We are buying 100 shares of Advanced Micro Devices at roughly $163.58. Following the trade, Jim Cramer’s Charitable Trust will own 300 shares of AMD, increasing its weighting in the portfolio to about 1.5% from 1%. Semiconductor stocks are taking a beating following news that the Biden administration could be looking to clamp down even harder on chip exports to China. That’s being compounded by comments from former President Donald Trump, who told Bloomberg Businessweek that Taiwan should pay the U.S. for defense. He also claimed that the self-governed island “did take about 100% of our chip business.” Taken together, the comments raised questions about Trump’s support for Taiwan, should he be elected in November. Many U.S. semiconductor companies — including AMD and our other two chip holdings, Nvidia and Broadcom — don’t manufacture their own chips. They design them, and then rely on companies like Taiwan Semiconductor Manufacturing Company for the actual production. Against that backdrop, the selling pressure in the chip cohort Wednesday is understandable. However, we must also be mindful that the export restrictions are nothing new and there is still so much demand in the United States that any additional restrictions are unlikely to materially impact earnings in the near term. Moreover, Trump may be talking tough about Taiwan, but he also sees himself as an America-first president. He can’t simply sacrifice great, important to national security names like Nvidia, Broadcom and AMD. Much of the earnings growth we expect to see this year and next is tied to these names and their ability to secure supply. Trump also tends to grade himself against the stock market’s performance, and harming the semiconductor industry won’t help. With all that in mind, we are stepping in and picking up additional shares of AMD. As noted in yesterday’s buy , we’re in the third day of the market rotation out of tech stocks that began on Thursday; we’re not counting Monday’s surprise swing back. Rotations like this typically last about three days, which would put us at the tail end of it. We still see plenty of earnings growth ahead for AMD, as its MI300x AI accelerator chip supply improves and consumers look to refresh their PCs. This rotation is why we started out small, because we wanted to do exactly this, buy into the decline and lower our overall cost basis with each purchase. Should we continue to move lower, we still have plenty of room to further build the position. (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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