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 broadly higher on Monday as AI trading rebounds from last week’s steep losses. The market is trying to restore confidence in the data center theme following three major news stories this morning: Meta Platforms announced plans to raise up to $95 billion in equity capital; SpaceX announced a $40 billion debt raise to fund Nvidia GPU purchases, and Anthropic filed for an initial public offering. As investors turned their attention back to AI infrastructure stocks, they took profits in defensive sectors such as basics, healthcare and utilities, which had outperformed during last week’s flight to safety and quality. Hyperscaler results later this week will provide key insights into the spending plans of the largest AI investors, as well as demand for AI products and services. Shares of Johnson & Johnson rose after the pharmaceutical giant announced Phase 1 results that Leerink analysts described as a “potential game-changer” for prostate cancer treatment and the company’s broader oncology franchise. J&J said 12 of 16 patients with advanced prostate cancer and measurable tumors who received its once-daily oral investigational drug, JNJ-6143, achieved a complete or partial tumor response. This means that 75% of these patients responded to treatment, with their tumors shrinking significantly or disappearing. JNJ-6143 works by disrupting cancer cell function and triggering cancer cell death. The findings are important because there is a significant unmet need for advanced prostate cancer. Leerink noted that J&J may provide new information on the drug’s future development plans, including prior therapeutic lines, at its Dec. 8 Enterprise Business Review event. Microsoft shares rose slightly after the company announced it was offering voluntary buyouts to about 60,000 eligible employees. Unlike Netflix’s layoff announcement earlier this month before earnings were released, we don’t view Microsoft’s update as a harbinger of a slowdown in its business. Instead, voluntary buyouts are likely linked to the company optimizing its operational structure as it invests in its AI infrastructure. It’s worth mentioning that Microsoft has spent well within its means, better than other major hyperscalers like Amazon, Alphabet, and Meta Platforms. Microsoft is expected to generate about $8 billion in free cash flow in the soon-to-be-reported quarter, compared to outflows of $9.9 billion for Amazon and $2.3 billion for Alphabet, according to FactSet. Meta Platforms reported a quarterly free cash outflow of approximately $2 billion last week. This could explain why Microsoft shares have outperformed Amazon, Alphabet and Meta year-to-date, despite their lackluster performance in the first six months of the year. We’ll know more about Microsoft’s revenue trajectory and spending plans when it reports earnings Wednesday after the closing bell. Nucor, Celestica, Cadence Design Systems and Amkor Technology report after Monday’s close. Before the opening bell Tuesday, Boeing reports. Other notable companies that released their reports on Tuesday are Coca-Cola, United Parcel Service, Centene, HCA Healthcare, Novartis, Freeport-McMoRan, Johnson Controls, Corning, PayPal, Sherwin-Williams, Illinois Tool Works, Sofi. On the data side, we’ll see durable goods orders, Conference Board consumer confidence and new home sales. (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.
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