Every weekday, the CNBC Investing Club with Jim Cramer provides the Homestretch — a timely afternoon briefing designed for the last hour of trading on Wall Street. On Monday, stocks saw a slight uptick, although an initial surge faced challenges in maintaining its momentum. By the afternoon, both the S&P 500 and the tech-centric Nasdaq had retreated from their peak levels for the day. The market was torn between analyzing whether the recent downturn in AI stocks was overblown or if volatility would persist, as increasing bond yields and oil prices continued to exert pressure on the stock market. WTI crude oil was priced close to $83 per barrel after dipping to around $80 earlier in the session. Treasury yields also continued to rise, with the 10-year yield reaching approximately 4.6%. The renewed fear of inflation, spurred by rising energy prices, resulted in a higher likelihood of interest rate hikes by the Federal Reserve.
In other developments, Alphabet's stock gained traction following news that its Google division is in the process of creating a more efficient AI chip. According to The Information, the tech titan is developing a new server chip aimed at enhancing the performance of its Gemini AI models. The upcoming chips, named Frozen v2, are projected to be launched by 2028 and will not replace the tensor processing units (TPUs) that are co-developed with Broadcom, another name featured in the Club's portfolio. Nevertheless, the Frozen chips could enable Alphabet to run its AI models in a more energy-efficient manner by producing a greater amount of tokens per energy unit. Tokens represent the data processed by AI technologies. Even though the new chip's release is several years away, this report underscores Google’s commitment to chip development, which not only proves cost-effective but also minimizes dependence on external suppliers like Nvidia. Alphabet has faced challenges recently, losing key AI talent and delaying its latest AI model, which has raised concerns about its AI initiatives. However, the Frozen v2 project should alleviate some investor worries by demonstrating the company's ongoing commitment to long-term AI advancements.
There are no significant earnings reports post-market today, but a busy schedule of quarterly results is expected before the open on Tuesday, with updates from companies like 3M, Danaher, Halliburton, Charles Schwab, General Motors, Novartis, and Northrop Grumman. The first earnings report from the portfolio will come from Capital One, set to be announced Tuesday evening, which presents an opportunity for the credit card giant to affirm the value of its $35 billion acquisition of Discover. No major economic reports are anticipated for Tuesday. Subscribers to the CNBC Investing Club with Jim Cramer will receive trade alerts ahead of any transactions made by Jim in his charitable trust's portfolio. After sending a trade alert, Jim waits 45 minutes before executing buys or sells, and if he has discussed the stock on CNBC, he delays trading for 72 hours following the alert.
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