3 big things we’re watching in the stock market in the week ahead
The S&P 500 kept its record alive last week, boosted by strong earnings reports that showed the growth in AI spending is not slowing. Even more gains are on the way next week. Additionally, the job market will be under the spotlight. The market’s strong rise in recent weeks has come despite ongoing disruptions to global energy supplies in the Middle East. Enthusiasm for AI trading and signs of a resilient U.S. economy have outweighed concerns about rising oil prices. This tension remains something to watch out for. But right now the bulls are in control. Now let’s move on to the three biggest things on our radar this week. 1. Earnings: Three Club names will announce quarterly results this week. All revenue and EPS estimates courtesy of data provider LSEG. Electrical equipment supplier Eaton reported Tuesday morning. The main theme of this report is the evolution of artificial intelligence and the resulting order growth for Eaton. In the fourth quarter, Eaton saw a nearly 200% increase in data center orders in its Electrical Americas segment, its largest. Where will this number be this time? Eaton manufactures a range of products that collectively supply consistent, reliable electricity to power-hungry server racks used in data centers. That’s not all anymore. Eaton is now in the liquid cooling business, thanks to the smart acquisition of Boyd Thermal, which closed in March. This brings them closer to AI chips; that’s a lucrative place to be these days. Expect to hear more about Boyd in the earnings announcement. Eaton’s order backlog will be another focus. By the end of 2025, the total reached 19.6 billion dollars. This year’s earnings are expected to be stronger in the second half of the year as Eaton increases its production capacity. Revenue: $7.08 billion EPS: $2.74 DuPont also reported Tuesday morning, and one of our biggest focuses will be the performance of its Health and Water Technologies segment, which has been the most exciting since last fall when the company spun off its electronics business to independent Qnity. This segment is expected to see mid-digit organic growth this year. The other reporting unit, called Diversified Industrials, is expected to grow in the low single digits, helped in part by stabilization in U.S. construction activity and aviation strength. DuPont is the type of company that investors worry could be hurt by war-related slowdowns in economic activity, so the company’s commentary on changes in customer behavior since late February will be valuable. Revenue : $1.67 billion EPS : $0.48 Arm Holdings is our final report of the week on Wednesday night. This will be Arm’s first earnings call since it launched its AI-focused central processing unit (CPU) for data centers in March, and the first earnings call since we acquired shares on April 20. No doubt the so-called AGI CPU will be a big topic of discussion on the earnings call, as it marks a strategic shift from the company to designing a complete chip rather than licensing the Arm instruction set to other chipmakers in exchange for royalties. However, until the quarter, Arm’s revenues will come from royalties and licensing fees because the AGI CPU is not yet on the market. Increasing AI demand will drive strong growth in Arm’s cloud revenue in the fourth quarter of fiscal 2026. One question mark is the health of the smartphone royalty stream, as sky-high memory prices are expected to squeeze this market. In a note to clients on Friday, Morgan Stanley analysts said the trajectory of Arm’s operating expenses in fiscal 2027 is a focus for investors. SoftBank’s contribution to Arm’s licensing revenue is another area to watch, Morgan Stanley said. Last quarter, SoftBank accounted for $200 million of the $505 million in licensing revenue. Revenue: $1.47 billion EPS: $0.58 A few non-Club earnings reports worth flagging because they tie into AI business: Chipmaker AMD reported Tuesday night, as did optical technology supplier and Nvidia partner Lumentum. Coherent, another optical player and Nvidia partner, will announce results Wednesday night. And on Thursday we’ll hear from AI cloud computing provider CoreWeave. Away from the data center, Club reported on Cardinal Health’s two main competitors, Cencora and McKesson, on Wednesday and Thursday, respectively. 