Wall Street says sell Goldman, buy Capital One. Here's where we stand

An important development from the financial markets: 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. Stocks are higher on Tuesday, closing out June and the second quarter on a strong note. The S & P 500 rallied roughly 15% in the quarter, while the tech-heavy Nasdaq charged 21% higher.

Once again, it was technology and the semiconductors stocks powering the market's gains. The S & P tech sector was up about 2% in the session, extending the quarter's run to 30%. Industrials were the second-best performing sector in the second quarter, advancing about 14%.

Economic Details

Energy was the lone sector to post a significant loss, finishing the quarter deep in the red. That weakness in energy coincided with a pullback in oil prices from their Iran war-driven highs of the year. Goldman Sachs stock edged lower Tuesday after Oppenheimer downgraded it to a sell-equivalent rating from hold.

Oppenheimer's analyst said that current valuations for investment banks offer little room for upside, especially as the group enters the later stages of its expansionary cycle. Morgan Stanley was downgraded to a sell-equivalent for the same reason. Still, analysts don't see any near-term threats to Goldman's stock and even raised their estimates on strength in dealmaking and trading ahead of earnings next month.

"While the cycle may well go ​on for another 12-18 months or more, we'd rather not wait around for ‌the ⁠warning signs to appear, and thus particularly in the case of the investment banks, we are more inclined to take the money and run," Oppenheimer said in the Tuesday note, recommending investors instead buy into alternative asset managers like KKR , Ares Management and Blackstone ; those stocks are all sharply lower this year due to concerns around private credit. One thing to keep in mind is that Oppenheimer originally downgraded Goldman Sachs to a hold-equivalent rating on March 19, 2025, calling for an end of the hope for a M & A recovery. That never played out.

Analyst Views

M & A was up 40% year over year in 2025, according to the consulting firm Bain & Co. , and Goldman Sachs shares have roughly doubled since that call. Jim Cramer couldn't disagree more with Oppenheimer's latest call.

Little room for upside? Wrong on both fronts. While we have periodically trimmed our position to right-size it after big moves —that's our discipline — our long-term bullishness has not deviated.

Goldman's crown jewel investment banking division keeps attracting massive deals. Just look at Monday's news that Goldman will serve as an advisor on Martin Marietta's $13. 5 billion acquisition of Lhoist North America.

Financial markets are tracking the development closely as investors assess the likely impact.