It’s been a great week for the portfolio. Ahead of the long holiday weekend, I know the buzz centers on Nvidia (NVDA) and how this great $465 billion company signaled a sea change when it reported a solid quarter, cut guidance — and shares rallied. That was directly contrary to the pattern before it. I am not so sure of the direction here when it comes to technology stocks. I believe that if your company caters to the enterprise, a la Club holding Marvell Technology (MRVL), the process is simple. We know that’s good to go. But if the company cut its forecast and it is in enterprise, then it didn’t matter. Just look at Cisco (CSCO), which got clobbered after revising its sales forecast down for the current quarter. It didn’t matter, that is, until Nvidia. So it is natural to presume that perhaps things really have changed with Nvidia’s rally, especially because Nvidia has plenty of consumers with its massive video game business that was hurt by China’s Covid lockdown. Which brings us to the largest question: What does Nvidia portend for Apple (AAPL), which is all consumer and heavy China. Does Nvidia translate to Apple being able to be down enough that it can rally on a forecast cut? My take 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). Those are hardly the correct analogues for Apple because they rely on China’s manufacturing, but not the Chinese consumer. My take: Apple is a core holding that we will own through its travails, even as I understand the fear emanating from owning the stock. As always, we think it should be owned, not sold, and this is just a typical swoon. Sell now and what do you do when China pronounces that Covid is beaten? I say you’d get your head separated from your body by a bandsaw. Now let’s deal with 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 comebacks. These are are all equally problematic. Let’s take them one at a time. Google was felled by Russia and Eastern Europe YouTube sales. If it reported now, instead last month, I think it would have been excused and roll higher. Amazon, some say, has gotten to the point that you are getting retail for free. I am not as glib. There are operational problems at Amazon now that were unforeseen. These must be copped to more than they have before this stock has a real bottom, hence why we sold some of a once-sacred position. I think it can work its way higher over time but only if the market rallies. Not good enough yet. Then let’s talk about what we bought on the SNAP debacle: Facebook. We are up nicely on the recently bought shares, but the stock acts like a pre-announcement is a probability. I think able CFO David Wehner covered this possibility on the call. People are freaking out about the layoffs, but the company assures me that new employees are higher graded and don’t need the training that the beginners need. Most important, Metaverse is closer to Reels triumphing over TikTok without having to play the China card, which would actually resonate with the Street but not the customers. They just want whatever attracts the biggest audience. Here’s what matters: Facebook is now valued as a less-than-stellar retailer or even a second-rate materials company or an amalgam like 3M. To me that makes Facebook the buy it has become. One last concern: given that we called the rally we have earned the right to prognosticate on next week. I think we will be confronted by the sell-in-May clowns versus the Summer rally stooges. What we need to know is China, Ukraine, the Fed — the same trifecta walls of worry we have already scaled. My take is that we are pressing our bets at this time. Our high-grading is almost complete. A few more repositions and we are done. Have a fabulous Memorial Day Weekend. We will get it done again on Tuesday. (Jim Cramer’s Charitable Trust is long AMZN, AAPL, FB, GOOGL, 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. 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.
It’s been a great week for the portfolio. Ahead of the long holiday weekend, I know the buzz centers on Nvidia (NVDA) and how this great $465 billion company signaled a sea change when it reported a solid quarter, cut guidance — and shares rallied. That was directly contrary to the pattern before it.
