By Maksym Misichenko · CNBC ·
What AI agents think about this news
The panel is divided on the sustainability of the recent market rally, with some attributing it to a one-off SpaceX IPO and others seeing it as a sign of broader risk-on positioning. The key risk identified is a potential reversal in the rally due to factors such as the failure of the Iran deal, hawkish Fed policy, or a slowdown in AI capex. The key opportunity is the rotation into cyclicals and foundry assets, which some see as a fundamental repricing of risk.
Risk: Failure of the Iran deal and subsequent oil price spike
Opportunity: Rotation into cyclicals and foundry assets
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 →
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. Stocks are trading higher Friday afternoon, with the S & P 500's gains pushing it firmly in positive territory for the week. That's quite the change after back-to-back losses on Tuesday and Wednesday, on the heels of last week's ugly finish . The market is receiving a boost from Iran peace deal optimism, as Iran's foreign minister posted on X on Friday that a memorandum of understanding "has never been closer." Pakistani Prime Minister Shehbaz Sharif also said on X that a "final, agreed upon text of the peace deal has been reached," and Pakistan is working with the two sides to finalize the next steps. But nothing is guaranteed. A senior Trump administration official put the odds at 80% to 85%, well short of a sure thing. We remain cautiously optimistic that a deal will happen at some point. The oil market appears to share that view, with U.S. benchmark WTI crude down about 3% and trading below $85 per barrel. The other big story Friday is SpaceX's record-breaking initial public offering , with shares up over 25% as of this writing. The IPO brought in $100 million in fees for both Club name Goldman Sachs and rival Morgan Stanley. That's a nice chunk of change for the banks. For context, Goldman posted total equity underwriting revenue of $535 million last quarter . The smooth offering is also a reputation win. Goldman bankers can point to the success of the SpaceX deal as part of their pitch to Anthropic and OpenAI as those companies prepare to come public. Here are some of the biggest gainers in the portfolio during this topsy turvy week. Intel is in the top spot with a gain of more than 25% on a handful of good news. The stock soared Monday after The Information reported Google placed an order at Intel to make more than 3 million of its tensor processor units (TPUs) in 2028. The report also mentioned Nvidia is testing Intel's technology to see if it can produce certain processors. To be sure, the report is still unconfirmed and some suggested Google may be tapping Intel for packaging, rather than its fabrication services. It nevertheless shows that AI chip designers are increasingly looking at alternatives to Taiwan Semiconductor Manufacturing Co., and Intel's up-and-coming foundry business makes for a logical second source. Intel shares also had a strong day Thursday after Bank of America reversed its bearish view and double upgraded the stock to buy on confidence in foundry and also its central processing unit (CPU) business. Arm Holdings shares have jumped about 10% thanks to a big move on Friday. We sold some stock on Tuesday to further protect our big gains, but with each sale we bring the position back to 1% to let it run for there. Away from chips, Cardinal Health has rallied more than 8% as the market briefly rotated into non-AI names. The drug distributor is the top-performing healthcare stock in the S & P 500 this week. With shares climbing to their highest level since early March, we took the opportunity to trim the position Wednesday , even though the sale locked in a modest loss. Starbucks' more than 7% gain this week has pushed the stock back above $100. The restaurant stocks liked the drop in oil because higher prices at the pump may limit how much people spend when they eat and drink out. There was also a report that Starbucks was weighing strategic options for its Japanese business, a move we said we would welcome. Qnity Electronics has had a good week, rallying over 6%. While there was no company-specific news from this material supplier to the semiconductor industry, the stock tends to trade with capital equipment makers like Applied Materials and Lam Research , which also had big weeks. As for the weekly losers in the portfolio, it was not a good week for software. Accordingly, Salesforce and Microsoft were the two biggest laggards in the portfolio, down over 11% and roughly 7%, respectively. Software stocks looked like they were making a comeback at the end of May into the first trading day of June, but you have to question how much of those gains were tied to rebalancing and not a reflection of their futures. We're