Best stocks to buy tied to AI and great data center buildout
Let’s not belittle words. Every night, I leave the office because we don’t have enough data centers, which means we have to be stocked with shares of companies that make money from building AI infrastructure. I berate myself for not having all the right ones. I feel ashamed that I have some of the wrong ones. I swear it’s a blue line, I even threw a bottle or two at it like I did in my old hedge fund days, because it seems so easy to make money and we don’t make enough of it. These are all ridiculous, self-defeating, masochistic behaviors. A close examination of our CNBC Investing Club portfolio shows that we have approximately 47% exposure to AI and data centers, which is much more than it should be. Some might say we’re being completely reckless, given that we run a diversified portfolio. We’re constantly pivoting to find the best stocks. We’re always ready to pounce, even ready to break our discipline, because I know the data center boom is perhaps the biggest stock story of all time. I’ll review what we have. But let’s say, even after Tuesday’s massive 20% move in Micron and Wednesday’s subsequent rally, you still want to participate. What should you do? I’ll give you the best of the data center stocks we don’t have. But if you really want to buy one, two, three, even four of these stocks, who knows, maybe you just want to own data center stocks and don’t want to spend a second thinking about diversification, here we go. In semiconductors, Micron could still move higher because its forward price-to-earnings ratio is around 10 and remains cheap. You’re definitely not too early, but you can also buy Advanced Micro Devices, Marvell Technology, and Intel. AMD has both central processing units (CPUs) and graphics processing units (GPUs). Intel has the CPUs, the packaging business, and the necessary foundries; In the chip industry, this means manufacturing facilities. Marvell has a terrific optics department. In storage, you can still buy Sandisk, Seagate, and Western Digital. In AI hardware, Dell still makes sense and can move higher as it kills the competition. It is also the leader in personal computers. Among semiconductor equipment manufacturers, you can buy Lam Research and Applied Materials. We have either thought about or embraced most of these from time to time. We have chip leaders Nvidia, Broadcom and Arm Holdings accounting for roughly 47% of the portfolio. The four major hyperscalers (Alphabet, Amazon, Meta Platforms, and Microsoft) are featured on the pages. On the industrial side of the AI boom driven by powering data centers, we have GE Vernova and Eaton. We have Corning for fiber optic cabling that replaces copper. Let’s not forget our cybersecurity names CrowdStrike and Palo Alto Networks and our semiconductor materials company Qnity. Even Apple is tapping into AI. Expect to hear about a smarter Siri at Apple’s developers conference next month, thanks to its partnership with Alphabet and use of Google’s Gemini. But remember, we manage a charitable foundation, which is the portfolio the Club uses. We manage money responsibly and diversified; we do our best to avoid getting overloaded with companies with parabolic stocks; This means a round-bottom stock that then rockets straight to the moon. While no major companies seem to be doing anything other than building data centers, we don’t want to bet on anything. (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) When you subscribe 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 trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
