Investing Club: Cramer says buy semiconductor stock Marvell ahead of earnings — here's why

Published Mon, Feb 28 20222:08 PM ESTUpdated Mon, Feb 28 20222:18 PM EST

Semiconductor stock Marvell Technology (MRVL), a Charitable Trust holding with a nearly 2.5% weighting in the portfolio , is a buy right now. Jim Cramer recommended investors purchase shares of Marvell ahead of the company's quarterly earnings report Thursday after the bell. "I typically don't like to do that because that's not the game we play," he said on Monday's "Morning Meeting." That "game" is trying to market-time a stock before the company reports quarterly results. On Dec. 7, days after Marvell reported blowout fiscal third-quarter earnings and the stock went on an explosive run, we sold 200 shares above $92 share. In trades, on Jan. 10 at around $78 and Jan. 25 at $68, we bought those shares back as tech stocks were taking two legs lower. We like to sell into strength and buy stocks we believe in when they drop. Cramer called the persistent Marvell decline from where the Club bought in January to now "inexplicable." The data infrastructure technology provider shares have dropped more than 20% this year, while the sector represented by the Philadelphia Semiconductor Index has fallen roughly 13% this year. "We've liked it [Marvell] all the way down. We like it here," Cramer said, predicting that Marvell CEO Matt Murphy was "going to throw everything at us" in the company's fiscal fourth-quarter 2022 earnings release. JPMorgan thinks so as well , writing in a note to clients Monday it expects Marvell to beat estimates and deliver better-than-expected forward guidance, citing strength in the company's data center cloud, 5G and auto businesses. JPMorgan also sees strong Cisco Systems (CSCO) product order numbers as a good sign on the enterprise side. In perhaps a harbinger of good news on Marvell, Cisco, also a Club stock, reported quarterly earnings and revenue that beat estimates , and it raised its outlook. (Jim Cramer's Charitable Trust is long MRVL and CSCO. 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.

Matt Murphy, president and CEO of Marvell Technology.

Adam Jeffery | CNBC

Semiconductor stock Marvell Technology (MRVL), a Charitable Trust holding with a nearly 2.5% weighting in the portfolio, is a buy right now.