Every weekday, Jim Cramer’s CNBC Investment Club releases the Homestretch, a practical afternoon update to coincide with the last hour of trading on Wall Street. Stocks were on track to finish in the positive on Friday, pushing the S&P 500 into the green for the week and on pace for a fourth consecutive week of gains. Chip stocks are once again dominating the conversation following Intel’s strong quarter and comments on the central processing unit (CPU) market. Graphics processing units (GPUs) from Nvidia and others continue to play a key role in the AI boom. But the rise of agent AI is shifting the balance of CPUs and GPUs in AI clusters toward a more even mix, something the market is underestimating, according to Intel’s CEO. Intel and AMD are usually the first companies that come to mind for investors when it comes to data center CPUs, but recent club owner Arm Holdings also deserves to be in the conversation. The company sells “blueprints,” or CPU designs, and has recently begun developing its own CPU products. When we initiated this new position on Monday, we set a $200 price target on Arm. Remarkably, it has risen more than 30% since then, surpassing its goal. We raise this to $250, but lower the rating to 2. Of course, I’m still optimistic about Arm’s future, but it’s better to wait for it to weaken than buy more here. The company’s next earnings report on May 6th should be good based on everything we’re hearing about CPU, but the stock is going parabolic and it’s our discipline not to follow such movements. By the way, Amazon and Alphabet’s success in developing their own silicon could give them an even greater advantage over other hyperscalers due to the growing demand for CPUs. Amazon’s service is AWS Graviton, while Alphabet’s service is known as Google Axion. Further validating Amazon’s chip strategy, Meta announced Friday that it has agreed to deploy at least tens of millions of Graviton cores. Graviton and Axion are both Arm-based CPUs, and Arm collects royalties on each chip deployed. Get ready for the busiest week of earnings season, with about a third of the S&P 500 index set to be released. Within the portfolio, we will hear from 10 companies: Corning, Starbucks, Alphabet, Amazon, Meta Platforms, Microsoft, Cardinal Health, Eli Lilly, Apple, and Linde. Other large companies scheduled to report include Merck, Caterpillar, Chevron, Coca-Cola, SanDisk, and both Visa and Mastercard. In between these reports is the scheduled April Fed policy meeting, which will be Jerome Powell’s last meeting as Fed chairman. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
