We're continuing to reduce our semiconductor exposure with a sale of this holding

Published Mon, Oct 17 20229:11 AM EDTUpdated Mon, Oct 17 20229:38 AM EDT

We're selling 280 shares of Advanced Micro Devices (AMD) at roughly $56.97 a share. Following Monday's trade, Jim Cramer's Charitable Trust will own 470 shares of AMD, decreasing its weighting to about 1% from 1.6%. This small sale of Advanced Micro Devices is consistent with what we explained last Monday when downgrading our rating of the semiconductor stock to a 2. While this AMD move is a tough sale to make after its nasty decline this year — and we regret not selling more before the collapse of the PC industry — we believe it's necessary to reduce our exposure to semiconductors. The group is going through a period of significant price-to-earnings multiple compression and earnings cuts — trends that are set to continue as the economy worsens, and U.S. export controls blocking chips to Chinese semiconductor manufacturers take effect. One concern of ours is that the restriction list on artificial intelligence chips and manufacturing equipment will expand to include high-performance computing. The hardline U.S. stance on semiconductor exports is creating too much uncertainty for our liking, which is why are taking this difficult 30% loss on some AMD shares. Of course, what if the semiconductor decline is already two-thirds through? What if a lot of the bad news and future earnings cuts are already priced in? As such, this is not a decision taken lightly — but our sense is that there is more downside to go, as we said on last week's "Monthly Meeting." And we'll try to catch something closer to the bottom later on. (Jim Cramer's Charitable Trust is long AMD. 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.

Traders on the floor of the NYSE, Oct. 12, 2022.

Source: NYSE