S&P 500 record close Friday is down to the wire — plus, Amazon is more than just cloud
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. Markets: Wall Street lost some steam in afternoon trading Friday, as AI trade bellwether Nvidia gave up earlier gains and turned negative. Tesla , another momentum stock, was down 3% after opening the day in the green. The S & P 500 , which at session highs was up about half a percent, was up roughly 0.1% as of 2:40 p.m. ET. It’s going to be a close call on whether the index finishes the week at a fresh record close. The 30-stock Dow was the outperformer among the major indexes, led by a more than 1% advance in shares of Club name Goldman Sachs , Caterpillar and UnitedHealth . Nike , Nvidia and Boeing — all portfolio names — were the Dow laggards. Investors and traders are monitoring the spending bill debates in Washington over the government shutdown, which entered its third day Friday. The general consensus on Wall Street is that short-lived shutdowns do not have a long-term economic impact, resulting in limited market impact, too. But the longer it goes on, the greater the stakes for the economy and Wall Street. AWS defense: Goldman Sachs on Friday raised its price target on Amazon to $275 a share from $240, implying 23% upside from the stock’s previous close. Goldman, which reiterated its buy rating, addressed a key investor debate: Can Amazon Web Services reignite growth as cloud-computing rivals including Microsoft , Google , Oracle and smaller players like CoreWeave represent increasing competition for AI workloads? “There’s been a lot of bearish talk about what’s been going on with AWS,” Jim Cramer said Friday. “Perhaps they’re not spending enough, they’re doing their own chips and therefore not keeping up with the others,” Jim said, summarizing the debate. Goldman acknowledged that AWS’s market share loss is likely to continue, in part due to its larger revenue base versus rivals. Nevertheless, analysts expressed confidence in the business, including a belief that AWS can return to topline growth north of 20%. The last time its growth rate exceeded 20% was in the fourth quarter of 2022, according to FactSet data. In Amazon’s two most recent quarters, AWS revenue grew 17.5% and 16.9%, respectively. In making the case for a reacceleration, Goldman cited AWS’s backlog strength, rising AI services revenue, and its partnership with AI startup Anthropic as a “potential catalyst” in the second half of 2025 and early 2026 as compute capacity constraints ease. Goldman also argued that with all the focus on high-margin AWS in recent months, investors may be overlooking the importance of Amazon’s ad business as an additional profit driver through 2028. This resonates with Jim: “I like that ahead of the holiday season,” he said, as many consumers are likely to turn to Amazon’s e-commerce platform in search of deals. Goldman estimates Amazon’s ad profits will represent “the highest margin across Amazon’s major segments” in the coming years. We continue to maintain our 1-rating on the stock and $250 price target. Up next: In the week ahead, investors will be keeping a close eye on the state of the government shutdown, which is impacting the release of official government economic data. There are no Club holdings set to report earnings, though outside the portfolio some notable companies are on the docket, including Delta Air Lines, PepsiCo and Levi Strauss. On Tuesday, the Club is holding its October Monthly Meeting. (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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