By Maksym Misichenko · CNBC ·
What AI agents think about this news
The panel is cautious about the current rally, citing narrow breadth, elevated macro risks, and potential private-to-public market contagion from mega-IPOs like SpaceX.
Risk: Private-to-public market contagion from poorly priced mega-IPOs
Opportunity: Broadening risk appetite through well-priced mega-IPOs
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Stock market bulls wrestled back control last week after a brief respite, putting the S & P 500 back on the cusp of another record high. The index has now advanced for eight straight weeks since its Iran wartime bottom on March 30, its longest winning streak since late 2023, when it strung together nine in a row. With a modest gain Friday, the S & P 500 is now less than 0.4% below its May 14 record close of 7,501. It was a big shift from the start of the week, when the good times seemed in jeopardy thanks to the old foes of higher oil prices and bond yields. Oil again traded well above $100 a barrel, and the 30-year Treasury yield on Tuesday reached its highest level since 2007 . Stocks unsurprisingly didn't like that. The S & P 500 ended Tuesday riding a three-session skid dating back to May 15, a losing streak not seen since March 26, 27, and 30. Just like in the early days of the Iran war, stocks were taking their cues again from the oil and bond markets. Enthusiasm around artificial intelligence wasn't enough to break through. .SPX 3M mountain S & P 500 3 months The market turned a corner on Wednesday. Oil prices and bond yields retreated, resulting in a positive session for the S & P 500. It kicked off the stock market's ascent – just like the rally on March 31. Investors were optimistic after President Donald Trump said the U.S. was in the "final stages" of peace talks with Iran. The S & P 500 didn't stop there and continued its run into Thursday and Friday. It wasn't just hopes of a resolution that drove last week's action. Nvidia, the center of the AI trade, reported a strong quarter Wednesday night — but not strong enough to propel its own stock higher. Also on Wednesday, SpaceX filed for its initial public offering, which is expected to be the largest in history. The remarkable comeback in cybersecurity stocks, including Club name CrowdStrike , continued. Overall, the S & P 500 jumped 0.9% over the five-day stretch. The tech-heavy Nasdaq and Dow Jones Industrial Average rose 0.5% and 2.1%, respectively. The blue-chip Dow ended the week at a record high. Here's a closer look at the forces that drove last week's action. Nvidia's quarter Nvidia posted another blockbuster quarter late Wednesday. The company delivered a beat-and-raise well above analyst forecasts, and CEO Jensen Huang said that "demand has gone parabolic." It just reinforced our view that Nvidia is a must-own name during the AI race, and we raised our price target to $260 per share from $230. Still, the stock fell 2.6% in the session that followed and another 0.5% on Friday. It's a frustrating reaction, given shares are incredibly cheap versus peers, and it has plenty of avenues for more growth. The stock's post-earnings decline isn't that surprising to us — it's become a pattern in recent quarters, no matter how good the numbers look. At least shares of fellow Club name Arm jumped on the release. Nvidia highlighted strong demand for its new Arm-based Vera CPUs (central processing units). CFO Colette Kress said Nvidia has visibility to nearly $20 billion in total CPU revenue this year. That's good news for Arm because the company receives royalty payments. Arm shares jumped over 16% on Nvidia earnings, and gained 46% for the week. It was our top performer. But the stock has been running for some time now – up roughly 81% since we started a position in April. The parabolic move is why we sold some on Monday and will likely trim some again next week, as Director of Portfolio Analysis Jeff Marks wrote in Friday's Homestretch . Goldman's deal trifecta Nvidia earnings weren't the only driver of a Club stock's weekly gains. SpaceX filed for its highly anticipated initial public offering (IPO) on Wednesday, sending shares of Goldman Sachs higher as the company got a lead role on the deal. Goldman was listed as the highly coveted "lead left" position on SpaceX's prospectus. By spearheading some of the most crucial parts of the stock's debut, the investment bank will likely take home the biggest share of fees. It should be especially lucrative for Goldman as SpaceX is expected to be the biggest IPO in history. The offering of Elon Musk's rocket company, valued at $1.25 trillion, could raise $75 billion or more. That would be more than triple the size of the biggest U.S. offering to date: Alibaba 's $25 billion IPO in 2014. Banks on Alibaba's IPO were paid out more than $300 million in underwriting commissions at the time. That's roughly 1.2% of the e-commerce giant's total deal. Applying the same math to SpaceX, participating banks could bring in over $900 million. "This is a huge win for Goldman Sachs and