Nvidia CEO’s ask of Taiwan Semi means more upside for this portfolio stock

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: The S&P 500 gained nearly 1.5% on Monday as House members were called to Washington to vote on a Senate agreement that would end the longest government shutdown in history. Nasdaq gained more than 2 percent. With these gains, both indices recovered almost all of their losses last week. The possible end of the 41-day shutdown, which caused major flight delays and cancellations and shook consumer confidence in the economy, has put investors in a more risk-taking mode. Club, which owns Nvidia, rose nearly 5 percent on Monday after losing 7 percent last week in a tech rout driven by concerns about valuations in stocks tied to the artificial intelligence boom. Monday's rally isn't just about technology. The consumer discretionary and materials sectors were also strong. In fact, eight of 11 S&P 500 sector indexes were higher. Only real estate, utilities and consumer staples were in the red. Wafer demand: Nvidia CEO Jensen Huang asked main manufacturing partner Taiwan Semiconductor to increase wafer production, he told reporters over the weekend. This is a clear indication that Huang expects strong demand for Nvidia's AI chips to continue. This also aligns with the "$500 billion order visibility" comment the CEO made at the company's GTC event a few weeks ago. Huang's comments are certainly positive for Nvidia, but when we hear the word "wafer" - the basic building material used to make semiconductor chips - we immediately think of Qnity Electronics' DuPont spinoff. That's because CEO Jon Kemp has repeatedly said wafer starts are the best indicator of demand. Wafer starts refer to the number of new semiconductor wafers that begin the production process at a manufacturing facility. "Wafer starts, as measured by MSI data, are one of the best indicators of demand for our products. You can see wafer starts growing steadily over the long term. [compound annual growth rate] "Global factory capacity has expanded steadily to keep pace with this demand, driven by pioneering investments that will approach $200 billion or more in the coming years," Kemp said at the October Investor Day event. This comes after SEMI Silicon Manufacturers Group, which provides market data for the silicon industry, reported last week that worldwide silicon wafer shipments rose 3.1% year-over-year in the third quarter. The increase was driven by demand for supporting AI applications. SEMI expects global shipments to increase steadily through 2028. Shares of club name Qnity rose nearly 6% on Monday, rallying along with other AI-related names. But it's unclear how much of this move is due to Huang's comments. Washington wants to see if a deal can be made to reopen the government. Paramount Skydance, CoreWeave, Rigetti Computing, AST SpaceMobile, Rocket Lab and Occidental Petroleum will report after the closing bell. Wall Street Nebius Group and Sea Limited contributed to this report. Cramer's Charitable Trust.) By subscribing to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim executes a trade. Jim waits 45 minutes after sending a transaction alert before buying or selling a stock in his charitable foundation's portfolio. After Jim talks about a stock on CNBC TV, he waits 72 hours after issuing his trading alert before executing the trade. BY OUR TERMS AND CONDITIONS AND PRIVACY POLICY NO Fiduciary Obligations OR DUTIES SHALL EXIST OR BE CREATED IN CONNECTION WITH THE RECEPTION OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.