Every weekday, the CNBC Investing Club with Jim Cramer releases Homestretch — an actionable afternoon update, just in time for the final hour of trading on Wall Street. (We are no longer recording audio, so we can get this new written feature out to members as quickly as possible.) Markets rebound as Nvidia turns green: After a slow start to the session, Nvidia shares climbed out of an early hole and traded higher on the day. One reason for the positive reversal is the understanding that large cloud providers and other major technology companies are likely already lining up to get their hands on Nvidia's latest AI hardware. “Amazon CEO Andy Jassy said he would be happy to get as many chips as he can get,” Jim Cramer said. But what Nvidia has accomplished to advance AI is much more important than just looking at cloud computing. It will have a positive impact on many real-world applications, such as the healthcare industry. “Nvidia has spent all the time it needs to run a drug trial,” Jim said. “It will shorten that time dramatically.” Over time, he added, these AI-fueled improvements in drug discovery could translate into “more money for Danaher,” a club in the life sciences industry whose clients include pharmaceutical companies. “In the near term, remember that Danaher is 'in the right place when you see $2 billion to $3 billion worth of biotech acquisitions,'” Jim said. In fact, we saw another one of those deals in biotech on Tuesday. AstraZeneca agreed to Buying Fusion Pharmaceuticals for up to $2.4 billion Another announcement that caught our attention was Nvidia bringing its Omniverse 3D application platform to Apple's Vision Pro mixed reality headsets. “Commercial uses of Vision Pro just jumped to the top because (President Nvidia CEO Jensen Huang showed how you can buy a car with it.” “A simulator may be better than a test drive because you can then order the car to your specifications.” We call this the synergy between two long-standing club properties that “own it, don't trade “In Jim's view. It's only a matter of time before the market really starts to appreciate Nvidia's move toward software and services, like what Omniverse provides. Get more exclusive Cramer programming with Huang on “Mad Money” on Tuesday and Wednesday nights. MORNING MEETING FOLLOW-UP: Part of Tuesday's morning meeting focused on the recent struggles at Starbucks and the backlog of lawsuits affecting Abbott Laboratories. Since Jim was unable to attend the morning meeting, he offered his thoughts on the two stories. Regarding Starbucks, he said, “People don't want to say sell it because that might be what the bottom looks like.” The trough can be seen in many different ways. It could have to do with same-store sales, which are going through a difficult phase at the moment due to headwinds in China, the Middle East and the afternoon in the US. It could also mean valuation, several analysts said. Cite Starbucks' cheap price-to-earnings ratio versus history. At Abbott Labs, Jim said, “If Abbott stock goes down, buy it. Unfortunately, this exposure to lawsuits is business as usual. It's the numbers; (Johnson & Johnson) has 80,000 plaintiffs suing it. Abbott has a very small number that can “It quadruples, not quintuples, before we even take it into account.” As of January 31, Abbott had 993 lawsuits pending in federal and state courts. GLP-1s: It's hard to go a day without the increasingly popular drugs known as GLP-1s in the news. Oprah Winfrey hosted a television special Monday night in which she discussed the health benefits she has enjoyed since taking these revolutionary medications to help remove the stigma from weight-loss medications. We're all still trying to figure out the exact changes in consumer tastes and habits that these drugs will bring, but one area that seems increasingly at risk is alcoholic beverages. Jim believes that the decline in Brown-Forman shares to a four-year low can be explained by the GLP-1. “The company isn't saying no way,” he said. “But the explanation is simple: Why pay for high-end wines and spirits when they all taste the same? That's the GLP-1 dilemma.” However, Cramer doesn't think all alcoholic beverage companies fall into this trap. “Beer doesn't have the GLP-1 dilemma because it's a social drink. Constellation Brands' prices are reasonable,” he added. Constellation Brands shares are currently trading at about $5 per share, or roughly 2%, below the high reached by Club Holding in July. Wednesday's sneak peek: It will be a busy morning earnings day from Chinese online retailer Pinduoduo and packaged food company General Mills, followed by Broadcom's AI Infrastructure Invest event, which is scheduled to start at 12 noon ET. Then, at 2 PM ET, we will receive a policy announcement from the Federal Reserve's Federal Open Market Committee, followed a half hour later by Chairman Jerome Powell's press conference. Although no interest rate cuts – or hikes – are expected, the March meeting will be notable because the Fed will issue an update to its economic outlook materials. This includes forecasts for GDP, the unemployment rate, and personal consumption expenditures inflation, as well as so-called “dot charts,” which assess each FOMC participant's view of appropriate monetary policy. (See here for a complete list of stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you'll receive a trade alert before Jim takes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charitable fund's portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above Investment Club information is subject to our Terms and Conditions and Privacy Policy, as well as our Disclaimer. No obligation or fiduciary duty exists or is created by your receipt of any information provided in connection with the Investment Club. No specific results or profits are guaranteed.
Jensen Huang, co-founder and CEO of Nvidia Corp, arrives at an event in Taipei, Taiwan, on Thursday, January 25, 2024.
Lam yik fai | Bloomberg | Getty Images
Every weekday, the CNBC Investing Club with Jim Cramer releases Homestretch — an actionable afternoon update, just in time for the final hour of trading on Wall Street. (We are no longer recording audio, so we can get this new written feature to members as quickly as possible.)
