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. Stocks were falling Thursday, with the S & P 500 giving back Wednesday’s gains. The biggest story in the market was the pullback in Nvidia shares despite another impressive quarter and guide. Some of the more than 5% decline was down to skepticism about the ability of Nvidia’s main customers to keep spending. But the hyperscalers, like fellow portfolio names Amazon , Alphabet , Microsoft , and Meta Platforms , keep increasing their capital expenditure forecasts because compute capacity is directly linked with revenue. The more they spend, the more revenue they generate. Our long-term bullish view on Nvidia stock has not changed. The most interesting thing about Nvidia’s decline was how it triggered a major reversal of the “sell software, buy semiconductor and AI infrastructure” trade that has been dominant over the past several weeks. We see this rotation playing out with gains in beaten-up software stocks — like cybersecurity names CrowdStrike and Palo Alto Networks , as well as enterprise-focused Salesforce — and declines in Nvidia, Broadcom , Corning , GE Vernova , and Eaton . Qnity Electronics was also getting swept up in the rotation, despite reporting strong results earlier Thursday. It can be vicious to watch these counter-trend rotations crush the big gainers in the portfolio. We don’t have a prediction on how long it will last, but what happened Thursday is why we always try to lock in some profits when stocks are making their parabolic moves. We may not always catch the top. Very few investors will. But these rotations can be brutal, and trimming positions gives us the flexibility and the cash to step back in and repurchase shares at more attractive levels in the future. Up next, after the closing bell , are earnings from CoreWeave, Dell Technologies, Zscaler, Intuit, MP Materials, and Block. The CoreWeave results will give us another look into demand for AI compute and the pace of the data center buildout, while Dell’s will spotlight servers and networking equipment that are installed in data centers. There are no major earnings before the opening bell on Friday. On the data side, the producer price index for January is out at 8:30 a.m. ET. (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.
Nvidia takes the market lower — but one area of beaten-up tech moves higher
