Apple is a notable outlier in Monday's drubbing of mega-cap tech stocks
C
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. Stocks were lower on Monday, with the S & P 500 and Nasdaq giving up their earlier gains. Real estate, health care, industries, utilities, and energy traded solidly in the green, while communications services and consumer discretionary were the laggards. It was interesting to see energy stocks move higher while consumer discretionary slipped, even as WTI crude was on pace to close below $75 per barrel for the first time since March 4. Technology was mixed. The major hyperscalers were weak on Monday. Amazon shares fell more than 4%, while Microsoft and Meta Platforms dropped between 2% and 3%. Jim Cramer discussed some of the challenges facing these mega-cap tech companies in his Sunday column . Apple was a notable outlier, outperforming its Magnificent Seven peers during the session. We know Apple's AI strategy looks very different from the rest of the group. Rather than spending hundreds of billions of dollars per year building AI infrastructure, Apple is leaning on partnerships with model developers, including Google's Gemini, to deliver new AI features across its lineup of devices. Alphabet was the worst-performing of the hyperscalers and one of the biggest drags on the market, with shares falling about 6%. There may be several factors in play. The first concern is about AI researcher turnover. Over the weekend, Google DeepMind data scientist John Jumper said he's leaving the company for Anthropic. The news followed Gemini co-lead Noam Shazeer announcing last week that he's joining OpenAI. Two high-profile departures to competing frontier AI labs in less than a week may raise some eyebrows, but it's likely just a coincidence. Another issue might be Microsoft CEO Satya Nadella's exclusive interview with The Wall Street Journal, which highlighted that Microsoft is not focused on winning the AI race by building a leading model. Instead, the company is more interested in commoditizing AI models and finding lower-cost alternatives that can perform tasks effectively at a fraction of the price. Microsoft's AI strategy is very different (and far less successful thus far) than Alphabet's, which is plowing billions more dollars into its AI infrastructure. One more thing to keep in mind is that Alphabet's previously announced $40 billion at-the-market stock offering (as part of the larger $84.75 billion capital raise) is expected to begin in the third quarter. The equity raise may keep an overhang on Google shares until it's completed. There are no major earnings after the closing bell on Monday. Carnival reports before the opening bell on Tuesday, when the June S & P Global Manufacturing and Services PMIs are released. (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.
