Why chipmakers are the stars of the week, plus Cramer's read-through on 3 reports

Published Fri, Apr 26 20242:22 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.) Best in months: The S & P 500 and Nasdaq are both higher on Friday, on pace for their best weeks since November. The gains break a three-week losing streak for the broad-based S & P and four straight losing weeks for the tech-heavy Nasdaq. The market entered the week deep in oversold territory, according to the S & P Oscillator, a signpost we use to determine if there's been too much selling pressure in a short period. Strong reports helped lift the market. About 46% of the S & P 500 has reported earnings so far, with nearly three quarters beating consensus expectations, according to FactSet. The surprise rate is better than last year too, with companies reporting earnings 8.4% above expectations, ahead of the one-year average rate of 6.4%. Chips lead the way: The mega-cap stocks like Alphabet , Amazon , and Microsoft are all having a day, but the semiconductor stocks (excluding Intel ) were the stars of the week. These stocks soared when the market looked at the CapEx figures of Meta Platforms , Microsoft, and Alphabet and remembered that the hyperscalers are collectively spending hundreds of billions of dollars this year and next to fuel their AI ambitions. Before Nvidia can make its Grace Hopper Superchip or Blackwell platform, it needs Micron to make a ton of high-bandwidth memory products. That's why listening to Micron is always important. It gives you a read on the entire semiconductor industry. Micron CEO Sanjay Mehrotra was on "Squawk on the Street" Friday to discuss its $6.1 billion CHIPS Act grant and more. "Mehrotra makes it clear that orders for highest-end chips well exceed supply," said Jim Cramer. "This is positive. Lam Research had a good quarter but I think better times are ahead judging by what Sanjay needs to buy." Earnings ahead : The busiest week of the first-quarter earnings season is coming up. Twelve companies in the portfolio are scheduled to report. Amazon and Apple are the headliners, but we'll also hear from Coterra Energy , Starbucks, and DuPont among others. Below are Cramer's quick thoughts about what some of the earnings this past week could say about what's ahead. "The strongest part of Chevron is the Permian Basin, which is very good for Coterra Energy. I like Devon too. It also reports next week." "After listening to Chipotle , which I love ahead of the June stock split, I realize that Starbucks must solve throughput by machines and by simplification." " Dow 's read-through to Dupont would make one think that this can't be the breakout quarter. But the company will still be buying back stock ahead of better times." (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.

Sanjay Mehrotra, CEO of Micron Technology speaks at the Milton J. Rubenstein Museum of Science and Technology, in Syracuse, New York, U.S., April 25, 2024.

Kevin Lamarque | Reuters