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. Markets have been volatile due to uncertainty about the status of peace deal negotiations between the United States and Iran. The market was mixed for most of the session amid rising oil prices and interest rates, but rallied around 1:45 p.m. after President Donald Trump said on Truth Social that "talks are continuing, at a rapid pace, with the Islamic Republic of Iran." The FedEx-FedEx Freight breakup is complete , with shareholders receiving 1 share of FDXF for every 2 shares of FDX owned. From the portfolio's perspective, we received 50 FDXF shares from the 100 FDX shares we bought on May 18. FedEx retained 19.9% of the outstanding FedEx Freight shares and plans to divest its stake within 24 months. FedEx Freight is the largest less-than-truckload (LTL) carrier in North America with the broadest network and industry-leading transit times. The LTL market combines freight that's too big or heavy for regular parcel delivery but not large enough for a full truckload from multiple customers onto the same truck. This allows businesses to ship smaller loads more efficiently without paying for an entire trailer. At an investor day held in April, Freight's management estimated it will generate $8.7 billion in revenue in 2026 with adjusted operating income of about $1.1 billion, representing a margin of about 12%. The company is targeting medium-term compound annual revenue growth of 4% to 6%, alongside adjusted operating income growth of 10% to 12%. This includes expanding margins from 15% from about 12% today through four key drivers: investments in LTL-focused capabilities, automation, and technology; enhancing its customer mix by adding higher-yielding customers; focusing on ongoing efficiency initiatives and improving cost to serve; and expediting Transition Service Agreement (TSA) exits to accelerate modernization and automation initiatives. Exiting these TSAs, separation costs, and investment in technology are expected to result in a slight operating margin headwind during the company's transition period but should lead to solid margin gains once it's all cleaned up. More broadly, we view Freight as an asset that was overlooked at the larger FedEx, given the other (successful) initiatives under CEO Raj Subramaniam's turnaround plan. As a standalone company, Freight can better pursue opportunities to improve the customer experience and drive productivity gains. We're putting a 1 rating on FedEx Freight out of the gate, but plan to build the position gradually. We want to leave room to buy on potential post-spin volatility, which often occurs as the shareholder base turns over. Typically, with spins, shareholders sell the new company because they prefer to be invested in the larger, more established company. FedEx Freight's addition to the S & P 500 could help some of that volatility because index funds aren't forced to sell. But we saw post-spin blues play out with Qnity Electronics and Solstice Advanced Materials in their first three months of trading, and the same could happen for Freight. We are setting a $175 price target on shares, which is more conservative than the $185 target from Bank of America analysts, but still reflects solid upside as management works on its plan to optimize its network and improve margins. We'll also adjust our FedEx price target from $ 425 to $ 380 to account for the spin. The massive rally in Arm Holdings continued Monday after Nvidia unveiled its new Arm-based PC processor. Known for their superior power efficiency, Arm-based CPUs have gained traction in the data center through adoption by major customers, including Nvidia, Amazon , and Alphabet . With this latest announcement, Arm is poised to gain share in the PC market as well. With today's roughly 18% gain, the stock has now rallied more than 140% since we initiated the position in late April. We've made two trims in Arm since we bought it, and each sale has been followed by a new leg higher. Those sales were made out of discipline following parabolic moves, but we also wanted to keep some shares to see how much further the rally could go. We're not making our next trim in Arm just yet, but we are raising our price target to $450 from $250 to reflect its status as the premier CPU play amid a CPU resurgence. Hewlett Packard Enterprise reports after the close on Monday, and before the open on Tuesday, we'll see earnings from Dollar General and Signet . On the data side, we'll see JOLTS job openings and quit rates for April. (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.
