Latest news with #InvestingClub
CNBC
2 days ago
- Business
- CNBC
Morgan Stanley says 'take a breather' on CrowdStrike — why Jim Cramer disagrees
Jim Cramer on Monday brushed off Morgan Stanley's downgrade of CrowdStrike , viewing the cybersecurity giant's recent dip as a potential buying opportunity. "Morgan Stanley may downgrade this but I want to get in on the downgrade and get in on the discount," Cramer said Monday during the Investing Club's Morning Meeting. Shares of CrowdStrike dipped nearly 2% in the premarket Monday but stabilized by midday, trading at roughly $477 apiece. Morgan Stanley took CrowdStrike to equal weight from buy-equivalent overweight, while slightly increasing its price target on the stock to $495 from $490. After a 50% stock rise since April, analysts called it "time to take a breather," citing its high valuation that reflects lofty expectations. CrowdStrike's stock trades at 21 times its expected 2026 sales, well above the average of 12 times for large software companies. That suggests investors expect near-perfect performance. While the analysts still see CrowdStrike as a long-term leader in cybersecurity with strong artificial intelligence tailwinds, they said "the near-term opportunity appears fully priced in," referring to the second half reacceleration that CEO George Kurtz has guided over the past couple quarters. Concerns about CrowdStrike's valuation have lately been a concern on Wall Street. Yet investors are willing to pay a premium for the stock for its fast growth and potential. Morgan Stanley's downgrade comes just before the one-year anniversary of CrowdStrike's infamous July 19 IT glitch, when a routine software update led to one of the largest IT outages in history, causing millions of Windows computers to crash around the globe. When we initiated CrowdStrike in October 2024, we viewed it as a turnaround story following the botched software update. The risk proved to be manageable after CEO Kurtz fought to reassure clients and introduced customer package deals to retain impacted clients and rebuild trust. As a result, the company did not lose a lot of business. Jim remains confident that as those packages roll over, the customers will pay full price. That suggests "the second half is going to be much stronger than the first half," Jim said Monday on "Squawk on the Street." Cramer is scheduled to interview George Kurtz on "Mad Money" Monday evening and is expected to get the latest on how business is faring one year later. One area of concern is the budget cut back for cybersecurity by the federal government. Cyber stocks sold off last Thursday on a report that President Donald Trump's 2026 budget cuts cyber spending by over $1 billion from 2024 levels. CrowdStrike dropped 5%. Shares of fellow cybersecurity leader and Club holding Palo Alto Networks fell 6.8%, while Zscaler dropped 6.4%. We don't agree with this decision, given the rise in geopolitical tensions and nation states trying to hack one another. But we're comforted by the fact the CrowdStrike has reiterated time and time again that with bad actors working overtime companies and governments need, and will pay for, CrowdStrike's cyber solutions. (Jim Cramer's Charitable Trust is long CRWD, PANW. 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.
