Here’s our monthly update on all 33 portfolio stocks, including 4 to buy right now
The CNBC Investing Club on Wednesday held its May Monthly Meeting, featuring Jim Cramer and Jeff Marks, director of portfolio analysis, covering all 33 stocks in the portfolio. Jim offered his unvarnished takes on the stocks and spotlighted his four favorite names for new Club members to buy. Jeff also provided an in-depth look at the two newest positions and why we initiated positions. One theme Jim emphasized was the importance of diversification, even in moments where one dominant theme drives the market. Right now, artificial intelligence is winning the day. We have plenty of AI winners. But as long-term investors, our discipline requires us to own other stocks too. Now, let’s get into what Jim and Jeff had to say. The four stocks that Jim recommended new Club members buy are marked in bold. Big tech winners Alphabet : We were wrong to sell it last spring. We were right to buy it back, lured by the powerful combination of Google Search, Gemini, Google Cloud, YouTube, and the robotaxi service Waymo. For new members, Google is Jim’s favorite to buy right now. Amazon : This is another one with a remarkable collection of businesses. From cloud unit Amazon Web Services and its custom silicon chips to the Prime membership program and the advertising business, these are all worth more than what the current stock price indicates. Some investors may be worried about its massive AI spending, but the profits should start flowing as soon as next year. Apple : The stock has experienced a sudden run on optimism around its AI offerings. Many investors were worried after Apple’s delayed AI rollout, but we’re glad it didn’t end up putting out a second-rate product. Apple focuses on being the best, not the first. Let’s hope we get a long-awaited AI-infused Siri at the company’s annual developer conference on June 8 . Nvidia : The AI chip giant finds itself where Apple was over a decade ago, and it should follow in the iPhone maker’s footsteps by embarking on a massive buyback program paired with consistent, large dividend increases. Nvidia’s best buy right now is its own stock. Big tech laggards Meta Platforms : CEO Mark Zuckerberg is known for not tolerating underperformance, but that’s exactly what this stock has delivered lately. We’re afraid to sell it, only for Meta to deliver a breakthrough on AI shortly after we do. So, we’re keeping it. Microsoft : A similar debate here. We can all see there are real issues here, and it is inconceivable that CEO Satya Nadella and CFO Amy Hood do not see them as well. We’re giving them another quarter to show something that improves their prospects in the age of AI. We’ve owned this one for almost a decade and don’t want to give back any more of that gain. Saving grace AI plays Arm Holdings : Our second newest name, after FedEx, has been a rocket ship since we bought the chipmaker last month. Concerns about securing enough manufacturing capacity from TSMC haven’t vanished. It’s just that the zest for anything data center-related has made the question not matter for the stock. We took more profits on Tuesday. Broadcom : This one has stalled out recently, perhaps due to concerns that Marvell is a real threat in the custom AI chip business and a lack of new customer announcements. But we cannot forget the strength of its networking portfolio and the steady hand of CEO Hack Tan. We’re happy to wait out the sellers here because Broadcom remains at the heart of the data center. Eaton : This is a great example of a company doing the best to ease power concerns caused by the data center buildout. Eaton makes cooling and electrical equipment that makes the data center run smoothly and without interruption. GE Vernova : Another great pick to play AI’s insatiable appetite for energy. GE Vernova is a winner because it’s the principal builder of natural gas turbines that provide power to data centers. Corning : As data center operators wean themselves off of slow copper connections and onto fiber, this stock is our biggest winner. Corning is a fabulous, treasured American company and a tremendous name to own, as it keeps getting rediscovered by the analyst community. Qnity : Spun off from DuPont in the fall, Qnity is crushing it because of the AI chip boom. We’ve taken some profits, but we still like it, especially considering the stock remains under the radar on Wall Street. When more tech-focused analysts start covering it instead of chemical specialists, we could see that next leg of upside. Tech outside the data center CrowdStrike : It took gumption to stick with cybersecurity stocks during the “AI is eating software” sell-off earlier this year. We ignored the negatives here, and we’ve been rewarded with shares racing back to all-time highs. The small pullback on Wednesday, following peer ZScaler’s disappointing outlook, isn’t cause for concern . Palo Alto Networks : The long-term importance of cybersecurity isn’t fading. So for now, we’re comfortable holding a second cyber stock in Palo Alto. Both CrowdStrike and Palo Alto report earnings next week. Salesforce : The toughest tech stock we own reports earnings after Wednesday’s close. The debate: If it’s going to take a while to realize the AI implications, why not just sell it, and if we really want to, we can just buy it back? We’ll have a better idea of what to do when we get the latest quarterly numbers. The diversifiers The goal of the Club is to run a diversified portfolio that is durable and works over the long term. That means we can’t own just data center and AI plays. We