Jim Cramer: We're taking profits in AMD

After you receive this email, we will be selling 50 shares of Advanced Micro Devices (AMD) at roughly $160.20. Following the trade, the Charitable Trust will own 700 shares of AMD. Our trim in AMD will decrease its weighting in the portfolio from about 2.93% to about 2.74%.

We are trimming AMD this morning solely for portfolio management purposes and not out of any change to our bullish long-term view of the company. The markets may be volatile right now, but AMD has stood out as one of the better relative performers.

Our patience has been rewarded

We’ve been big believers in Advanced Micro Devices all year and stuck by this semiconductor through thick and thin. We added to our position back in February when the stock sold off on unfounded competitive concerns with Intel (who AMD is now closing in on from a market cap perspective) and even more in the months that followed as tech stocks became out of favor. Our patience has since been rewarded, with the gains on those buys ranging from the high 70% to 100%. We don’t want to give these outsized gains back, and we will realize a gain of about 80% on stock we purchased in early February.

Lastly, we have been steady buyers recently and have put a solid amount of capital to work over the past couple of weeks as certain stocks moved lower. A small trim of AMD near its highs will help us replenish our cash balance and allow us to continue to look for opportunities in beaten down stocks, like Mastercard (MA) which we would buy today if we were not restricted.

As a reminder, we cannot buy the stock today because we are restricted from trading any stock that Jim mentions on TV for three full days following the mention. Although we cannot make the trade for the Charitable Trust, our restrictions will never prevent us from telling the Investing Club what we would buy or sell and when we would do it.

Buy now, pay later disruption overblown?

We saw another data point this morning from a Wall Street Journal article that suggested the disruption of credit card companies at the hands of buy now, pay later outfits has been overblown. The article noted that nearly 27% of U.S. consumers said in October they had applied for a credit card in the past 12 months, citing the Federal Reserve Bank of New York. That’s a new pandemic high.

Mastercard also made two announcements last night that should go over well with investors. Not only did they increase the dividend by 11%, but the Board also approved a new share repurchase program of up to $8 billion that will become effective after the completion of the current authorization that has $4.4 billion remaining. We view the buyback news as a sign that management recognizes how cheap the stock has become relative to the fundamentals and the strong 2022-2024 outlook they provided at their recent Investor Day.

The omicron variant may have created some uncertainty in the near-term recovery of cross-border spending, but we do not see it as a long-term issue and that’s what makes the recent sell-off a buying opportunity.

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

 
Connect with CNBC News Online

#CNBC
#CNBCTV

[yashvashi]

Jim …. i am up 410% in AMD … Still owns every single share i bought …smart pigs never get slaughtered

[Son-of-Krypton]

Nope add more AMD cause Uncle Kramer always tell the opposite 😎

[aleeah]

Well, he wasn’t wrong long term. Actually, if this happened 3 months ago, he was wrong on the money because that’s about when stocks peaked and have been trending down ever since. Especially with the Russia invasion into Ukraine, we might even see more lows coming up. AMD closed at around $104 this past Friday.

[C.S.Sensei]

Jim Cramer, you've lost your "mission", you can't claim to be "just trying to make us money" anymore.
I've always respected you for staying out of politics, but you've lost many people after your "get the military involved" to force people and give up our freedoms over our bodies.
I've turned many people on to your show over the years, and defended you, you disgust me and many others now.
Just look at the comments on all your recent post.
We put you into the pile of "useful idiots" now and will never watch your shows again.
I had to listen to your rant 3 times, hoping you were being sarcastic, but you weren't.
~Former fan of Cramerica~

[hennshue]

I have been holding and accumulating AMD since 2015. I am really disappointed with you.

[Robertltrev]

Too bad we cant see the 1 millions disliked this clown received.

[markmiwords]

Jimmy Sage said yesterday it was ok now to go in and buy some Delta. Today Delta has dropped 5%.