CNBC
6 days ago
- Business
- CNBC
Jim Cramer has a message for investors who don't own Costco after solid June sales
There's no better time to stick with Costco than right now, Jim Cramer says, on the back of the company's solid June sales report late Wednesday. "You're going to want to stay with Costco because that's going to be the way you fight inflation," Jim said Thursday on "Squawk on the Street," a day after the membership-only retailer delivered healthy headline sales last month amid a challenging retail environment threatened by tariff uncertainty raising consumer prices. "I'm more steadfast about Costco now that we have tariffs coming because boy, they're going to keep prices down." "Those who do not own Costco … might want to put some in," Jim said. "I think Costco is a buy," during the Investing Club's Morning Meeting on Thursday. Costco announced late Wednesday that its U.S. core comparable sales, excluding gas prices and currency fluctuations, rose 5.5% for the four weeks ending Jul. 6, slightly below Wall Street's estimate of 6% estimate but above buy-side expectations of 5%, according to JPMorgan's analysis. Total company sales grew 6.2% — matching their May increase, but were slightly lower than April. U.S. traffic fell slightly to up 2.4% from up 2.8% last month and was down from mid-single-digit levels to start the year. However, that weakness is being offset by average transaction size growth of 2.4%, which was an acceleration from up 0.9% in May. Costco stock dipped roughly 0.5% to around $977 per share in Thursday's midday trading. Across categories, fresh foods led performance, with meat and produce driving high-single-digit growth, consistent with May. Nonfoods, including jewelry and gift cards, were slightly better than May's mid-single-digit growth. Food and sundries grew mid-single digits, down slightly from up mid-to-high-single digits last month. The company's comparable sales have been running light for the past few months, but Jim is "not worried" in the slightest. He points to the warehouse retailer facing tough year-over-year comparisons since introducing high-demand gold bars online and in some physical stores. Gold has become a hot commodity and a tailwind for Costco's revenue, often selling out quickly after being restocked. Costco's gold bars are considered competitive because they are being sold at a small premium over the gold spot price, which is seen as a good deal for members. COST YTD mountain COST YTD stock performance. Costco shares have also been under pressure due to its premium valuation, which leaves little room for error despite the company's strong execution and durable membership-only business model – two key fundamental factors that Jim has long praised and argued are worth paying since the warehouse retailer keeps prices low for members. It does that through its high-volume, low-margin business model, and leveraging economies of scale to negotiate better deals with suppliers. Also, its membership fees provide a stable revenue stream, allowing the company to prioritize value over profits. JPMorgan suggests Costco's underperformance may be ending. Analysts pointed to Costco's Canada and international sales jumping by 7.9% and 8.2%, respectively. They also noted that issues like new store openings hurting existing store sales are easing, stating the "source of funds short in COST … should be fading," as challenges from gold and gas prices lessen. The "source of funds" that JPMorgan is referring to is investors selling Costco on strength after it had a nice move into mid-May and early June and using those funds to buy other stocks. From May 14 through Jun. 2, Costco stock rallied 6.6% from $991.54 to $1,056.85. Now, with the stock stabilizing around $977, "I think this may be a level to get involved," Jim said, even though we're still in an overbought market. We have a price target of $1,100 per share on Costco and a buy-equivalent 1 rating on the stock. We're going to run through Costco and many other stocks in the portfolio during Friday's CNBC Investing Club annual meeting from the New York Stock Exchange. The livestream begins at 10:30 a.m. ET. (Jim Cramer's Charitable Trust is long COST. 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.
CNBC
09-07-2025
- Business
- CNBC
Nvidia hits a $4 trillion market cap. Here are buy levels for new investors in 1 chart
Nvidia on Wednesday became the first company in history to reach an astounding $4 trillion stock market value. What do we do now? As headline-grabbing as that milestone may be, it is just a nice round number. If anything, human emotion might dictate some profit-taking when these types of levels are reached. Nvidia stock is currently reading as overbought, according to the relative strength indicator, a tool used by technical analysts. The RSI is kind of like the S & P Short Range Oscillator , which we use to gauge overbought and oversold conditions in the overall stock market. Jim Cramer has for years thought Nvidia should be part of investors' portfolios, and he continues to feel that way. Nvidia remains one of the largest weighted stocks in the Investing Club portfolio. There is still some room in our price target of $170, and we're actively considering whether we need to raise it. But, we