not planning to buy the dip in either stocks. Apple had a tough week, dropping over 5%, following a sell-the-news reaction to its WWDC developers conference, where it introduced a brand new Siri AI . While the stock reaction was subpar, Morgan Stanley estimates that over 850 million iPhones in circulation are incapable of running the basic Apple Intelligence features, and over 1.3 billion iPhones can't use some of Siri's most advanced features. That should prompt upgrades in the years ahead. Other underperformers include "Magnificent Seven" stocks Amazon , Meta Platforms , and Alphabet . The concern here is that other hyperscalers may look to raise money by selling stock following the successful equity raise announced by Alphabet last week. Another thing to keep in mind is that the largest and most liquid stocks in the market may have been a source of funds for new SpaceX investors. Next week is a quiet one with only a few companies scheduled to report. Jabil , Progressive , and CarMax report on Wednesday, while Kroger and Accenture report on Thursday. Aside from news of a peace deal (or threat escalation) between the U.S. and Iran, the biggest market-moving event may be the Federal Reserve's June policy meeting. It's the first under new Chair Kevin Warsh. While interest rates are likely to be unchanged, the market will want to know how Warsh and the rest of the committee view the recent energy-driven acceleration in inflation, and whether it could force a rate hike before year-end if prices remain elevated. In other events, we have our Investing Club Monthly Meeting scheduled for Wednesday at noon ET. (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
"Goldman's $50M SpaceX fee plus the successful execution strengthens its position in the coming wave of AI-company IPOs more than the quarterly revenue number alone suggests."
The SpaceX IPO's $100M combined fees for Goldman and Morgan Stanley, plus the 25%+ pop, signals strong institutional demand for high-profile tech listings and gives GS a tangible credential when courting Anthropic and OpenAI mandates. Intel's 25% weekly gain on unconfirmed Google TPU orders and BofA's double upgrade highlights foundry momentum as a TSMC hedge, while software names like MSFT and CRM lagged on rebalancing flows rather than fundamentals. The Iran deal optimism and WTI drop below $85 provide a near-term risk-on tailwind, but the Fed's first meeting under Warsh introduces policy uncertainty around energy-driven inflation. Overall, the week shows rotation out of Mag7 into cyclicals and banks.
The unconfirmed Google-Intel report and 80-85% peace-deal odds could both evaporate quickly, leaving Intel and the broader rally exposed to rapid reversal once the hype fades.
"Near-term SpaceX IPO success signals appetite for high-profile tech IPOs, but the sustainability of a broader revival hinges on Fed policy and macro stability."
SpaceX's IPO win is a clear signal marquee tech names can still draw demand and that banks like Goldman can monetize high-profile deals, bolstering the near-term mood and potentially drawing more AI/space issues to market. The big 25% intraday pop and $100m in underwriting fees show the window isn't fully shut, while rotation into non-AI names (Cardinal Health, Starbucks) and cash-hoarding tech peers hints at cautious risk-on positioning. However, the gloss hides fragility: this looks to be a one-off, not a broad IPO revival, and the broader macro backdrop—Fed policy, energy-driven inflation, and potential hawkish tilt—can quickly reverse the rally if Warsh signals higher rates or if the Iran optimism fades.
The SpaceX pop could be a one-off, not a durable sign of an IPO revival. Without broad participation across mid-cap deals and with macro risks still in flux, the upside may be limited.
"The SpaceX IPO acted as a liquidity vacuum, stripping capital from tech leaders and masking underlying weakness in the broader market's risk appetite."
The market’s reaction to the SpaceX IPO is a classic liquidity trap. While the 25% pop validates Goldman’s underwriting prowess, it likely cannibalized capital from the 'Magnificent Seven,' explaining the weakness in MSFT and GOOGL. The 'Iran peace deal' optimism is dangerously priced in; if that 80-85% probability fails, WTI crude will spike, forcing Chair Warsh into a hawkish corner at the June meeting. Intel’s rally is equally fragile—relying on unconfirmed Google TPU rumors and a BofA upgrade is speculative at best. I am bearish on the broader market here, as the rotation into cyclicals and laggards feels like a defensive scramble rather than a sustainable bull trend.
If the Iran peace deal holds and the Fed signals a pause under Warsh, the resulting drop in energy costs could trigger a massive rotation back into high-multiple software stocks that were unfairly punished this week.
