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It was not the best quarter, but far from bad. View More

Costco Wholesale reported a decent quarter Thursday evening, delivering just enough on the membership numbers that we identified as crucial ahead of the print. Total revenue in its fiscal 2026 third quarter increased 11.6% year over year to $70.53 billion, ahead of Wall Street expectations of $69.81 billion, according to estimates compiled by LSEG. Adjusted earnings per share (EPS) in the 12 weeks ended May 10 rose 15.2% to $4.93, in line with expectations, LSEG data showed. Membership fee income in the quarter grew 10.7% to $1.37 billion, slightly exceeding the FactSet estimates of $1.36 billion. The U.S./Canada membership renewal rate ticked higher. COST YTD mountain Costco YTD The stock was not doing much after-hours trading. Weighing the lukewarm print against the benefits to Costco that come with a consumer forced to seek out value, we're maintaining our hold-equivalent 2 rating and $1,100-per-share price target. Bottom line It was not the best quarter, but far from bad. Paid members came up short at 82.9 million but grew 4.1% year over year. However, stability in membership renewal rates should help support the stock, which has dropped some 9% since hitting a 52-week high of just over $1,096 on May 19. Traffic growth decelerated sequentially, but comparable ticket size growth accelerated as consumers continued to seek out the best-in-class value Costco can provide, thanks to its membership, bulk-selling warehouse model, and record demand at the gas pumps. That means folks are doing a bit more of their shopping at Costco these days. On the post-earnings call, CEO Ron Vachris called out record gas sales as prices hovered around four-year highs on supply disruptions due to the Iran war. "All three, four-week fiscal periods of the quarter set successive all-time company volume sales records, with the final five weeks of the quarter becoming our top five volume weeks ever," the CEO said. The demand was so strong that some high-traffic Costco locations needed multiple daily gas deliveries. We were also pleased to hear Vachris say that many members were first-time Costco gas buyers in the quarter. He added, "We believe this will drive even greater loyalty with these members in the future, as members who use our gas stations typically spend more with us in the warehouse." Motorists flock to Costco when prices are high because the company sells gas at a discount. After filling up, they're more apt to duck their heads into the warehouse locations to do a little unplanned shopping. Total comparable sales rose 9.8% in fiscal Q3, a material acceleration from the 7.4% growth in the prior quarter. Comparable sales, or comps, is a key metric for the retail industry that adjusts for new store openings and closings to ensure fair year-over-year comparisons. Comps were driven by a 2.4% increase in traffic and a 7.3% increase in ticket size. That sounds pretty fantastic, but unfortunately, that's not the full story. On an adjusted basis, which strips out the effects of foreign exchange and gasoline prices, comps growth decelerated slightly to 6.6%, and ticket size was only up 4.2%. Digitally-enabled comparable sales were up 21.5%, or 20.8% on an adjusted basis, as e-commerce site and app traffic increased 37% versus the prior year period. Gross margin contracted 17 basis points year over year to 11.02%. However, it was actually up 1 basis point when excluding the impact of gas prices. Operating margins improved from the year-ago period. While overall paid memberships missed, executive tier memberships, which cost $130 per year, versus the $65 basic tier, increased to 41.2 million, up 9.6% year over year, and up from 40.4 million in the prior quarter. The executive tier launched in China this quarter, with management noting strong early adoption. As for renewals, the worldwide membership renewal rate managed to hold steady at 89.7%. That said, we were pleased to see a slight increase in the U.S./Canada region renewal rate — back to 92.2%, the levels seen in the first fiscal quarter, before a small tick down to 92.1% in Q2. The renewal rate has come under pressure recently because of growth in online membership sign-ups. Members who sign up online tend to churn at a higher rate than those who sign up in the store. This remains the case, however, on the call, CFO Gary Millerchip said that efforts to increase renewal rates amongst the online cohort, via targeted digital communications and retention strategies, are proving effective enough to more than offset the impact of this change in membership mix. Finally, Costco opened four new warehouses in the quarter and plans to open 12 more in the final (current) quarter of its 2026 fiscal year. The planned total openings of 26 this year are down from the 28 that the team was targeting in the prior quarter. Two of those openings were pushed into fiscal year 2027. In the coming years, Costco will increase its openings to 30-plus per year, globally. Costco currently has 928 locations worldwide, most of which are in the U.S., Canada, and Mexico. In addition to North America, the company also has representation in Europe, Asia, and Australia. Why we own it Costco is the best-run retailer in the world, with a business model focused on offering its members a relatively small universe of products at hard-to-beat prices. It has succeeded for decades, but the high inflation of recent years has made the company's value-focused ethos really shine. Competitors: BJ's Wholesale , Walmart , fellow Club holding Amazon Last buy: Sept. 30, 2025 Initiation date: Jan. 27, 2020 (Jim Cramer's Charitable Trust is long COST. See here for a full list of the stocks.) 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.

