Late Thursday, we took a look at our mega-cap tech stocks — Facebook parent Meta Platforms (FB), Google parent Alphabet (GOOGL), Microsoft (MSFT), Apple (AAPL), and Amazon (AMZN) — to see if there were any bargains to be had with each one down roughly 20% or more from its prior high. On Friday, we want to revisit Apple. As we said Thursday in our “Morning Meeting,” we think now is the time to start thinking more opportunistically about the stock. That’s why we’re formally upgrading our rating back to a 1 , which means we view it as a buy at current levels. You may recall that on April 11, we trimmed our Apple position at around $166 per share and downgraded our rating to a 2. It was a tough sale to make at the time because for years and through thick or thin we have said that this was to stock to “own and not trade.” But like we always say, discipline must trump conviction, and our discipline said that we had to right-size the position after a stretch of outperformance pushed the stock’s weighting in the portfolio above 6%. We don’t want to be the Apple fund. Whenever any stock’s weighting in our 30-plus stock portfolio exceeds 6% after a big run, we always like to take some chips off the table. We made a similar call to right-size Ford (F) in January when it traded at around $24.50. If you have been following Jim Cramer’s Charitable Trust over the years then you would know we did the same exact thing in the summer of 2020 when Amazon first crossed above $3,000. Like Ford in January and Amazon a couple of years ago, the Apple trim turned out to be a timely call. The stock has fallen roughly 10% since our sale, bringing its year-to-date losses to about 16%. When we downgraded our rating on Apple last month, we said we would look for a better entry point to upgrade our rating back. But at the time, we had two concerns about the company. First, we knew there was some earnings risk related to the lockdowns in China. Second, we thought that at a then-26x earnings, the stock looked a little expensive due to the market’s aversion to high multiple stocks. Now that Apple’s price-to-earnings multiple is come down slightly to 24x and the revenue risk from supply chain constraints due to lockdowns has been quantified and fully digested by the market — $4 billion to $8 billion , as reported April 28 by Apple in its most recent earnings report — we thought it was time to the return to a 1 rating on the stock. (Jim Cramer’s Charitable Trust is long FB, GOOGL, MSFT, AAPL, AMZN and F. 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.
