Why this unheralded AI stock can go higher despite its recent massive rally

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Here's a recap of Wednesday's key moments. 1. Stocks pulled back Wednesday after a hotter-than-expected inflation report raised concerns that the Federal Reserve may have less room to cut interest rates later this year. The producer price index rose 1.4% in April, seasonally adjusted, well above the consensus estimate of a 0.5% increase. On an annual basis, the index climbed 6%, marking its biggest increase since 2022. The report comes one day after the Bureau of Labor Statistics reported that the consumer price index rose 3.8% from a year ago. The PPI reading pushed Treasury yields higher, with the 10-year yield hovering around 4.45%. Still, the Nasdaq Composite was up, powered by a rebound in tech stocks. Many semiconductor and AI names bounced back after Tuesday's sharp sell-off, though Jeff Marks, director of portfolio analysis for the Club, cautioned against chasing names that made parabolic moves. 2. Shares of Club holding Nvidia jumped 2%, fueled by optimism surrounding CEO Jensen Huang's trip to China alongside President Donald Trump . Investors are hopeful the visit could eventually lead to a reopening of chip sales in the region, though Jeff said that is not the Club's main focus. "It would be great if it happened for Nvidia, but not something we're banking on," he said. Instead, Jeff said he is paying closer attention to the possibility of a major aircraft order for fellow Club name Boeing . Reports suggest China could order as many as 500 planes, which Jeff said would be a meaningful catalyst for the aerospace giant. 3. Club name Qnity Electronics pulled back slightly after surging nearly 10% Tuesday on a strong beat-and-raise quarter . Jeff called the move lower "totally acceptable" following the stock's massive rally. Qnity's stock has more than doubled this year and remains one of the Club's top performers. Most analysts, including the Club, raised their price targets to near $180 following earnings. Jeff said Qnity remains underfollowed by Wall Street, with only nine analysts currently covering the stock. This dynamic could create further upside as additional firms initiate coverage. However, he cautioned that it's "very hard to chase it ... after this move straight up," adding that the Club may eventually look to trim the position as it becomes a larger part of the portfolio. (Jim Cramer's Charitable Trust is long Boeing, Nvidia, and Qnity. See here for a full list of the stocks.) 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. 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