PayPal co-founder Peter Thiel has purchased a $12 million mansion in Buenos Aires and is exploring Argentina as a sovereign Plan B, drawn by President Javier Milei's libertarian agenda and the country's distance from Northern Hemisphere risks. View More

Tesla has registered 42 automated vehicles in its driverless Robotaxi service in Texas, putting it far behind Waymo in the state. View More

In this articleTSLAFollow your favorite stocksCREATE FREE ACCOUNT A Tesla robotaxi drives on the street along South Congress Avenue in Austin, Texas, on June 22, 2025Joel Angel Juarez | Reuters Tesla now has 42 autonomous vehicles authorized for driverless ridehailing in Texas, a fleet that's less than one-tenth the size of Waymo's in the state. Waymo, Alphabet's self-driving vehicle business, has 577 authorized robotaxis in Texas, according to new records available on the state's Department of Motor Vehicles website. The records were published in an online database on May 28, as a new law took effect giving Texas greater power over commercial driverless vehicle operators. Texas law previously allowed for AV testing and operations on roadways, "as long as they meet the same safety and insurance requirements as every other vehicle on the road."The new law requires operators of driverless vehicles, including Tesla, Waymo and others, to self-certify that their AVs are level 4 autonomous vehicles, per the standards established by SAE. Level 4 generally means an AV can operate in normal weather and on typical roads, without a a human driver on board. Waymo has long counted their robotaxis as level 4, but Tesla has told regulators that most of its cars feature level 2 driver assistance systems.Tesla has been operating its Robotaxi-branded service in Texas since June 2025, but hasn't disclosed details about how it came to self-certify any of its vehicles in the fleet as level 4. The company didn't immediately respond to a request for comment. Tesla is counting on driverless cars to fuel much of its future growth as the company faces dramatically increased competition in the electric vehicle market and as CEO Elon Musk tries to prove he's at the forefront of artificial intelligence and robotics. But Tesla is far behind Waymo, which has an existing commercial fleet of close to 4,000 vehicles across the U.S. and is rapidly expanding its paid service to new markets. In Texas, Tesla also trails smaller player AV Ride, which had 317 automated vehicles authorized in the state, according to the DMV, while Amazon's Zoox had 35.Tesla's Austin fleet experienced 17 known incidents between July 2025 and April 2026, two of which involved minor injuries, with one requiring hospitalization, according to records filed with the National Highway Traffic Safety Administration. Those incidents occurred while human safety supervisors were on board. Tesla has filed for driverless testing permits in Arizona, Nevada and Florida, but has yet to begin paid driverless rides in those states.WATCH: Waymo introduces new generation of vehicles, the Ojai watch nowVIDEO2:0402:04Waymo begins public rides in Ojai as it shifts to lower-cost robotaxisTechCheck Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Applied Materials CEO Gary Dickerson said the semiconductor industry is experiencing its strongest period ever. View More

In this articleAMATNVDALRCXKLACTSMTSMFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO1:2001:20Applied Materials CEO Gary Dickerson: This is the greatest time in the history of our industryMad Money with Jim Cramer Applied Materials CEO Gary Dickerson said Thursday the semiconductor industry is experiencing what he believes is its strongest period ever, driven by accelerating demand for artificial intelligence."It is the greatest time in the history of the industry and for Applied Materials," Dickerson said on CNBC's "Mad Money." "AI is driving incredible computing demand."Applied Materials is one of the key suppliers of equipment used to manufacture advanced semiconductors. Other companies in the semicap equipment group include Lam Research and KLA Corp. While not as well-known as the chip designers or foundry operators, such as Nvidia and Taiwan Semiconductor Manufacturing Co., they are critical cogs in the industry supply chain.Shares of Applied Materials have surged roughly 178% over the past year, and Dickerson argued the momentum is far from over. The company has visibility into future demand as customers race to build more AI infrastructure. "We're guiding for tremendous growth," he said. "This