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 choppy for most of Wednesday, losing the burst at the open as investors sat with January’s strong-than-expected job growth data, which dimmed the case for a resumption of Federal Reserve interest rate cuts. The threat of AI’s disruption on business models was rippling through the market again, with the brokerage and wealth management firms unable to rebound from Tuesday’s selloff. Enterprise software stocks were getting hammered again and giving back the slight rebound from the past two sessions, serving as a tough reminder that a couple of positive days in a row doesn’t mean there’s an all-clear signal. The AI infrastructure stocks — the picks and shovel data center buildout plays and companies involved with the “guts of the data center” — were making another big move after the power and cooling equipment company Vertiv highlighted 252% organic year-over-year growth in orders. Eaton, GE Vernova, and Corning were all up 3% to 4% in the session and made new record highs. In light of the gains in these stocks and the positive revisions to global hyperscale expectations we highlighted this past week, we’re raising our price targets in several of our AI data center plays. We are increasing our price target on Eaton to $425 per share from $410 and GE Vernova to $875 from $800. Eaton makes power management solutions used in data centers. GE Vernova makes natural gas turbines that can be hooked up to data centers to provide extra energy beyond what the power grid can offer. As for Corning , we are increasing our price target to $140 from $125. But earlier Wednesday, we debated whether to lock in some hefty gains on the stock, which is up 50% year to date. Ultimately, we decided to hold off for now to see if another multibillion-dollar supply agreement with a hyperscale customer, as announced with Meta Platforms last month, happens in the near term. What Meta did was a signal that hyperscalers are racing to secure fiber supply, and Corning said it is in talks with more customers. That’s our most up-to-date thinking for now, but we may still take some off if this parabolic move continues because we don’t want to be too greedy. In addition to fiber optic cabling, Corning makes glass for connected devices, including the iPhone and Apple Watch. Finally, this week’s 15% rally to new record highs in the semiconductor materials supplier Qnity Electronics has pushed it above our $110 price target. We’re holding off from making a price target change on Qnity until we see its results and outlook Feb. 26. If it’s any indication, a beat and strong guidance from its closest peer Entegris on Tuesday was a positive sign. Qnity was spun off from DuPont back in November. Up next, after the closing bell, we’ll see earnings from portfolio stock Cisco Systems , as well as AppLovin, and MGM Resorts. Howment Aerospace, Zoetis, PG & E, and Nebius Group will report their quarters before the opening bell Thursday. On the data side, we’ll see weekly jobless claims Thursday morning. (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.
We’re raising our price targets on 3 picks and shovel data center buildout stocks
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