From CNBC · Matthew J. Belvedere · · 1m 30s
Nvidia downgraded as Huang scandal roils the stock
The CNBC Investing Club cuts its rating on Nvidia and shifts strategy away from data center plays following the CEO's affair revelation.
In brief
The CNBC Investing Club cuts its rating on Nvidia and shifts strategy away from data center plays following the CEO's affair revelation. CNBC Investing Club downgraded Nvidia from a one to a two rating after the stock fell nearly ten percent following CEO Jensen Huang's affair scandal. Originally reported by CNBC.
Nvidia cut to hold from buy
Portfolio director Jeff Marks said the CNBC Investing Club is unwilling to call Nvidia's nearly ten percent two-session drop this week a buying opportunity.
Huang affair triggers investigation
Jim Cramer said putting CEO Jensen Huang on leave during the board's investigation into his affair with an accused Chinese spy is standard practice, but Nvidia is not proceeding in an orderly fashion.
Shifting away from data center
The Investing Club wants to get smaller in data center and bigger in non-tech names, Cramer said Friday at the Annual Meeting and again Tuesday, citing worries about a slowdown in the data center buildout.
Building Constellation Brands position
The club is bulking up its newest position, Constellation Brands, the Modelo and Corona beer maker, which should benefit as lower oil prices leave consumers with more money to spend.
Waiting for better entry point
Jim Cramer said he is not ready to add more Constellation shares yet. He wants to see the stock decline to improve the average cost basis before any meaningful rally occurs.
The headline
CNBC Investing Club downgraded Nvidia from a one to a two rating after the stock fell nearly ten percent following CEO Jensen Huang's affair scandal.
