Jim Cramer’s top 10 things to watch in the stock market Thursday

1. Tech is taking it on the chin. The reason? Alphabet shares are down more than 11% after a terrible earnings night. Microsoft’s evening was better. But shares up 3% not enough to dissuade sellers. Plus, Caterpillar and ServiceNow are disasters this morning. Tonight is another big one for Club earnings with Amazon and Intel out. Also this morning, bond yields are down as new inflation data, out before-the-bell, basically matched expectations but remained well above the Federal Reserve’s 2% target. After leaving interest rates steady yesterday afternoon, Fed Chairman Kevin Warsh talked tough on inflation. He also said the economy is looking stronger. New GDP numbers came in better than expected.

2. Alphabet missed on almost every line except Google Cloud, as questions grow. Can it have robust Search in a world where “high intent” searches are underway, even as query growth reaches a five-year high? Remember a search query is a unit of activity, not a fixed amount of ad revenue. AI mode currently monetizes at a lower rate than traditional Google Search. Search growth rate slowed year-over-year and was essentially flat sequentially. It’s difficult to isolate, but Google’s problems stem largely from a lack of discipline and a lack of differentiation between Gemini and classic Search.

3. Microsoft delivered a sane and sensible quarter with accelerating growth, excellent margins, and living within its means as free cash flow remains positive. We appreciate management’s spending discipline. Tremendous Azure growth accelerated to 48% year over year, exceeding analyst expectations and management’s guidance of about 45%. Shares should continue the dramatic rebound that started this summer.

4. Marvell shares down 11.5% this morning on reports that the chip and networking company is in advanced talks to buy optical and laser provider Lumentum. Shares of Lumentum are up 6%. Marvell had a terrific quarter and does not need to do this deal, although the two companies are great friends. There is a big shift toward optical in entirety in the data center away from copper. Not clear if a Lumentum purchase would be a win for Marvell.

5. Samsung dropped 4% overnight after the Korean memory and smartphone giant dashed hopes for a really big buyback and gave a more conservative forecast than peer SK Hynix did yesterday. SK Hynix shares are giving back some of yesterday’s more than 13% gain, which had lifted the memory and storage group yesterday. Club name Micron closed up nearly 6%. This morning, it’s down almost 3%.

6. Cybersecurity vendor Fortinet is plunging 27% premarket after a disappointing earnings report. Concerns about decelerating product growth. Shares had more than doubled this year, so expectations were lofty. But it’s ridiculous that this is dragging down other cybers, including Club names Palo Alto Networks and CrowdStrike. Fortinet has a bigger hardware business than peers. If you’re selling Palo Alto on this, you’re missing the point.

7. Another standout quarter from Club stock Eli Lilly thanks to Mounjaro and Zepbound, sending shares up 4% this morning to what would be a new all-time high. Beat on revenue and earnings, paired with a big hike to the full-year sales outlook. The international GLP-1 business stayed hot, driving a lot of the upside. One blemish: sales of obesity pill Foundayo did miss estimates.

8. Industrial gas giant Linde turned in solid third-quarter numbers. Top- and bottom-line beats. Nice to see volume growth across all geographies. Earnings guidance for the current quarter was a tad light, but this management team is known for conservatism. The electronics end market is on fire, up 15% year over year, benefiting from a boom in semiconductor manufacturing.

9. Chipotle is up more than 8% as quarterly same-store sales growth of 2.1% beat estimates. Revenue matched. Earnings were a bit short. The company did have some labor costs, but it does feel like they are on the mend. CEO Scott Boatwright said, “Three consecutive quarters of positive comparable transaction growth demonstrates that our Recipe for Growth strategy is working.” Remember, Starbucks shot down reports that it wanted to buy Chipotle. Club name Starbucks reports earnings tonight.

10. FedEx Freight, also a portfolio holding, rounds out our four earnings report night. This has been a tough one with high fuel costs. Last night, its former parent company, FedEx, demonstrated that its transformation under CEO Raj Subramaniam is making progress. Still, softer holiday forecast. Worries over FedEx’s purchased transportation are overdone. This outsourcing to third-party line item should adjust itself in the next quarter. Matter of timing, and FedEx has the levers to pull.

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