Stocks experienced a notable rebound Friday, reversing earlier declines driven by softer GDP growth figures. The Supreme Court’s decision to strike down a significant portion of President Donald Trump’s tariffs provided a much-needed boost, injecting optimism into the market.
In portfolio adjustments, the CNBC Investing Club decided to divest its position in Texas Roadhouse. Despite an initial uptick in share price as Wall Street appeared to discount high beef costs due to accelerating comparable sales, Jim Cramer highlighted a severe “cattle problem” in the U.S., which he described as the worst in American history. This underlying issue ultimately led to a reversal in the stock’s performance. Additionally, a portion of holdings in Qnity Electronics, a DuPont spin-off, was trimmed following a recent strong run. While the stock opened higher, it later pared some of its gains.
The Supreme Court’s ruling, asserting that the President exceeded his executive authority with emergency tariffs, has created a degree of uncertainty regarding potential reimposition of levies through alternative mechanisms. While this decision is undoubtedly positive for consumer-facing companies, as previously noted, the market’s reaction suggests a cautious outlook. Retail and consumer stocks, though initially reacting, ultimately saw most of their gains diminish, indicating broader market concerns about the long-term impact on trade policy.
Corning Inc. emerged as a significant performer, with shares surging approximately 7% and positioning it among the top gainers in the S&P 500. This upward momentum was fueled by an upgrade from UBS, which raised its price target to $160 from $125, establishing a new Street-high. The analysts revised their sales and earnings forecasts upward, attributing this to anticipated substantial capital expenditure by hyperscalers. A portion of this spending is expected to flow into Corning’s fiber-optic cable and connectivity solutions, crucial components for the expansion of AI data centers. Further upside potential for Corning could materialize following Nvidia’s upcoming earnings report, which may lead to revised capex projections and potentially new contracts, such as the recent fiber optic deal secured with Meta Platforms. This strategic alignment with the burgeoning AI infrastructure market, particularly the integration of fiber optics within advanced chip architectures, presents a compelling long-term growth narrative for Corning.
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