It’s a jam-packed afternoon of developments impacting 7 portfolio stocks
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. Stocks rebounded on Thursday as investors shrugged off concerns about a serious escalation in the military conflict between the United States and Iran. This caused bond yields and oil prices to fall; These are two factors that have supported stocks recently. The S&P 500 gained nearly 1% in afternoon trading, while the Nasdaq was up more than 1%. Meta Platforms initially traded lower after Reuters said a leaked internal document showed the company plans to aggressively expand its AI computing capacity next year. The market is divided on Meta’s AI roadmap; While it rewards new monetization opportunities (like public cloud and AI models), it also pays attention to the massive expenses required to get there. The company’s latest AI model raises optimism that these investments will eventually pay off. The company introduced Muse Park 1.1 on Thursday, calling it “the most powerful model ever for agency and coding work.” What’s notable about the model is that Meta makes its application programming interface (API) available through a developer portal. The inclusion of API capabilities puts Meta in more direct competition with platforms like Anthropic and OpenAI. APIs are the bridge that allows two software programs to talk to each other. For the first time, Meta provides APIs that allow developers to integrate its Muse Spark 1.1 model into external applications; This is an important step towards building a commercial AI platform that can compete with OpenAI and Anthropic. The commodity stock reversed as the session progressed. Cowen raised his Cardinal Health price target to $275 per share from $255. The increase was part of analysts’ pharmaceutical and medical distribution second-quarter earnings preview note. Cardinal Health’s upcoming print is for the company’s fourth quarter of fiscal 2026, and Cowen estimates Cardinal’s fiscal 2027 earnings per share (EPS) will be above consensus, which currently stands at $12.04, according to FactSet. Shares touched $240 at one point this morning, but fell along with other names in the healthcare space as the market turned back to tech. Cardinal Health and rivals McKesson and Cencora fell after FedEx announced the formation of FedEx Life Sciences, a private entity created to support the transportation of pharmaceuticals, medical devices, biological products and other critical healthcare shipments. The new initiative is part of the company’s goal to transform FedEx Healthcare into a $10 billion business. This may encroach on some territory for Cardinal Health, but the company does much more than move drugs from Point A to Point B. It provides inventory management, data reporting, new product launch support, and many other healthcare services that FedEx cannot provide. Bottom line: We like this news for FedEx, but it shouldn’t be devastating for Cardinal Health. The news never ends — FedEx shares fell after a publication called Supply Chain Dive reported that Amazon was beating out FedEx and United Parcel Service (UPS) by offering lower shipping rates to potential delivery customers. Amazon has always been the cost leader in every industry it pursues, so it should come as no surprise that they offer lower prices. We see little impact on FedEx. Amazon’s new shipping initiative affects just 2% of FedEx revenue, CEO Raj Subraniam told Jim Cramer from the company’s World Headquarters in Memphis. Additionally, Amazon’s program is currently best suited for companies that offer lightweight, low-cost products. This is the exact opposite of FedEx’s strategy. As we mentioned, FedEx is moving further into sectors such as automotive, aviation and data centers, as well as healthcare. Instead of shipping cheap items, FedEx wants to gain share from shipping items that weigh over 50 pounds or are high in value; these are two areas where customers are willing to pay a premium for speed, reliability, tracking and security. Honeywell Aerospace wants to expand its defense business abroad. Reuters reported on Thursday that the company is expected to launch more defense products for Europe that do not need to go through U.S. export controls. An announcement could come at the closely watched Farnborough Airshow in England later this month. This is a smart move, as a sudden increase in European defense spending has increased demand in the region amid growing concerns that Europe can no longer survive under US protection. This trend doesn’t look like it’s going to slow down anytime soon. NATO allies recently agreed to more than double their defense spending targets by 2035. All of this is an incremental positive for Honeywell Aerospace’s Defense and Space business, which accounts for approximately 40% of total revenue. Honeywell Aerospace was spun off from its other club name, Honeywell, late last month. The club last purchased more shares on Tuesday. Finally, Starbucks shares fell more than 2.5% after Bloomberg reported that the coffee giant is looking to use artificial intelligence to create in-house software tools to replace software it pays Microsoft and IBM to do. Reacting to the news, Jim Cramer said it was “cruel to think how many companies could switch from existing programs to AI – especially after companies see what their stock is doing.” [like Starbucks] No big wins after Thursday’s closing bell. Delta Air Lines reports before the opening bell on Friday. There is no major economic data planned for the final day of the trading week. (See here for a full list of stocks in Jim Cramer’s Charitable Trust, including META, CAH, FDX, AMZN, HONA, SBUX, MSFT.) As a CNBC subscriber to the Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a transaction alert before buying or selling a stock in his charitable foundation’s portfolio. After talking about a stock on CNBC TV, Jim waits 72 hours before executing the transaction. THE POLICY CONDITIONS THAT NO UNDERTAKING LIABILITY OR DUTY WILL EXIST OR CREATE IN CONNECTION WITH THE RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
