It was a great week for the portfolio. Ahead of the long holiday weekend, I know the buzz is centered around Nvidia (NVDA) and how this big $465 billion company signaled a sea change when it announced a strong quarter, cut its guidance – and stocks rallied. This was directly contrary to the pattern that had preceded it. I’m not sure of the direction here when it comes to tech stocks. I believe that if your company goes to the company, the Marvell Technology Holding Club (MRVL), the process is simple. We know it’s good. But if the company cut its forecast and was in business, it didn’t matter. Just look at Cisco (CSCO), which took a beating after it lowered its sales forecast for the current quarter. It didn’t matter, that is, until Nvidia. So it’s natural to assume that things may have really changed with Nvidia’s rally, especially since Nvidia has a lot of consumers with its huge video game business which has been hit by the Covid lockdown in China. Which brings us to the bigger question: what does Nvidia portend for Apple (AAPL), which is all consumer and China-heavy. Is Nvidia translating to the fact that Apple may be down enough to be able to rally around a lower forecast? My view remains no and that Apple remains precarious even from these levels. We have yet to see a consumer company with ties to China have a real rally besides Dollar Tree (DLTR) and Dollar General (DG). These are not the right analogues for Apple as they depend on Chinese manufacturing, but not on the Chinese consumer. My take: Apple is a core holding that we will own through its struggles, although I understand the fear emanating from owning the stock. As always, we believe it should be owned, not sold, and that’s just a typical swoon. Sell now and what do you do when China declares Covid beaten? I say you would have your head separated from your body by a bandsaw. Now on to the next elephant: the massive declines of Google (GOOGL), Amazon (AMZN) and Facebook (FB) – forgive me for using the previous monikers – and whether they can make any comebacks. These are all equally problematic. Let’s take them one at a time. Google was shot down by YouTube sales in Russia and Eastern Europe. If he had reported now, instead of last month, I think he would have been excused and driven higher. Amazon, some say, has gotten to the point where you get retail for free. I’m not that flippant. There are now operational issues at Amazon that weren’t anticipated. These need to be reduced to more than they have before this stock hits a real low, hence why we sold some of a once-hallowed position. I think it can go up over time, but only if the market recovers. Not good enough yet. Next, let’s talk about what we bought in the SNAP debacle: Facebook. We are well up on recently bought stocks, but the headline acts as a pre-announcement is a probability. I think CFO David Wehner covered that possibility on the call. People freak out about layoffs, but the company assures me that new hires rank higher and don’t need the training that newbies need. More importantly, Metaverse is closer to Reels triumphing over TikTok without having to play the China card, which would actually resonate with the street but not customers. They just want what appeals to the biggest audience. Here’s what matters: Facebook is now seen as a less than stellar retailer or even a second-rate materials company or an amalgamation like 3M. To me, that makes Facebook the purchase it has become. One last concern: since we have called the rally, we have won the right to predict next week. I think that we will be confronted with the clowns of the sale in May against the stooges of the summer rally. What we need to know is China, Ukraine, the Fed – the same walls of worry we’ve climbed before. My view is that we are pressing our bets right now. Our ranking is almost complete. A few more repositionings and you’re done. Have a fabulous Memorial Day weekend. We will start again on Tuesday. (Jim Cramer’s Charitable Trust is long AMZN, AAPL, FB, GOOGL, NVDA. See here for a full stock list.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim does a shop. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
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Adam Jeffrey | CNBC
It was a great week for the portfolio. Ahead of the long holiday weekend, I know the buzz is centered around Nvidia (NVDA) and how this big $465 billion company signaled a sea change when it announced a strong quarter, cut its guidance – and stocks rallied. This was directly contrary to the pattern that had preceded it.
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#Jim #Cramer #Apple #Amazon #Facebook #Google #Nvidias #rise
