This week’s impressive results showed that ramping up AI is not a zero-sum game, meaning both hardware and software stocks can win. The tech-heavy Nasdaq Composite and S&P 500 rose 0.9% and 0.5%, respectively, and the blue-chip Dow Jones Industrial Average rose 0.5%, marking its first winning week in three weeks. Much of the increase came on Thursday, with Nvidia’s impressive earnings and the ripple effect of its forward guidance pushing the three averages to their best day since Aug. 4. Stocks were little changed Friday after Federal Reserve Chairman Kevin Warsh said in his Jackson Hole speech that recent inflation data had not eased concerns about underlying price pressures and that the possibility of further rate hikes remained on the table. Traders raised the probability of a rate hike in September to 55% from about 35% a day earlier, according to the CME FedWatch tool. Here, we take a closer look at three trends that propelled our portfolio this week. Nvidia puts an end to AI demand concerns The AI chip leader on Wednesday reported better-than-expected fiscal second-quarter results, marking the fourth consecutive quarter of accelerating revenue growth, and issued a surprisingly positive outlook for next year. The results boosted confidence in AI demand, driving overall trading higher on Thursday. Nvidia stock ended the week up 1%. The earnings call also revealed that Amazon plans to buy an additional 2 million Nvidia GPUs in 2027 and 2028, even as it develops its own AI chips. This commitment supports Nvidia’s claim that its AI infrastructure generates enough benefits for customers to justify continued spending. “The return on invested capital is currently less than one year,” said CEO Jensen Huang. As Jim says, “The profits are here now, customers are taking advantage of it, and they’re making a lot of money.” The appetite for spending on Nvidia products extends beyond hyperscalers. Colette Kress, Nvidia’s head of finance, said the company’s growth this quarter will be driven primarily by non-hyperscaler customers, including so-called neoclouds and enterprises such as CoreWeave and Nebius. We now have more confidence in Nvidia. Demand is accelerating and customers are seeing tangible benefits, but supply remains a constraint. The price target was raised from $260 to $280. AI as a software tailwind Salesforce on Wednesday delivered better-than-expected revenue and a brighter outlook, offering new evidence that AI is helping the business rather than cannibalizing it. CEO Marc Benioff called concerns about SaaSpocalypse “nonsense,” pointing out that nine out of the 10 largest AI companies use Salesforce products, and their spending has increased 435% year over year. Salesforce also announced Claudeforce, which enables sales reps to leverage customer data stored in Salesforce using Anthropic’s Claude to perform tasks such as composing emails and updating records. Crowdstrike provided another example of AI becoming a tailwind rather than a threat. On Wednesday, the cybersecurity company reported a 26% increase in revenue as AI-powered attacks drove demand for stronger defenses. CEO George Kurtz said the technology is exposing flaws in corporate defenses and that “many companies are realizing that legacy and freely available technology is no longer sufficient.” We think CrowdStrike is a buy with significant upside, especially after more than 100 other companies and organizations signed a letter Thursday urging companies and policymakers to “act decisively” to strengthen cybersecurity defenses in the age of AI. The results accelerated a broader software rally on Thursday, with Salesforce soaring 22% and CrowdStrike soaring about 20%. These ended the week as the two best-performing stocks in the club’s portfolio. The club that owns Palo Alto Networks rose 13% Thursday, in line with its cyber peers. Investors spent much of this year worrying about AI’s disruptive impact on software, but this week provided some of the clearest evidence yet that the best-positioned companies could actually benefit the most. Meta reversals major legal excesses Meta also scored an important victory Wednesday, agreeing to an $18 billion settlement with the attorneys general of 48 states, Washington, D.C., and three U.S. territories over claims that the social media platform harms young users. Jim said the resolution is “a really big step forward” for the company because it avoids a lengthy trial and potentially much higher fines. On Friday’s Morning Meeting, Jim said Meta could become a buy once the legal overhang is resolved, but he plans to wait until a secondary offering occurs that could fund the settlement and its large AI spending. The stock price briefly fell after the announcement, but ended the week up 5%. As part of the settlement, Meta will implement additional protections for young users, including default daily time limits, enhanced parental controls, age verification measures, and limits on push notifications during school hours. Our view is that these requirements are manageable in meta, as young users make up only a small portion of Facebook and Instagram’s audiences. Jim said this change could actually have a bigger impact on YouTube and TikTok, given that younger age groups are spending more time on these platforms. Snapchat stock fell more than 8% on Wednesday as investors weighed the possibility of widespread restrictions across social media. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. 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