $230 to $245. The growth in orders has been amazing. Dover can ride the AI wave because AI plays a role in liquid cooling in data centers. GE Vernova closed at a record high on Friday. Dover stock ended the week about 3% below its February 20 closing high. Investors went into the earnings call worried about Boeing and its aerospace companies, believing that soaring jet fuel prices caused by the war would hurt demand and profits. That turned out not to be true for Boeing, which reported better-than-expected earnings on Wednesday. As a result, the stock price rose 5.5% at one point. It was also a step in the right direction for Boeing’s turnaround under CEO Kelly Ortberg. Honeywell shares fell on Thursday’s announcement that the aerospace division’s disruptions in the Middle East had hurt sales. However, the quarter was more encouraging than the market expected. In a more significant development, Honeywell has agreed to sell its warehouse and workflow solutions division and set a June 29 date for spinning off its aerospace business as a separate company. The remaining second company will focus on automation. (See here for a complete list of Jim Cramer’s Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investing Club, you’ll receive trade alerts from Jim Cramer before he makes a trade. 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