inflection is going to go on for a very long time." Dickerson pushed back on concerns that the semiconductor industry could return to a traditional boom-and-bust cycle, arguing demand has become more durable and predictable in the AI era. "We have really unprecedented visibility in terms of our business," he said, adding that customer conversations are already centered on demand in 2027 and 2028. To keep pace, Dickerson said Applied Materials has invested heavily in operations and supply chains. "We made big investments in our operations so we could pretty much double the operational capacity," he said. "But again, the demand just keeps going higher." He believes the long-term opportunity remains significant as growing AI demand drives the need for increasingly advanced chips and the equipment required to manufacture them. "AI is going to transform every industry," Dickerson added. "It's the most enabling innovation of our lifetimes." watch nowVIDEO8:1208:12Applied Materials CEO Gary Dickerson goes one-on-one with Jim CramerMad Money with Jim Cramer Jim Cramer's Guide to InvestingClick here to read Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest smarter Sign up now for the CNBC Investing Club to follow Jim Cramer's every move in the market.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - InstagramQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

American Eagle beat Wall Street's expectations but sales at its namesake banner fell short of estimates after its latest Sydney Sweeney campaign. View More

In this articleAEOFollow your favorite stocksCREATE FREE ACCOUNT Actress Sydney Sweeney is displayed on a billboard on the front of the New York Stock Exchange (NYSE) before ringing the Opening Bell for American Eagle Outfitters on February 09, 2026, in New York City. Spencer Platt | Getty Images American Eagle's two key brands are moving in different directions.Revenue at the retailer's namesake banner fell during its fiscal first quarter, even after it ramped up its marketing campaign with actress Sydney Sweeney. Meanwhile, sales at its intimates brand Aerie spiked during the quarter. The trends at the retailer appeared to disappoint Wall Street, as shares tumbled more than 10% in extended trading.In the three months ended May 2, comparable sales at the American Eagle banner fell 2%, far worse than the 3.1% growth that analysts had expected, according to StreetAccount. Meanwhile, comparable sales at Aerie soared 25%, beating expectations of 19.1%.Net revenue for the American Eagle brand dropped 2% to $678.4 million, while Aerie revenue jumped about 34% to $480.83 million. Combined, the business saw comparable sales grow 8%, short of expectations of 8.6%, according to StreetAccount. "While results at American Eagle were mixed, our teams are moving decisively to reignite the women's business and strengthen product execution and brand positioning," CEO Jay Schottenstein said in a news release"Looking ahead, our priorities are clear. Despite continued consumer and macroeconomic uncertainty, we remain confident in our ability to navigate near-term headwinds," he added." We are focused on operational excellence and disciplined execution to drive long-term value for AEO and our shareholders." Here's how the apparel company performed during the fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:Earnings per share: 14 cents vs. 12 cents expectedRevenue: $1.20 billion vs. $1.19 billion expectedDuring the quarter, American Eagle posted net income of $23.53 million, or 14 cents per share, compared with a loss of $64.90 million, or 36 cents per share, a year earlier. Sales rose to $1.20 billion, up 10% from $1.09 billion a year earlier. American Eagle reiterated full-year guidance and issued an outlook for the current quarter. For the year, the company expects mid-single digit percentage comparable sales growth and an increase in gross margin.In the second quarter, the retailer is expecting comparable sales to rise by a mid-to-high single digit percentage, compared to estimates of 6.5% growth, according to StreetAccount. It's expecting its gross margin to be down compared to the prior year during the period.During the quarter, American Eagle reignited its campaign with the "Euphoria" star Sweeney ahead of the summer shopping season, but took a tamer approach than the controversial campaign it launched last year under the slogan: "Sydney Sweeney has great jeans." This time around, instead of cleavage and double entendres, Sweeney was all smiles in a modest, casual look on the