a verification that this Investing Club stock is in pole position for all the big ones," Jim said. OpenAI might be one of those "big ones" as well. CNBC reported on Wednesday that Goldman and Morgan Stanley are working on the AI startup's public debut. It's another monster deal as OpenAI recently announced a record $122 billion raise at a post-money valuation of $852 billion. Goldman could also nab rival Anthropic as the Claude creator weighs plans to go public. In the meantime, Anthropic is in talks with investors to raise money at a $900 billion valuation. Overall, more deals for Goldman means more revenue for its crucial investment banking division — the main reason we're in the stock. It was great to see investors recognize the value of Goldman's dealmaking line last week as shares kept hitting records. The bank stock gained around 5% for the week. CrowdStrike's comeback It was another incredible week for CrowdStrike. Shares climbed almost 12% over the five-day stretch as Wall Street analysts issued bullish calls and the market continued to come around to our idea that cybersecurity names are not threatened by AI adoption and should not be lumped in with general-purpose enterprise software stocks. At least seven Wall Street firms raised their price targets on CrowdStrike last week. Some of the most notable include KeyBanc, which went to $700 from $525. While more of a catch-up call, the updated PT still implies nearly 6% upside from Friday's close of $663. Analysts pointed to an improved outlook on security demand. Cantor Fitzgerald raised to $700 from $550 a few days later, citing "quite strong" first-quarter checks and improved earnings. Stifel, Morgan Stanley, Truist, TD Cowen, and Barclays raised their targets, too. The Club did the same on Monday, and hiked our CrowdStrike price target to $650 from $500. We took peer Palo Alto Networks to $255 from $200 as well. Now that both stocks have pushed past those levels, we'll need to reevaluate. That's probably a call we'll make after earnings in June. CrowdStrike stock has been on a six-week winning streak. Last week, it gained 11.7%; the week before, it was up nearly 12.6%; and the week before that, it was up nearly 16%. Huge advances like these are why we trimmed twice since Monday, and downgraded CrowdStrike to a hold-equivalent 2 rating . It's not because our conviction has changed. Instead, it's an opportunity to capitalize on a parabolic move that might not be sustainable in the long run. We're cautious because CrowdStrike has had such a volatile 2026. AI disruption concerns previously pummeled the entire cybersecurity group and software broadly through February and March. But ever since Anthropic's Project Glasswing launched, the narrative on cyber has shifted. The market's seeing what we always have: new AI models will accelerate demand because the risk of new cyber attacks has never been greater. (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.
Four leading AI models discuss this article
"Nvidia's post-beat decline and position trimming in parabolic names reveal the rally's foundation is narrower and more fragile than the eight-week streak implies."
The S&P 500's eight-week streak and proximity to 7,501 rests on fragile de-escalation hopes with Iran plus AI momentum, yet Nvidia's 3.1% post-earnings drop despite a parabolic demand beat and repeated trimming in CrowdStrike and Arm expose fading conviction. Oil above $100 and 30-year yields at 2007 highs remain live threats that already triggered a three-day skid mid-week. Goldman's role in a potential $75B SpaceX IPO and OpenAI deal flow offers a separate catalyst, but the broader market's reliance on retreating bond yields and commodity prices leaves it exposed if geopolitical talks stall or inflation reaccelerates.
The longest winning streak since 2023 and Dow record show durable momentum that has repeatedly shrugged off the same oil and yield spikes, so any pullback is likely to be bought aggressively.
"This is a relief rally on geopolitical de-escalation and yield retreat, not a revaluation of fundamentals — and the article itself flags that CrowdStrike and Arm are in parabolic moves the Club is trimming."
The article conflates a relief rally with fundamental strength. Yes, S&P 500 is 0.4% from records on geopolitical de-escalation and bond yield retreat — but those are tactical tailwinds, not earnings-driven. Nvidia beat but fell 2.6%, signaling AI enthusiasm has limits at current valuations. CrowdStrike's 46% six-week surge is explicitly acknowledged as 'parabolic' and unsustainable; the Club downgraded it to a 2-rating (hold). Goldman's upside rests entirely on speculative mega-IPOs (SpaceX, OpenAI) that haven't priced yet. The article celebrates positioning in stocks already trading at stretched multiples on hope, not results.
If Iran tensions genuinely ease, oil stays sub-$90, and the Fed signals a pivot by June, the market's 8-week streak could extend into a sustained bull run — especially if Nvidia's $20B CPU guidance translates to Q2 beats across the AI stack.