are reiterating our hold-equivalent 2 rating — out of respect for Nvidia's huge comeback from its April lows, when concerns about President Donald Trump 's tariffs crushed the stock market. There have been many twists and turns in tariffs, with near-daily trade chatter starting back up again. So far, though, Nvidia and the overall market have been able to take the current barrage of tariff news in stride. While it's not our style to chase all-time highs — you know, buy low and sell high — Nvidia is not that straightforward. The stock has been an absolute juggernaut. It closed above a $1 trillion market cap on June 13, 2023, and rode the artificial intelligence boom to $2 trillion, just over eight months later. Three months after that, on June 5, 2024, it closed above $3 trillion. Wednesday's intraday $4 trillion milestone, when shares topped $163.93 each, took 13 months. So, where does that leave investors who don't own any Nvidia shares or own small positions that they want to bulk up? We're not here to tell you not to buy Nvidia. We, obviously, love the company and think that it is critical to the future that most of us likely envision, now that the age of AI is upon us. We also see the stock going higher still in the long term, given the strength of the business fundamentals — otherwise, we wouldn't be holding on to our position. While we can't recommend an Nvidia buy at Wednesday's levels, let's instead take a look at its stock chart for some possible entry points should shares pull back. In a commentary on Tuesday , we detailed a similar analysis on three other stocks that have soared since their April lows. Methodology Two key levels to watch are the 50-day moving average (green line) and 200-day moving average (maroon line), which tend to serve as support when the stock is trading above them and as a resistance level when the stock is trading below them. By their name, moving averages are moving all the time. There are also long-term horizontal support/resistance lines (straight black lines) that technical analysts focus on. Those are static. So, more than the exact prices, we want to show investors how to spot the moving averages and long-term trend lines. Taking a look at a one-year chart of Nvidia, the first two levels to note are $137, the 50-day moving average, and $130, the 200-day moving average. Members don't necessarily need to wait for pullbacks to those levels. Declines of 3% to 5% from here start to get interesting. More precisely, at the end of 2024 and into the beginning of 2025, shares came up against strong resistance at around $150. However, after a wildly volatile first half, shares finally rallied back and blew through that level in late June. The polarity principle in technical analysis dictates that prior resistance, once broken, should then be looked to for support (and vice versa). Working off that notion, we would look to $150 as an area of support and a decent level to start a position. This would represent a pullback of just over 8% from the intraday all-time high reached on July 9). If you want to play it a bit safer, it might be best to wait to see if the stock bounces off $150, confirming the support, and pick shares on the bounce, slightly above the $150 level. However, for those looking to start a position, you can always step in with your first buy at $150 and then wait to see if we get to the 50-day moving average of $137. If the 200-day moving average level of $130 is breached, however, we would want to widen the scales a bit on subsequent buys. A break below the 200-day is quite bearish from a technical perspective as it means that a key area of long-term support has been broken. We would also have to ask ourselves if anything in the Nvidia story has changed. If not, then we would advise investors to average down but only make buys that meaningfully lower their overall cost basis. In early April, just after Trump's "Liberation Day" of so-called reciprocal tariffs, Nvidia traded down to its lowest valuation, on an earnings-per-share basis, in five years — about 20 times forward estimates. That valuation level has also only been seen about three or four times in Nvidia stock over the past decade. If we apply a 20 times multiple to fiscal year 2027 (similar to calendar year 2026) EPS estimates of $5.73, we would get to about a $115 stock price. Below that, and we're pretty much looking at the April lows, somewhere around $95 to $100. While we certainly don't expect that, we wanted to call it out, given the inherently volatile nature of the semiconductor industry, not to mention the dynamic nature of trade negotiations. Bottom line For those looking to start and build a position, we think a good plan of attack is target $150 per share, the 50-day moving average (currently $137), the 200-day (currently $130), the 20 times forward trough valuation on fiscal 2027 EPS estimates (about $115), and the April lows in the $95 to $100 region. How much to put on at each level depends on how aggressive you want to be and your risk tolerance. But the most helpful thing you can do is watch for these levels — and if reached, consider the fundamentals and potential catalysts ahead. (Jim Cramer's Charitable Trust is long 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.
