Nike, Starbucks score well among teen shoppers — and Microsoft has fans in the C-suite
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. Markets: Stocks were mostly lower Thursday as the S&P 500 and Nasdaq retreated from record highs. A decline in the S&P 500 could erase most of this week’s gains. While AI trading is mostly down, megacap tech names like Nvidia and Oracle are on the rise. Nvidia received a new Street-high price target of $300 by analysts at Cantor Fitzgerald, who held a meeting with the chipmaker’s management team this week. While defensive groups such as consumer staples and healthcare performed better in the session, materials, industrials, energy and consumer discretionary sectors led the market lower. Backtracking: On Thursday, we received one of our favorite sell-side research reports of the year: the fall 2025 edition of Piper Sandler’s “Taking Stock of Teens” survey. The latest release was the result of a survey of nearly 11,000 teens in 47 states. This bi-annual survey provides valuable insight into the opinions of this notoriously fickle demographic and provides their opinions on many household brands. The survey touches on just about everything, from spending trends and opinions on the economy to favorite celebrities and social media personalities. It also covers a wide range of industries, including beauty and fashion, radical and mainstream retail, food, beverage, restaurants, internet and software, and even orthodontics. There’s a lot to summarize in this report, but we’ll move on to two consumer-focused companies that are working hard to turn their businesses around: Nike and Starbucks. Nike scored well in the survey. It continued to be the No. 1 favorite shoe brand of all young people. Piper’s analyst noted that Nike increased mind share (basically how much kids think about the brand) among upper-income teens for the first time since fall 2022. These signs of stability made Piper more optimistic about Nike after the survey. This milestone likely wouldn’t happen unless the company took concrete steps to improve innovation, which is another positive data point that suggests CEO Elliott Hill’s plan is working. As for Starbucks, the coffee retailer retained its top spot for any coffee, tea or beverage chain in the survey. For the third survey in a row, 51% of respondents cited their preferred brand in this category. This shows that flexibility in an area that is down from 57% in spring 2024 is becoming increasingly competitive. Starbucks shares are down this week (it’s not just among coffee and restaurant stocks), and while the turnaround may take longer than expected, we’re still confident in CEO Brian Niccol. Strong stance: Microsoft is poised to capture an increasing share of productive AI spending and IT budgets as more workloads shift to the cloud, Morgan Stanley said in a note to clients following its survey of AlphaWise’s chief information officers in the third quarter. Analysts noted that expectations for IT budget growth are stable and CIOs are still prioritizing AI. Microsoft’s alignment with CIO priorities puts it in a prime position to capture a share of IT budgets in one- and three-year time frames. Analysts said Microsoft is also a leader because of its deep integration into the software ecosystem; wide range of products to monetize generative AI; and increased AI infrastructure spending. Microsoft is “the clearest beneficiary of GenAI spending,” the firm wrote, adding that the company’s recent decision to abandon a $300 billion cloud contract with OpenAI is “likely to prove correct” in the long run. That contract went to Oracle instead. Morgan Stanley reiterated its buy-equivalent rating on Microsoft, confirming it remains at the top of large-cap software, given its valuation discount relative to its peers. Next up: Levi Strauss reports after the closing bell on Thursday. There are no major earnings reports before the opening bell on Friday. Most economic data has been delayed by the government shutdown, but on Friday morning we’ll see sentiment and one-year inflation expectations from the University of Michigan (See here for a full list of stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investment 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 GUARANTEE IS MADE.
