Micron elevates two executives. Plus, what the Meta settlement means for its top line
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 is basically flat on Wednesday as the market awaits several key tech earnings reports after the bell, including Nvidia . Oil was lower for most of the session but turned positive amid a lack of new developments to open the Strait of Hormuz. Treasury yields have been higher throughout the session following a slightly higher-than-expected reading from the Federal Reserve’s preferred inflation gauge, the personal consumption expenditure (PCE) price index. Meta Platforms shares are holding onto slight gains after the company announced it reached a proposed settlement with 52 state and U.S. territory attorneys general over its social media addiction cases. Jim Cramer called this a “big win” for Meta earlier this morning, noting the potential fines could have been much larger, and litigation could have lasted for a very long time. That’s why he argued the stock should trade higher on the news. Equally as important, the new protections for teens and stronger parental controls that were announced shouldn’t materially impact the company’s products or business model. Analysts at Piper Sandler estimated in their reaction to the settlement that these changes will impact roughly 0.5% of Meta’s global users. The revenue impact may be even smaller because Piper says users under 18 are less monetizable. What this suggests is that the impact on Meta’s engagement and average revenue per user metrics should be minimal from this. While we cannot predict whether Meta will issue equity in the future to fund its AI infrastructure investments, today we view the settlement as a big win. Micron announced a few leadership changes. CEO Sanjay Mehrotra, who Jim interviewed last week in Idaho, isn’t going anywhere. But the memory-chip maker appointed Manish Bhatia to president and chief operating officer and Scott DeBoer to president and chief technology and products officer. Bhatia joined Micron in 2017, while DeBoer has been at the company since 1995. Also, Sumit Sadana is moving from executive vice president and chief business officer to a new role as senior advisor to the CEO. Reacting to the announcement, analysts at KeyBanc wrote, “We believe this new management structure will better streamline customer relationships, business operations, and manufacturing.” That’s fine with us. We don’t see the changes as needle-movers. Micron’s stock performance will ultimately be decided by the durability of the supply-demand cycle. But changing its leadership structure in a way that better aligns with customer needs is always positive. It’s a big night ahead, as Nvidia, CrowdStrike , and Salesforce all report earnings. The key to Nvidia earnings is a healthy revenue beat, strong guidance, and perhaps a significant share repurchase program announcement. The key metric for CrowdStrike is net new annual recurring revenue (NNARR), which measures the quarter-over-quarter change in ARR. And for Salesforce, we want to see momentum in its Agentforce product, and for the company to deliver on its target of second-half revenue acceleration to fight against the “SaaSpocalypse” narrative. Other companies reporting are Synopsys , Agilent , Okta , and HP Inc . Before the opening bell on Thursday, we’ll see earnings from Best Buy , Burlington , Dollar Tree , Dollar General , and Hormel Foods . On the data side, we’ll see weekly jobless claims. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.
