Jim Cramer says to buy these two stocks — including one with nearly 20% upside

U.S. April PCE inflation rose 0.4% month over month, slightly below the 0.5% forecast, while headline inflation held at 3.8% year over year, easing some market चिंता around sticky prices. Geopolitical risk also improved as the U.S. and Iran reportedly extended their ceasefire for 60 days and began nuclear talks. On the stock side, Snowflake surged 35% after a strong quarter and a roughly $6B AWS commitment, while Jim Cramer highlighted Starbucks' improving afternoon traffic and reiterated Amazon as a buy on a modest pullback.

Analysis

The near-term setup is constructive for the AI infrastructure stack, but the more interesting read-through is that hyperscaler spend is becoming more selective rather than weaker. A large enterprise commitment to custom silicon and cloud compute supports the thesis that differentiated infra is winning share inside AI budgets, which should keep pricing power with the largest platforms even if broader software multiples stay capped. That is a second-order positive for AMZN: the market still underestimates how much of AWS growth can come from workload mix shift into higher-margin, custom-architecture demand rather than just raw usage expansion.

SNOW’s move likely overstates the durability of the re-rating, but it does validate a stronger growth algorithm if AI attach rates keep improving over the next 2-3 quarters. The risk is that investors extrapolate one quarter of acceleration into a multi-year compounding story before retention and net expansion stabilize; software rallies of this magnitude often mean the bar resets higher for the next print. For competitors, the message is less about SNOW specifically and more about the increasing importance of infrastructure partnerships and compute economics, which should pressure mid-tier cloud data platforms that lack scale or proprietary chip leverage.

For SBUX, the catalyst is operational rather than macro: improved daypart mix can lift utilization and margins faster than same-store sales alone because fixed labor and occupancy costs are already in place. If afternoon traffic is genuinely inflecting, the earnings torque over the next 2-4 quarters could be meaningful even without heroic revenue assumptions. The contrarian risk is that investors may be paying for a turnaround before the evidence is fully durable; if traffic gains fade, the multiple support disappears quickly.

CVS looks like a neutral read-through here, but in a market rewarding clearer growth and margin stories, stagnant care-delivery and PBM narratives remain dead money unless management can show a catalyst in the next reporting cycle. The broader macro backdrop is mildly supportive for cyclically sensitive consumer names if inflation cools, but that effect is secondary to idiosyncratic execution in these names.

Key Decisions for Investors

• Add AMZN on intraday weakness; time horizon 3-6 months. Risk/reward favors the long side because AWS custom-chip adoption can expand margin mix even if top-line growth stays moderate; use a 5-7% stop from entry.
• Fade extreme SNOW strength with a tactical short or put spread into strength over the next 2-4 weeks. The move likely prices in too much near-term perfection; downside catalyst is any moderation in net new AI workload commentary at the next update.
• Go long SBUX for a 2-4 quarter turnaround trade. Best entry is on pullbacks after initial enthusiasm fades; target 12-18% upside with downside defined by failure of the afternoon-traffic trend to persist into the next two monthly traffic reads.
• Pair long AMZN / short a basket of non-scale cloud software names over the next 1-2 quarters. The thesis is that compute winners with proprietary infrastructure will keep absorbing AI spend while generic software multiples stay compressed.
• Avoid adding to CVS until there is a catalyst. Capital is better deployed in names with near-term operating inflection; if held, treat it as a low-conviction defensive placeholder rather than a return driver.