Stocks climbed to fresh record highs early last week, but renewed volatility in the artificial intelligence trade showed just how fickle investors can be in this market. The wheels almost came off the bus after Thursday’s terrible session for tech stocks. Then came Friday’s modest bounce-back rally, which proved to be enough to keep stocks in the green for the week. The S & P 500 logged a weekly gain of 1.2%, after hitting an all-time intraday high Tuesday and closing above 7,800 for the first time ever. The Nasdaq added 0.6% for the week. The tech-heavy index also closed at a record on Tuesday. Looking to balance out our AI exposure, we put more of our sizable cash pile to work Thursday, adding to three Club names: Kimberly-Clark , FedEx and Bank of New York . While elevated oil prices and interest rates continue to create uncertainty, we’re selectively buying quality companies at attractive valuations rather than deploying all our cash at once. Here’s a closer look at the three developments that drove last week’s market action. SpaceX gives investors more reasons to buy into the bull case SpaceX gave investors plenty to be excited about last week. The Financial Times reported late Tuesday that the Elon Musk rocket and AI company is looking to raise $40 billion to buy more Nvidia chips and expand its AI compute business, which rents capacity to customers including Anthropic and Alphabet’s Google. For Jim, the potential debt raise is a win for both companies, reinforcing the idea that Nvidia customers are generating strong returns on their AI investments. “Why not [do it]? Musk can immediately monetize these chips,” Jim said. “SpaceX could end up being Nvidia’s largest client at this pace. That’s fantastic news for both sides.” On Thursday evening, SpaceX announced a deal to acquire a nationwide spectrum portfolio , potentially positioning its Starlink service as a more formidable competitor to traditional U.S. wireless carriers. The spectrum would help address a key technical hurdle in Starlink’s mobile ambitions and eventually allow SpaceX to combine satellite coverage with a ground-based network. The news slammed telecom stocks Friday and opened another potential avenue for growth beyond rockets, satellites, and AI infrastructure for SpaceX. Wall Street is taking notice. Goldman Sachs on Tuesday raised its SpaceX price target to $230 from $220, reinforcing Jim’s view that the company’s ambitious growth plans are becoming more tangible . Barclays initiated coverage of SpaceX in a note released late Thursday, writing that it’s “the name to own in space due to its complete dominance of each vertical it operates in.” While Jim still feels that SpaceX isn’t appropriate for the Club portfolio, he said the developments suggest Musk’s vision could become reality sooner than investors expected. OpenAI rattles the AI trade, and reinforces a key investing lesson AI stocks whipsawed last week after a Financial Times report raised questions about OpenAI’s growth. The report suggested OpenAI’s annualized revenue at the end of September was roughly $20 billion below what was believed to be previously indicated levels, sending AI stocks sharply lower Thursday. Club holding Broadcom fell 4.4% (though ended the week higher). Beaten-down stocks outside the AI trade rallied Thursday as Treasury yields eased. The AI trade rebounded Friday after sources told Bloomberg that OpenAI expects annualized revenue of at least $70 billion by the end of the year. The reversal underscored how quickly sentiment toward AI stocks can shift, even as the underlying demand for computing power remains strong. Jim said the real problem is that people think of AI as a trade, not an investment. For us, the bigger lesson is the importance of diversification . “If you had nothing but artificial intelligence stocks, [Thursday] would’ve been a nightmare,” Jim said. The danger of a concentrated portfolio is that steep losses could prompt investors to panic, sell their holdings and retreat to cash, potentially missing a subsequent recovery . A diversified portfolio can help cushion losses when a particular investing theme gets hit and make it easier to stay invested. Starbucks’ turnaround gains traction with consumers New consumer data offered encouraging evidence that the Starbucks turnaround is, indeed, taking hold. According to HundredX, Starbucks was the only chain among a group including Dunkin’, Dutch Bros and 7 Brew to see improving customer intentions to spend more in recent months. Feedback from 29,000 customers also showed Starbucks gaining ground against competitors on taste, speed, quality, and brand trust. The findings are particularly encouraging given concerns that fast-growing beverage chains such as Dutch Bros and 7 Brew could threaten Starbucks’ long-term growth. They also suggest the underlying business is improving even as worries about consumer spending have pressured restaurant stocks. A separate development, however, has complicated things. The Financial Times reported that Starbucks has explored acquiring Chipotle , raising questions about a potential deal . This is interesting because Brian Niccol engineered a successful turnaround as CEO of Chipotle before he left to try to repeat that magic as CEO of Starbucks. We’re not convinced a transaction will happen. Jim said Thursday he had considered buying more shares following the sell-off. During Friday’s Morning Meeting , he said a further decline to $90, coupled with signs that Starbucks won’t pursue Chipotle, could present an attractive buying opportunity. He reminded members that the Club was restricted from trading because he had discussed it on CNBC on Friday. (Jim Cramer’s Charitable Trust is long NVDA, AVGO, SBUX, KMB, FDX, BNY. 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. 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