Boeing Corning earnings setup splits stocks before Tuesday reports

Boeing Corning earnings are setting up two very different stock reactions before both companies report Tuesday. CNBC’s Investing Club with Jim Cramer said Monday that Boeing moved higher as investors focused on production and cash flow, while Corning sold off as enthusiasm around AI-linked names cooled.

The split came on a softer day for the broader market. The S&P 500 declined even after tensions between the United States and Iran eased over the weekend, according to the CNBC Investing Club recap of its Monday morning meeting.

Cramer said investors were watching three pressure points: interest rates, oil prices and heavy spending by big technology companies. Jeff Marks, portfolio director for the Investing Club, pointed to tech spending as the biggest concern because the sector has been a major force behind the market’s advance in recent years.

Why are Boeing and Corning moving in opposite directions?

Corning shares dropped nearly 5% to about $139 ahead of the glass and optical technology company’s Tuesday earnings, according to CNBC’s Investing Club. Marks said the company’s results “should be pretty good” because of strong optical revenue tied to hyperscaler demand.

Hyperscalers are large cloud-computing companies that buy large amounts of infrastructure, including equipment used to support artificial intelligence and data-center workloads. For Corning, that means investors are watching whether optical sales can keep supporting growth after a sharp run-up in the stock.

The Investing Club said it had trimmed its Corning position several times last month when the stock traded much higher. Cramer said investors moving away from AI-related stocks, combined with the Club’s small remaining position, raised the argument that it could exit the rest of the stake.

Corning’s stock had climbed to a record closing high of roughly $255 in June before falling nearly 46%, according to the Investing Club. Marks described that kind of fast rise as the risk of a parabolic move, meaning a stock advances so quickly that expectations can become hard to sustain.

Boeing moved the other way, rising 1% before its Tuesday report. Marks said investors should watch free cash flow and any update on how quickly Boeing can lift aircraft production.

Free cash flow is the cash a company has left after covering operating costs and capital spending. For Boeing, the Investing Club said the connection is straightforward: if the company builds more planes, it can deliver more aircraft, which can help convert its order backlog into cash.

Marks cited Boeing’s extensive backlog and said the key issue is fulfillment. In his view, the backlog is large enough that the focus has shifted to building, delivering and converting those orders.

What else did CNBC’s Investing Club say about the market?

The Investing Club said Cramer still sees longer-term prospects intact for many companies, including Intel, which posted a strong quarter Thursday. The Club said it viewed Intel’s stock decline, which it attributed to concerns about rising hyperscaler spending, as a buying opportunity for its portfolio.

The Club also said it added to its Intel position and its stake in Honeywell Aerospace on Monday morning. General Motors and Ford were covered in the rapid-fire segment at the end of the video.

Cramer’s Charitable Trust is long Boeing, Corning, Intel and Honeywell Aerospace, according to CNBC’s Investing Club disclosure.

This story draws on original reporting from CNBC.