We are selling 165 shares of Broadcom at roughly $361.27 and buying 50 shares of Cardinal Health at roughly $229.25. Following the trades, Jim Cramer’s Charitable Trust will own 160 shares of AVGO, decreasing its weighting in the portfolio to about 1.5% from 3%. It will also own 425 shares of CAH, increasing its weighting in the portfolio to 2.5% from 2.2%. We’re cutting our Broadcom position roughly in half to reduce the portfolio’s exposure to the AI theme. This sale is in response to the growing political pressure against new data center construction, a topic Jim explored on Sunday in his weekend column. In the past month, the governors of Texas and Pennsylvania have pivoted to a harder-line stance against data center developers. These former champions of AI data center investment in their states are now placing stricter standards on construction projects and requiring additional disclosures to root out more speculative activity. We expect rhetoric against data centers to intensify as we move closer to the midterm elections in November, potentially leading to a slowdown in new investment activity. If there is in fact a slowdown, we need to make sure the portfolio is better equipped to withstand further losses. As such, we are substantially reducing our Broadcom position, and we’ll debate over the next few days whether to trim another infrastructure or AI component play to protect against giving back more of our gains. With this sale, we will realize a profit of about 323% on shares purchased in September and October 2023. We’re taking some of the cash raised from the Broadcom sale to buy more Cardinal Health. Shares of the drug distributor have pulled back 5% from the all-time closing high made two weeks ago. The stock reached that high after the company reported better-than-expected quarterly results and outlook. For the full fiscal 2027, Cardinal guided adjusted earnings growth of 13% to 15%, which puts us in a range of $12.40 to $12.60. That’s well ahead of the $12.04 per share consensus at that time.We find shares attractive here trading at roughly 18 times the new earnings range, coupled with the company’s track record of delivering double-digit earnings growth. Accordingly, we are upgrading our rating to a 1. (Jim Cramer’s Charitable Trust is long AVGO and CAH. 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.