beach. Though the two campaigns were different, the effect has been the same – neither led to a major increase in sales at American Eagle's namesake banner. During a call with analysts, Schottenstein said marketing is leading to stronger engagement among new and existing customers, but moving forward, the company will "recalibrate spending" to ensure it's getting the strongest return on investment. Later on, President Jennifer Foyle said marketing has driven "awareness and consideration" and now the company is "focused on conversion." During the quarter, selling, general and administrative costs, which include marketing, increased 11% to $376 million — which was in line with sales growth at Aerie but less so at American Eagle. For the back half of the year, the company said it plans to focus more of its marketing dollars on social influencers and other forms of digital media, which carry a higher propensity of conversion, the company said. Beyond marketing woes, Foyle said the sales declines at American Eagle primarily came from the women's bottoms segment — not having enough of the styles shoppers wanted and too much of the ones they didn't. "As merchants, we move quickly when we see opportunities and when we see misses. And we are already making adjustments. As we head into the crucial back-to-school season, we are refining our bottoms architecture, specifically optimizing key silhouettes and risers while leveraging our chase capabilities to inject fresh newness," said Foyle. "At the same time, we are scaling high-demand categories within women's tops to fully maximize ongoing consumer momentum." When asked how its core consumer was holding up given high gas prices and other macroeconomic pressures, Schottenstein said he thinks the U.S. economy is "very strong" and only going to get better. "We think with gas prices hopefully will start settling down very shortly and with the, you know, current affairs, hopefully we'll come to some type of finish," said Schottenstein. "Hopefully it'll be a very good finish for the world and we're very optimistic on that." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Gap issued mixed results as sales at its largest brand, Old Navy, fell short of estimates. View More

In this articleGAPFollow your favorite stocksCREATE FREE ACCOUNT An Old Navy store at the Serramonte Mall on Black Friday in Daly City, California, US, on Friday, Nov. 28, 2025. David Paul Morris | Bloomberg | Getty Images Sales at Gap's largest brand Old Navy fell short of expectations during its fiscal first quarter, leading the retailer to cut its sales guidance on Thursday.During the quarter, Old Navy's comparable sales grew 1%, while analysts expected them to grow 3%, according to StreetAccount. As a result, Gap cut its sales outlook and is now expecting companywide sales to grow between 1% and 2%, down from a prior range of between 2% and 3%. Gap's stock dropped more than 14% in extended trading following the results.In an interview with CNBC, CEO Richard Dickson attributed the sluggish sales to a spring and summer assortment that failed to land with shoppers – not a larger macroeconomic issue. "It's not a consumer issue," said Dickson. "We're winning with all income cohorts across low, middle, and high. When you have the right product at the right price value equation, customers are there, and our seasonal categories just got off to a weaker start."While Old Navy caters to lower- to middle-income shoppers, who have felt economic shocks like soaring gas prices more acutely than higher-income cohorts, those customers are still shopping — just in different categories. Dickson said sales of Old Navy's dresses and swimming shorts were particularly weak, while active, denim and kids categories were strong. He said the brand is working to boost sales with better price points and marketing and has seen trends start to improve. Still, as Old Navy's slowdown has persisted into the current quarter, the company is taking a "moderated view" of the year, Dickson said. Considering that the brand accounts for almost 60% of Gap's overall revenue, any pressure on Old Navy impacts the entire company. While Gap cut its sales outlook for the year, its profitability is another story. The company raised its guidance and is now expecting adjusted earnings per share to be between $2.30 and $2.40, compared with a prior range of between $2.20 and $2.35. Here's how the specialty apparel company performed during the fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:Earnings per share: 38 cents adjusted