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Cramer's Morning Take: Broadcom 6/13/24

Jim and Jeff weigh in on this semiconductor stock’s AI-fueled earnings beat. Become a CNBC Investing Club member to go behind the scenes with Jim Cramer and Jeff Marks as they talk candidly about the market’s biggest headlines. Signup here: cnbc.com/morningtake
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Duration:
4m
Broadcast on:
13 Jun 2024
Audio Format:
mp3

Jim and Jeff weigh in on this semiconductor stock’s AI-fueled earnings beat. Become a CNBC Investing Club member to go behind the scenes with Jim Cramer and Jeff Marks as they talk candidly about the market’s biggest headlines. Signup here: cnbc.com/morningtake 

CNBC Investing Club Disclaimer

The market doesn't joke around, so why would you get serious? Choose tasty trade. Tasty trade gives you the tools you need to make smarter moves. Dig into data with advanced charting, track profit accurately with order chain trackers, see risk clearly with curve analysis, and trade with low-cap commissions, stocks, options, futures, and more. All-on-one platform. No wonder serious traders choose tasty trade. Join the club genius. Tasty trading is a registered broker dealer and member of FINRA and SIPC. Hey, it's Kramer. And this is my morning take on the market from today's CMC investing club morning meeting. Being here today is once again not deflation but a lowering in inflation. It's just time it's the PPI, but it's not enough to drive things higher today. It's kind of getting discounted in the market. Yeah, but nonetheless, I think it's an encouraging sign. Definitely. You know, especially after the Fed meeting yesterday, where it seemed like PAL is remaining data dependent. It doesn't necessarily want to put out some predetermined path, but PPI encouraging jobless claims a little bit higher than expected. So maybe some more loosening, but in the job market. But today is also about the AI trade after Broadcom earnings last night, which were great earnings. And it's why we have said this is, you know, behind NVIDIA, the second best way to play AI in the chip space. We tend to kick ourselves versus looking at what we did with AMD, and we took the money and put it in Broadcom. And Broadcom doubled. AMD did not. Yeah, I think AMD is up maybe like 8% year to date. Obviously Broadcom up 50%, even more going back to last night. In your actual note last night, you made it clear that AI is inflecting huge, but also there's some bottoming and some in another part of it. Yeah, yeah, storage. And I think too, when you look at the wireless, they got it flat every year. But there's content gains in the iPhone with the apples that are being customer. And we know we're big believers at these AI integrated smartphones will lead to a very strong upgrade cycle. So I think that's positive there. That's more than half of the company. Can you imagine what happens when it turns? That's why you can't sell it yet. Yeah, I mean, are you inclined to think to be sure? I don't think it's that big. But do you want to sell some? I want to hold one to it. Well, look, I think it's obviously it's a huge step off. Yeah, we'll see in the days ahead. Obviously the split 10 for one, that's not forget. We also see some strong action after that. I mean, maybe when you get some additional shares in the split, maybe we do lighten up. Yeah, but also VMware, right? We have to talk about what's happening there because what Broadcom does best is M&A. And that continues to show with the VMware acquisition in terms of good revenues, but also on the expense side, the cost synergies. Cost tracking better than expected. That's going to drive earnings higher. But what did you think about the idea that they have such a huge amount of debt, including what more than 20 billion that's fair able? They'll get paid down. They'll be 2 billion a quarter. Well, I think actually by the end of the year, their leverage ratio will be kind of back to where it was when they started looking at M&A again, which was actually a question. Well, that was on the call. And you're dealing with a very smart CEO. Start your day with my outlook on the market every morning. Visit cbc.com/morningtake to become a CNBC investing club member at a special rate today. All opinions expressed by Jim Kramer on this podcast and in connection with the CNBC investing club are solely Kramer's opinions and do not reflect the opinions of CNBC, NBC, Universal or their parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet or another medium. No specific outcome or profit is guaranteed in connection with your reliance upon or other use of the content from Kramer. The opinions offered in connection with this podcast and the CNBC investing club are not an attempt to induce any particular trading behavior, investment or strategy. You should be aware of the risk of loss and following any strategy or investment discussed in the content from Kramer. To view the full CNBC investing club disclaimer, please visit cnbc.com/investingclubdisclaimer. What's on the horizon for financial markets? At PIGIM, it's a question that over 1,400 investment professionals relentlessly research in pursuit of your long-term goals. Specialized across asset classes but united in collaboration. Our teams provide global and local expertise. Our investments shape tomorrow, today. Pursue your tomorrow with PIGIM, a leading global asset manager. [MUSIC PLAYING]