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. Markets : U.S. stocks were pacing for their third straight session of strong gains. Tech was among the strongest corners of the market Thursday, and that was reflected in the Nasdaq outperforming the S & P 500 and the Dow . There have been conflicting headlines around U.S.-China trade negotiations. China said earlier that no talks were ongoing. But later, President Donald Trump said, “We’ve been meeting with China,” though he declined to share further details. For now, Wall Street’s belief that Trump is softening his tone on China is prevailing. Still going: The data center trade was having another strong session, led to the upside by power and cooling equipment maker Vertiv and turbine maker GE Vernova . Club holding Eaton , another industrial with ties to the AI data center buildout, also jumped Thursday, outperforming the broader market. Vertiv and GE Vernova both reported better-than-expected earnings on Wednesday, sending their stocks flying alongside the market rally, and we’re seeing similar follow-through action on Thursday. Eaton is set to report earnings next Friday, May 2. All three stocks have struggled as the AI trade lost steam this year — first thanks to DeepSeek’s emergence in late January, and then more recently on reports that big spenders such as Club name Microsoft were modifying their data center investment plans. Broader tariff-related uncertainties about the economy haven’t helped. No change : After such a tough stretch for the data center trade, it’s encouraging to see signs of life. And this was playing out in the market Thursday before we saw the following headline from our colleagues at CNBC: ” Amazon and Nvidia say AI data center demand is not slowing down .” The story is from energy reporter Spencer Kimball, who is in Oklahoma City for an industry conference. The whole piece is worth a read, but here’s one highlight. “There’s been really no significant change,” Kevin Miller, Amazon’s vice president of global data centers, said at conference organized by the Hamm Institute for American Energy. “We continue to see very strong demand, and we’re looking both in the next couple years as well as long term and seeing the numbers only going up.” Those comments do not resolve the data center spending debate just yet, but they’re certainly relevant as we head deeper into first-quarter earnings season and get to hear directly from the large tech companies making these investments. In a key test, the first of those reports comes Thursday night from ex-portfolio name Alphabet , which is also a customer of fellow Club names Broadcom and Nvidia . Then, next week we’ll hear from Microsoft, Meta Platforms and Amazon . Charging ahead: Shares of Discover Financial rose Thursday on strong quarterly results. The stock was working on a fifth straight session of gains, keeping pace with recent moves in Club name Capital One ahead of the closing of their all-stock merger on May 18. Discover shareholders will receive 1.0192 Capital One shares. So, based on Discover around $185 per share and Capital One around $183 on Thursday, the premium in the deal basically flat — as it should be now that regulatory approval has been secured. We reported on Capital One’s solid first quarter on Tuesday, which featured improving delinquency rates and a larger-than-expected reserve release in its credit card business. After Wednesday’s market close, we saw some of the same strength in Discover’s first quarter. The company delivered better-than-expected first-quarter earnings of $4.25 per share and revenue of nearly $4.3 billion. “Good credit performance highlighted by a reserve release and lower net charge-offs.” That’s how Discover described its quarter in its analyst conference call presentation. Discover’s “strong credit performance is another sign that Capital One will be able to return a significant amount of excess capital in the second half of this year,” Director of Portfolio Analysis Jeff Marks said Thursday. On their post-earnings call, Discover management said the company’s purchase by Capital One will “increase competition in payment networks.” Among other synergies, the deal will allow Capital One to save money by moving some of its portfolio away from Visa and Mastercard to Discover’s payment network. The benefits on the network side are also a major reason for our investment in Capital One. Up next: While Google parent Alphabet is the biggest earnings report on Thursday night’s docket, we’ll also hear from Intel and its new CEO about plans to turn around the struggling chipmaker. T-Mobile , Skechers and Gilead Sciences are other reports of note, and executives at all three firms figure to comment on how tariffs are impacting their industries. On Friday morning, AbbVie , Colgate-Palmolive and AutoNation are scheduled to release quarterly results. (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.
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.
www.cnbc.com
#data #center #trade #coming #life #key #test #remains
