On Monday, several analysts downgraded Apple and Amazon, megacap stocks that rarely receive downgrades. These highlight both issues and opportunities for retail investors. At Jefferies, analysts downgraded Apple’s rating to “unchanged,” but raised the price target to $213 per share from $205. Meanwhile, Wells Fargo analysts downgraded Amazon’s rating to hold and lowered their price target from $225 to $183. The problem with both calls is that they are aimed at short-term traders and hedge funds, not long-term investors. Neither report challenges the underlying fundamentals of these businesses or the idea that both will get better over time. They are more concerned about the rate of growth. It also poses a problem for investors who see a downgrade as a reason to sell some stocks. As Jim Cramer said on CNBC on Monday, “How do you get out there and come back in?” Is anyone really that good at it? …I have no intention of taking revenge. What I’m saying is that for most people at home, these calls are too much of a hassle. Unless they’re an algorithmic trader or someone with a lot of money at stake, calm down — calm down about these things. ” We are the only integrated hardware and software player that can leverage our unique data to deliver low-cost, personalized AI services. ” However, he added that it will take several years for the benefits of these AI capabilities to reach a mandatory level. Wells Fargo analysts say Amazon doesn’t yet have the hardware for AI software to truly change the way we interact with our everyday devices, saying the company is “remaining in a profit-growth story.” said. They said investors are more prepared for pressure on operating profits in the fourth quarter, but perhaps less so in the first quarter of next year. An active approach to stocks in your portfolio. But we also believe that time in the market trumps market timing. It is important to balance these two principles. We spend a lot of time researching and monitoring investments and understand that jumping in and out of investments entirely on short-term headwinds is not the way to maximize long-term returns. I’m doing it. We want to identify the best companies in a particular industry and manage those positions in a disciplined manner by buying weaknesses and locking in profits into outsized strengths. We always want to maintain diversification, but at the same time we always want to maintain exposure. So if you want a long-term outlook, you always want to add some exposure to your books. Suppose you cut Amazon by downgrading Wells. When will we get back to these best-in-class tech stocks? Jim noted in the morning meeting that analysts said there are multiple headwinds. “Amazon has faced a lot of headwinds since it went public. So what happens is, if you have a product like this and you have to decide whether you can buy it back for, say, $169, Every time I put it in.” [downgrades on near-term headwinds] I’ve been forced to sell it, and each time I’ve been wrong. Apple’s phones are equally alarming. In addition to suppressing expectations for iPhone 16 sales, analysts said the next model will also disappoint. “We’re basically saying the iPhone 17 is going to fail,” he said. Jim said, “Are you going to be honest? Do you really have that level of vision? Do you have a gun that can shoot around the corner?” Smart analysts believe that such a call could be made with great confidence. Is there a reasonable way to do this? Keep in mind that Apple Intelligence, which we learned this weekend, will be released in iOS 18.1 as more AI capabilities come to market. As long as we are starting to see strong evidence that the cycle could be shortened by 6-12 months, we don’t need a major upgrade cycle this quarter or even this year.In fact, this type of Wall Street call is not needed. Investors (not traders) should consider when to buy rather than how quickly they can press the sell button, as this could present a buying opportunity.Today we shake off weak hands and sell pressure. If you’re an investor, these calls won’t erase your name. As noted investor Philip Fisher writes in his book Common Stocks and Uncommon Profits: , there are companies that are “lucky and competent” and companies that are “lucky to be competent.” The former refers to companies that are lucky enough to take advantage of long-term tailwinds. For example, I can think of companies that could currently benefit from Nvidia’s success in AI chip manufacturing. The latter, on the other hand, refers to Nvidia, which is driving the accelerating computing revolution. Lucky refers to companies that succeed not because they are blessed with worldly tailwinds, but because they demonstrate a clear ability to reinvent themselves and, as a result, succeed. Amazon has been able to find new growth opportunities, moving more broadly from book sales to e-commerce, and is now increasing the value of Prime members by offering artificial intelligence, logistics, and a host of other add-ons, and in turn This has led to an increase in membership rates. Apple has moved from computers to iPods to iPhones to services, and now Apple Intelligence believes it’s not where it is by luck and will continue to find new avenues for growth. . Because they make their own luck. We remain bullish on both. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
An iPhone 16 sign is seen in the window of the Apple Store on Fifth Avenue on New York City’s new product launch day, September 20, 2024.
Michael M. Santiago | Getty Images News | Getty Images
On Monday, several analysts downgraded Apple and Amazon, megacap stocks that rarely receive downgrades. These highlight both issues and opportunities for retail investors.