also must recognize that not everything goes up at once. Goldman Sachs : This is a business that typically operates in sales and trading but excels in the far more lucrative IPO and M & A markets. It wouldn’t be surprising if the nearly $1,000 stock could rally 25% from here by the fall. That’s how many big public offerings and mergers are about to happen. This is another stock that Jim said new members can consider buying. Wells Fargo : It might be time to say goodbye if the bank reports another bad quarter. Its last earnings release was so disappointing that we downgraded the stock. It’s perplexing because CEO Charlie Scharf has done tremendous work. Capital One : It’s hard not to be disappointed in this bank after its top and bottom line misses in late April, and another subpar quarter before that. CEO Richard Fairbank is an exceptional leader, but Capital One hasn’t yet rationalized the Discover business it acquired last year as we hoped. It’s a cheap stock, and we’re willing to be a little more patient with this one compared with Wells. Eli Lilly : We’ve owned this one for years, and it’s done well by us. Its next-generation injectable retatrutide is poised to be the real game-breaker, the one that allows Lilly to pull away from its main rival, Novo Nordisk , for good. Cardinal Health : No getting around the fact that there’s been a harsh and destructive rotation away from medical device and ancillary health-care names. The reaction to last month’s earnings was excessive for a company of Cardinal’s quality. This is a stock worth battling. Johnson & Johnson : Another victim of the market’s disdain for health care. But management has an exciting portfolio and pipeline of new drugs and medical technology products to accelerate growth in the coming years. Plus, it has adopted a stronger legal strategy to fend off talc lawsuits and refocus investors on business fundamentals. J & J said its new once-daily psoriasis pill could be one of its biggest drugs ever. Home Depot : This has been our main bet on falling mortgage rates and a major pickup in housing activity. That, unfortunately, hasn’t materialized despite the Federal Reserve’s rate cuts in recent years. But we don’t want to take this hedge off because we never know when that catalyst will arrive. Costco : Far better than Home Depot within retail is Costco, which reports on Thursday night. The quarter should be fine because it sells cheap gas to attract new cardholders . TJX Companies : Another retail winner. We bought ahead of last week’s earnings, and we’re glad we did. The T.J. Maxx and Marshalls parent may still be cheap enough to buy for those of you who are new to the Club. Yes, it is that good. Starbucks : We’re sticking with this one. We’re glad we didn’t bail when Wall Street got sick of it in the $80s and $90s range. Recent results show CEO Brian Niccol’s turnaround is working. There should be more upside for the stock as he works his way through the long list of problems. Procter & Gamble : Like Home Depot, P & G is a hedge. In this case, it’s a way to protect against a severe slowdown. We’re not saying one is imminent, but we also didn’t foresee a war in the Middle East. You just don’t know. Nike : This stock has been a disappointment. No denying that. If the apparel maker posts yet another lackluster quarter and Wall Street is forced to cut estimates again, we’ll have to dump it. CEO Elliott Hill might have just been dealt too bad a hand. The industrials Boeing : This is another one that Jim said new members should consider buying. As monthly deliveries increase, the stock should keep moving higher toward that $300 level. The stock is up nearly 2% Wednesday afternoon after CEO Kelly Ortberg said at a conference that it has met regulatory requirements to increase 737 Max production. Honeywell : We trimmed some on Tuesday because the stock is running for a preposterous reason: it owns half of a quantum computing company that is going public. That excitement has overwhelmed the market’s judgment. Honeywell’s stake in Quantinuum actually means very little to shareholders like us. The real catalyst is the industrial conglomerate’s upcoming split. DuPont : This one is a pastiche of chemicals, plastics, filtration, and safety materials. It’s hard for investors to get their arms around, though, which is why the stock’s been a bit directionless for some time. There’s plenty of value in DuPont. CEO Lori Koch just needs to bring it out soon, or else we’ll exit our position. Its former electronics business, now trading as Qnity, has been the real star of the show. Dover : This is a terrific conglomerate levered to so many different parts of a growing economy. But it’s hard to figure out what to make of Dover the stock. It seemingly trades up and down on nothing, while other names soar. This is one we’re monitoring closely to determine whether it deserves to stay in the portfolio. Linde : The good thing about this industrial gas company is that it’s exposed to a host of industries, including health care, semiconductors, wine, and soda. Linde is the kind of stock that does well when the economy is just OK and superb when the economy is humming. FedEx : We called up FedEx from our Bullpen watchlist on May 18. CEO Raj Subramaniam has done a great job improving FedEx’s operations, and the spin-off of its freight shipping business next week is another catalyst for making investors money. We love spin-offs around here because they help companies get a sharper focus. (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.
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