Friday’s rally in the S&P 500 might not be enough, but Linde is out of this world
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. The S & P 500 is on pace for a positive Friday — but lower for the week. There was a bigger stock rally earlier in the session as oil prices fell in reaction to the G7 releasing up to 100 million barrels of diesel and crude, and bond yields dropped on a softer-than-expected September nonfarm payrolls growth. The move after the jobs report was a classic example of when bad economic news is good news for the stock and bond markets because a less tight labor market could keep the Federal Reserve from raising interest rates later this month. However, the rally in bond prices was temporary. The 10-year Treasury sold off through the session, pushing yields higher . Linde’s space- and electronics-focused investor day has been getting a lot of buzz. Our takeaway from the handful of analyst recaps we reviewed is that it was a positive event. These are Linde’s two fastest-growing end markets, and combined they are expected to account for about 20% of total sales by 2030. Space is benefiting from the growing number of launches each year. According to Citi, annual space launches have increased from 114 in 2020 to 325 in 2025 and could exceed 1,500 in 2030. Linde has a few different paths to generating sales to commercial space customers. In most cases, Linde provides oxygen, nitrogen, hydrogen, and helium to customers through merchant sale of gas (SOG) agreements, which is where Linde continually supplies gas to customers through long-term contracts. Another option is sale of plant (SOP), where Linde designs and builds the processing plant for customers and sells the equipment. We typically prefer SOG arrangements because those are recurring sales that investors love. While Linde said it has sold six commercial space plants, they all went to one customer that wants to vertically integrate. The rest of Linde’s customers are pursuing SOG deals, which could ease some concerns about a change in Linde’s business model. As for electronics, It’s Linde’s fastest-growing segment; remember, the company is a key partner to the world’s largest chip fabricators, or fabs, like Taiwan Semiconductor’s Arizona and Taiwan plants. According to Morgan Stanley, Linde highlighted $5 billion worth of projects that are under execution, with another $7 billion of additional opportunities in the United States and Asia. What’s behind the electronics activity is rising gas intensity of more complex chips used in the AI boom. Morgan Stanley also pointed out that advanced packaging, which is an important step in combining silicon and high-bandwidth memory (HBM) into one integrated package, is becoming increasingly gas-intensive. Linde hasn’t delivered 10% or higher earnings growth since 2023, largely because of weak volume growth. But as faster-growing end markets like space and electronics become a larger part of the overall business, we expect Linde to return to the double-digit earnings growth it has historically been known for. Next week is quiet on the corporate front . There are no companies in the portfolio scheduled to report earnings. Other companies reporting are ex-Club stock Constellation Brands , as well as PepsiCo and Delta Air Lines . On Tuesday, Marvell Technology is hosting an investor day, and some refreshed targets could help the AI semiconductor trade. Marvell is a custom chip competitor of Club name Broadcom. Next week’s economic data flow is also light, but there’s lots of Fed officials giving speeches. On Wednesday, the central bank releases minutes from its September meeting, when the Fed hiked rates for the first time in three years. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.