vs. 37 cents expected  Revenue: $3.50 billion vs. $3.52 billion expectedSales rose to $3.50 billion, up slightly from $3.46 billion a year earlier. The company's reported net income for the three-month period that ended May 2 was $339 million, or 90 cents per share, compared with $193 million, or 51 cents per share, a year earlier. Excluding one-time items related to a hefty legal settlement, Gap saw earnings per share of 38 cents. Chief Financial Officer Katrina O'Connell attributed the higher earnings forecast to tax rate favorability and interest income. The company is expecting an $80 million benefit from reduced tariff rates, but she said she didn't factor that into the guidance and is instead reserving it. Half will be put aside to account for higher fuel prices, while the other half will be reserved in case the company needs to dial up promotions to stimulate demand. Here's a closer look at how each brand performed.Gap: Comparable sales at Gap's namesake banner, the center of its turnaround, soared 10% during the quarter, far better than the 5.5% growth analysts had expected, according to StreetAccount. Sales overall grew 10% as well to $796 million. The right marketing and a better presence in key categories like denim, fleece and kids drove the quarter. Banana Republic: Comparable sales fell short at the workwear brand, growing 2% while analysts had expected 4%, according to StreetAccount. Overall sales grew 1% to $431 million. It's the fourth consecutive quarter of positive comparable sales at Banana Republic. Earlier this month, Gap announced the former CEO of PVH Americas, Donald Kohler, was appointed to be the brand's next CEO. "We're getting better in women's, including pants and sweaters in particular that performed well," said Dickson. "[Kohler] brings incredible, deep experience across luxury, premium, specialty retail and we're really excited for him to lead the brand's next chapter." Athleta: Sales at Gap's athleisure brand continued to suffer. Comparable sales were down 11% while overall sales fell 12%. New CEO Maggie Gauger, a Nike veteran, has worked to streamline the assortment, and Dickson expects some improvement in the back half of the year. "It's in the hands of the consumer," he said. "We've just got to deliver that to them, and then we'll see how they respond."Old Navy: Sales grew 1% to $2 billion, while comparable sales were up 1%, worse than expected.  Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

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Anthropic is now the most valuable AI company in Silicon Valley after a new $65 billion funding round. View More

watch nowVIDEO1:3501:35Anthropic raises $65B in latest funding round at $965B valuationPower Lunch Anthropic is now the most valuable artificial intelligence company in Silicon Valley. The AI giant announced a $65 billion Series H financing round at a $965 billion valuation on Thursday. The financing puts its valuation above that of rival AI lab OpenAI. CNBC reported in late April that Anthropic was in talks to raise capital.The newest round was led by Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital, and almost triples Anthropic's valuation from February, when it was worth $380 billion. The financing also includes $15 billion of previously committed investments, including $5 billion from Amazon, the company said. Anthropic's biggest competitor OpenAI was valued at $852 billion in late March after closing a record-breaking $122 billion funding round. Anthropic's revenue has exploded thanks to its popular AI coding assistant, Claude Code. Anthropic also reported a $47 billion revenue run rate on Thursday. That's up from a $30 billion run rate earlier this year, and $10 billion in annual revenue last year. The company released its latest model, Claude Opus 4.8, earlier on Thursday. Anthropic has also captivated Wall Street by unveiling Claude Mythos Preview, a model with advanced cybersecurity capabilities that's only available to a select group of companies. Read more CNBC tech newsWaymo opens Ojai robotaxis to select riders as company aims to lower cost of fleet expansionAI part of another tech layoff as Wix CEO announces 20% workforce cutMistral to explore designing own chips, CEO says, as it ramps up infrastructure buildMark Zuckerberg says a Meta cloud computing business 'definitely on the table' "Claude is increasingly indispensable to our growing global community of customers, and we work tirelessly to make tools like Claude Code and Cowork more helpful, more powerful, and more