Why Broadcom is still a solid AI play following a murky quarter
Every weekday the CNBC Investing Club with Jim Cramer holds a Morning Meeting livestream at 10:20 a.m. ET. Here’s a recap of Friday’s key moments. 1. U.S. stocks edged up in midmorning trading Friday after a muted start to the day, with the S & P 500 up 0.23% and the Nasdaq Composite up 0.3%. At the same time, bond yields climbed on the back of faster-than-expected jobs growth in November. Nonfarm payrolls rose by a seasonally adjusted 199,000 last month, slightly ahead of the 190,000 Dow Jones estimate, the Labor Department said Friday. The yield on the 10-year Treasury rose to above 4.2%. Meanwhile, oil prices jumped nearly 3% Friday morning, with West Texas Intermediate crude trading around $71 a barrel. 2. Club holding Honeywell said Friday that it had reached a deal to acquire Carrier ‘s security business for $4.95 billion in cash . The planned acquisition will fit in Honeywell’s building technologies business, strengthening the company’s alignment to the megatrend of automation. The deal price represents about 13 times 2023 earnings before interest, taxes, depreciation and amortization (EBITDA), inclusive of tax benefits and run-rate cost synergies. The acquisition should be accretive to Honeywell’s growth, gross margins and operator margin. Honeywell has said its committed to deploying at least $25 billion over the next three years towards mergers and acquisitions, as well as dividends, capital expenditures and share buybacks. 3. Club holding Broadcom delivered mixed quarterly results after the closing bell Thursday, coming up short on revenue even as earnings-per-share of $11.06 came in better than Wall Street expected. The company also made clear that its integration of recently acquired cloud-computing firm VMware is off to a great start, with management forecasting a double-digit growth rate for the business over the next several years. More broadly, Broadcom continues to be a solid artificial-intelligence play, as it sees strong demand from hyperscalers deploying ethernet into their AI networks. (Jim Cramer’s Charitable Trust is long HON, AVGO. 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.
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