Globe and Mail
29-05-2025
- Business
- Globe and Mail
2 Ways Nvidia Stock Can Gain Another 40% From Here
Famed investor Jim Cramer believes the post-earnings surge in Nvidia (NVDA) shares may be a drop in the bucket compared to where the AI darling could eventually be headed. Despite tightened export regulations under President Donald Trump's administration and the rising trade tensions between the U.S. and China, NVDA reported better-than-expected financials for its fiscal Q1 of 2026 last night. Including today's gain, Nvidia stock is up more than 60% versus its year-to-date low on April 4. Sovereign AI Could Push Nvidia Stock Up Further According to Jim Cramer, foreign investments in artificial intelligence infrastructure or 'sovereign AI' as Nvidia calls it, could unlock significant further upside in the semiconductor stock. Nvidia has already secured deals worth billions of dollars from Saudi Arabia and the United Arab Emirates in recent weeks. And now Jensen Huang, its chief executive, is scheduled for a visit to Europe that experts believe could bring more AI-focused deals to the company based out of Santa Clara, California. That said, Nvidia shares are still down more than 8% versus their year-to-date high. NVDA Shares Could Rally on Resolution of China Overhang Another major tailwind for NVDA shares in the second half of this year could be resolution of the China overhang, Cramer argued in a report to members of his Investing Club on Thursday. Nvidia expects an $8 billion hit from Washington's curbs on exports of sophisticated AI chips to Beijing in its second financial quarter. However, the Nasdaq-listed firm could launch a toned-version of its Blackwell chip to resume its business in China without having to cross U.S. regulations. Together, sovereign AI and the resolution of China export restrictions could together push the AI stock up to a new high of $200, concluded Jim Cramer. His price target translates to another 43% upside from here. Does Wall Street Share Cramer's Optimism on Nvidia? Wall Street analysts share Cramer's optimism on Nvidia stock. The consensus rating on NVDA shares currently sits at ' Strong Buy ' with the mean target of $167 indicating potential upside of about 20% from current levels.
CNBC
10-05-2025
- Business
- CNBC
The case for owning stocks at every age, plus what the Street means by 'risk off'
Here's our Club Mailbag email investingclubmailbag@ — so you send your questions directly to Jim Cramer and his team of analysts. We can't offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries. This week's first question: I retired a few years ago, sold my business. Should I be in the market? Or is there another place you would suggest? — Jack If you are recently retired or near retirement, it can be tempting to reallocate funds out of the stock market — especially in during volatile times. But pulling out entirely may not be the answer. "Sure, you can get out but can you get back in," Jim Cramer said in a recent Mad Money episode , noting that most investors miss some of the upside recovery before returning to the market. That's because recoveries can be confusing. They don't come with clear signs and usually start as bear market rallies. "We want to be in for the seven days each year that are really unbelievable," Cramer said during the April Monthly Meeting , noting that the market's annual gain usually comes down to a handful of sessions. The truth is the market doesn't move in a straight line. Some days make you wish you were heavier in cash, while others make you want to own more stocks. But trying to time that balance perfectly – jumping in and out – rarely works. That's why Jim recommends staying the course. "If you stayed the course in good stocks, you never had to worry about getting back in and you made a huge amount of money," he said. At the same time, it's crucial to tailor a strategy to your personal situation. You do this by knowing your risk tolerance, liquidity needs, and how much cash you want available. Generally speaking, if you're in retirement but still have a multi-decade time horizon and can stomach some volatility, there's little reason not to have exposure to the market. In fact, downturns can offer opportunities to buy great companies at a discount. As Jim often says, investing is an art, not a science. We use tools like the S & P 500 Short Range Oscillator to help guide decisions on when to raise or deploy cash. But the core principles of maintaining discipline while reviewing your portfolio regularly and being ready to take advantage of long-term opportunities remain as our north star in staying in the market during tough times. This week's second question: I keep hearing analysts talking about "risk on" and "risk off." Can you explain what this means and how it would relate to stocks in the Investing