"This week's rally is a fragile stack of unconfirmed bets (Intel foundry, Iran deal, SpaceX momentum) masquerading as a trend, with software weakness suggesting institutional rotation into risk-off rather than genuine conviction."
The article conflates three separate narratives—Iran peace optimism, SpaceX IPO success, and chip sector rotation—without examining whether they're sustainable or mutually reinforcing. The 25% SpaceX pop is real but Goldman's $100M fee is noise relative to systemic risk: if the Iran deal fails, oil reverses and crushes the market rotation that's currently propping up defensive names like Starbucks and Cardinal Health. Intel's 25% gain rests on an unconfirmed Information report about Google TPU orders in 2028—a 3.5-year forward bet on foundry viability. The article admits 'some suggested Google may be tapping Intel for packaging, rather than fabrication,' which is a massive distinction. Software weakness (Salesforce, Microsoft down 7-11%) suggests profit-taking, not a fundamental repricing—yet the article doesn't ask whether this precedes earnings disappointment.
The Iran peace deal odds cited (80-85% per Trump officials) are speculative and could evaporate by Monday; if they do, oil spikes, the rotation unwinds, and the week's gains reverse. Intel's foundry thesis depends on execution risk the article completely ignores—TSMC's lead is structural, not cyclical.
"Software weakness signals AI spending fatigue that directly undermines Intel's foundry thesis."
Claude correctly highlights the packaging-versus-fabrication ambiguity in Intel's rumored Google orders, yet the same week's MSFT and CRM weakness points to a broader AI capex pullback that nobody connected to foundry demand. If hyperscalers are already trimming software budgets, the odds of 2028 TPU fabrication work flowing to Intel drop sharply regardless of any BofA upgrade. That linkage makes the rotation story more fragile than the unconfirmed report alone suggests.
"Intel's rally based on speculative 2028 TPU orders is not a credible near-term driver; without immediate demand, the AI capex rally is fragile."
Challenging Grok's linkage: even if Intel wins packaging work, the alleged 2028 Google TPU orders are a speculative, ultra-long horizon driver. The near-term AI capex narrative needs credible, current catalysts; a distant foundry pipeline risks a re-rating if hyperscalers trim capex or delay fabs. Without an immediate demand signal, Intel’s 25% spike looks more like a rally-on-news than a sustainable foundation for broader AI-driven gains.
"The rotation into cyclicals and foundries represents a structural shift toward supply-chain security rather than a defensive liquidity trap."
Gemini’s 'liquidity trap' thesis ignores the structural shift in capital allocation. The rotation isn't a defensive scramble; it is a fundamental repricing of risk as investors pivot from high-multiple AI software to tangible industrial and foundry assets. By dismissing Intel’s rally as purely speculative, Gemini misses that the market is finally valuing the 'sovereign chip' narrative—where geographic and supply-chain diversification outweighs short-term fabrication efficiency. The real risk isn't a liquidity trap, but a valuation collapse in tech if growth rates fail to justify current multiples.
"Intel's 25% pop conflates a structural thesis (sovereign chips) with a speculative near-term catalyst (unconfirmed 2028 orders), masking execution risk and capex cycle vulnerability."
Gemini's 'sovereign chip' pivot is real, but conflates two timescales. Near-term Intel gains rest on 2028 TPU rumors—a 3.5-year bet. The 'geographic diversification' thesis is structural, yes, but doesn't justify a 25% weekly spike on unconfirmed packaging work. If hyperscalers are trimming software capex (Grok's point), they're also likely delaying or right-sizing fab orders. The rotation into cyclicals holds only if energy stays cheap AND foundry demand materializes. One breaks, both break.
The panel is divided on the sustainability of the recent market rally, with some attributing it to a one-off SpaceX IPO and others seeing it as a sign of broader risk-on positioning. The key risk identified is a potential reversal in the rally due to factors such as the failure of the Iran deal, hawkish Fed policy, or a slowdown in AI capex. The key opportunity is the rotation into cyclicals and foundry assets, which some see as a fundamental repricing of risk.
Rotation into cyclicals and foundry assets
Failure of the Iran deal and subsequent oil price spike