It’s a jam-packed afternoon of developments impacting 7 portfolio stocks
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 rebounded Thursday as investors shrugged off concerns about a significant escalation in the military conflict between the U.S. and Iran. That sent bond yields and oil prices lower — two factors that have recently been supportive of equities. The S & P 500 gained nearly 1% in afternoon trading, while the Nasdaq jumped more than 1%. Meta Platforms initially traded lower after Reuters said a leaked internal document showed the company plans to aggressively ramp up AI compute capacity next year. The market remains divided on Meta ‘s AI roadmap — rewarding new monetization opportunities (such as a public cloud and AI models) while remaining guarded on the massive spending required to get there. The company’s latest AI model is fueling optimism that these investments will ultimately pay off. The company unveiled on Thursday Muse Park 1.1, which it called its “strongest model for agentic and coding work yet.” What’s notable about the model is that Meta is making its application programming interface (API) available through a developer portal. The inclusion of API capabilities puts Meta in more direct competition with the likes of Anthropic and OpenAI. APIs are the bridge that allows two software programs to talk to each other. For the first time, Meta is providing APIs that let developers integrate its proprietary Muse Spark 1.1 model into external applications, a key step toward building a commercial AI platform that can compete with OpenAI and Anthropic. Meta stock reversed higher as the session unfolded. Cowen increased its Cardinal Health price target to $275 per share from $255. The bump was part of the analysts’ drug and medical distribution second quarter earnings preview note. Cardinal Health ‘s upcoming print is the fourth quarter of the company’s 2026 fiscal year, and Cowen anticipates Cardinal guiding fiscal year 2027 earnings per share (EPS) above consensus, which currently sits at $12.04, according to FactSet. Shares touched $240 at one point this morning, but dropped alongside others in healthcare names as the market rotated back into tech. Cardinal Health and rivals McKesson and Cencora fell after FedEx announced the launch of FedEx Life Sciences, a dedicated organization created to support the transportation of pharmaceuticals, medical devices, biologics, and other critical healthcare shipments. The new initiative is part of the company’s goal of growing FedEx Healthcare into a $10 billion business. This may encroach on some of Cardinal Health’s territory, but the company does a lot more than transport medicines from Point A to Point B. It provides inventory management, data reporting, new product launch support, and many other healthcare services that FedEx can’t provide. The bottom line is that we like this news for FedEx, but it shouldn’t be disruptive to Cardinal Health. The news never stops — FedEx shares fell after a publication called Supply Chain Dive wrote that Amazon is undercutting FedEx and United Parcel Service (UPS) by offering lower shipping rates to prospective delivery customers. Amazon has always been a cost leader in every industry it goes after, so it shouldn’t come as a surprise that they are offering lower prices. We see little impact on FedEx. CEO Raj Subramaniam told Jim Cramer at the company’s World Hub in Memphis that Amazon’s new shipping initiative only affects 2% of FedEx revenue. Also, Amazon’s program right now is best suited for companies with light, lower-cost goods. That’s the opposite of FedEx’s strategy. FedEx is pushing deeper into verticals like healthcare, as we mentioned, and also automotive, aerospace, and data centers. Instead of shipping cheap stuff, FedEx wants to gain share in transporting products that either weigh over 50 pounds or are high in value — two areas customers are willing to pay a premium for speed, reliability, tracking, and security. Honeywell Aerospace wants to scale up its defense business overseas. Reuters reported Thursday that the company is expected to roll out more defense products for Europe that don’t have to go through U.S. export controls. An announcement could come later this month at the closely watched Farnborough Airshow in Britain later this month. It’s a wise move as a spike in European defense spending drives demand in the region on growing concerns that Europe can no longer live under U.S. protection. This trend doesn’t look to be slowing down anytime soon. NATO allies recently agreed to more than double their defense spending target by 2035. All of this is an incremental positive for Honeywell Aerospace ‘s Defense & Space business, which accounts for roughly 40% of overall revenue. Honeywell Aerospace spun off from fellow Club name Honeywell late last month. The Club last bought more shares on Tuesday. Last, but not least — Starbucks stock ripped higher by more than 2.5% after Bloomberg reported that the coffee giant is looking to use AI to build in-house software tools to replace the ones it pays Microsoft and IBM for. Jim Cramer reacted to the news, saying it is “brutal to think about how many companies might switch from current programs to AI — especially after companies see how much a stock [like Starbucks] climbs if a company can figure out how not to rely on expensive programs.” There are no major earnings after the closing bell on Thursday. Delta Air Lines reports before Friday’s opening bell. There are no major economic data releases scheduled for the final day of the trading week. 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