Ditch all the negativity: Here’s what can go right to lift each of our 34 stocks
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Sometimes, there can be an overwhelming amount of negativity and noise on Wall Street. To counter that, Jim Cramer has said investors should not lose sight of what can go right for their stocks. That doesn’t mean ignoring risks and investing on autopilot. It does mean investors should remember the wall of worry can be surmounted. As Wall Street starts to look ahead to 2025, here’s a look at a few things that can go right for all 34 Club holdings. Abbott Laboratories Legal overhang dissipates: Lawsuits over its specialized formula for premature infants have kept a lid on Abbott shares since March. However, the company’s surprise win in a case a few weeks ago increases the likelihood that a settlement could be reached. The positive stock reaction to that decision hints at what a complete resolution could do for shares. More momentum in medical devices: Abbott’s strong portfolio, led by its flagship FreeStyle Libre for diabetes, has been a bright spot, turning in multiple quarters in a row of double-digit sales growth. Abbott’s over-the-counter continuous glucose monitoring system called Lingo, which recently launched in the U.S., is a key product to watch. Early momentum in sales is promising. Advanced Micro Devices Finding its lane: AMD’s foray into artificial intelligence chips for data centers with its MI300 has gone well, with executives hiking their sales forecast multiple times this year. If huge clients like Microsoft keep investing in AI hardware, AMD should be able to further carve out a lane as a strong No. 2 player behind market leader Nvidia. Smooth chip updates: AMD needs to successfully carry out its annual release cycle for AI chips. The upcoming release of its next-generation MI350x chip, scheduled for 2025, could attract additional customers who want to diversify away from Nvidia chips. Alphabet AI ROI: The Google parent must keep showing that its hefty spending on AI is growing sales and making the company more efficient. Checking both boxes will quiet concerns that its capital expenditures are excessive and that Google Search is ceding share to AI chatbots. Easing on antitrust action: A more lenient regulatory environment under a second Donald Trump presidency could reduce the risk of major antitrust actions. Alphabet recently lost an antitrust case brought by the Justice Department, which argued the company maintained a monopoly in online search and recommended it sell Chrome, its web browser. However, Trump has expressed skepticism about breaking up the company . Waymo expansion: Increased adoption of Waymo’s self-driving technology in new cities — and the potential for a spin-off in the future — would represent big wins for Alphabet’s money-losing “Other Bets” segment. Amazon Retail margin expansion: The e-commerce giant needs to show that it can continue lowering logistics and shipping costs, which would keep alive the improving profitability trend that has been key to the bullish narrative around the stock. Cloud growth: Investors want Amazon Web Services to show accelerating topline growth, fueled in part by demand for AI computing, along with improved profitability. That combination will help assuage concerns about AI spending levels. Less scrutiny: Deregulation under Trump could allow Amazon to focus on scaling its core businesses without the distraction of legal battles. Apple AI-led sales: The introduction of new AI capabilities in Apple Intelligence needs to spark a larger-than-normal device upgrade cycle, boosting sales of the iPhone 16 and the next few models. If AI can spur more revenue in its high-margin services unit, that would be a cherry on top. New deals: A looser regulatory environment would allow management to expand Apple’s strategic partnerships and focus on other initiatives, including its push into health-care wearables. Best Buy Device upgrades: Best Buy’s same-store sales need a jolt, and that could come from people sitting on older computers and devices who want the latest and greatest in AI-powered personal computers and smartphones, including the new iPhone 16. Rate play: Mortgage rates haven’t come down since the Federal Reserve’s first rate cut in September. But when we do see a decline, it should lead to more homebuilding. That means new homeowners will need to fill up their places with big-ticket appliances and flat-screen TVs. BlackRock New growth prospects: The asset manager has had a great year of net inflows, and the market wants to see that momentum sustained. Its move into alternative investments like infrastructure will hopefully drive