Why Eaton’s CFO change isn’t a red flag — plus, Palo Alto’s buzzy new deal
Every weekday, CNBC Investment Club with Jim Cramer hosts a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s highlights. 1. The S&P 500 rose 1.1% on Thursday as AI trading regained full force after Nvidia’s quarterly earnings boom. While the chip maker’s shares rose more than 4%, the Club’s other name, Broadcom, also rose nearly 6%. Wall Street also digested the delayed September jobs report, which showed 119,000 jobs added, well above the 51,000 forecast. The data was positive. But the October push will be even more important as the Fed decides whether to cut interest rates at its December meeting. 2. Palo Alto Networks delivered a better-than-expected quarter on Wednesday evening, which included successes in every key metric, including adjusted earnings per share (EPS), total remaining performance obligation (RPO) and next-generation security annual recurring revenue (ARR). ARR is important because it can indicate the success of the company’s subscription-based business model and its “platformization” strategy to bundle its products and services. Management also announced plans to acquire cloud management and monitoring company Chronosphere for $3.35 billion. We like the deal because of Chronosphere’s ARR growth, which will make analysts even more optimistic about our cyber stocks. 3. Eaton announced Thursday that CFO Olivier Leonetti will leave the power management solutions provider next year as part of a planned transition. Leonetti will remain in his post until his successor is determined. Management also reaffirmed Eaton’s 2025 guidance. But the leadership change doesn’t affect our thesis on the industrial stock. Jim said if there was a sudden transition it would be a red flag. “You need a really long transition,” he added. Otherwise, investors will be concerned about the stability and future of the company. “You really give them a structured year,” Jim continued. 4. At the end of the video, the stocks covered in Thursday’s rapid fire were: Walmart, Abbott Laboratories, Williams-Sonoma, Block and Jacobs Solutions. (Jim Cramer’s Charitable Trust is long NVDA, PANW, AVGO, ETN. See here for a full list of stocks.) 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 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 CAN BE GUARANTEED.