adaptable to their needs," Anthropic Chief Financial Officer Krishna Rao said in Thursday's press release. "This funding will help us serve the historic demand we are experiencing, stay at the research frontier, and bring Claude to more of the places where work happens."Anthropic's latest round comes as the leading AI model makers prepare to go public.Elon Musk's SpaceX, parent company of his AI startup SpaceXAI, filed its prospectus with the Securities and Exchange Commission last week on its way to an initial public offering.When Musk merged SpaceX with his AI startup in February, the combined company was valued at $1.25 trillion.OpenAI is preparing to file its confidential IPO prospectus in the coming days or weeks, CNBC has confirmed. The Sam Altman-led startup is looking to go public as soon as September, a source familiar with the matter said. The person asked not to be named because the decisions are internal.Not to be left too far behind, Anthropic is also getting its IPO ready behind the scenes, though timing on the effort remains fluid, CNBC previously reported. watch nowVIDEO2:0102:01OpenAI vs. Anthropic: The IPO raceTechCheck Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Every weekday, the Investing Club releases the Homestretch; an actionable afternoon update just in time for the last hour of trading. View More

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. The S & P 500 and Nasdaq powered higher on Thursday, with both indexes touching all-time highs during the session. Helping fuel the gains, Axios reported that the U.S. and Iran agreed to a memorandum of understanding to keep their ceasefire going and begin talks on Tehran's nuclear program. While welcoming these encouraging headlines on the war, this is hardly an all-clear sign. It was only a few hours ago that we were reading about the U.S. and Iran trading airstrikes , causing a spike in oil prices. Following the news, oil has basically turned flat on the day. Some of our best portfolio stocks are CrowdStrike and Palo Alto Networks . These two cybersecurity providers were unfairly dragged down Wednesday in sympathy with peer ZScaler 's earnings blowup. We wrote that their declines weren't cause for concern , and we're now seeing the buyers step in. CrowdStrike and Palo Alto were each up roughly 4%. Another mover that caught our eye: Microsoft , which gained more than 3.5% on the session and has now erased all its late April post-earnings losses . The Information, a tech-focused publication, reported Microsoft will debut a new coding model next week at its Build developer conference . One of the reasons why we put Microsoft on a short leash is because we're worried that its AI innovation is lagging behind the likes of OpenAI, Anthropic, and Alphabet 's Google. Needless to say, we're glad to hear about product announcements on the horizon. The big question is: Will the moves be effective and well-received? Our biggest mover by a mile is Arm Holdings . Shares soared more than 13.5% on Thursday afternoon, pushing its one-month gains north of 73% — easily the best performer in our portfolio in that stretch. The stock has more than tripled year to date. After sliding nearly 6% on Wednesday, it is on track for another record close. Arm is no stranger to massive single-day moves these days, thanks to all the excitement about the growing importance of central processing units (CPUs) for agentic AI systems; the same goes for Intel and Advanced Micro Devices , the two other main data center CPU suppliers. Interestingly, they're seeing divergent performance Thursday. While Arm was flying, AMD was up a more modest 5%, and Intel was down almost 1%. We can't pinpoint an exact reason for Arm's major outperformance. But there are a few different headlines that, when taken together, could be fueling another wave of buying. Mizuho Securities raised its price target on Arm shares to $360 from $290, citing tailwinds from both the company's new in-house CPU efforts and its traditional business collecting royalties and licensing fees for its CPU intellectual property. It's difficult to imagine this is the main driver of Thursday's action, but we wanted to call it out as a sign that Wall Street isn't souring on the stock despite its big run. Snowflake announced a $6 billion cloud-computing spending commitment with Amazon — and it explicitly mentions that Snowflake will use Amazon's Graviton CPUs as part of this multiyear agreement. This is very positive for Amazon's computing business, as Jim mentioned on Thursday's Morning