significant growth and open new revenue streams. Lower rates: If the Fed and other central banks keep cutting rates, that should enhance inflows into BlackRock’s fixed-income and ETF offerings. That’s because existing bonds become more attractive as rates fall. Bristol Myers Squibb Cobenfy launch succeeds: The company’s new treatment for schizophrenia in adults was approved in September, and a better-than-expected rollout would be positive for Bristol Myers shares. Wall Street currently projects $187 million in revenue in 2025 and $620 million in 2026, according to FactSet. Broadcom AI stays hot: Broadcom’s leadership in providing essential components for AI infrastructure, including co-designing custom chips for tech giants such as Alphabet, makes it a key beneficiary of the growing demand for AI technologies. So, the AI boom continuing apace would be good for Broadcom, like it would be for AMD. Smartphone market improves: This area has lately been a drag on Broadcom, so evidence that global smartphone shipments are recovering, especially for the iPhone, would be a welcome development. Broadcom provides connectivity chips for the iPhone. Constellation Brands Wine-and-spirits comeback: That business has hurt Constellation’s overall growth rate during a period of strength for its top-selling Mexican beers, including Modelo and Corona. However, if management’s recent strategy to focus on higher-end wines pays off, the stock could bounce. Divesting from this segment entirely, as Jim Cramer has suggested, is another option. Improving beer sales: Its beer unit needs to show that pockets of softness in the most recent quarter were just a short-term blip, not a festering issue that curtails topline growth. Cash flow bounty: Once capital investments for expanding brewing capacity peak, Constellation will be able to ramp up cash returns to shareholders through higher dividends and buybacks. That could begin in a few quarters. Costco More stores around the world: Costco’s runway to open more warehouses outside of the U.S. is an underappreciated growth driver. The company has said it expects more than 10 new locations outside the U.S. next year. Membership growth quickens: Evidence that Costco’s card-scanner rollout, designed to crack down on multiple people using the same membership, is creating a “Netflix moment” would be a clear-cut positive. Coterra Energy LNG export approvals: Trump making good on its reported desire to restart export permits for LNG would play right into Coterra’s hands. President Joe Biden paused them. Deregulation in general could lower Coterra’s operational costs. The big data center buildout: Booming power consumption from data centers in the coming years offers a growing market for Coterra’s natural gas . CrowdStrike IT outage in rear view: While CrowdStrike stands to benefit from the increase in cyber-attacks and threats, the company needs to move past the global IT outage it caused this summer. To judge this, analysts are keeping a close eye on topline growth. Customer churn hasn’t been a big issue, but some deals have been paused. Danaher China recovery: Economic stimulus in China needs to start showing up in Danaher’s order book, which would provide a major boost to growth in 2025. IPO floodgates open: A resurgence of biotech IPOs would create a cash windfall for one of Danaher’s key customer bases. Some of the money will surely go toward buying Danaher’s tools and products used in the drug development process. Dover More energy, more cooling: Continued spending on data center overhauls should translate into more orders for Dover’s thermal connectors, which are used in the liquid cooling of AI servers. It’s one of Dover’s key growth areas, and investors want more evidence that its topline is picking up speed. Bioprocessing bounces back : The still-nascent recovery in the biopharmaceutical industry needs to show further progress, translating into more orders for Dover’s pumps and single-use components for manufacturing. DuPont The breakup: DuPont is on track to split by December 2025 into three standalone public companies: a water business, an electronics-focused firm, and the remaining DuPont, serving health care and construction markets, among others. It’s the best way to unlock significant value. A sharper focus on AI : Unleashing DuPont’s electronics assets will allow the standalone company to better serve customers tied to the AI boom by enabling smart technologies as well as next-generation semiconductors and circuit boards. Eaton More power needed: Eaton is helping companies meet the increased electricity demand fueled by the rapid expansion of AI, with its electrical equipment playing a vital role in