CNBC Investing Club Homestretch: Market Drift Higher, AI Infrastructure Pullbacks, Big Tech Earnings Ahead

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 were drifting higher following an initial sluggish start to the week. Some semis and other AI infrastructure stocks were giving back some gains after their historic rallies and parabolic moves, but Nvidia is on pace for a record close. Meanwhile, oil prices and Treasury yields inched higher, signaling that uncertainty about the Strait of Hormuz reopening continues in the background. One part of the Microsoft-OpenAI amended agreement that was announced on Monday was that OpenAI can now serve all its products to customers across any cloud provider. Our first read was that this news would be positive for Amazon Web Services, even though Amazon's stock wasn't doing much. To be fair, Amazon is up 26% this month, so a down day after a big move should be expected. Still, it was great to get Amazon CEO Andy Jassy's thoughts on the news through his post on the social media platform X: "Very interesting announcement from OpenAI this morning. We're excited to make OpenAI's models available directly to customers on Bedrock in the coming weeks, alongside the upcoming Stateful Runtime Environment. With this, builders will have even more choices to pick the right model for the right job. More details at our AWS event in San Francisco tomorrow." Amazon and OpenAI announced a strategic partnership in February, and the amended Microsoft agreement opens the door for that relationship to expand further. AWS is hosting a "What's Next with AWS" event on Tuesday, and the focus is expected to be on Agentic AI. We'll see first-quarter earnings from both Amazon and Microsoft after the closing bell on Wednesday, along with quarterly results from Alphabet and Meta Platforms — the big four hyperscalers are all Club stocks and all are out on one night. Eli Lilly announced yet another small acquisition on Monday, buying the private Ajax Therapeutics in a deal that could be worth up to $2.3 billion. Ajax's lead asset is an investigational, once daily, oral Type II JAK2 inhibitor that's being studied in a Phase 1 trial in patients with the rare blood cancer myelofibrosis who previously were treated with a Type 1 JAK2 inhibitor. The deal is another example of Lilly using its balance sheet to expand its portfolio beyond GLP-1s. Separately, Eli Lilly's price target was significantly cut at Leerink. While the analysts maintained their outperform buy rating, they lowered their price target to $1,058 per share from $1,296, reflecting a 25 times multiple on their 2027 earnings per share (EPS) estimate of $42.30. Previously, Leerink was using a 30 times multiple on 2027 EPS estimates of $43.21. Basically, the earnings estimates were little changed, but Leerink changed how much investors should pay for those earnings. The reason to cut the target multiple was due to competitive pressures, specifically on the oral GLP-1 Foundayo. It's true that Foundayo hasn't lived up to sky-high expectations and is off to a sluggish start compared to oral Weogvy, which had a first-mover advantage and the benefit of the same brand name. Lilly management has cautioned against extrapolating Wegovy to Foundayo, but we think Foundayo can gain share over time because it has the advantage of having no food or water restrictions. We'll hear more about oral script dynamics and tirzepatide (Mounjaro and Zepbound) sales when the company reports earnings this Thursday before the opening bell. The list of companies reporting earnings after the closing bell includes Celestica, Cadence Design Systems, Amkor, and Nucor. Corning reports before the opening bell on Tuesday, and we'd like to see the optical cable market announce another big partnership with a hyperscaler. Other companies scheduled to report are United Parcel Services, Coca-Cola, Spotify, General Motors, Centene, Hilton Worldwide, S&P Global, Enterprise Products Partners, Kimberly-Clark, and Sysco. On the data side, we'll get the Conference Board's consumer confidence index.