Our basket of stocks that benefit from higher spending on AI is up again

CNBC Finance

3 min read

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch â an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets are up nicely, with the S & P 500 rising roughly 0.5%, the Nasdaq up 1%, and the Dow Jones Industrial Average holding around the flatline above 50,000. Technology stocks are having a strong day, with the group rebounding from recent declines. The portfolio's Magnificent Seven positions, excluding Apple and Amazon , were part of the bounce ( Alphabet , Microsoft , Nvidia , Meta Platforms ), as were enterprise software stocks ( CrowdStrike , Palo Alto Networks , and Salesforce ). It's been a relatively quiet day from a company news standpoint, and we're all waiting to see the January jobs report on Wednesday. But the market received a small boost at 11 a.m. ET after the New York Fed's 1- year inflation expectations fell to 3.09% from 3.42% in December. The new reading was below the consensus estimate of 3.38%. Our AI capex beneficiary basket , which we laid out last Friday, is having a strong session with new highs in Corning , GE Vernova , Dover , Cisco , and Qnity Electronics ; solid gains in Eaton ; and strength in semiconductor stocks Nvidia and Broadcom . One reason for this recent strength is that capital expenditure expectations for the next two years have increased significantly following the latest round of earnings. Analysts at Bank of America updated its capex tracker to reflect the latest earnings results from hyperscalers and found that fourth-quarter global hyperscale capex increased 14% quarter over quarter and 66% year over year to $148 billion. That was $7 billion more than previously expected. Looking ahead to 2026 and 2027, Bank of America expects capex to be $748 billion, rising to $869 billion. These 56% and 16% year-over-year growth rates are significantly higher than the 36% and 15% rates they had two weeks ago. Up next are two earnings reports after the closing bell: On Semiconductor and Vornado Realty Trust . Before the opening bell on Tuesday, we'll hear from DuPont , Coca-Cola , Datadog , Fiserv , Spotify , AstraZeneca , Ferrari , Marriott International , BP , and Xylem . On the data side, we'll see the December retail sales report. (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.

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Our basket of stocks that benefit from higher spending on AI is up again

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