My Top 10 Things to Watch Wednesday, February 25th 1. Workday stock fell 9% this morning after announcing disappointing guidance last night. We are witnessing the disruptive threat posed by AI. As the number of seats decreases, more products must be charged per seat. A clear and potentially long-term slowdown due to the power of AI. Cowen and Evercore downgraded the stock from “buy” to “hold.” Significant price reductions have also been made. 2. The memory chip crisis is hitting HP Inc., whose personal computer division has recorded double-digit sales declines this year. Memory and storage typically account for 15% to 18% of a PC’s input cost. Now it’s 35%. The stock price fell more than 5% this morning. The AI boom is causing this memory shortage. Tonight, we hear from a big driver: Nvidia. 3. In last night’s State of the Union address, President Donald Trump said he was essentially directing big tech companies to bring their own power to their data centers. Hyperscalers building their own power plants would be a windfall for reliable nuclear companies like GE Vernova and BWX Technologies, whose CEO appeared on Monday’s “Mad Money.” I still don’t like speculative nuclear stocks. 4. Lowe’s stock fell 3.5% premarket. Fourth-quarter comparable sales easily beat consensus at 1.8%, but full-year guidance was weak in several areas, including EPS. The club name Home Depot, which we reported yesterday, has finally surpassed its main rival. Wells Fargo raised its price target on Home Depot to $420 from $395, saying the underlying trend is stabilizing. 5. Diageo shares plunged 10% this morning after the Guinness maker slashed its 2026 sales outlook and cut its dividend to fund a turnaround plan under new CEO Dave Lewis. Mr Lewis, known as “Drastic Dave” for his cost-cutting reforms at Unilever and Tesco, said such moves were needed to turn around Diageo. Alcohol stocks continue to cause pain. 6. Club name TJX Companies continued its strong fourth quarter this morning, driven by same-store sales growth of 5% versus expected 3.8%. TJ Maxx’s parent company’s first-quarter and full-year guidance was below expectations. However, the stock price fell slightly in the previous session. This management team is known for under-promising and over-delivering. 7. Morgan Stanley lowers IBM’s price target from $304 to $247 and leaves its rating unchanged. Analysts believe that IBM faces “some degree of AI disruption risk” due to recent advances in AI. But analysts at UBS upgraded the stock from sell to hold, saying they see a more balanced risk-reward balance after IBM’s 23% decline since the beginning of the year. 8. Ahead of next week’s quarterly results, CrowdStrike’s price target has been lowered from JPMorgan’s $582 to $472. Still, analysts maintain a buy rating on the stock and expect a “healthy” fourth quarter thanks to the cybersecurity leader’s strong deal pipeline. CrowdStrike’s stock price decline is a compound downsizing issue, not an issue with the company’s business. 9. Oppenheimer upgraded Oracle from Hold to Buy, with a price target of $185, suggesting an upside of approximately 27%. Analysts acknowledged that the call may be premature given market concerns about Oracle’s massive AI spending plans. However, they said the stock’s price multiple has more than halved since September and the risk-reward profile looks good. 10. Wells Fargo raised its price target on Caterpillar, which is rated Buy, from $756 to $870. The company is raising its forecast for nonresidential construction this year and next by about 3%, which will require Caterpillar earthmoving equipment. Caterpillar fits into the simple framework for identifying winning stocks that I laid out last night on “Mad Money.” Sign up for free for my Top 10 Morning Thoughts on the Markets email newsletter (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you’ll 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.
