Jim Cramer Sold The Stock He ‘Swore’ He Would Never Sell: Why The ‘Ultimate Buy-And-Hold Stock’ Had To Go

ZINGER KEY POINTS

• Jim Cramer has exited his Microsoft position ahead of earnings.
• “I swore that we would never sell it for the charitable trust because Microsoft is the ultimate buy-and-hold stock,” Cramer says.

Jim Cramer is out warning that Microsoft Corp’s quarterly results are going to underwhelm. So much so that he axed his Microsoft position for his charitable trust after pledging to never sell. 

“We sold some Microsoft yesterday,” Cramer said Tuesday on CNBC’s “Squawk On The Street.”

“I swore that we would never sell it for the charitable trust because Microsoft is the ultimate buy-and-hold stock.”

What To Know: 

Earnings season is underway and some of the biggest names in the market are set to report toward the end of the month. 

Cramer believes several companies are going to see estimates cut “in the next five weeks” as earnings season unfolds and ultimately disappoints. After listening to Microsoft CEO Satya Nadella’s warning about the tech sector over the coming years, Cramer decided to part ways with his shares.

“Is he really saying buy the stock? I think he’s saying hunker down,” Cramer said.

In a CNBC interview from last week, the Microsoft CEO warned that the tech industry will face setbacks for the next two years before companies start to recover, per The Street.

Cramer noted that Microsoft is not the stock to “hunker down in,” citing valuation concerns. Microsoft is currently trading with a forward price-to-earnings multiple of around 24, according to Benzinga Pro. The “Mad Money” host anticipates that analysts will cut numbers following the company’s quarterly results.

“When someone cuts numbers, no matter where the multiple is, the stock goes down,” Cramer said. 

Microsoft is due to report earnings at the end of the month. Benzinga estimates that the company will announce around Jan. 24. 

Microsoft is expected to turn in fiscal second-quarter earnings of $2.30 per share on quarterly revenue of $52.99 billion, according to average analyst estimates from Benzinga Pro.

MSFT Price Action:

Microsoft has a 52-week high of $323.41 and a 52-week low of $213.43.

The stock was up 0.63% at $228.54 Tuesday afternoon.

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Originally Posted January 10, 2023 – Jim Cramer Sold The Stock He ‘Swore’ He Would Never Sell: Why The ‘Ultimate Buy-And-Hold Stock’ Had To Go