Jim Cramer’s top 10 things to watch in the stock market Wednesday
My top 10 things to watch on Wednesday, March 25 1. Expect a stronger open on Wall Street this morning as oil prices fall on hopes of a ceasefire between the US and Iran. US benchmark WTI crude oil fell below $90 per barrel again. That’s the whole game right now. While Iran denies it is interested in a ceasefire, it’s hard to be negative on stocks if oil prices are falling. 2. Arm is seeing incredible demand for its first in-house chip, known as the AGI CPU. It is billed as the chip for AI agents. Arm now not only licenses instruction sets to other customers, it designs the processor itself. Raymond James upgraded the stock to buy from hold. Citi analysts said the $15 billion revenue forecast by 2031 exceeded all expectations. Shares are up 12% this morning. Synchronized with Nvidia’s GPUs. 3. OpenAI has raised another $10 billion from investors, bringing its total volume in this record fundraising round to north of $120 billion, CFO Sarah Friar told me on “Mad Money” last night. The ChatGPT creator has received institutional money from companies such as Andreessen Horowitz, DE Shaw Ventures, MGX, etc. It is noteworthy that long-time partner Microsoft is also part of this $10 billion slice. 4. Friar didn’t offer a clear timeline when I asked him about plans for a possible IPO, but acknowledged that OpenAI was “starting to build that outcome.” His goal, he said, is to make sure the startup is ready for the public markets. The closure of video creator Sora may be part of this. Continuing the blockbuster IPOs: According to The Information, Elon Musk’s SpaceX may file a statement with the SEC this week or next week. 5. UBS lowered its price target on Microsoft from $600 to $510, citing investor concerns about its software business. Yesterday we received two positive surveys on Microsoft (from Bank of America and Citi) but frustratingly the shares failed to recover, falling 2.7%. There is a lot of concern about Copilot. I worry that OpenAI makes up a large chunk of Microsoft’s Azure numbers and that the initiative could diversify into other clouds. 6. Vertiv receives a buy rating from HSBC. Analysts say the long-term outlook for AI development looks strong, which should keep Vertiv’s earnings growth at an impressive pace. Vertiv produces critical power and cooling solutions for data centers. This is still a winning part of the data center business. Vertiv shares are up nearly 2% on top of a more than 67% gain year to date. 7. Club name Meta implemented a large stock incentive program for senior executives. In order to receive the maximum reward, Meta’s market cap must reach $9 trillion by 2031; This is well above the current $1.5 trillion. It’s a very aggressive timeline. The Wall Street Journal is right to point out that there are many cash costs associated with stock-based compensation. At Investing Club, we recently published a detailed review of all things stock-based calculations. 8. Rothschild & Co Redburn downgraded Oreo owner Mondelez and stopped buying it. Analysts are concerned about softening volumes and toughening competition in European chocolate. Restrictions on SNAP benefits and increased GLP-1 adoption are also bad news, they said. One reason Procter & Gamble is the Club’s core consumer choice is its lack of GLP-1 risk. 9. Love for General Motors: Wolfe Research upgraded the automaker from hold to buy mode. Analysts said the stock looks cheap at current levels and pointed to headwinds such as widening losses in electric vehicles. The firm kept its $96 price target unchanged; this figure is still 25% above yesterday’s close. CEO Mary Barra has done an incredible job at GM. 10. Merck is buying cancer biotech Terns Pharmaceuticals for $6.7 billion. This is all about expanding its oncology portfolio before its best-selling cancer drug, Keytruda, loses patent protection in 2028. Merck is one of my favorite pharma stocks, and CEO Rob Davis told a good story about its transformation away from Keytruda last month. Sign up for free for my Top 10 Morning Thoughts on the Market email newsletter (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.
