Cramer's Morning Take: Broadcom & Apple 10/30/23

SPEAKER_1 (0:00)

What's on the horizon for financial markets?

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Jim Cramer (0:33)

Jim Cramer here to share with you a sample of my take on the market from today's CNBC Investing Club morning meeting.

If we put up, to say, the stocks of Apple or the stock of Alphabet, these are the two that I am most concerned about at my business seven. The reason I am with Apple is because there's really, this is not a significant quarter for Apple. You did not get the 15 in here. What matters for the 15, by the way, I think, is that T-Mobile is offering it, and Verizon is the ability to offer it because the balance sheet is not so bad. So, if you're thinking, wow, Jim's saying, own Apple, don't trade it, that means buy Apple. Now, my view is consistent. There are moments where Apple goes down severely.

This is not a severe moment. I'm talking about a big drop in the day, and that's when you get your chance. This has obviously been a terrible moment for Apple, except for the fact that this was by far the best performing stock at that point. So, you have these situations where I prefer an Amazon to an Apple because Amazon just reported a terrific quarter.

Jeff Marks (1:30)

Yeah, that was a great quarter, and of course, Apple reports Thursday evening.

A lot of concern with Apple right now has to do with China, Huawei, but China is also impacting Broadcom as well in terms of not approving their acquisition of VMware. The deal was expected too close today. It didn't happen. It's still waiting on regulators in China. This seems to be more of a bureaucratic issue is what David Faber was talking about than a political.

Jim Cramer (2:00)

Right, and there, what the way you want to think about it is- But that's what Broadcom is saying. Are they becoming a pawn between the United States? It's just a pawn in the chessboard between the United States and China. I no longer believe that. Take that off the table. What I think is more important, because we're not geopolitical people, is that if this deal doesn't go through, then Hochtam will buy a huge amount of a stock. If it does go through, the price journeys multiple goes higher. So if you had to ask me what I'd be a buyer here of our portfolio, right now, it would be I would go buy 10 shares at Broadcom.

Jeff Marks (2:28)

Yep, and termination fee 1.5 billion, but they generate a lot of cash. This is a big free cash flow generating company that can support not just the dividend, but consistent buybacks as well. And that buyback has been on hold in accordance to the acquisition. So you would expect some type of step up if the deal doesn't happen. But we're in favor of the deal for them boosting their software, just to be clear.

Jim Cramer (2:51)

But I want to emphasize that Hochtan is someone who has been a big support. Why do we buy so much at the 850 level? Obviously, to me, this is a rally. Well, the answer is that this stock could easily go to 1200 if Hochtan's in there buying it up, because it has the second best AI actual.

You need them for generative AI, and people don't seem to understand it. This is not a hack company.

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SPEAKER_4 (3:34)

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