Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street. Stocks are down as this week’s sales extend beyond technology. The Dow was the big loser Friday, down more than 1%, as defensive stocks joined what has largely been weaker AI trading this week. There are some bright spots in technology, like cybersecurity and chip stocks, that keep the sector modestly in the green on the day, but not enough to keep the S&P 500 and Nasdaq out of the red. Club names Micron and Intel are higher. The only other positive sector is energy, which is having a good session. This is because oil prices are rising due to growing tensions in the Middle East. U.S. benchmark West Texas Intermediate crude is above $103 a barrel. Brent international rose above $116 for a six-month high. These high oil levels and recently higher government price data keep inflation fears at the forefront ahead of next week’s Federal Reserve meeting. According to the CME FedWatch tool, the chances are quite low, just over 10%, for an interest rate hike Wednesday afternoon after the central bank’s two-day meeting. The market puts the chance of a rate hike in December at almost 78%. If that happens, it would be the Fed’s second rate hike in 2026 after September’s, which was the first in three years. For the week, the Dow is slightly higher, while the S&P 500 and Nasdaq are slightly lower. Palo Alto Networks and CrowdStrike are our winners for Friday and for the week. The reason? Researchers found that AI could exploit security flaws in PHP, a programming language used on nearly 70% of websites, one of the most widely used server-side languages. The vulnerabilities had been known for years, but exploiting them was considered too difficult and time-consuming for hackers. AI has changed the game by figuring out how to break into vulnerable servers, potentially steal sensitive information, and take over websites. The discovery prompted urgent government warnings and a rush to install security patches after details of the vulnerabilities were disclosed ahead of schedule. “This affects tens of millions of servers connected to the Internet,” CrowdStrike CEO George Kurtz told CNBC on Friday. Although patches were released on Wednesday, many outdated versions of PHP are still in use, and the patch certainly didn’t fix all of PHP’s issues. “Many violations will occur in the coming months,” Kurtz warned. The most important takeaway is that AI makes sophisticated cyberattacks easier and less expensive to carry out, increasing the need for advanced cybersecurity defenses. Kurtz said AI-based attacks observed by CrowdStrike doubled every month from July to September. “It becomes almost unsustainable unless you’re using defensive AI to be able to combat what the offense is doing, and that’s what CrowdStrike is focused on,” he said. This growing threat reinforces our belief that cybersecurity is a long-term winner from AI. Our decision Friday to trim CrowdStrike after a strong rally was strictly about resizing our position, not a change in confidence in the company. CrowdStrike’s weighting in our portfolio has increased to almost 5%. The reduction brought it down to 4.25% and delivered a gain of around 187% on stocks purchased in late 2024. Next week will be the busiest earnings season. About a third of the S&P 500 is expected to report quarterly results, including 11 portfolio companies. Tuesday is Boeing before the opening bell. Wednesday, GE Vernova in the morning and Alphabet, Microsoft and FedEx in the evening. Linde and Eli Lilly report before Thursday’s opening, while Amazon, Intel, Starbucks and FedEx Freight are off that evening. (See here for a complete list of Jim Cramer’s Charitable Trust stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Gn bussni
