Cramer's Morning Take: Broadcom 12/17/24

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Jim Cramer (0:57)

Welcome to your Walmart. Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club morning meeting.

Jeff Marks (1:08)

Do have some trades today.

Jim Cramer (1:10)

Yes, we do.

Jeff Marks (1:11)

Some profit taking at Broadcom.

Jim Cramer (1:13)

Right, there we go. So we're like everybody else. And when we see something like Nvidia say, well, who is that selling? Well, you see something like Broadcom. Who's that selling? Well, we're selling. We're selling because this is a parabolic move, and we don't like to do nothing when we see parabolic.

Jeff Marks (1:27)

Yeah, I mean, the stock was up 38% between Friday and Monday. You did have this really bullish outlook, CEO Hock Tan provided on the earnings call talking about having a leading share in this $60 to $90 billion serviceable, addressable market in 2027 with its three AI customers. These are custom chips. But then he also talked about two new customers potentially for these custom XPUs. Just a big gain, a big win, 190% gain on stock purchase in August 2023 Just a lot of discipline here.

Jim Cramer (1:58)

Right, when you have that kind of gain, you have to show some discipline. And we still have a ton of product come out.

Jeff Marks (2:03)

Yeah, but again, because the stock had made such a big two day move, it became one of the largest in the portfolio. So some right sizing as well. This is discipline. This is so you don't get greedy taking gains after a double this year.

Jim Cramer (2:17)

Now let's talk about the tough one. When I met with Matt Murphy last night from Marvell, whom I've known for many, many years, it was very clear that the new strategy of the hyperscalers, the tech titans, is to have GPU from NVIDIA and then have these adjacencies, which are custom.

Jeff Marks (2:37)

Custom chips from Broadcom, which we just talked about, from Marvell.

Jim Cramer (2:41)

And if you notice in that universe, I'm not mentioning AMD. And that's because AMD has not been able to crack this portion of the market. They've also been hurt because the AIPC turned out to be not as robust as we thought. That's the best buy commentary.

And people have to understand, how do mistakes get made? Well, okay, so someone has come to me when a stock is at five, and says, you've got to get on board. And another stock to say short it, which is Intel. Well, and it's so right, you do get a little dazzled. You get dazzled. And when she introduced this MI300 and talked about what she could do, there was no reason to doubt her. It still may work.

Jeff Marks (3:28)

Yeah.

Jim Cramer (3:28)

But it's not working now.

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