Club portfolio? — Reneta, Ithaca, NY When analysts talk about a "risk on" or "risk off" environment, they're describing investor sentiment. In a risk-on environment, investors are feeling optimistic, often because of strong economic data or solid corporate earnings. Stocks tend to rally as people are more willing to make bigger bets on higher-risk assets like stocks, which offer the potential for greater returns. Since markets are forward looking, this bullish sentiment reflects expectations of continued growth. Conversely, a risk-off environment is driven by uncertainty or fear, like concerns about a slowing economy, geopolitical tensions, or a weak labor market. That fear fuels market volatility and prompts investors to rotate out of riskier assets like tech stocks and into safer plays such as cash, bonds, or defensive stock sectors like consumer staples and utilities. In risk-off mode, the market may look bearish, and the focus shifts from trying to grow capital to preserving it. We've seen a clear risk-off tone in recent months. Investors have been pulling back from U.S. stocks amid unpredictable and aggressive tariff policies from President Donald Trump. His tense trade negotiations with China — a country that accounts for over 16% of total U.S. goods imports — have raised alarm bells over global trade, economic growth and corporate profits. Higher tariffs on Chinese imports into the U.S. could raise consumer prices and slow spending, which could in turn tip the U.S. into a recession. That caution is showing up in CEO sentiment, too. An April survey found more than 60% of the U.S.'s top executives expect a recession in the next six months. "I feel we're in a risk-off market on an intermediate term basis," said DoubleLine Capital CEO Jeffrey Gundlach in a CNBC interview Wednesday following the Fed's policy decision to keep rates steady. "We are in, sort of, unchartered waters," he continued. "We don't know what tariffs are going to do to inflation and there is pressure, a little bit, on rising unemployment." Market volatility is reflecting that fear. The VIX – Wall Street's fear gauge – spiked to a high close of 54.33 on Apr. 8, more than double its long-term average of about 20, after Trump unveiled surprisingly aggressive country-specific tariffs. The S & P 500 dropped nearly 11% in just two days , and the CNBC Magnificent 7 Index plunged about 14% in that same stretch, which put it down over 27% from its January high. The index has recovered almost all of those losses, rebounding more than 13%, as of Friday afternoon, after an upbeat first-quarter earnings season. As stocks have bounced back, the VIX also has retreated substantially and traded around 22.5 on Friday. Notably, however, 89% of S & P 500 companies have discussed tariffs on earnings calls this quarter, suggesting they are still a concern. This market anxiety has provoked investors to hedge and seek refuge in "risk-off" safe havens assets like gold, which set a new all-time high of $3,500 per ounce on April 22. As of Friday, gold traded less than 5% below that late April peak. At the Investing Club, we tend to think of risk-off as buying defensive sectors like consumer staples, health care or utilities, which tend to exhibit low volatility in different phases of the economic cycle. Investors tend to also prefer assets perceived to be safe havens like bonds and gold. This also means staying away from high multiple stocks, particularly in the tech sector, or, as Director of Portfolio Analysis Jeff Marks puts it, "anything super-fast growing" since they tend to show weakness in an uncertain environment. Jim Cramer, however, cautions against investing purely based on the risk-on or risk-off mindset. He said trying to time those shifts can backfire (see first question above). "The derivation of the terms 'risk on' and 'risk off' has more to do with what big-time hedge fund managers are thinking about — cash, short or long S & P futures — than what we are doing, which is attempting to make money via individual stocks no matter the market," Jim wrote in a Sunday think piece in March. "You are not going to get a Sunday email from me saying, 'I can't figure it out so it is risk off.' To me, risk off means, 'What the hell do I know?'" Instead, Jim and Jeff focus on investing best-of=breed companies that have great management, and solid long-term growth at reasonable valuations. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) 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. Traders works on the floor of the New York Stock Exchange (NYSE) at the opening bell on April 8, 2025, in New York City. Here's our Club Mailbag email investingclubmailbag@ — so you send your questions directly to Jim Cramer and his team of analysts. We can't offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries.
