Eaton finalizes a smart acquisition to advance its AI data center ambitions

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. The S&P 500's oversold rally failed to hold on Friday and early gains were erased. This was due to oil, which was low for most of the morning but reversed by the afternoon. US benchmark WTI crude rose as high as $98 a barrel on Friday before pulling back slightly. Brent crude, the global oil standard, traded north of $100 a barrel. Some stock investors may be hesitant to "go long" during what is expected to be another busy weekend of military action in the Middle East. While the market action during the Iran war may feel exhausting, our plan remains more opportunistic as the S&P Oscillator falls to minus 10%, the level it reached in September 2022 and April 2025. Both of these examples prove to be good times to put money to work. As of Friday afternoon, the Dow Jones Industrial Average was down nearly 2% for the week. The S&P 500 was down about 1.5%, while the tech-heavy Nasdaq was down just over 1%. Eaton announced late Thursday that it is closing the $9.5 billion Boyd Thermal. The deal expands Boyd Thermal's reach into AI data centers by bringing liquid cooling solutions to a company known for its electrical equipment and power management solutions. One of the key points that Eaton CEO Paulo Ruiz emphasized in Eaton's third-quarter earnings call, just days after Boyd's announcement, was that the liquid cooling market is seeing unprecedented growth as each new generation of Nvidia's AI chips requires more power per rack. We'll hear more about chip power requirements at Nvidia's GTC conference next week. Eaton's data center exposure will increase further early next year after spinning off its Mobility unit; It's a "subtract and add" move because it's a slower-growing, lower-margin business. There are no Club companies scheduled to report next week, but there are two highly anticipated earnings releases outside the portfolio. The first is Micron after the closing bell on Wednesday. What the company has to say about the tightness in the memory market could impact other semiconductor stocks and tech names like Apple and Cisco Systems, which provide a lot of short-term DRAM memory from companies like Micron, SK Hynix and Samsung. The other is FedEx, the pioneer of commerce. It's time to hear what CEO Raj Subramaniam has to say about global business. FedEx is also in the midst of a spin-off plan to spin off its shipping business into an independent company. Conference season will also be in full swing next week, and we expect to hear first quarter updates from the Bank of America Global Industry Conference, JPMorgan Industry Conference, Fiber Optic Communications Conference and more. But the biggest one will be Nvidia's annual GTC conference, where CEO Jensen Huang will showcase new products and update his views on building AI infrastructure. Earlier Friday, we explored Nvidia's potential plans for a new type of AI chip focused on the everyday use of AI models. Finally, next week is Jerome Powell's penultimate Federal Open Markets Committee meeting as chairman of the Federal Reserve. The central bank's policy-making committee is largely expected to leave interest rates unchanged at the meeting, and bets on a rate cut later this year are diminishing due to rising oil prices. President Donald Trump nominated former Fed Governor Kevin Warsh to replace Powell. This meeting will give us an updated view of how the Fed balances labor market softness with inflation risks. (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.