Wall Street recovers from Fed slump, and the next step for Amazon's AI chip ambitions
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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 are closing the week higher, recovering most of Wednesday's losses sparked by the Federal Reserve meeting. Crude prices also fell on encouraging headlines about oil tankers exiting the Strait of Hormuz. For the week, the S & P 500 is up about 1%. The AI chip trade was on the move again, helped by comments from Apple CEO Tim Cook indicating that the iPhone maker will raise prices as memory and storage chip costs continue to climb. Because Apple typically treats price increases as a last resort, the comments suggest memory prices aren't coming down anytime soon as supply and demand remains imbalanced. With memory and storage demand showing little sign of slowing, we're seeing big gains in stocks like Sandisk and Western Digital , but also in semiconductor capital equipment makers like Applied Materials and Lam Research ; anybody ramping up manufacturing output needs their machines. Don't forget materials supplier Qnity Electronics also plays an important part to the semiconductor value chain, and we'll hear from the Club name's chief executive, Jon Kemp, on Thursday night when he appears on "Mad Money." Amazon shares jumped a few dollars after Bloomberg News reported the company is in talks to sell its custom chips to third -party data centers. It was only a matter of time before Club name Amazon started monetizing its family of chips, which includes Graviton, Trainium, and Nitro. Google has already begun monetizing its custom silicon, announcing in October a deal to supply Anthropic with one million of its tensor processing units (TPUs). Like Google, Amazon has a terrific custom chip business. In April, CEO Andy Jassy estimated that if the chip business was a standalone company and sold chips to AWS and other third parties, its annual revenue run rate would have been $50 billion. That's about the same figure analyst estimate pure-play chipmaker Advanced Micro Devices will do this year. Of course, Amazon pushing to sell chips to outside parties could take share from Club name Nvidia in the future, but Nvidia stock took the headline in stride and traded about 2% higher Thursday. Next week we'll see earnings from Club stocks FedEx and the recently spun off FedEx Freight . Outside the portfolio, the big reports include memory chipmaker Micron , cruise line operator Carnival Corp , and Olive Garden parent Darden Restaurants . On the data side there is S & P Global Manufacturing and Services PMI; the May PCE price index, which is the Fed's preferred inflation gauge; weekly jobless claims; the final read on first-quarter U.S. gross domestic product; and the University of Michigan's final read on consumer sentiment and inflation expectations for June. (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.
