Stocks have fluctuated wildly over the last week as investors grapple with the impact of artificial intelligence on various sectors and the broader economy. Next week is a wild card after the US and Israel attacked Iran. President Donald Trump said Saturday that a “massive combat operation” in Iran would begin overnight, with the United States and Israel striking Iranian military and nuclear targets. President Trump called on Iranians to “take control of their own destiny” and overthrow the Islamic leadership. Iran reportedly retaliated with missile attacks on US military facilities in the Middle East. The president on Friday expressed dissatisfaction with nuclear talks with Tehran and suggested an attack could occur soon. “We are not satisfied with the way they negotiated. They cannot have nuclear weapons.” The big question for investors over the coming week is how the market will react. Wall Street has had a good time digesting geopolitical and economic tensions, from the recent tariff turmoil to the U.S. detention of Venezuelan President Nicolas Maduro last month and attack on Iran’s nuclear facilities in June 2025, but this time the issue is much more serious. Oil prices soared on Friday due to concerns about current events in Iran and the risk of disruption to oil supplies from the Middle East. Stocks traded wildly on Friday, driven by concerns about the negative economic impact of AI that have plagued markets for weeks. The nail in the coffin was February’s producer price index, which beat expectations on Friday, as persistent inflation was added to the laundry list of unknowns. Concerns about job losses due to AI have been further heightened after the fintech company Bloc laid off almost half of its workforce. In February, the S&P 500 and Nasdaq fell nearly 1% and 3.4%, respectively, due to AI disruption and broader macro concerns. It was the worst monthly decline in these indexes since March 2025. Last week, while financial stocks (Capital One and Wells Fargo) fell sharply, industrial AI stocks (Corning) soared. Traditional enterprise software stocks (Salesforce) rallied, but cybersecurity stocks (CrowdStrike and Palo Alto Networks) fell sharply. Chipmakers (NVIDIA and Broadcom) also fell. In the end, the S&P 500 and Nasdaq ended the week down 0.4% and nearly 1%, respectively. Here are three factors that have moved the market and club portfolios over the past week. Chips fall, AI industry rises The market wasn’t too happy with chip stocks. Nvidia shares fell nearly 6.7% last week, despite reporting better-than-expected quarterly results and forward-looking information on Wednesday night. It has nothing to do with the fundamentals of the company. “This reflects the idea that hardware (stock prices) are getting too high,” Jim Cramer said Thursday. Nvidia fell 5.5% on Thursday and 4.2% on Friday. Fellow AI chip maker Broadcom also fell along with Nvidia on the day, ending the week down nearly 4%. These declines highlight the market’s broader shift away from semiconductor stocks. Broadcom will report its earnings after the close of trading this Wednesday. While chips fell, the AI industry rose. This was good news for Corning, which is benefiting from increased data center demand due to fiber-optic cables. Corning soared 7.8% last week, continuing a banner year for the AI infrastructure giant. The biggest winner in our weekly portfolio was Qnity Electroncis, which makes essential materials needed to make high-performance AI chips. Buoyed by Qnity’s blockbuster earnings results on Thursday, the stock rose 11.7% last week. This was Qnity’s first quarter since its separation from DuPont in November. Software Volatility Salesforce rebounded last week after a period of poor performance. The stock has risen 5.2% over the past five trading sessions, marking the enterprise software’s best weekly performance since early December. The rotation of money from expensive hardware to weaker software helped, as did Salesforce’s better-than-expected earnings report Wednesday evening. We liked what management had to say about the new deal for Agentforce, the company’s key AI-powered platform. This release alone wasn’t enough to convince us that Salesforce was clear on the risk of AI disruption to its sheet-based business software-as-a-service model. After the earnings release, we lowered our price target for Salesforce from $300 to $250 per share to account for the price-to-earnings compression occurring across the sector. Rating maintained at 2. Cybersecurity stocks have also been caught up in software trading. CrowdStrike and Palo Alto Networks fell earlier in the week after AI startup Anthropic announced new cybersecurity tools. The news raised concerns about increased competition. However, software remained on the books Wednesday and Thursday, with both stocks surging midweek. Still, CrowdStrike ended Friday’s trading lower. This week, CrowdStrike fell 4.3%. Palo Alto’s stock actually rose 0.15% last week, after a strong quarter but volatile guidance that caused it to drop significantly last week. At the club’s February monthly meeting on Friday, Jim reiterated that cyber, like any other software, should not go down. But he said he recognizes the market is doing so. As a result, he believes clubs should only have one cybername. He supports CrowdStrike, which will report earnings after the close of trading this Tuesday. Banks under fire Financial institutions’ names came under pressure this week after last Sunday’s virus investigation report stoked concerns about the economic impact of AI. Citorini Research has warned that rapid adoption of AI could lead to mass white-collar layoffs, leading to double-digit unemployment rates by 2028. The report also said there could be a significant drop in consumer spending. Bank stocks, which are closely tied to the health of U.S. consumers, fell in response to the investigation. Capital One, Wells Fargo and Goldman Sachs each fell in Monday’s first trading session after the report was released. Tuesday’s decline appears to have been an overreaction, using the declines in Wells Fargo and Capital One as buying opportunities. “I read a scary article about how AI is going to crush credit card companies and wipe out the white-collar economy. This is a novel argument, and it crushed Wells Fargo and Capital One,” Jim said at the monthly meeting. “Thank you to the writers for giving me the opportunity to purchase these stocks at such low prices.” Capital One ended the week down 6%, and Goldman was down 6.8%. Wells Fargo was the worst-performing club stock last week, dropping more than 8%. (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.