powering data centers and AI infrastructure. Megatrend momentum: Eaton’s products are used in a bunch of big growth trends – like reindustrialization and electrification – that should keep sales humming for a long time. Only 16% of the 504 projects in its backlog have been started, as of its late October earnings report. Eli Lilly Wider GLP-1 adoption: Eli Lilly’s GLP-1 drugs, Mounjaro for diabetes and Zepound for treating obesity, are best sellers and should be for many years to come. That’s especially true if the active ingredient in these drugs gets approval for other conditions such as heart health and sleep apnea. Solving supply shortages: Lilly has invested billions of dollars in its GLP-1 manufacturing operations. Availability of the drugs, which require highly specialized factories and workers, is still tight. Ramping up manufacturing capacity will help bring more supply to the market and end the ability of other companies to compound knockoffs. GE Healthcare Easier sell: Declining interest rates support GE Healthcare’s growth by lowering borrowing costs for its customers who must shell out big bucks for its expensive MRI and CT scanners. More China: Health care stimulus measures in China working their way into the market and recovering demand in the world’s second-largest economy could drive a rebound in orders there for GEHC. Home Depot Lower mortgages: Mortgage rates, which have been going in the wrong direction since the Fed has been cutting rates, will eventually come down. That will lift the housing market and spur homebuilding and improvement projects. Home Depot will be right there to serve both the pro and the do-it-yourself customers. Tailwinds into 2025 : Third-quarter sales related to Hurricanes Helene and Milton were a tailwind to revenue growth. The company also raised its full-year 2024 outlook across several key metrics. It appears that Home Depot is on the verge of an earnings rebound heading into next year. Honeywell Business split : Honeywell shares surged following Elliott Management’s disclosure of a $5 billion stake and push for a breakup of the industrial conglomerate. Splitting up Honeywell into two companies — aerospace and automation — could unlock significant value, with Elliott estimating up to 75% upside over the next two years. Linde Economic improvement: Linde’s stronghold as an industrial gas leader with what Jim calls “oligopolistic” pricing power ensures the company can withstand an uncertain economy. As interest rates decline, economic activity could accelerate, increasing demand for industrial gases and boosting Linde’s volumes and earnings. Beating conservative guidance : Any uptick in the economy would help keep Linde’s under-promise, over-deliver run intact as management issued a fourth-quarter outlook assuming an economic contraction. Linde normally gives guidance assuming a neutral economy. Meta Platforms AI monetization: Meta has successfully used AI to keep users on Instagram and Facebook longer, thanks to its suggested Reels and other posts. AI also has made ad targeting better, so marketers want to spend more dollars across Meta’s apps. That needs to be sustained to justify Meta’s heavy spending on AI chips. Microsoft Azure capacity meeting demand: Microsoft’s cloud-computing service Azure has faced the high-quality problem of too much demand for its availability capacity. Its AI services are contributing to that dynamic. Nevertheless, correcting this dynamic should translate into faster revenue growth rates. Artificial Intelligence ROI: Microsoft’s strategic investments in AI, including its CoPilot suite of AI-powered tools, are beginning to bear fruit. While it has pressured short-term profits, the monetization of these tools should lead to more sales. Morgan Stanley Lower rates: The Federal Reserve in September lowered interest rates for the first time in four years, beginning a loosening cycle that’s expected to continue into 2025 as the central bank looks to achieve a soft landing for the U.S. economy. A rebound in the IPO market is likely as stocks become more attractive to own than bonds. It should lower the cost of capital for would-be acquirers, thus increasing M & A activity. Both trends play to Morgan Stanley’s strength in investment banking. Deregulation: The Trump administration is likely to usher in deregulation and a more deal-friendly environment than under the Biden administration – another boost to M & A. Nextracker Renewable energy adoption: On the face of it, the GOP sweeping this election should spell disaster for Nextracker , a key provider of solar tracker systems. But there’s hope the incoming Trump administration provides clarity on its policy toward