Analysts downgrade Palo Alto to a hold — here’s what they got wrong

Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s key moments. This story originally misstated Redburn Atlantic’s rating change on Palo Alto shares. It has been corrected. The Nasdaq Composite tumbled 0.8% Thursday, a session after the benchmark gauge had its worst performance since December 2022. The S & P 500 traded 0.4% lower, while the Dow Jones Industrial Average declined 0.2%. Thursday’s big laggards include chip stocks like Club holding Advanced Micro Devices, down 2.8% after the bell. We added to our Advanced Micro Devices position on Wednesday’s dip, and are considering buying more if the weakness continues. Redburn Atlantic downgraded its rating on Palo Alto Networks stock to neutral from a buy. Analysts said it’s unlikely Palo Alto’s platformization strategy — basically bundling its services and products together for clients — will lead to the revenue growth that management expects. We disagree with the call, and think the consistent demand for cybersecurity offerings will continue to benefit our portfolio name. Shares are down 1.7% on Thursday. Abbott Laboratories shares tumbled 2.3% despite posting better-than-expected quarterly earnings. The stock is likely down on continued concerns regarding the trial about its premature infant formula. We’re not concerned, and remain long on shares. This was Abbott’s second consecutive beat-and-raise quarter, showing us that management’s also upbeat on the company’s underlying fundamentals. (Jim Cramer’s Charitable Trust is long ABT, AMD, PANW. 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.