Important points
CNBC’s Jim Cramer said Friday that next week’s flurry of tech earnings will test the mettle of a market driven overwhelmingly by a surge in artificial intelligence stocks. “This market is a beast,” the “Mad Money” host said. “More precisely, if you own anything connected to a data center, it’s very dangerous.” The S&P 500 and Nasdaq Composite closed at record highs on Friday, helped by gains in semiconductor maker Intel and other stocks that benefit from massive AI infrastructure developments. Mr. Kramer warned that he would be challenged in the coming week. “Next week is the most important week of the quarter for the tech industry,” he said, arguing that it will tell “if everything has gone a little too far.” On Monday morning, Verizon reported, reminding us that consistency is still key. Mr. Kramer emphasized the company’s yields and stable profits, in contrast to high-flying tech companies. Steel manufacturer Nucor also reported this. He calls the company “the best industrial stock on the market” and thinks a drop could create a more attractive entry point for owning the stock. Corning begins work on Tuesday. Kramer’s Charitable Trust, a portfolio used by CNBC Investment Club, owns Corning. The increasing use of fiber optic cables instead of copper wire in data centers is a big win for Corning, Kramer said. This was reported by securities app Robinhood after the close of trading. Kramer said market volatility should lead to a strong quarter, but questions remain about whether the platform can expand beyond its core trading base. Kramer said Bloom Energy could get a “huge quarter” thanks to its solid oxide fuel cell technology, which can generate electricity without combustion. Starbucks has also reported that the stock has been quietly rising in recent weeks. The stock has struggled to break above the $100 level, but Cramer suggested the earnings could ultimately push the stock higher. “Wednesday is as important as any day I’ve seen in my career,” Cramer said, referring to the busy earnings season and the last Federal Reserve meeting chaired by Jerome Powell. Powell’s term expires in May, but President Donald Trump has nominated Kevin Warsh to replace him. Microsoft released a report after the market close that suggests it could hit “great data center numbers,” but Cramer believes demand for its AI tool Copilot may be weaker than expected. Amazon has reported similarly, with investors watching to see if its results match recent optimism following CEO Andy Jassy’s bullish letter to shareholders. Mr. Kramer said he would stick to this policy for the investment club. Kramer believes concerns about Meta’s recent job cuts are overblown, arguing that CEO Mark Zuckerberg is only cutting back on redundancies. Alphabet has one of the broadest stories in technology, from search to cloud to AI, and the results “could be outstanding,” Kramer said. On Thursday, drug giant Eli Lilly withdrew from its new weight-loss drug on Friday after disappointing prescription data, but Kramer believes the sell-off has gone too far. “It’s going to be a good story if it’s reported,” he predicted. After the bell, Apple reported that CEO Tim Cook was preparing to step down. Kramer said business momentum could keep the stock price higher. After the close, SanDisk and Western Digital have already reported massive stock gains this year. Cramer said continued memory shortages could “continue to blow the numbers” and push the stock price higher. Chevron and Exxon reported Friday that investors are listening for changes in their long-term strategies after the Iran conflict. “Usually it’s a peaceful event, but this time it’s different,” Kramer said. Regardless of what the companies report, Kramer urged investors to work hard during a busy week. “We need to stop, look and listen before we take action,” he says. “Conference calls, not headlines, determine stock prices.” Disclosure: Cramer’s Charitable Trust, a portfolio used by CNBC Investment Club, owns stock in Alphabet, Apple, Amazon, Corning, Eli Lilly, Meta, and Microsoft. Subscribe to CNBC Investing Club today to follow Jim Cramer’s every move in the markets. Questions about Cramer’s disclaimer? Call Cramer: 1-800-743-CNBC Want a deeper look into Cramer’s world? Punch him! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Have questions, comments, or suggestions about the Mad Money website? madcap@cnbc.com
