We're buying back the last chunk of shares sold at higher levels in a stock we like long term - CNBC

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We're buying 100 shares of Advanced Micro Devices (AMD) at roughly $80 each. Following Thursday's trade, Jim Cramer's Charitable Trust will own 750 shares of AMD, increasing its weighting in the portfolio to 2.06% from 1.79%. With the S & P Short Range Oscillator still flashing oversold market conditions despite Wednesday's rally, we're stepping into do some buying in one of the most beat-up industries. The semiconductor sector, which is down roughly 35% year-to-date, most recently took a hit following a securities filing last month from fellow Club holding Nvidia (NVDA). Nvidia in the filing said the U.S. government would impose a new license requirement for any future export to China, including Hong Kong, and Russia of the company's A100 and forthcoming H100 integrated circuits. Nvidia said the reason from the government was to "address the risk that the covered products may be used in, or diverted to, a 'military end use' or 'military end user' in China and Russia." The announcement pressured the entire industry. An AMD spokesman told Reuters at the time that while the license will halt exports of the company's MI250 artificial intelligence chips to China, the MI100 will not be affected and perhaps more importantly from the perspective of investors, added that "it does not believe the new rules will have a material impact on its business." Despite that update, shares were still down roughly 6% since the Aug. 31 filing from Nvidia. Analysts at Stifel said in a Thursday research note that they initiated coverage on AMD with a buy rating and $122-per-share price target, which is more than 50% higher than Wednesday's close. Stifel cited strong execution on the company's product roadmap that they believe will continue to result in overall market share gains. Moreover, while they acknowledge that the current pressure in the personal computer market, they believe it to be adequately reflected at current levels. We tend to agree. Shares currently trade at roughly 16.5x 2023 FactSet consensus earnings estimates, the lowest forward earnings-based valuation for AMD in over 5 years. With this buy, we're repurchasing the last tranche of the 300 shares we sold on April 11 at $97.80 per share. We bought back the first 100 shares on April 26 at $86.25, and the second 100 share lot was repurchased June 14 at $86.46 per share. This is a perfect example of how we like to manage individual positions, especially when we have longer-term conviction in the business's growth prospects — take a little off as shares rally in order to free ourselves to repurchase them should the stock come in. (Jim Cramer's Charitable Trust is long AMD and NVDA. 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.

An engineer inspects a Sapphire Technology Ltd. AMD graphics processing unit (GPU) at the Evobits crypto farm in Cluj-Napoca, Romania, on Wednesday, Jan. 22, 2021.

Akos Stiller | Bloomberg | Getty Images

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We're buying back the last chunk of shares sold at higher levels in a stock we like long term - CNBC
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We're buying back the last chunk of shares sold at higher levels in a stock we like long term - CNBC

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