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Key Takeaways from the CNBC Investing Club Update with Jim Cramer:

1. Massive AI Infrastructure Investment:

hyperscalers are Doubling Down: Microsoft (MSFT),Meta (META),Amazon (AMZN),and Google (GOOGL) are significantly increasing capital expenditure (capex) on AI infrastructure.Morgan Stanley analysts predict even higher commitments in 2026.
Demand Outstrips Supply: Cloud providers are still reporting that demand for computing power for AI is exceeding supply.
Confidence in ROI: Management teams are increasingly confident they can generate a return on these massive investments and are willing to sustain high spending levels. Positive for Generative AI Trade: This signals serious commitment to AI and bodes well for companies involved in the AI ecosystem.

2. Company Specifics:

Apple (AAPL): Needs AI desperately. Tim Cook announced “meaningful growth” in AI investment, but Apple has historically spent less on capex than competitors.A accomplished AI rollout is crucial for device sales and its services unit. Cramer’s team is trying to understand Apple’s long-term AI strategy.
Microsoft,Amazon,Meta: Cramer is impressed with their AI plans and notes the market wants to see high spending,irrespective of whether it seems excessive.
Industrial Stocks Benefit: Companies like Eaton,GE Vernova,and Dover will benefit from the data center construction and electricity infrastructure needed to support AI. GE Vernova’s gas turbines are notably in demand.

3. Earnings Watchlist (Monday/Tuesday):

Monday After-Close: Coterra Energy, Palantir, Hims & Hers, Axon Enterprise, MercadoLibre, Vertex Pharmaceuticals. Cramer’s team will wait for Coterra’s conference call before analysis,focusing on their permian Basin well issues. Tuesday Morning: DuPont, eaton, Caterpillar, Apollo Global Management, Marriott International.
Economic Data: ISM Services PMI on Tuesday at 10 am ET.

4.Vital Reminders about the Investing Club:

Trade Alerts: Subscribers receive alerts before Jim Cramer makes a trade.
Waiting Periods: 45-minute wait after alert before execution; 72-hour wait after CNBC TV mention.
* Disclaimer: No fiduciary duty or guaranteed outcomes.In essence, the update paints a picture of a rapidly escalating investment cycle in AI infrastructure, driven by strong demand and increasing confidence in the technology’s potential. It highlights specific companies poised to benefit, and outlines a busy earnings week for the CNBC Investing Club.

Stocks including Northrop Grumman and Advanced Micro Devices appear overbought after this week’s rally, according to one widely used technical metric. The three major U.S. indexes notched strong gains this week, powered by a slew of positive earnings reports and developments on trade deals. The S&P 500 rose 1.5% in the period after recording five record closes this week alone and notching 14 total record closes this year. The 30-stock Dow gained roughly 1.3% this week, and the Nasdaq Composite rose 1%.

Stocks that popped during this winning run could be on risky ground moving forward, though. Using the CNBC Pro stock screener tool, we identified the most oversold and overbought stocks this week by their 14-day relative strength index. An RSI above 70 suggests that a stock is overbought and could see a decline, while a result below 30 indicates a stock could be oversold and may be due for a boost.

Take a look at the overbought names below, which were each up at least 5% this week. Chipmaker Advanced Micro Devices made the list this week wiht an RSI of nearly 77. Shares rallied 6% this week. Earlier this month, the company said it will soon resume shipments of it’s MI308 artificial intelligence chips to China, once licence applications are approved by the U.S. Commerce Department.

Defense and aerospace company Northrop Grumman jumped 9.8% this week, putting the stock in the overbought group with an RSI of about 73. Northrop on Tuesday posted a second-quarter revenue beat along with a guidance raise for the full year. CEO Kathy Warden said on a conference call with analysts that the company believes revenue from its B-21 stealth bomber could perhaps exceed 10% of total revenue “in the future.”

Othre stocks that have high rsis and could see their shares dip include Block, Newmont and GE Vernova. GE vernova shares rallied about 12% this week on strong second-quarter results, which led analysts from firms including Citi and Bank of America to raise their price targets on the stock.

International Business Machines, Texas Instruments and Philip Morris International are considered some of the broader market’s most oversold companies, per their high RSIs. IBM shares slid more than 9% this week after the tech company’s second-quarter software revenue came in below expectations, even though its overall revenue and earnings topped analysts’ forecasts, per LSEG. The stock has an RSI of around 26.

Tobacco giant Philip Morris fell on the back of lackluster results, which missed second-quarter revenue expectations. Wall Street was also disappointed by the company’s Zyn nicotine shipments. Shares dropped almost

This article does not constitute financial advice. Investing in the stock market involves risk, and readers should consult with a qualified financial advisor before making any investment decisions.

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Key Takeaways from the CNBC Investing Club Update with Jim Cramer:

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