Here’s why we disagree with Citigroup’s downgrade of industrial gas giant Linde
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Wednesday’s key moments. U.S. stocks tumbled on Wednesday as investors digested hotter-than-expected inflation data. Concerns that the Federal Reserve will keep interest rates higher for longer seem to be rattling the market. Jim Cramer argued that Wednesday’s hotter-than-expected consumer price index report shouldn’t be a surprise to investors because the economy is humming. “We are troubled by the people who got it wrong and are selling. They are quite frankly ill-advised,” Jim said. “I see a lot of wild flailing.” Instead, the Club is focused on the upcoming quarterly earnings season. Constellation Brands and Wells Fargo will post results on Thursday and Friday, respectively. Nvidia shares are bucking the trend on Wednesday, up 1.6% in morning trading. This follows a down session for the world’s leading artificial intelligence chipmaker, when the stock pulled back 2%. Overall, Nvidia shares have entered into correction territory, which means they are down more than 10% from their record highs in late March. On Wednesday, Bank of America analysts argued that the decline is a “refreshing pause” and the current volatility is nothing to be concerned about. The most recent dip in share price was the ninth time Nvidia has declined 10% or more since ChatGPT was launched in late 2022. Wall Street analysts also forecasted that Nvidia will continue to dominate the accelerator market despite perceived competition like Intel’s latest AI chip, Gaudi 3 , a sentiment the Club agrees with. Meanwhile, Citigroup analysts downgraded Linde shares to neutral from buy, citing valuation concerns for the industrial gas company. Analysts also increased Linde’s price target to $500 apiece from $475 apiece, a more than 9% upside from Tuesday’s close. Jim disagreed with the downgrade, noting that Linde continues to operate at a very high level and deliver double-digit earnings despite no volume growth. “I don’t like valuation calls because that’s someone who just says, ‘Listen I want to declare a victory,’ ” Jim said. (Jim Cramer’s Charitable Trust is long LIN, NVDA, STZ, WFC. 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.
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