Stock set to win from thaw in China-U.S. relations, Amazon’s AI project
Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch, an actionable afternoon update just in time for the final hour of trading on Wall Street. Market update: The S&P 500 is on pace for its second straight positive session as it claws back some of its losses over the past few weeks. Alphabet is leading the tech market as it rides on positive buzz surrounding its new AI model, Gemini 3. This news is good for Alphabet, but it’s even better for Broadcom, the primary custom AI chip provider that makes the TPUs (Tensor Processing Units) that Gemini is trained on. Broadcom was the S&P 500’s biggest gainer in midday trading, rising more than 10%. China talks: President Donald Trump and Chinese President Xi Jinping spoke by phone Monday and discussed the Ukraine-Russia war, fentanyl and soybeans, among other topics. Trump also said he accepted Xi’s invitation to visit Beijing in April. A few stocks in the portfolio immediately come to mind as likely winners if relations with China improve: Boeing, as China has not placed a large order from the aircraft maker since 2017; and Nvidia, if the chipmaker is allowed to sell its AI chips to Chinese companies. There are also stocks that could benefit from any tariff cuts, including Apple and Nike. Amazon’s AI project: Amazon announced it will invest up to $50 billion to expand AI and supercomputing capabilities for AWS US government customers. The new project will break ground next year and add approximately 1.3 gigawatts of artificial intelligence and supercomputing capacity. Amazon said the facility will give federal agencies access to AI services and will feature its own proprietary AWS Trainium AI chips as well as Nvidia infrastructure. The market is still wary of new AI investments and, more importantly, how they are financed, but we don’t think Amazon would make this commitment if demand and returns were questionable. Next up: After the closing bell on Monday, Zoom Communications, Semtech, Keysight Technologies and Agilent will report earnings. Tuesday is a big retail day, with Abercrombie & Fitch, Best Buy, Kohl’s, Burlington Stores and DICK’s Sporting Goods scheduled to report. Alibaba and Analog Devices will also report. On the data side, we’ll have retail sales and producer price index (PPI) for September and the Conference Board Consumer Confidence Index for November. (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) When you subscribe 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 trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
