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: Stocks are slightly lower Thursday, but not far from the S & P 500 ‘s record close set Wednesday. Oil spiked a few dollars per barrel and the China stock market rally resumed overnight. Both have been headwinds to S & P 500 gains. The slightly warmer-than-expected September inflation data isn’t causing a lot of volatility, though, as the market seems more focused on the downward trend with an eye on third-quarter earnings in the weeks ahead. A defense of Salesforce : There was a bullish note on Salesforce published Thursday by Piper Sandler titled. “Laggard to Leader Potential; 10 reasons to Buy CRM.” Analysts wrote the note in response to the pushback they received on their Sept. 24 upgrade to a buy-equivalent rating. It’s been a pretty good call so far, with Salesforce up nearly 9% since the upgrade compared with a roughly 1% gain in the S & P 500. Some of the reasons Piper listed were tied to valuation, pointing to a forward price-to-earnings multiple of 27, more than 30% below its 10-year average. That also is the lowest across its large-cap software peers. Sentiment was a factor too, with Piper noting Salesforce’s underperformance versus the S & P 500 and other large-cap software companies as reasons to be bullish. From a business operations perspective, Piper likes the double-digit free cash flow growth story and commitment to operating margin expansion. But the key to the stock right now is uptake of Agentforce, the company’s new suite of AI-enhanced chatbot tools . Agentforce turns the perceived threat of AI disrupting application software into tailwind, according to Piper Sandler, and the formal product launch event on Oct. 29 followed by the Agentforce World Tour NYC on Nov. 20 could be potential catalyst events. AMD update: Shares of Advanced Micro Devices dropped more than 4% Thursday as the company held its Advancing AI event. The exact reasons for the dip are unclear to us, but there could be a “sell the news” dynamic at play after the stock’s recent outperformance since its recent lows in early September. CEO Lisa Su unveiled AMD’s new MI325x AI chip , which will ship to partners in the first quarter of 2025. Su described the demand for these AI processors as exceeding expectations. Although not as dominant as Nvidia , these chips are expected to carve out a place in the data center AI market, which Su now sees as being worth up to $500 billion in 2028; last year, AMD forecast a $400 billion market by 2027 . For AMD’s current AI chip, the MI300X, we didn’t hear any headlines around 2024 sales guidance (or 2025, for that matter). That might be causing some disappointment among investors, though Su could be saving that for AMD’s Oct. 29 earnings report. AMD also didn’t announce any new major customers — something UBS analysts said in a preview note this week that could be an “upside surprise.” Still, Jim Cramer said the stock’s pullback Thursday could be a buying opportunity, especially when considering the magnitude of AMD’s underperformance compared with AI peers. AMD is up less than 11% year to date while fellow Club holdings Broadcom and Nvidia are up roughly 66% and 172%, respectively. Up next: There are no earnings of note after the closing bell. But Friday kicks off the official start of third-quarter earnings season with Wells Fargo , JPMorgan Chase , BlackRock , and Bank of New York Mellon scheduled to report before the opening bell. On the economic data side, there is the producer price index report. While PPI is one of several important inflation readings for investors, Jim cautioned during the Morning Meeting about reading too much into slight changes in the data when the overall trend is lower. Plus, the more important upcoming numbers are earnings. (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.
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.
