We’re exiting our position in Advanced Micro Devices , selling our remaining 300 shares at roughly $122 each. We’re also buying 25 shares of Constellation Brands at roughly $221. Following Tuesday’s trades, Jim Cramer’s Charitable Trust will own 450 shares of STZ, increasing its weighting in the portfolio to 2.8% from 2.64%. The Trust will no longer hold a position in AMD. We’re making a couple of moves on this last trading day of 2024. AMD YTD mountain Advanced Micro Devices YTD Earlier this month , we downgraded AMD to our 3 rating — meaning sell into strength — and cut our position in half on competitive concerns from custom artificial intelligence chips. While we previously thought AMD’s AI graphics processing unit (GPU) roadmap would be competitive and win business from all the major hyperscalers, our view changed after listening to the recent earnings call from Broadcom CEO Hock Tan and Marvell Technology CEO Matt Murphy on “Mad Money.” Both companies are leaders in the custom chip business. The two executives made a strong case for why hyperscalers — like Club holdings Amazon , Alphabet , and Meta Platforms — increasingly prefer custom chips as alternatives to Nvidia ‘s leading AI GPUs. Each company is spending billions of dollars on these custom chips because they are cheaper, are optimized for specific workloads, and are more energy efficient. Due to the rise of these specialized chips, we are less optimistic about AMD’s ability to aggressively ramp up sales of its AI chip in 2025. With our thesis changed, we’ll move on from the rest of this position and realize an average loss of about 15% on stock purchased from August to November. Broadcom and Nvidia are also Club names. STZ YTD mountain Constellation Brands YTD We are taking some of that cash to nibble on shares of Constellation Brands, which we called out in a Friday screen of cheap stocks to buy . Shares of this Mexican beer powerhouse have been a major disappointment in 2024, and they hit a 52-week low below $220 during Tuesday trading. The company’s struggling wine and spirits unit was also a drag this year. The stock has fallen roughly 14% since the start of October and 8% for the year on concerns about slowing depletion growth and potential tariffs on imports from Mexico where the company’s Modelo, Corona, and Pacifico brands are made. But at roughly 15 times earnings estimates over the next 12 months, we think the stock’s multiple discounts these risks. If tariffs are not implemented or Constellation gets an exemption because it can’t make Mexican beer in the United States, the stock should trade up significantly. In addition, we think 2025 will be the year where the Constellation narrative shifts from its peak capital expenditure year to accelerating free cash flow. A meaningful step up in cash returns to shareholders via dividends and buybacks should help the stock attain a higher multiple. Also, we welcomed management’s steps this year to overhaul parts of its wine and spirits portfolio to focus on premium brands. We hope to see more of that in the year to come as we have been calling for the company to get rid of wine and spirits and concentrate solely on beer. (Jim Cramer’s Charitable Trust is long STZ. See here for a full list of the stocks.) 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.
We’re exiting a stock that didn’t pan out; using some cash to buy more of another