Jim Cramer’s Charitable Trust is selling 25 shares of Palo Alto Networks at roughly $318.35, which will decrease its weighting in the portfolio to 2.43%. Despite Palo Alto Networks having a strong week and rallying over 5%, the decision to sell some shares is due to Wall Street’s recent attitudes towards the company. The recent cybersecurity run may have been triggered by another high-profile data breach involving data-analytics firm Snowflake, emphasizing the importance of cybersecurity to every industry and company. Although Palo Alto Networks may not be directly involved in the recovery process, the news has reinforced the notion of cybersecurity’s significance. The market remains skeptical of management’s platformization strategy, as seen in the reaction to the May earnings report, despite the company’s accelerating remaining performance obligation. The sale of Palo Alto Networks shares will result in a strong gain of about 80% on stock purchased in February 2023.
In addition to selling Palo Alto Networks shares, the Charitable Trust would also be trimming 10 shares of Broadcom if not restricted from trading it. Despite Broadcom’s stock soaring after reporting a beat-and-raise quarter driven by artificial intelligence-related revenues and upside from the VMware integration, the Trust wants to lock in big gains with the stock up over 50% to date. While still believing in Broadcom’s ability to rise over the long run, the Trust is cautious due to the broader market’s record highs driven mainly by the AI trade. The stock’s 10-for-1 forward stock split, while not creating shareholder value in theory, has had a positive impact on stock prices. The Trust does not want to be greedy after the parabolic move seen in stocks like Broadcom.
As a subscriber to the CNBC Investing Club with Jim Cramer, members receive trade alerts 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 and 72 hours if he has discussed the stock on CNBC TV. It’s important to note that there is no fiduciary obligation or duty created by receiving information related to the Investing Club, and no specific outcome or profit is guaranteed. Members are subject to the terms and conditions, privacy policy, and disclaimer of the Investing Club.
Overall, Jim Cramer’s Charitable Trust is making strategic decisions to sell shares of Palo Alto Networks and trim shares of Broadcom to lock in gains amid the market’s uncertainty and record highs driven by the AI trade. Despite the strong performance of both companies, the Trust is cautious based on Wall Street’s attitudes towards Palo Alto Networks and the parabolic move in Broadcom’s stock. The cybersecurity run triggered by recent data breaches highlights the importance of cybersecurity in every industry, further supporting the Trust’s decision to sell some Palo Alto Networks shares. Members of the CNBC Investing Club receive trade alerts before Jim makes trades, with careful consideration given to market conditions and the Trust’s portfolio.
