Cramer’s Investing Club Cuts Nvidia to Hold-Equivalent 2 Rating

Mad Money host Jim Cramer’s Investing Club lowered Nvidia to a hold-equivalent 2 rating from 1 during its Tuesday, Nov. 10, Morning Meeting, after the stock fell nearly 10% over two sessions. Portfolio director Jeff Marks said the decline alone was not enough for the club to upgrade its view of the chipmaker.

Marks said the club was in a holding pattern until it had more clarity on developments around Nvidia. The rating change came as the club reconsidered its exposure to data-center companies and technology stocks more broadly.

Cramer said the club wanted to reduce data-center exposure and increase holdings outside technology. Concerns that Democratic gains in the midterm elections could slow data-center construction have added to uncertainty around the sector.

Constellation Brands, the maker of Modelo and Corona, is the club’s newest position. Cramer said he was not ready to add shares and wanted the stock to fall first, which would allow the charitable trust to lower its average cost basis. The trust held both Nvidia and Constellation Brands.

Lower oil prices may leave consumers with more money to spend, a potential benefit for the beer maker. Cramer previously described Nvidia as trading at 16.5 times projected earnings, a level he called its lowest valuation in roughly a decade. Nvidia is scheduled to report earnings Nov. 17.