Jim Cramer looks at why our AI data center stocks are among the worst of the week
Every weekday, the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Friday’s key moments. 1. Stocks rose on Friday following a steep sell-off in the prior session. The S & P 500 is still on pace for a weekly decline. Club holding Broadcom is in talks to raise $70 billion to $80 billion in debt for a chip financing deal, CNBC’s David Faber reported. That would make it the latest in a string of tech companies, including Oracle and Amazon , to recently turn to debt financing for the AI buildout. Broadcom shares are up over 1% Friday, but on track for a 6% weekly decline. The stock tumbled earlier this week when Alphabet ‘s Google, Broadcom’s flagship custom chip customer, announced a deal with competitor Marvell. We have no plans to run for the exits. 2. Pain in the AI trade has weighed on our portfolio names, especially industrials that support the data center buildout. GE Vernova and Eaton are down 9.5% and 6.7%, respectively, week to date. Jim Cramer said he’s trying to figure out whether blowback from politicians over data center projects, including Pennsylvania Gov. Josh Shapiro’s executive order on Tuesday that imposes tough standards on any developments in his state, could be weighing on the AI trade. He added that it’s hard to know how much of this is just talk ahead of midterm elections, or whether it can create a real slowdown in the AI buildout. We bought some more GE Vernova earlier this week on weakness. 3. Big week of earnings ahead. Nvidia , CrowdStrike and Salesforce will all report on Wednesday.The numbers from the chipmaker should be great, given how strong demand has been. “Will the market care? That’s the bigger question,” Jeff said. We want more details on Nvidia’s recently announced plan to raise $500 billion of financing with Wall Street firms to fund the AI buildout. Jeff is expecting CrowdStrike’s numbers to be “quite good” as well, despite the recent weakness in the stock. He pointed to increased demand for cybersecurity solutions as AI models become more advanced. Then, there’s Salesforce: This could be a make-or-break quarter for the software giant. The software company has rallied over the past month as investors warmed back up to software after spending much of the first half of the year worried that AI would disrupt traditional software-as-a-service (SaaS) business models. (Jim Cramer’s Charitable Trust is long NVDA, CRWD, GOOGL, GEV, ETN, AVGO, CRM, AMZN. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
