The stock market continued its upward trend since our last monthly CNBC Investing Club meeting, although leadership was changing beneath the surface. The Dow led the way, rising 2.3% from June 17 through Wednesday’s close. The 30-stock average hit a record high on July 6 before retreating slightly in recent days. The S&P 500 gained 2.1% since our June meeting, while the Nasdaq gained a more modest 1%. Investors are becoming increasingly selective about their exposure to artificial intelligence, as Thursday morning’s losses further demonstrate. Cybersecurity stocks rose again last month as Wall Street’s latest AI winners continued their recovery from their decline in late 2025 into the spring of this year. Companies offering clearer paths to monetizing their massive AI investments also attracted buyers. At the same time, investors shifted to more defensive areas of the market as renewed concerns over the Iran war created even more uncertainty. (We excluded Honeywell Aerospace from the list because it was only spun off on June 29.) Ahead of our July monthly meeting livestream, starting at 12 p.m. ET, here’s a look at what’s moved our top and bottom three performers since our last meeting. Top Performers: Palo Alto Networks rose 25.5%, CrowdStrike rose 21.7%. These two cybersecurity names both reached record highs since our last monthly meeting as the sector established itself as an AI winner rather than a loser. At the beginning of the year, investors feared that artificial intelligence would revolutionize the industry. Now they expect AI will only increase demand for cybersecurity, a topic that first gained traction after Anthropic’s Mythos models in April reignited concerns about AI-powered cyber threats. The recent rally began after The Wall Street Journal reported that Chinese AI models are nearly as capable as leading U.S. platforms at identifying software vulnerabilities. Instead of seeing this as a threat, investors saw another reason why companies need to spend more on defending their systems. IBM CEO Arvind Krishna gave Palo Alto and CrowdStrike another boost this week when the company announced disappointing second-quarter results ahead of its scheduled earnings release next week. He said cybersecurity is one of three areas that companies are increasingly prioritizing in their IT spending. We took advantage of the strong rise in both stocks to reduce our positions, generating gains of nearly 150% in Palo Alto and 105% in CrowdStrike, while maintaining our long-term conviction in both companies. Both stocks are near all-time highs. Meta increased by 20%. The Facebook and Instagram parent company went from being one of our worst performers before the June monthly meeting to one of our best performers before the July meeting. The turning point came when Meta finally gave investors more confidence in how the company plans to monetize its massive investments in artificial intelligence. Meta recently announced plans to create a cloud company that would lease excess computing capacity to external customers, something Jim has been advocating for weeks. The company also launched new AI products for developers and advertisers, signaling a broader trend toward paid use of its AI capabilities rather than relying primarily on open source releases. Reuters also reported that Meta plans to start manufacturing its custom AI chip later this year to boost its computing power. Following the report, a Bank of America analyst said Meta’s custom chip efforts could result in significant cost savings. The company had estimated that Meta would spend about $45 billion per gigawatt of computing capacity, but now estimates that figure could be closer to $22 billion. The announcements sent Meta shares up 15% last week, making it the best-performing stock in our portfolio. Apple gained 10.7%. The iPhone maker rallied during the period as investors grew more confident in the company’s artificial intelligence strategy. Earlier this year, Apple announced a multiyear partnership with Alphabet to integrate Google’s Gemini with Apple Intelligence, easing concerns that Siri had fallen behind competing AI assistants. That optimism continued after the company unveiled its revamped AI platform at its Worldwide Developers Conference in June, reinforcing the view that Apple may not need to develop the industry’s leading AI model if it can deliver the best user experience across its installed base of roughly 1.5 billion iPhones. The Street has also come around to the idea that Apple can join the AI competition without spending all of its free cash flow. The stock rallied in late June after Apple announced price increases for its MacBook and iPad lineup as higher storage costs hit the tech industry. While KeyBanc analysts warned that the hikes combined with lower subsidies for wireless carriers could slow device upgrades and pressure future growth, Citi analysts argued that the higher prices should largely offset rising storage costs and would have a limited impact on demand. We continue to view Apple’s improved AI roadmap as the larger long-term catalyst, particularly given the broader rollout of Apple Intelligence later this year. The stock closed at a record high on Wednesday. The worst performers, Intel, fell by 15%. The chip giant pulled back from a record high in the period as investors turned away from several semiconductor stocks following the group’s sharp rise. We took advantage of the weakness to add to our position on Wednesday, viewing the decline as a buying opportunity rather than a sign that AI trading is losing steam. Intel remains Jim’s favorite stock in the portfolio as the company offers increasing central processing unit (CPU) opportunities in AI and its foundry business. “I just want Intel to have too many opportunities to win,” he said during Wednesday’s morning session. Despite having a difficult month and coming under pressure again on Thursday, Intel is still up more than 170% year to date. FedEx Freight is down 12.4%. The less-than-truckload (LTL) leader has struggled since forming as an independent company in early June, but we believe the weakness reflects a familiar post-spin pattern rather than deteriorating fundamentals. Many shareholders who received the shares through the separation likely decided to sell, creating short-term pressure. The company’s first earnings report as a standalone company was somewhat unusual as it transitioned to calendar-year reporting, but both revenue and operating income exceeded expectations. However, margins faced the same headwinds from fuel surcharges that weighed on the former parent company. We continue to view FedEx Freight as a long-term winner and have used the recent declines as a buying opportunity. As the largest LTL operator in North America, FedEx Freight is well positioned to benefit from the recovery in the freight cycle. Qnity Electronics fell 10.5%. Similar to Intel, the DuPont spinoff gave back some of its recent gains as semiconductor stocks declined after a huge rise earlier this year. The weakness deepened after Samsung Electronics, Qnity’s largest customer, delivered results that Jim said were “excellent, but not excellent enough.” The results raised new questions about demand for Samsung products, causing Qnity shares to fall about 4% the following session. We view the sell-off as a short-term reaction and not a change to our long-term thesis. But similar to Intel, Qnity is also having a strong 2026 – not quite as strong – but up about 70%. (Jim Cramer’s Charitable Trust is Long PANW, CRWD, META, JNJ, INTC, FDXF, Q. See a full list of stocks here.) As a subscriber to 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 foundation’s portfolio. If Jim discussed a stock on CNBC television, he waits 72 hours after the trade alert is issued before executing the trade. THE INVESTING CLUB INFORMATION SET FORTH ABOVE IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, ALONG WITH OUR DISCLAIMER. THERE ARE NO fiduciary duty or duty IN RECEIVING YOUR INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Three of our shares benefited from the AI rally, whereas three others fell out of favor since final month
