Virtus Investment Partners' Joe Terranova began building a position in Advanced Micro Devices Inc AMD earlier this year, but he reversed course on Wednesday and cut the stock from his portfolio, along with a couple of other popular tech names.
What Happened: Terranova sold out of his positions in AMD, NVIDIA Corp NVDA and Alphabet Inc GOOG this week, he said Wednesday on CNBC's "Fast Money Halftime Report."
"At a certain point, you have to have a ... risk management strategy that takes over whatever your fundamental view might be of a stock, so enough is enough with AMD," Terranova said.
He told CNBC that he was down 28% in his AMD position when he finally decided to cut it. AMD shares are down more than 55% year-to-date, according to Benzinga Pro.
It's much of the same with Nvidia, he said, noting that he bought the stock just below $150 per share in July.
"The loss there is a little bit smaller, but in each one of these semi stocks the beta is well above 2, my risk assumption is well beyond what I want to incur at this point, and you are also exposed to significant tax loss selling, which is in the process of unfolding," Terranova said.
Overall, Terranova said he believes most of the bad news is already priced into the chip names, but he's focused on creating a more defensive portfolio for the current market environment.
That's also part of the reason he sold his Alphabet shares. He's more worried about a slowdown in ad spending and a deceleration in sales growth, he said.
Related Link: As Google Parent Alphabet Continues To Fall Here's Where To Watch For The Bounce
In the company's most recent quarter, Alphabet reported sales growth of 6% year-over-year. In the prior quarter, the company turned in sales growth of 13%, according to Benzinga Pro.
Terranova told CNBC that he replaced the three technology names with Texas Instruments Inc TXN and Visa Inc V.
AMD, NVDA, GOOG Price Action: AMD was up 4.14% Wednesday afternoon at $62.13 and Nvidia was up 3.95% at $140.78, while Alphabet Class A shares were down 0.13% at $90.35.
Photo: courtesy of AMD.
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November 03, 2022 at 01:26AM
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