Every weekday, Jim Cramer’s CNBC Investment Club releases the Homestretch, a practical afternoon update to coincide with the last hour of trading on Wall Street. Markets: The S&P 500 continued its fourth day of gains on Tuesday, helped by strength in AI stocks. AI chipmakers and Club Holdings Nvidia and Broadcom were up about 2.5% and 2%, respectively, in afternoon trading. Meanwhile, stronger-than-expected economic data further dampened expectations that the Fed would cut interest rates in January. The third-quarter GDP report, delayed by the government shutdown, showed the U.S. economy grew 4.3% in the three months to September, beating the Dow Jones forecast for a 3.2% expansion. China Truce: The Trump administration has chosen to delay imposing additional tariffs on Chinese chips for at least 18 months, according to a Federal Register filing Tuesday. The decision came after the administration concluded a trade investigation launched under former President Joe Biden. The study found that China has “adopted increasingly aggressive and pervasive non-market policies and practices in pursuit of dominance” in the semiconductor industry, which “are to the detriment of U.S. businesses, workers, and the economy.” Despite this finding, the Trump administration said it would implement an “initial tariff level of 0%” on Chinese silicon until at least June 23, 2027. This move should help reduce U.S.-China trade tensions and be positive for the overall economy heading into 2026, which in turn should be positive for the stock market heading into 2026. Reassuringly for investors, the move is about Chinese chips coming into the United States, not U.S. restrictions on cutting-edge chips destined for China. The White House’s attitude toward China. It should also help with input costs for companies manufacturing products with Chinese chips in industries such as defense, medical equipment and automobiles. Buying on the edge: Baird says the downturn in Metaplatform stock is a great opportunity for investors. After closing at a record high of $790 per share on Aug. 12, the stock declined until late October, then plummeted following third-quarter profits as investors worried about the level of AI spending. Meta stock bottomed out a few weeks later and has performed well since then, but the stock is still more than 11% below where it was before the crash. Year-to-date, the Meta index is up about 13.5%, underperforming the S&P 500 index, which is up more than 17% over the same period. In a note on Tuesday, Baird analysts encouraged clients to be “opportunistic buyers” during the downturn, as expectations look better balanced than they were earlier this year, although there are still short-term risks to investor sentiment. Baird cited catalysts such as improved execution in Meta AI and Llama, the company’s large family of language models. The company added: “While mixed sentiment is likely to persist into early 2026 amid margin uncertainty, we believe the narrative will change more constructively throughout the year through a potential margin liquidation event, the launch of the next Llama model, Meta AI updates, and enhanced monetization for WhatsApp and Threads.” Although the analyst remains meta, he slightly lowered his price target from $820 to $815 per piece. Still, the updated price target represents a 23% increase from Monday’s closing price and a new all-time high. Like Baird, we are optimistic about Meta’s AI ambitions. That’s why I decided to buy more Meta stock for the first time in three years when the stock price fell last month. Facebook’s parent company has poached top AI talent and given all of its world-class engineers to its TBD Labs, which oversees language models at scale. Meta is also reportedly planning job cuts in its Metaverse division, which should give the company more flexibility to deploy capital into fast-growing areas such as generative AI. The club has a price target of $825. Next: No big earnings report tonight. As for economic indicators, the first jobless claims numbers will be released at 8:30 a.m. ET on Wednesday. The New York Stock Exchange will close at 1 p.m. Eastern time on Christmas Eve and will be completely closed on Christmas Day, Thursday. (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. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
