Jim Cramer likes some key names in the semiconductor sector. They're not always the cheapest -- but Cramer measures buys and sells on more than just that one factor. Speaking on the September conference call with members of the Action Alerts PLUS investing club, Cramer speaks to the rationale behind some of the AAP chip holdings in the portfolio.
Why don't we examine the semis for a second? Broadcom, symbol AVGO... just reported a very, very, very fine quarter, and it sells at a very reasonable 16 times earnings. At 15 times earnings, or a 330-odd price, with a dividend yield of 4, we are going to pound the table for you. So keep in mind, that's the kind of thing you want to do.
We wanted it to be down 39 points. So you may say, well, that's ridiculous. Remember what I told you about what Zoom did. OK? Anything's possible in this market.
I like Broadcom's 5G products. They're not as good as Marvell. Every time I want to ring the register on Marvell, I am reminded that 5G might be the great growth story of this era. And you can't let go so easily, as anyone who owns Qualcomm, Skyworks, Qorvo or NXP could tell you. Marvell isn't the cheapest but it has the best growth prospects. That's what matters. A pullback to 33, 35. There you go. New buyers.
We had a scare with AMD the other day. A reporter penned a piece about how the company was having trouble making chips for the PlayStation 5. My first reaction was ... just boot the darn thing. I'll take the big gain.
But the more we dug into the story, the more we realized that AMD has so much going in its pipeline. And we also couldn't be sure of the bona fides of the story. ... We got some in the low 50s when everybody was dumping it. And I think Lisa Su has created a great company. It is tempting to buy even more stock, even though we already have such a low basis, if it would just go near 70 bucks.
Nvidia. What can I say? Buying Arm is really about taking the reins from Intel as the world's biggest semiconductor company, and the best one. Nvidia could be dominant in cellphones, data centers, gaming, artificial intelligence, machine learning and internet of things. One company.
I believe visionary CEO Jensen Huang is DaVinci. That's what I call him. And when he says this deal will pass muster, I believe him. I doubted him on the Mellanox deal that he just closed. I said, I don't know, I don't think the Chinese will approve. He told me, Jim, it will be approved. He was right. I'm not going to doubt him on this one. You buy it now? No. It just had a monster move. We will reevaluate if it sees 460. Patience can sometimes be virtuous, as you saw with Zoom. Maybe it happens again here.