Meeting . But the Arm angle is this: Amazon licenses the Arm instruction set for Graviton. In very simple terms, the more demand Amazon sees for Graviton, the better it is for Arm because Arm collects a royalty on every chip that contains its IP. Amazon first debuted Arm-based Graviton in 2018 , and it's now on its fifth generation . Excitement is building for Nvidia 's presentation next week at the Computex conference in Taiwan after CEO Jensen Huang said the company has a "surprise new product." Nvidia and Arm have a close partnership. Nvidia is another licensee of Arm IP for its Grace and Vera CPUs, and we saw last week that what Nvidia says can move Arm's stock. Shares of Arm soared after Nvidia's bullish CPU comments on its May 20 earnings call. Huang's keynote is Monday morning, Taiwan local time (Taipei is 12 hours ahead of New York). Arm CEO Rene Haas is also giving a Computex keynote on Tuesday morning local time. We don't know what announcements may be coming, but the overall tone on AI demand should be quite upbeat. We trimmed Arm on Tuesday because the stock has had a parabolic move, and our discipline requires us to lock in gains in case the momentum quickly fades. Big earnings are on our radar after Thursday's closing bell. Club name Costco leads the group, and we'll pay close attention to its membership metrics . Fellow retailers American Eagle and Gap will provide a look at consumer spending trends for clothes. We'll also hear from Dell , which will offer another read on AI server demand, and cybersecurity providers Okta and SentinelOne . The earnings calendar is light on Friday morning. On the economic data side, the Census Bureau's Monthly wholesale trade survey, which figures into quarterly GDP estimates, is due out at 8:30 a.m. ET. (See here for a full list of the stocks in Jim Cramer's Charitable Trust, including CRWD, PANW, MSFT, GOOGL, ARM, AMZN, NVDA, COST.) 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.

Is now the time to step and buy shares of Meta Platforms? View More

Is now the time to step and buy shares of Meta Platforms ? If concerns about the monetization of artificial intelligence investments and the wait for new revenue streams were keeping you on the sidelines, then two major updates from the company may have just given you the green light. The first came during Meta's annual shareholder meeting late Wednesday, when CEO Mark Zuckerberg was asked about the possibility of entering the public cloud space. His response? "It's definitely on the table." He added that "almost every week there are different companies that come to us from outside asking us to both stand up an API [application programming interface] service or asking if we have compute that they could buy from us at some premium to what we've bought it at." When Zuckerberg uses the industry term "compute," he's talking about all the data center infrastructure needed to train and run AI workloads. Meta cloud? Zuckerberg's cloud commentary is material, not only for how shareholders like the Investing Club think about possible future growth opportunities, but for sentiment as well. Think back to last month, when Meta reported a monster quarter and the stock tanked. Sure, Meta increased its full-year capital expenditure guidance to a greater-than-expected range of $125 billion to $145 billion, up from between $115 billion and $135 billion. The market, however, graded Meta's spending outlook hike more harshly than Amazon, Alphabet, and Microsoft even as their capex guides were even higher. Wall Street sees Meta at a greater risk of overbuilding and not optimizing its return on investment because it does not have a public cloud service to fall back on. Meta, unlike its megacap brethren, must sop up all the capacity it is building on its own. Any excess can't be easily rented out to be monetized. The Street is simply more apt to reward those spenders with the infrastructure in place to sell excess compute. It also means less pressure on the cloud companies to provide the best possible AI models themselves for every situation. It's why they are offering a wide variety of models. They don't really care which one a client uses, as long as the demand for these models drives demand for the compute they have invested hundreds of billions of dollars in and are now looking to rent out. Standing up a public cloud business at Meta would require more investment — and what better way to blunt worries about spending than driving new revenue streams. Premium tiers That brings us to the second Meta update, which