Here’s what we like about our two newest additions to the Bullpen watchlist
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. The S & P 500 soared to a new record high Friday after Iran said the Strait of Hormuz was “completely open” for commercial traffic. Oil prices fell more than 10%, with WTI crude falling to the low $80s, as did interest rates, with the market beginning to price in a 25-basis-point cut in December. Stocks’ comeback from their March low has been nothing short of remarkable, with the S & P 500 on pace to notch its third straight week of 3% or more gains and the Nasdaq win streak extending to 13 straight, something it hasn’t done since 1992. Here’s more on why we added two companies to the Bullpen watchlist during our Monthly Meeting on Thursday. Arm Holdings has always been one of the most important companies in the semiconductor industry, although it has mostly operated behind the scenes, making its name by licensing technology to other companies. Its royalty base is predominantly from the smartphone end market, but it is broadening its product range to include CPUs and systems for markets such as cloud, automotive, and the Internet of Things (IoT). But the story just changed in a very big way. At a recent event, the company unveiled its first in-house data center CPU, the AGI CPU , designed specifically for agentic AI workloads. This marks an ambitious shift from purely licensing designs to building and selling its own chips. Historically, x86-based CPUs from AMD and Intel dominated the market, but Arm-based processors have gained momentum, with AWS Graviton as one notable example. Business shifts are not easy to execute, regardless of how much strategic sense they make. Morgan Stanley downgraded Arm to equal weight from buy earlier this month, acknowledging that entering the silicon market creates execution risk and potential channel conflict with some licenses. However, the upside is clear. Arm predicts it can generate $25 billion in revenue by FY3031, with $15 billion coming from these in-house chips. You know we love a good breakup story. When strong management teams spin off high-quality businesses, both entities benefit from a sharper strategic focus, helping to unlock value through improved products and services and expanded margins. Both companies become better equipped at pursuing their own growth strategies. Last December, FedEx CEO Raj Subramaniam announced plans to spin off FedEx Freight to create two industry-leading public companies. FedEx has been outperforming UPS partly due to Subramaniam’s cost-cutting, and this separation is the next phase of his plan to streamline the company. FedEx Freight is the largest LTL (less-than-truckload) carrier in North America, with the broadest network and industry-leading transit times. The spin is on track for June 1. FedEx Freight management recently held an investor day and outlined a medium-term outlook of 4% to 6% revenue growth with expanding margins. Next week kicks off the industrial heavy part of earnings season. More than 80 companies in the S & P 500 are scheduled to report, including portfolio holdings Capital One , Boeing , GE Vernova , Honeywell , Dover , and Procter & Gamble . Other key reports include UnitedHealth Group , 3M , IBM , American Express , Tesla , and ServiceNow . In addition, we’ll see March retail sales, S & P Global PMIs for April, and the University of Michigan consumer sentiment survey. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber 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 trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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