News Analyst
Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street. Markets: The S&P 500 is up solidly on Thursday, overcoming a volatile start to the session during which the index oscillated between gains and losses. We’ll get to Alphabet in a moment, but its peers within the Magnificent Seven cohort are mostly inferior, acting as a source of funds as investors turn to other areas like banks and industrials. The market also takes inspiration from the Nvidia club name, but not in the way you might think. Sure, Nvidia is up slightly on Thursday after another earnings surge and upside guidance, but what’s happening around Nvidia might be the more important story. The action in industrial stocks related to the theme of data center construction and power generation has been incredible. Names of clubs like Eaton and Dover, as well as other data centers such as Vertiv, are flying. Eaton is right around its all-time closing high on Thursday, while Dover is trading less than $2 below its closing record. Alphabet: Shares of Google parent Alphabet were hammered Thursday after the Justice Department said in a court filing late Wednesday that it wants the company to divest its Chrome web browser as a remedy to its antitrust case . In Alphabet’s response, which can be read in full here, General Counsel Kent Walker argued that the DOJ had filed a “stunning proposal to make sweeping changes to Google’s services.” He added: “It would break a line of Google products – even beyond search – that people love and find useful in their daily lives.” The DOJ’s other proposed remedies could threaten Google’s existing partnership with AI startup Anthropic, Bloomberg News reported Thursday. We disagree with the DOJ’s proposed solutions, especially since they target products that, as Walker said, people like to use every day. If there was a better alternative to Google’s products like Chrome or Search, you’d hear more about it. Yet as longtime Alphabet shareholders, we have never felt comfortable ignoring the Justice Department — even if its final ruling “seems draconian,” according to Evercore ISI, or it is unlikely to be approved by the court, according to Baird. We cannot underestimate what we don’t know. This regulatory overhang is why we reduced our position in Alphabet to a smaller size and did not seek strong profits as we saw in response to the third quarter numbers. Thursday’s near 6% selloff seems excessive, but we don’t have the confidence to buy the weakness until we have more information. The federal judge overseeing the antitrust case, Amit Mehta, is expected to issue a final ruling on the remedies by August 2025. In August of this year, Mehta ruled against Alphabet, concluding that it illegally maintained a monopoly on online search and text advertising markets. . Alphabet announced its intention to appeal the decision. Next up: Companies reporting after the closing bell Thursday are Gap, Ross Stores, Intuit and NetApp. There are no major earnings reports on Friday. (See here for a complete list of Jim Cramer’s Charitable Trust stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked 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 OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Every weekday, CNBC Investing Club with Jim Cramer publishes the Homestretch – an actionable afternoon update, just in time for the final hour of trading on Wall Street.
https://www.cnbc.com/2024/11/21/alphabet-shares-tumble-on-doj-fears-heres-what-we-think-about-the-stock.html
