Intel's bold claims for new chip, plus bad calls on Wells Fargo, Freeport-McMoRan

Published Tue, Apr 9 20242:09 PM EDT

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. (We're no longer recording the audio, so we can get this new written feature to members as quickly as possible.) Market pullback: Stocks took a bit of a dive on no news shortly after the Morning Meeting wrapped up but have clawed back some losses. The decline came even as Treasury yields and oil moved lower. Both have been market headwinds lately. Real estate, utilities, and consumer staples outperformed while financials, industrials, and energy lagged. Nvidia vs. Intel?: One of the stocks that led to the downside mid-morning was Nvidia . We initially thought the decline was on no news, but then Intel issued a press release mid-day about its new AI chip, called Gaudi 3, which the company claims is better at training and inference than Nvidia's H100. Intel also claims it's more power-efficient than Nvidia's chips at a competitive price point. Intel shares were up about 1% in trading while Nvidia fell more than 2%. Intel shares are off about 24% in 2024 compared to Nvidia's 71% gain. While we never want to write off a new competitive threat at first blush, we are skeptical that Intel has something here. Given the company's track record, it is not surprising to us that its stock isn't working after these much-ballyhooed claims. That's because it has been one of the biggest overpromise-underdeliver companies in all of tech. We've seen Intel make similar claims with its previous generation Gaudi 2, and nothing has come from it. We'll do more work on this announcement, but as of now, we can't take this seriously. Upgrades/downgrades: Bank earnings season kicks off this Friday with Wells Fargo , JPMorgan , and Citigroup scheduled to report. Ahead of earnings, Wells Fargo was downgraded to neutral by a research firm called Compass Point Wells has also been downgraded by KBW and Citi since the start of March with valuation being a point of debate following the stock's strong gains in 2024. "I know that Wells Fargo has moved and there have been a lot of downgrades but I would point out that this stock was at $62 six years ago when the market was much much lower," said Jim Cramer. "It is well behind the market." Wells Fargo will report its first-quarter earnings Friday before the opening bell. Meanwhile, Cramer is critical of an upgrade of Freeport-McMoRan after the stock has gained 35% since the beginning of March. "I do not like this recommendation of Freeport," Cramer said. "It is coming in after a parabolic move. That's ill-advised." Other items: Cramer points out that Amazon spiked this morning to a fresh all-time high but it has since reversed lower. "It's a shame because nothing has happened. Better to wait until you have something." We are also keeping our eyes on the GE family of companies. " GE Vernova , even up two, is terrific because it is down a lot from the high," Cramer said. "But GE Healthcare , as it comes down, represents better value. Up next: Wednesday's key event is the March consumer price index (CPI), which measures the changes in prices paid for goods and services by consumers. The index is a good proxy for inflation and could impact monetary policy expectations, which explains why rates and stocks tend to be volatile on CPI day. The index is expected to increase 3.4% year over year, a slight acceleration from 3.2% in February. Core CPI, which excludes food and energy, is expected to rise 3.7%, which would be a tick lower from February. (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.

Intel CEO Patrick Gelsinger speaks at the Intel Ocotillo Campus in Chandler, Arizona, on March 20, 2024.

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