"The market is currently pricing in a 'goldilocks' scenario by ignoring the systemic risk of extreme valuations in AI-adjacent sectors and the volatility of energy-dependent inflation."
The market's resilience, particularly the S&P 500's eight-week rally, masks significant fragility. While the narrative focuses on AI-driven optimism and potential peace in Iran, the underlying reliance on lower bond yields and oil prices is precarious. The valuation expansion in cybersecurity and semiconductor names like Nvidia is increasingly decoupled from macroeconomic reality. The excitement surrounding the SpaceX IPO—a $1.25 trillion valuation—suggests a speculative mania reminiscent of 1999, where private market exuberance is being priced into public equities regardless of fundamental cash flow constraints. Investors are ignoring the duration risk inherent in a portfolio that treats 'parabolic' growth as a permanent state rather than a cyclical anomaly.
If the U.S. successfully de-escalates geopolitical tensions in Iran while AI-driven productivity gains begin to manifest in non-tech corporate margins, the current valuation premiums may be justified as a permanent re-rating of the S&P 500.
"Near-term upside in the S&P 500 depends on earnings visibility and macro stability, not the AI hype narrative."
Open takeaway: The rally looks like a macro-tilt toward AI-led growth, but two flaws deserve attention. First, breadth appears narrow—Nvidia, Arm and CrowdStrike are driving leadership, while many S&P 500 sectors lag. Second, macro risk remains elevated: oil above $100 a barrel and a 30-year yield near post‑2007 highs, plus renewed geopolitical tension around Iran, could snap liquidity and compress valuations quickly. The piece glosses over mean-reversion risks after parabolic moves and treats SpaceX and IPO dynamics as durable catalysts rather than tests of underwriting and funding risk. Without clearer earnings visibility, the prints risk fading into the next bout of volatility.
The strongest counter is that the rally's breadth and momentum are fragile and hinge on a continued macro backdrop of easing yields and stable oil; any miss in AI earnings or a shock to energy prices could unleash rapid mean reversion.
"Goldman’s IPO mandates create an unpriced contagion path from private valuations into Nvidia and Arm that macro risks alone do not capture."
ChatGPT flags narrow breadth and macro risks around oil and yields but misses the direct pipeline from Goldman’s SpaceX and OpenAI mandates into public multiples. A $75B SpaceX raise at $1.25T that underwrites poorly would force immediate re-rating of Nvidia and Arm, whose post-earnings drops already show conviction fading. This private-to-public contagion channel sits outside the oil-yield lens and could accelerate mean reversion faster than liquidity shocks alone.
"Goldman's IPO mandates are advisory noise, not structural triggers for public-market re-ratings unless execution fails visibly."
Grok's private-to-public contagion thesis is speculative. Goldman mandates don't automatically force re-ratings; they're advisory roles with no guarantee of execution or pricing power. More critically: if SpaceX IPO underperforms, it signals *caution* about mega-cap valuations, not automatic Nvidia/Arm compression. The real risk is sentiment spillover, not mechanical repricing. We're conflating deal flow with market structure.
"Mega-cap private IPOs force mechanical capital reallocation away from liquid tech, creating a hidden liquidity drain."
Claude, you dismiss the 'contagion' as mere sentiment, but you're ignoring the institutional liquidity drain. When Goldman anchors a $75B SpaceX raise, capital isn't just moving; it's being locked up. This creates a zero-sum game for the remaining tech float. If the IPO pricing is aggressive, it forces portfolio rebalancing out of liquid, high-multiple names like Nvidia to fund the private allocation. It’s not just 'sentiment'—it’s a mechanical reallocation of institutional capital.
"SpaceX's mega-IPO contagion could harm high-multiple names only if priced above fair value; otherwise it may not derail Nvidia/Arm."
Grok, the private-to-public contagion thesis is worth testing, but it’s not a given re-rating lever. A $75B SpaceX IPO at a lofty valuation could siphon capital, but if priced conservatively and supported by strategic investors, it might broaden risk appetite and stabilize tech leadership rather than crush Nvidia/Arm. Contagion only materializes if deals land above fair value and force selling in high-multiple names; otherwise, capital can flow into quality earnings.
The panel is cautious about the current rally, citing narrow breadth, elevated macro risks, and potential private-to-public market contagion from mega-IPOs like SpaceX.
Broadening risk appetite through well-priced mega-IPOs
Private-to-public market contagion from poorly priced mega-IPOs