We’re exiting this tech stock to replenish our cash pile after our annual charity donation
Shortly after the opening bell, we will be exiting our position in Cisco Systems , selling 600 shares at roughly $80.48. Following the trade, Jim Cramer’s Charitable Trust will no longer own a position in CSCO. We’re making a sale on Monday into the market’s positive morning to replenish our cash position following our annual distribution to charity. This year’s distribution was $298,017, bringing the total since the Charitable Trust’s inception to over $4.5 million. As a result of our donation, our cash position has decreased to 6.5% from roughly 15%, and we believe these levels are too low given the current period of heightened uncertainty and volatility during the war in Iran. This sale will lift our cash levels to around 8%, providing us with more flexibility to be opportunistic in broader market sell-offs. While we are hesitant to be sellers after a correction in some of the major indices, Cisco shares have been remarkably resilient in the market’s downturn. Shares are up roughly 4% year to date, outperforming the broader S & P 500’s 6% decline and the roughly 8% drop in the Nasdaq 100 . The stock is also up about 1% since the start of the Middle East conflict on Feb. 28. We remain positive on Cisco’s accelerating networking order growth and the gains it’s making at hyperscale and enterprise customers. A potential peak in memory prices would be a tailwind to gross margins, too. However, there are reasons for caution. In addition to wanting more cash, we are ringing the register on Cisco and taking the win due to ongoing concerns about its cybersecurity business. This segment has underwhelmed for several quarters now as it rolls off its “legacy” product offerings and Splunk transitions to a cloud-subscription model from on-premise deals. Sentiment around Cisco’s security unit likely won’t be getting better any time soon due to the perceived threat of AI disrupting the cybersecurity industry. We believe those fears are overblown for Club names CrowdStrike and Palo Alto Networks , but we acknowledge it could be an overhang on shares until we see more evidence of AI accelerating sales for those two companies. A note from analysts at Piper Sandler published Sunday didn’t make us feel any better about Cisco’s security business. They argued the company will likely continue to lose a few points of market share over the next few years. Even with Cisco’s new and refreshed products becoming a larger part of the business over time, Piper Sandler believes the drag from its legacy offerings will make the segment a low-single-digits grower. The ongoing softness in security could limit Cisco’s upside the rest of the year, and with the stock already up year to date and sitting roughly $6 below its all-time closing high, we’re choosing to lock in gains and move on. From this sale, we will realize an average gain of roughly 18% on stock purchased in July and August of 2025. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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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