Apple rises after Citi lifts target as chip stocks retreat

Apple shares advanced 1.1% on Monday after Citi increased its price target on the company to $365 from $315, according to CNBC Investing Club. The move contrasted with a broader decline in equities, as investors assessed renewed airstrikes between the United States and Iran, higher oil prices and the start of a heavy earnings week.

CNBC Investing Club said semiconductor stocks led the market lower as traders took profits after a recent rally. Micron and Intel each fell more than 4%, while Nvidia declined almost 2%.

West Texas Intermediate crude rose about 4% to roughly $74 a barrel, the club said, after weekend escalation revived concern over the Strait of Hormuz. The waterway is a key route for global energy shipments, so signs of military risk can feed quickly into crude prices as traders reassess the potential for supply disruption.

Citi raises Apple target

Citi said Apple remained positioned to take market share even after increasing prices on some MacBook and iPad models to counter higher memory costs, according to CNBC Investing Club. A price target is an analyst’s estimate of where a stock could trade over a defined period, based on that firm’s model and assumptions. It is not a guarantee of performance.

Apple also filed a lawsuit against OpenAI late Friday alleging theft of trade secrets, CNBC Investing Club reported. Jeff Marks, portfolio director for the club, said he did not have a view on the legal merits of the case. He said Jim Cramer considered it a serious lawsuit with legitimate concerns, according to the club’s Monday meeting recap.

Cramer remained constructive on Apple’s position and wrote in a morning note to “own, don’t trade this one,” CNBC Investing Club reported. Jim Cramer’s Charitable Trust holds Apple shares, according to the club’s disclosure.

AI trade faces pullback

The weakness in chip stocks came despite Cramer’s continued positive view on technology, CNBC Investing Club said. In a Sunday column cited by the club, Cramer argued that technology companies still offer some of the market’s strongest earnings growth and are well placed to benefit from artificial intelligence demand.

Nvidia, a central equity in the artificial intelligence trade, fell almost 2% Monday. CNBC Investing Club said Cramer remained bullish on the long-term AI theme and argued in his Sunday column that Nvidia should adopt a more aggressive share repurchase program to return more capital to shareholders.

A share repurchase reduces the number of shares outstanding when a company buys back its own stock. That can increase earnings per share if profits are unchanged, though the effect depends on the price paid, the company’s cash needs and other capital allocation choices.

Cramer also suggested Nvidia could sell parts of its investment portfolio to help finance additional buybacks, according to CNBC Investing Club. Marks disagreed with the idea of Nvidia taking gains on its Intel stake, saying such a move could add pressure to Intel shares.

CNBC Investing Club said it used Monday’s semiconductor pullback to add to its Intel position, consistent with Cramer’s view that Intel remains one of the charitable trust portfolio’s highest-conviction holdings. The club disclosed that Cramer’s Charitable Trust is long Apple, Intel and Nvidia.

The club also said Monday’s rapid-fire discussion covered Boeing, Honeywell Aerospace, Capital One, Goldman Sachs and Wells Fargo.

This story draws on original reporting from CNBC.