Jim Cramer’s top 10 things to watch in the stock market on Monday
My top 10 things to watch for Monday, July 27 1. Futures are up this morning, and oil prices have eased after the US and Iran stopped hostilities over the weekend. The Nasdaq led the way, rising about 1.4%. WTI crude fell nearly 7% to below $84 a barrel, the slowest pace of decline since May. Rising oil prices were a problem for the market last week, but not the only one. 2. The sell-off of many tech stocks has shown that the market is no longer willing to tolerate public companies’ massive spending on AI infrastructure. Even though Google Cloud has shown great demand, Alphabet is still in decline. We are looking for companies that will make money, not just “meet a need.” I explored this contradiction in my Sunday column for Investing Club subscribers. 3. Group name Nvidia is considering providing a $250 billion backstop to OpenAI to help ChatGPT creator lease Softbank’s massive data center project in southern Ohio, the Wall Street Journal reports. That figure doesn’t even include the chips that will go inside the data center. It was difficult. Nvidia as an AI central bank? The market will love and ultimately hate this deal in the belief that it is “Lazy Susan.” 4. Nvidia and South Korean tech conglomerate SK Group have entered into a $500 billion partnership to build AI infrastructure. SK Telecom plans to build a 2-gigawatt data center using Nvidia’s Vera Rubin chips. Also, Nvidia and SK Hynix have agreed to a long-term memory supply agreement. Securing enough memory is currently the biggest bottleneck. Supply is tight and adding production capacity takes time. 5. Just look at what happened at the start-up of memory-chip maker Changxin Technology Group in Shanghai. CXMT surged 466% today following its initial public offering, becoming China’s most valuable listed company. The US government considers CXMT a national security risk. But faced with rising memory costs, the club name Apple is reportedly testing CXMT chips in devices sold inside China. 6. Samsung and Broadcom announced a $200 billion deal to expand their collaboration in memory and technology support. Even as the market grows uneasy about AI infrastructure spending rates, companies that design and manufacture chips are moving forward. We own the Broadcom Club because it is a leading designer of custom AI chips for tech giants like Google and Meta Platforms. We’re getting gains from Meta , Amazon , and Microsoft this week. 7. Bottom line: Verizon’s price target cut guidance over the years has been lowered with confidence. This time, Barclays is taking the stock up to $46 from $45 and is signaling a change of guard. Wells Fargo went to $47 from $43, pointing to strong growth by the end of the year and 2027. However, both Barclays and Wells maintain a hold rating on the stock. Verizon is making a play on the data center boom, striking a $1 billion fiber deal with Google. 8. Making a bad call to another phone giant. Wells lowered its price target on Charter to $101 from $160 and reiterated its sell rating. Analysts downgraded their broadband outlook and said cable remains a tough operating environment. Barclays lowered its PT to $115 from $130 as well. The stock fell on Friday after Charter reported another quarter of subscribers that fell and missed free cash flow estimates. 9. Barclays raised PT on SLB to $67 from $64. Analysts say restructuring in the Middle East and the data center relationship with Meta are reasons to be bullish. Bank of America took the stock to $57 from $56. This is the only oil service company worth playing if you think a lull in the war between the US and Iran is a good thing. 10. SAP’s price target was lowered to $242 from $255 at Barclays. While the German software company sees growth in AI demand bolstering confidence in its second-half outlook, analysts say near-term spending may be less visible. That’s something I worry about with Palantir. Sign up for my free Top 10 Morning Thoughts on the Market email newsletter (See here for a full list of stocks from 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 stock in his charity portfolio. When Jim talks about a stock on CNBC TV, he waits 72 hours after issuing a trade warning before making a trade. THE PRIVATE INFORMATION OF THE BURNING CLUB IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AND OUR PRIVACY POLICY. NO LEGAL LIABILITY OR OBLIGATION EXISTS, OR IS CREATED, BY YOUR ACCEPTANCE OF ANY INFORMATION PROVIDED BY CONTACTING THE INVESTMENT CLUB. NO PARTICULAR RESULT OR INTEREST IS GUARANTEED.
