Tech
On Thursday, Jim Cramer and portfolio director Jeff Marks held the CNBC Investing Club’s August Monthly Meeting. They ran through each stock in the portfolio, with Jim putting special emphasis on his five favorite names to buy in this moment, as the artificial intelligence trade springs back to life. Jim also dedicated the start of the meeting to lessons learned from our recent exits of Nike and Honeywell Aerospace . Top 5 names to buy Jim started his portfolio rundown by calling out his five favorite stocks to buy right now. Nvidia : The chipmaker is at the center of this new AI world, and the stock is one to own as this revolution goes on, which it might for many years. It reports earnings on Aug. 26. We’re expecting both profits — and the multiple that the market pays for those profits — to move higher. Nvidia is up there with Micron and Intel as Jim’s current favorites in the portfolio. Micron : This is our newest name, having entered the portfolio Tuesday morning. It’s had a good couple of days but is still well off its highs. We’re not done buying Micron. While the memory industry is historically boom-and-bust, newly minted long-term supply agreements offer some protection. Memory supply is still well short of memory demand thanks to AI. Intel : We’re confident that CEO Lip-Bu Tan will get Intel’s third-party foundry business up and running, with big-name customers. This week’s $20 billion secondary stock offering is a necessary evil to help fund those efforts while protecting the balance sheet. Shares may churn for a bit as the secondary is digested, but stay long. Amazon : This is a company that’s already making big money from AI. CEO Andy Jassy made clear on the company’s most recent earnings call that Amazon has a plan to dominate AI computing in the same way it does e-commerce and traditional cloud. Jassy knows this isn’t a “if you built it, they will come” situation. The demand is already here. FedEx : We’re expecting more market share gains versus UPS this holiday season, and we’re big believers FedEx CEO Raj Subramaniam’s emphasis on higher-margin business-to-business shipments, particularly in the verticals of healthcare , automotive, aerospace, and data center. In this way, FedEx is kind of a play on the reindustrialization of America. A bonus name to buy? FedEx Freight . Spun off from FedEx in June, FedEx Freight is focused on the less-than-truckload (LTL) market. Its customers are companies that have bulky shipments in need of transport — too large for regular parcel delivery, but not so large that it requires an entire 18-wheeler trailer. Hence the less-than-truckload name. FedEx Freight needs to execute on some self-help and rationalization initiatives now that it’s an independent company, but we’re optimistic on where this stock can go. The rest of tech and other AI names Apple : Tim Cook will step down as CEO next month and transition to executive chairman. What an incredible leader he has been. We’re still embracing the “own, don’t trade” mantra, but it will be hard to be as confident in the iPhone maker with Cook no longer at the helm. We’ll see what John Ternus brings to the table. We don’t want to make a judgement just yet. Broadcom : This is our remaining chip stock alongside Nvidia, Intel and Micron. Led by Hock Tan, Broadcom is very well run and has a great business designing custom AI chips for the likes of Google and OpenAI. But we like our other three chip names more these days. Qnity Electronics : You can’t make AI chips without the materials and other products that Qnity sells to the likes of Taiwan Semiconductor and SK Hynix . It’s making a ton of money, though it remains underappreciated by Wall Street. If more tech analysts covered the stock and pushed it to their tech-focused clients, that could start to change. Qnity was spun off from DuPont last fall. GE Vernova and Eaton : We’re content with the size of our positions in these two industrial AI plays. GE Vernova’s gas turbines help make electricity, and Eaton’s equipment is key to distributing it across the data center. Eaton’s acquisition of liquid cooling provider Boyd Thermal brings it even closer to the chip level, which is attractive. Corning : This stock has been on a volatile ride since June, but the fundamental reason to own it — optical technology replacing more copper in the data center to keep up with the need for faster data transfer speeds — hasn’t changed. Plus, it’s a business supplying glass to Apple and others provide some counterbalance. CrowdStrike and Palo Alto Networks : While these stocks are expensive, the importance of cybersecurity in the AI era cannot be understated. That’s what makes these names the ones to buy when they get hit on pullbacks, which will happen from time to time. Our recent trims were strictly due to our discipline, ensuring we didn’t let a gain turn into a loss. Salesforce : This is the ringleader of our problematic tech stocks, though it has been trading better of late. We don’t think its business is doing as badly as the bears claim, but its upcoming earnings report and its Dreamforce conference in September will help us get a better read. We’ve been willing to give CEO Marc Benioff the benefit of the doubt, though that doesn’t mean