Before recording “Mad Money” on Friday, I always check the market trends for the week to see if the percentages are noteworthy. Usually they are not. But this week things were different, very different. The S&P 500 and Nasdaq recorded their best weekly gains in 2024, making up for the worst previous week of the year. Such reversals need to be mentioned, even if it only shows the inconsequential nature of these big gains and losses. These are moves that may be considered meaningless volatility, based mainly on random articles about the Federal Reserve and highlighted by continued despair and lamentations about the loss of data centers. The previous week saw Broadcom disappoint and Nvidia, an essential key to this market, continue to fall. But last week started with a shock. Larry Ellison, co-founder and chairman of Oracle and one of the most respected figures in Silicon Valley, said the company will eventually be able to operate 1,000 to 2,000 more data centers from its current 162. The reaction to the news was delayed, with analysts debating whether Ellison was hallucinating. When it became clear that he wasn't, the stock soared to new highs. This was the move we'd been waiting for since the enterprise software giant's two spectacular failures. Oracle's mega-buying of medical records company Cerner was so bad it was enough to make management wonder if it had taken its eye off its biggest opportunity. Maybe the $28 billion deal was a disappointment. Maybe it fell victim to a well-established, better system in private company Epic. Maybe it was stillborn, and the data center initiative a cover-up. When you lose money twice on a stock, you start to question everything. In the end, it was impossible to ignore Ellison's comments on September 10 after the company reported better-than-expected quarterly results. His words were too convincing. He could have easily said that the company needed 200 more data centers. That would have been enough. But he went all out and had the numbers to back it up. With so much riding on data center growth, good news helped counter the gloomy outlook. This includes everything from the physical (Eaton, Vertive, etc.) to the digital (Marvel, Broadcom, etc.). So yeah, the real winner is NVIDIA, as Ellison validated Jensen Huang's view that NVIDIA's platform is not only necessary, but will pay for itself almost immediately. This is a big difference from the previous week, when Oracle, Meta, Microsoft, and Google all made foolish moves by spending $50-60 billion each on NVIDIA semiconductors, only to be found to have vastly overspent. The only real winner was Apple, who got a free ride. This was very evident at Apple's event on September 10th, and was fitting for its huge install base. As I said in the monthly meeting, no one wants to be left behind in building AI and be the Bing of search. Microsoft's Bing was once Google's biggest rival in search, but Google (now the main Alphabet company) chose to invest and corner the market. Nobody wants to be underinvested and “left behind by Bing” in this age of AI. Oracle understands that. By the time NVIDIA’s Huang spoke on Wednesday, we knew three things: Blackwell would be relatively on schedule; There was tension and emotion over allocation; There would be no end to spending, as the use cases were all about staying in the race; We needed to hear these comforting words after a suboptimal presentation last week in which a senior JP Morgan official told analysts that their 2025 net interest income and expense projections were too optimistic. Either way, Jensen’s story carried right through Friday’s trading, with stocks like Broadcom benefiting greatly. Plus, a Wall Street Journal article suddenly brought up talk of a 50 basis point Fed rate cut. That alone would have corrected all of the selling from the previous week. I’ve been preaching about sitting back and doing nothing for a while, but I put some money in recently as the market finally got oversold. When the market goes down, you never sold enough. When the market goes up without you, it feels almost the same. Almost. So, back to the original concept of a big down week followed by a big up week. September was a bad month, I got a lot of impressions. What month would give you the benefit of the doubt and be followed by a big up week? What about a good month? So, what to do now? There may be a staircase pattern going on, and if we only get a 25 point cut this week, we need to jump on the bears. Don't worry about buying low. It will pay off. Home builders and retailers have soared. With a 25 point cut, they're going to lose a lot of their gains. This week I'm in San Francisco at Dreamforce, Salesforce's annual AI event, trying to get a measure of useful artificial intelligence. Most of us are tired of pretense AI and commodity AI, and we're in the pretense stage now. And as you can see from Adobe's forecast, which was the only real drop this week, not many of us are. Without a good explanation or cost cuts tied to employee numbers or earnings per share, the group is vulnerable again. One thing is certain: the financials, part of the expansion, were lost as JP Morgan beat them to it with a haphazard estimate cut. There was upside in healthcare, however, with devices, big pharma and hospitals coming in. The real movers were Microsoft and Amazon, two stocks that hadn't really seen any traction after earnings. The change went largely unnoticed, but was very meaningful as it showed that some of the Magnificent Seven still have momentum. Looking at the situation, I keep coming back and recommending DuPont to buy. This is a special three-part split that makes this a very exciting stock. A good week for Kamala Harris was also a big week for Nextracker. That's all for now. (See here for a complete list of Jim Cramer's charitable trust stocks.) Subscribers to Jim Cramer's CNBC Investment Club get trade alerts before Jim makes any trades. Jim will wait 45 minutes after sending a trade alert before buying or selling shares in the charitable trust's portfolio. If Jim talks about a stock on CNBC television, Jim will wait 72 hours after issuing a trade alert before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, as well as our Disclaimer. No fiduciary duty or liability is created by the receipt of any information provided in connection with the investment club, nor is there any guarantee of any particular results or benefits.
Larry Ellison, Oracle's chairman of the board and chief technology officer, delivered a keynote speech at the 2019 Oracle OpenWorld in San Francisco on September 16, 2019.
Justin Sullivan | Getty Images
Before the Friday taping of “Mad Money,” I usually check the week's market trends to see if the percentages are noteworthy. Usually they aren't. But this week things were different, very different. S&P 500 and Nasdaq It was the biggest weekly gain of 2024, making up for the previous week's gain, which was the worst this year.
