Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Tuesday's key moments.
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Tuesday’s key moments. We are sticking to NVDA despite struggles in sector We’re trimming an oil stake Tensions with China could worsen chips shortage Quick mentions: CRM, COST, AMZN, DHR, DIS 1. We are sticking with NVDA despite struggles in chip sector Shares of Micron Technology (MU) fell nearly 6% on Tuesday after the chipmaker preannounced to the downside , warning that its expectations for DRAM and NAND demand growth have fallen due to inventory adjustments across most end markets like PCs, smartphones, and even the cloud, thus hurting its sales for the current quarter. This warning comes one day after Club holding Nvidia (NVDA) said in a preliminary earnings report that it expects second-quarter revenue to be well below its initial guidance due to weaker-than-expected gaming revenue. The report dragged down semiconductor stocks. We believe that NVDA, which is our smallest semiconductor position, will continue to go lower due to the magnitude of the miss. However, we find it difficult to walk away from the stock completely because when the company does get it right, they get it right for multiple periods for many years. While NVDA might not be an attractive short-term buy, we are in it for the long term because we are investors and are waiting for a lower level to buy back the shares we sold in early April. 2. We’re trimming an oil stake We are taking some profits in Chevron (CVX) as oil prices go higher again. We have been looking to decrease our position in oil into strength, and this could be a great opportunity to do so, especially considering our mantra when it comes to the oils: We don’t want to be greedy. However, we don’t plan to trim our position in Devon Energy (DVN) just yet. We like its $1.8 billion acquisition of Eagle Ford operator Validus Energy, announced this morning. We believe that the incremental free cash flow from this purchase positions Devon to return even more cash to shareholders through larger variable dividends and more aggressive share repurchase activity. 3. Tensions with China could worsen chips shortage Solar panel shipments to the U.S. from several Chinese suppliers have been sent back or detained over the last few weeks as the U.S. enforces the Uyghur Forced Labor Prevention Act, according to the Wall Street Journal . The Act went into effect in June and restricts U.S. imports of products from China’s Xinjiang region. We believe that China could retaliate against this law by curtailing or blocking exports of semiconductor chips to the U.S. This would be catastrophic for companies already struggling to get enough chips, including Club holding Cisco (CSCO). We are debating selling shares of Cisco, regardless of what happens with China, because it has been struggling to get the chips it needs. The stock could down if those problems persist longer than anticipated, and we’d prefer to sidestep that decline – though its dividend yield makes waiting for a tempting choice. While Ford (F) is another company dealing with chip shortages, the stock continues to perform well. We also expect that clean energy provisions in the Inflation Reduction Act, including a $7,500 tax credit for electric vehicles, will boost Ford’s growth. The automaker’s July sales increased 36.6% from the year before, also giving us hope that it will continue to perform well. 4. Quick mentions: CRM, COST, AMZN, DHR, DIS We also have some quick takes on other Club holdings. We previously sold some shares of Salesforce (CRM) at $180 and $190. While we are hesitant to sell any more ahead of its annual Dreamforce conference taking place next month, we would consider selling on a bounce to try to buy some back at a lower price. Club holding Costco (COST) remains a buy. We believe that it is a great, consistent play for investors who want to bet on consumers who are looking to save money by purchasing non-branded products – including Costco’s private-label Kirkland Signature. Cramer said on Monday’s “Mad Money” that Amazon (AMZN), Danaher (DHR), and Costco are three Covid-era winners that have staying power, and we encourage investors to examine the stocks as long-term investments. Disney (DIS) reports Wednesday after the closing bell. If the stock goes down, that could represent one last chance to buy it. Remember, it is not a pandemic streaming stock, Cramer said. (Jim Cramer’s Charitable Trust is long CRM, COST, CSCO, F, AMZN, DHR, DIS, NVDA. 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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