We have a divided market, especially in tech. It was a major theme in the Club’s April Monthly Meeting . (The replay video will be up shortly). There are companies that everyone loves and companies everyone is on the fence about, and then the company that everyone hates. Let’s start with the beloved. I’m talking about Meta Platforms , which delivers earnings on Wednesday evening, as well as Alphabet and Microsoft , which are out late Thursday. Amazon is next week. META YTD mountain Meta Platforms YTD Meta has the biggest tailwind on Earth being dangled in front of it — the newly signed law that says Chinese company ByteDance must sell TikTok or face a U.S. ban on the short-form video platform. It’s a total windfall because Reels will become the de facto short funny video place to go. Instagram is becoming more and more of a place where consumer packaged goods companies are going. Still, nothing on the Metaverse. But I hope we get a little color on the worth of WhatsApp. CEO Mark Zuckerberg has much up his sleeve given how many Nvidia chips he’s bought. I like it here but don’t want to play Meta roulette and tell you to buy it ahead of earnings, which come out after the closing bell on Wednesday. GOOGL YTD mountain Alphabet YTD On Thursday evening, we have the once-hated, now-loved Google-parent Alphabet, and I admit that it has to do several things to justify this move out of the doghouse. First I would love to see $10 billion in Google Cloud revenue. Second, I would want to see some breakouts: YouTube and Waymo. Third, I would like to see a dividend. Last quarter, Meta was the latest of our Super Six stocks to declare a dividend. Without these, I fear that we will be in some sort of feedback loop — just like the old days, except this time it is Search versus Google’s AI Gemini and we don’t want to go down that rabbit hole, which is why I am glad we sold some Alphabet stock this year. MSFT YTD mountain Microsoft YTD Microsoft is so loved that it could be the one that Wall Street comes for unless it can say some reassuring things about AI and demonstrate continued gains in the Azure cloud. Microsoft can when it reports after the bell on Thursday. I also want to know more about the AI button it’s going to put on new personal computers, starting in July, keeping in mind that this version of the Co-pilot AI assistant strategy is not part of a business-to-business effort. Can Microsoft just keep hitting it out of the park? I don’t see what is stopping it. AMZN YTD mountain Amazon YTD Amazon is also in the loved category but reports this coming Tuesday. CEO Andy Jassy will tell a calm, strong story about the Amazon Web Services cloud, the growing advertising business, and some stuff about Prime. It’s not clear if the company is going to be mining the Anthropic business, which has Claude AI, in part because Google also owns a big stake. I do believe, however, that Amazon will try to do something with Alexa and artificial intelligence — if only to justify the money pit that’s been. Amazon’s business model is so perfect for what I am calling the new frugality, the desire for people to bargain hunt for everything but still travel. The next category is the fence-sitters . That’s Nvidia , Broadcom and Salesforce . NVDA YTD mountain Nvidia YTD I have no idea how Nvidia got to be a fence-sitter. I think it is because everyone is allegedly making up competitors to Nvidia and that’s simply untrue. The chips that the others are making do not measure up to what Nvidia has. I want you to go to an Oregon State symposium where CEO Jensen Huang spoke. Right before it was over, he discussed why we are in an industrial revolution and everything we know about computing is about to change. Only Nvidia can change it. The company has almost the entire market to itself. It is sold out of everything it makes before it makes it. Nvidia’s new Blackwell-powered supercomputer will be able to create lifelike robots, that can do anything a human can do, and it will be able to be trained by the movies. I am not kidding. This will be the breakout machine that can do so many things that we can do — and yet, people act as if the current chips are already being beaten by what Meta or Amazon has going. Oh please. Go watch the video. Nvidia reports earnings late next month. AVGO YTD mountain Broadcom YTD Broadcom is iffy. It still hasn’t reaped the benefits of the VMWare acquisition, and it’s still stuck with a cellphone cycle that is incredibly stubborn and just plain awful. I don’t know how CEO Hock Tan will be able to once again say do not worry the turn will soon be at hand but in the meanwhile enjoy our AI partnership with Nvidia. That’s the message from last quarter, which was out in March. But he’s going to try it. He must rationalize VMWare and do something so it can be justified and give us a better narrative until the AI calvary becomes big enough to overwhelm everything else, which, of course, is why we like it. Broadcom doesn’t report earnings again until June. CRM YTD mountain Salesforce YTD Salesforce has become mighty complicated. While I believe it’s doing incredibly well and has a terrific handle on its generative artificial intelligence offerings for its clients, I do not like it when a company we own suddenly starts talking about doing a merger that I think is a little off kilter, like buying the so-so property that is Informatica . Here, I am thinking about what happened when a flailing PayPal started talking about buying Pinterest a couple of years ago, when we owned shares in that losing business that was PayPal, which, for the record, is finally starting to turn. Earlier this week, there were media reports that Salesforce was backing away from the Informatica talks. I want to believe the Informatica episode was a momentary lapse in discipline and Salesforce CEO Marc Benioff has enough of a suite on his hands to grow the company north of 10% still. Salesforce, though, is in the penalty box for certain now. The stock everyone seems to want hate. That’s Apple right now. AAPL YTD mountain Apple YTD What can I say about Apple other than what’s been said: that it’s a no-growth stock that’s hostage to China and is incapable of coming up with anything to replace the iPhone; the string has run out and there’s nothing left. However, here’s my problem with this now in-vogue analysis. There are only a handful of stocks in the entire S & P 500 that are facing a flat or down year, and we save low single-digit price-to-earnings multiples for them. That would put Apple in the neighborhood of about $135 per share. As we said in a commentary earlier this week , that’s not going to happen. I arbitrarily picked $160 as a battleground level. That seems to be ages ago. It has hung in. I don’t try to sell it and buy it back. We aren’t a hedge fund. But I will tell you this, if Apple does have something and I think they do, something AI connected to the next iPhone iteration due out in September, you will not be able to get back in anywhere near where you can sell it now. (Jim Cramer’s Charitable Trust is long META, GOOGL, MSFT, AMZN, NVDA, AVGO, CRM, and AAPL. 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. 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.
We have a divided market, especially in tech.
It was a major theme in the Club’s April Monthly Meeting. (The replay video will be up shortly). There are companies that everyone loves and companies everyone is on the fence about, and then the company that everyone hates.
Read the full article here