2. Corning’s investor day: After a quarter in which the stock decline was stronger than indicated, Corning is holding an investor day in New York on Wednesday. The AI boom is driving demand for Corning’s fiber optic technology in data centers, so expect to hear plenty of positive updates. Specifically, Corning plans to update and expand its “Springboard” growth initiative for another two years through 2030. For now, Corning’s Springboard plan is expected to add $11 billion in annualized sales through 2028. We’ll see where this goal goes next. We’d also love to hear more details about Corning’s long-term supply agreements with three hyperscalers (only Meta has publicly disclosed). Any more on the way soon? Corning will also unveil what it calls the “Photonics Market Access Platform”; This platform will be able to shed light on the roadmap for not only connecting server racks but also replacing the copper inside them with fiber. Finally, although Corning’s solar business is still relatively small, it is growing rapidly and becoming an increasingly important consideration for management. It certainly helps with diversification away from the data center, so that will probably take some time at investor day as well. CEO Wendell Weeks will join Jim Cramer on “Mad Money” Wednesday night. 3. Jobs, jobs, jobs: The usual list of monthly labor market reports is about to be published. It begins Tuesday with the Job Opportunities and Labor Turnover Survey (JOLTS), which is used to measure the tightness of the job market; A labor market that is too tight could be a source of inflation, but this is not a big risk right now. Remember: The JOLTS report runs on a slight delay, so Tuesday’s data will cover the month of March. The week’s other key data (ADP’s private payroll survey and the government’s official nonfarm payroll report) are for April. Economists surveyed by FactSet on Wednesday morning expect the ADP to show a 95,000 job gain in April. The consensus for the nonfarm report released Friday morning is to add 60,000. As Federal Reserve Chairman Jerome Powell said last week, the labor market is showing “more and more signs of stabilization.” We’ll be looking for more of these signs in the next batch of data. Next week, Monday, May 4 Consumer durables and factory orders 10 a.m. ET Before the bell: Norwegian Cruise Line Holdings (NCLH), Axsome Therapeutics (AXSM), CNA Financial (CNA), Hess Midstream (HESM), Krystal Biotech (KRYS), Tyson Foods (TSN), Twist Bioscience (TWST) After the bell: Palantir Technologies (PLTR), Transocean (RIG), onsemi (ON), Duolingo (DUOL), BWX Technologies (BWXT), Pinterest (PINS), Ero Copper (ERO), Fabrinet (FN) Tuesday, May 5 10 a.m. ET JOLTS report ISM Services PMI 10 a.m. ET Census Bureau new home sales 10 a.m. ET Before the bell: DuPont (DD), Eaton (ETN), Shopify (SHOP), PayPal (PYPL), Energy Transfer (ET), Pfizer (PFE), KKR (KKR), Cipher Mining (CIFR), Fiserv (FISV), American Electric Power (AEP), DigitalOcean (DOCN), Harley-Davidson (HOG), Ocular Therapeutix (OCUL), Anheuser-Busch InBev (BUD), GlobalFoundries (GFS), Marathon Petroleum (MPC), Ferrari (RACE) After the bell: Advanced Micro Devices (AMD), Lumentum Holdings (LITE), Supermicro (SMCI), AMC Entertainment Holdings (AMC), Arista Networks (ANET), Astera Labs (ALAB), Hecla Mining (HL), Strategy (MSTR), Occidental Petroleum (OXY), BigBear.ai (BBAI), Tempus AI (TEM), Devon Energy (DVN) ADP special payroll Wednesday, May 6 at 8:15 AM ET Before the bell: Walt Disney (DIS), Hut 8 Mining (HUT), Kraft Heinz (KHC), Uber Technologies (UBER), CVS Health (CVS), Amcor (AMCR), Carter’s (CRI), Cenovus Energy (CVE), Trinity Capital (TRIN), Apollo Global Management (APO), Instacart (CART), EOG Resources (EOG) After the bell: Coherent (COHR), IonQ (IONQ), Axon Enterprise (AXON), Arm Holdings (ARM), AppLovin (APP), Dutch Bros (BROS), Fastly (FSLY), Beyond Meat (BYND), Snap (SNAP), Albemarle (ALB) Initial unemployment claims Thursday, May 7 at 8:30 a.m. ET Before the bell: ACM Research (ACMR), ARKO Corp. (ARKO), Blackstone Secured Lending Fund (BXSL), BlackSky Technology (BKSY), Datadog (DDOG), Iovance Biotherapeutics (IOVA), McDonald’s (MCD), 1-800-Flowers.com (FLWS), GigaCloud Technology (GCT), Planet Fitness (PLNT), TripAdvisor (TRIP), Unity (U) After the bell: CoreWeave (CRWV), IREN Limited (IREN), Coinbase Global (COIN), Opendoor Technologies (OPEN), Applied Optoelectronics (AAOI), MercadoLibre (MELI), Red Cat Holdings (RCAT), SoundHound AI (SOUN), Affirm Holdings (AFRM), Monster Beverage (MNST), Rocket Lab USA (RKLB), Trade Desk (TTD), Toast (TOST), McKesson (MCK), Cloudflare (NET), Gilead Sciences (GILD), NuScale Power (SMR), DraftKings (DKNG), MP Materials (MP), 10x Genomics (TXG), Block (XYZ), Airbnb (ABNB), Axcelis Technologies (ACLS), Corsair Gaming (CRSR), Expedia (EXPE), Grindr (GRND), HubSpot (HUBS), Innodata (INOD), nLIGHT (LASR), Rocket Companies (RKT), RingCentral (RNG) Friday, May 8 Nonfarm payrolls report 8:30 a.m. ET University of Michigan Consumer Sentiment Survey 10 a.m. ET (preliminary) Before the bell: Wendy’s (WEN), Algonquin Power & Utilities (AQN), Dauch Corporation (DCH), Enbridge (ENB), Arbor Realty Trust (ABR), AMC Networks (AMCX), Embraer (EMBJ), Plains All American Pipeline (PAA), Plains GP Holdings (PAGP) (Jim Cramer’s Charitable Trust long ETN, DD, They are ARM, GLW, and META. See here for a full list of stocks.) Jim Cramer with CNBC Investing Club By subscribing you will receive a trade alert before Jim places 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 would wait 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.
