We're booking big profits in an AI stock and trimming a credit-exposed bank
We making two trades Tuesday afternoon. Selling 40 shares of Broadcom at roughly $335 each; reducing the stake in Jim Cramer’s Charitable Trust to 120 shares and decreasing AVGO’s weighting in the portfolio to 1% from 1.36% Selling 75 shares of Capital One Financial at roughly $201; reducing the Trust’s stake to 600 shares and decreasing COF’s portfolio weighting to 3.1% from about 3.45% We’re trimming a small amount of our AI exposure following the group’s modest rebound over the past two sessions. AVGO YTD mountain Broadcom YTD We may not be selling Broadcom at the same high levels as other times this year. But we believe it’s never too late to lock in more of our big profits. This is about protecting our downside as AI stocks come under fire due to the rising cost of capital; it’s something Broadcom CEO Hock Tan acknowledged as a risk last week. This line of thinking protected us in Arm Holdings when we exited our position around $300 in early July, as well as our Corning exit in the mid-$140s last month. Arm has fallen about 23% from our exit price, while Corning’s recent slide puts it about 7% lower from where we sold our last bit of shares. From this Broadcom sale, we will realize a gain of 312% on stock purchased in August 2023. COF YTD mountain Capital One YTD We’re reducing our Capital One position ahead of earnings after the closing bell. We’re also downgrading the stock to our hold-equivalent 2 rating . This sale does not represent a call either way on Tuesday evening’s upcoming earnings report, but rather reflects some of our disappointment with how front-loaded investments to unlock growth from its Discover and Brex acquisitions have been, which have limited outsized profit beats. We also want to note that we’ve been adding financial exposure lately through several purchases of Bank of New York , which does not have the same credit exposure and sensitivity to high oil prices and inflation as Capital One. (Jim Cramer’s Charitable Trust is long AVGO, COF. 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.