buy more shares. Meta Platforms : We’re convinced Meta will use all its computer power for more than just a social media ad business. So far, that hasn’t happened yet, despite signaling a cloud offering is under consideration. We’re holding on because we fear selling right before the actual cloud pivot occurs. Alphabet : Its Gemini chatbot and core Google Search business may feel tired right now, but that’s no reason to cut bait on a stock with a cloud business that grew 82% last quarter. Microsoft : This stock is the reason for our patience with Meta and Alphabet. We held on through a monthslong period of poor performance due to our faith in CEO Satya Nadella and CFO Amy Hood, believing the company had too much optionality to exit. Its strong earnings report put that on full display, which is why the stock was one of our best performers since the July monthly call. The rest Jim said he wishes we owned more healthcare and financial names, but we do have a handful. Johnson & Johnson : We wish we could put the drugmaker and medical-technology giant in our top five stocks right now, but it’s run too much to endorse buying up here. Eli Lilly : We’re paying close attention to the obesity pill battle with Wegovy maker Novo Nordisk , which has built a solid lead in the new category. Of course, Lilly has consistently proved the doubters wrong during the injectable phase of the GLP-1 boom, so it’s possible it happens again on the pill side. Cardinal Health : The stock closed at a record high Tuesday thanks to a strong fiscal 2027 earnings outlook , only for the sellers to step in over the past two days. The way the stock rallied off its May lows (shortly after we bought more) is a sign the Street knows Cardinal has become more than a sleepy drug distributor. But the recent action has been an annoyance. Wells Fargo : This bank is still reinventing itself, including with an expanding investment banking presence to diversify its bottom line. CEO Charlie Scharf told a great story on “Squawk on the Street” earlier this month. I want to buy more because it’s cheap. Eventually, the market will realize that Scharf is going to remake Wells in the image of a domestic JPMorgan . Capital One : This one is torturous. Shares are up 22% over the past three months, but still down over 8% for the year. It’s tempting to take the win and sell on the recent advance. The argument to let it ride is that the stock is cheap and we’re getting closer to seeing more benefit from its Discover and Brex acquisitions. That’s our plan for now. Goldman Sachs : It’s the premier investment bank in the world and is still doing incredibly well. This is the best environment to own Goldman. With a less stringent regulatory environment, more companies want to make deals, and Goldman’s the most trusted. Linde : The industrial gas giant’s latest quarter was imperfect, especially the performance of its home-health business, Lincare. Management is on the case to fix the issue. There will be times when some of Linde’s businesses skip a beat, leading to selling pressure. Those are the moments to buy. Nothing has changed with the thesis here. DuPont : This position is up for debate. While healthcare packaging and water filtration are exciting areas, DuPont doesn’t seem to have enough heft to stay independent. Contrast that with larger peer 3M , which had an amazing quarter. Honeywell Technologies : While we acknowledge the error that was recently spun off, Honeywell Aerospace, we think Honeywell Technologies CEO Vimal Kapur is hungry to accelerate growth. The remaining businesses are focused on industrial automation, selling things like sensors, fire and security systems, and technology for liquifying natural gas . Boeing : Much-needed quality control improvements are happening under CEO Kelly Ortberg. Unfortunately, the stock has become hostage to headlines around the Iran war and the price of oil. It is frustrating, but patience is required here because the upside could be huge if the geopolitical situation clears up. Home Depot : We wish CEO Ted Decker well after this week’s news that he’s taking a medical leave of absence. Home Depot is one of three brick-and-mortar retailers in the portfolio. At the moment, we like but don’t love these names. Costco and TJX Companies : These are the other two retailers. Both stocks go through periods where they bid their time, waiting for their next big moves. That doesn’t mean we’re pleased with their recent trading. While TJX rival Ross Stores has an intriguing new CEO, we know the Marshalls and T.J. Maxx parent is the better-run company. It reports earnings next week. As for Costco, it’s tempting to consider switching into Walmart . We wish the warehouse retailer would raise its profile on Wall Street. Starbucks : Shares aren’t cheap, but they’ve set a new 52-week high on Thursday. Our faith in CEO Brian Niccol is paying off. He’s rebuilding the coffee chain into the pleasant one of yesteryear. We don’t see a need to touch it, unless it drops, in which case that’s a chance to buy more. (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.
Here’s a rapid-fire update on our 32-stock portfolio, including Cramer’s 5 favorites to buy
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