came Wednesday via a Facebook post by the company's head of product. During a video message, Naomi Gleit detailed a premium tier of subscription choices for Meta's Family of Apps, more tools for businesses and creators, as well as two new paid options for Meta AI, the company's large language model. We already knew Facebook, Instagram, and WhatsApp were getting "Plus" subscription tiers, which will provide users with enhanced ways to interact across the suite. For Facebook and Instagram, the Plus tier will cost $3.99 per month; and for WhatsApp, it will cost $2.99 per month. What's new is that Meta AI will also be getting subscription plans. The lower tier, Meta One Plus, will cost $7.99 per month, while the upgraded tier, Meta One Premium will cost $19.99 per month. Those are for users with more intense compute needs. The free tier will remain for those with more basic needs. For creators and business customers, Meta will soon start to offer the Meta One Essential plan for $14.99 per month, as well as an upgraded Meta One Advanced plan that increases ranking and targeting capabilities. Insight into how Meta might look to monetize its billions in AI capex spend with a cloud service and pushing ahead with paid tiers are perhaps signs that Zuckerberg has had enough. Meta is down nearly 4% year to date versus the S & P 500's more than 10% gain and the Nasdaq's over 15% increase. During our May Monthly Meeting on Wednesday, Jim Cramer said that Meta's 2026 performance is shocking because Zuckerberg is known to be intolerant of underperformance. Last month, on the company's post-earnings conference call, Zuckerberg was asked about the return on invested capital he sees over the next 12 to 24 months. "Just like anything else that we've done over time, the basic milestones that I look at are around, first, technically, are we delivering the quality to enable a great product? Then second, when you have the product, how is it scaling? And then third, you look at the monetization and then you drive up the efficiency of it towards increasing profitability....I don't think we have a very precise plan for exactly how each product is going to scale month-over-month or anything like that... I think Muse Spark was a very high-quality model. It powers Meta AI, which I think is now a world-class assistant. We have an ability to be able to grow that and have a large amount of engagement. And over the coming quarters, we're just going to be tracking how do our next set of training runs go, how do our products scale, how excited are we about the products in the pipeline? We're – right now, we're very excited. And then we'll also ramp up monetization over that period of time as well." (Muse Spark is Meta's proprietary large language model (LLM), successor to the open-source Llama, and the brains behind Meta AI.) The success of the Meta AI subscriptions, in particular, will heavily rely on the capabilities of the Muse Spark as it puts the company in more direct competition with LLM heavyweights like Google's Gemini, OpenAI's ChatGPT, and Anthropic's Claude. The Family of Apps tiers are more about strengthening the existing revenue stream from social media. Bottom line Both updates are important, while the new Meta AI subscriptions are likely the more near-term new revenue stream opportunity, the neocloud commentary could prove more material to future earnings estimates should we see more of a roadmap here. The Family of Apps tiers are wringing more money out of the existing social media platforms. While not a full-on new product roadmap, the announcements do feel like management's attempt to let investors peek behind the curtains for reassurance that new revenue streams are most certainly a top priority. Neither is probably enough to move the needle on near-term earnings estimates. But the updates certainly move the needle on sentiment. Will they spark a sustained rally? Time will tell. But a change in the way investors think about Meta stock may just be enough to put in a floor. With shares trading at less than 19 times forward earnings estimates, Meta management was clearly looking to preview monetization opportunities that they were not eager to speak about before the stock's recent pullback. Remember, long-term investing is not about trying to time rallies. It is about identifying undervalued stocks and CEOs who can't stand to lose. In our minds, Meta and Zuckerberg check both boxes. (Jim Cramer's Charitable Trust is long META, AMZN, GOOGL, MSFT. 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