Lightning Round: I can not recommend DigitalBridge, says Jim Cramer
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CNBC
2 hours ago
- CNBC
'Those of us who have backed Apple are worried' — Jim Cramer looks at the challenges
Apple investors are losing confidence following the company's latest executive shift. "Those of us who have backed Apple are worried," Jim Cramer said on " Squawk on the Street " on Wednesday. The struggling tech giant announced Tuesday that its chief operating officer, Jeff Williams, plans to retire later this year . But until then, he will continue to lead its design team, Apple Watch engineering efforts, and other health initiatives. Sabih Khan, a 30-year company veteran and current operations senior vice president, is slated to take over as CFO. These personnel moves are the latest at Apple, which recently lost a key artificial intelligence executive, Ruoming Pang, to Meta Platforms and saw a chief financial officer switch in January. "Apple has to not have anybody else leave for a while. They should have people like Jeff Williams, if he's going to stay for the Watch, have him stay years, because we just are worried," Jim said. Jim's concerns are well-founded. While Apple shares saw a record-high close of $259 on Dec. 26, 2024, the stock started the new year under pressure. Like many stocks and the overall market, Apple hit a 2025 low in April before President Donald Trump paused his "reciprocal" tariffs. Year to date, Apple has lost nearly 17% versus the S & P 500 's more than 6% gain, as of Wednesday afternoon, and last week's record highs. AAPL 1Y mountain Apple 1 year Apple is unfortunately between a rock and a hard place lately, with challenges stacked at its doorstep. This includes criticism from the White House. President Donald Trump has been pressuring Apple to make iPhones in the U.S. While most iPhone production is still in China, Apple has moved some of it to India. "With all these new advanced manufacturing techniques and the way things are moving with AI. It's inconceivable to me that [Apple CEO] Tim Cook could not produce his iPhones elsewhere around the world and in this country," White House trade advisor Peter Navarro told CNBC on Tuesday. In May, Trump threatened Apple with tariffs of 25% or more. Separately, he told Cook, "I don't want you building in India." In February, Apple committed to spending over $500 billion in the U.S. over the next four years, with a new Texas factory and other facility expansions as part of the plans. But a full iPhone production overhaul would be difficult and quite costly, according to analysts, noting that a fully American-produced iPhone could have an estimated price tag of up to $3,500. Jim on Wednesday defended Apple, arguing that Trump's ire should be "restricted to companies that are bad actors. ... Can we just recognize that Apple is a gem?" He added, referring to the iPhone, "It's the product that everyone around the world loves." Also on Apple's plate of troubles is its AI strategy. The company is lagging behind its big tech peers. The simple solution to its AI problems, according to Jim, would be for Apple to "go buy Perplexity" to get back into the AI conversation. (Jim Cramer's Charitable Trust is long AAPL, META, MSFT, 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.
CNBC
3 hours ago
- CNBC
We're raising our price target on a one-time laggard that's looking better and better
Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Market moves : Stocks were higher on Wednesday, with the S & P 500 on pace to break a two-day losing streak. The Nasdaq briefly touched a new all-time. A rally in tech stocks supported the market, as Club name Nvidia broke above a $4 trillion market value. The magic number to close at the milestone is $163.93. Session highs were above that, but the stock has lost some of its steam and was back below the $4 trillion market cap level. Earlier, we sent out a commentary looking at possible Nvidia buy levels for new investors. Meanwhile, the minutes from the Federal Reserve's June meeting show that monetary policymakers see interest rate cuts coming. But they were divided on how many this year. AI savings : We haven't heard a lot about how much money companies are saving by leveraging AI to help with their daily tasks, until now. According to Bloomberg, Microsoft Chief Commercial Officer Judson Althoff said in a presentation last week that artificial intelligence saved the company more than $500 million last year in its call centers. The Bloomberg report also mentioned that AI generated 35% of the code for new products, speeding up their time to launch. Finally, Althoff said Microsoft's Copilot AI assistant made salespeople more effective at finding leads and closing deals. What Microsoft is doing is a great example of how companies can cut down on expenses and become more efficient through the use of AI tools. Improving story : Honeywell shares were experiencing a slight pullback on Wednesday. Still, it's been a nice comeback story after a challenging period, which saw the stock fall from the $230s after Election Day last year to a low of $182 after Liberation Day. Part of the stock's recent bounce is tied to investors gaining appreciation for the breakup story and ongoing push to simplify the business and make accretive acquisitions to drive growth. There also may be earnings momentum here. On June 29, Deutsche Bank named Honeywell a catalyst buy idea, anticipating an earnings beat in the second quarter and a "material" increase in the full-year outlook. We've been saying Honeywell set up 2025 for quarterly beats and guidance raises, even as it navigates a tricky tariff environment. In February, the stock fell after the company issued its initial 2025 outlook, which came in well below consensus expectations and disappointed investors. At the time, we took the other side of the trade, upgrading the stock to our buy-equivalent 1 rating . On March 5, we added to our position at around $210 because we thought this was the first time in years Honeywell had set humble, achievable guidance. We were proved right in the first quarter after Honeywell beat the consensus earnings per share (EPS) estimate and raised the midpoint of its guidance range. We'll have to see how tariffs came into play during the second quarter, but we think it could happen again. Between earnings and the breakup/simplification story, we think the stock can continue to work higher over time. We are raising our price target to $255 per share from $235. On Tuesday, we identified some buy levels for investors who want to start a Honeywell position. Honeywell logged a record-high close of over $240 per share last week. Up next : There are no major earnings after Wednesday's closing bell. Before Thursday's open, however, we will get earnings from Delta Air Lines and Conagra Brands . On the economic data side, weekly jobless claims are out. (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.
CNBC
4 hours ago
- 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.