renewable energy and specifically keeps in place some of the favorable tax credits under the Biden administration. Demand dynamics: Artificial intelligence and the data centers that fuel it require multiples of the current energy output, creating a greater need for solar. Nvidia Accelerating AI demand: Nvidia’s recent earnings call made it clear that we’re still in the early innings of the AI revolution that will fuel demand for the company’s chips well into 2025 and beyond – despite the concerns of some on Wall Street. As Jim Cramer recently pointed out on “Mad Money,” the demand simply isn’t slowing down. “The demand is accelerating because the payoff is so great,” he said. “According to [CEO Jensen Huang], for every dollar their customers put in, they’re making five smackers. That means they have no choice but to buy Nvidia’s chips.” Hyperscaler spending: Some of Nvidia’s biggest customers, like Microsoft , Meta , Amazon and Tesla will have to keep buying the chips to build out their AI infrastructure. Palo Alto Networks Bigger deals: Cybersecurity is a secular growth market: As the number of bad actors grows, companies can’t afford to not invest in defense. Industry leader Palo Alto stands out for its advanced cybersecurity solutions and strategy of bundling them altogether (what it calls “platformization”), which is leading to megadeals. During its most recent quarter, the company said it signed a transaction worth more than $50 million with a large technology firm and a more than $20 million deal with a financial services firm, among other deals. Stanley Black & Decker Housing rebound: Falling interest rates are likely to kickstart the sagging homebuilding market, increasing demand for Stanley’s tools. Cost cuts keep bearing fruit: Ongoing cost-cutting measures are improving operational efficiency and profitability, positioning the company for stronger performance as the economic cycle turns. Starbucks Improvement in global sales: Under CEO Brian Niccol’s leadership, efforts to revitalize Starbucks’ sales through a simplified menu and rebranding as a community-focused coffee house should drive global sales growth, leading to more investor confidence that a turnaround is taking shape. Better margins: By focusing on profitable growth, while continuing strategic investments, Starbucks is positioning itself for stronger margins, which should translate to a higher stock price. Walt Disney Parks bounce back: A recovery in Disney’s theme parks business is expected to lift overall revenue and profitability, providing a strong tailwind for the stock. Streaming profits accelerating: Continued growth in streaming profits could become a key driver of stock gains since it would offset the languishing performance in linear television. CEO replacement: While not an immediate catalyst, the eventual announcement of a new CEO by 2026 is expected to improve investor sentiment and signal fresh direction for the company’s future leadership. TJX Companies Cautious consumer spending: TJX’s off-price model does well as consumers turn cautious, as shoppers prioritize value and turn to TJX for affordable high-quality gifts. Overseas expansion: The company’s gradual expansion into international markets offers a new avenue for revenue and profit growth, which could help sustain momentum and drive the stock higher as it captures market share abroad. Salesforce Adoption of AI agents: Salesforce’s new AI agent, Agentforce, is driving strong demand as it automates tasks and boosts productivity for customers, positioning the company for accelerated growth in deals. Wells Fargo Lifting of the asset cap: The removal of the Fed-imposed asset cap, implemented in 2018, would enable Wells Fargo to grow revenues and expand its balance sheet. While the exact timing remains uncertain, there’s some hope that it could occur in 2025 . (See here for a full list of the stocks in Jim Cramer’s Charitable Trust, the portfolio the Club uses) 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. 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Traders work on the floor of the New York Stock Exchange (NYSE) at the opening bell on November 6, 2024, in New York City. Images)
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Sometimes, there can be an overwhelming amount of negativity and noise on Wall Street. To counter that, Jim Cramer has said investors should not lose sight of what can go right for their stocks. That doesn’t mean ignoring risks and investing on autopilot. It does mean investors should remember the wall of worry can be surmounted. As Wall Street starts to look ahead to 2025, here’s a look at a few things that can go right for all 34 Club holdings.
