Recently, 30 shares of Capital One were purchased at about $192 each, which increased the Jim Cramer Charitable Trust’s investment in the company from 2.85% to 3%. This brought the total number of Capital One shares held to 610. Additionally, 25 shares of Wells Fargo were bought for around $84, raising the trust’s stake from 3.41% to 3.47%, also totaling 610 shares. After acquiring these Capital One shares, there are plans to repurchase all 60 shares sold last December at approximately $242 each. The first half of this buyback happened last Wednesday for $208 per share.
On Monday, stock prices took a hit following a report from Citorini Research that suggested AI might hurt American Express. This situation stems from two main issues: a weak labor market and the emergence of agency transactions. The report posited that using stablecoins could bypass the transaction fees credit card companies collect. While American Express was singled out, Capital One shares were affected too. It’s unclear how AI will ultimately impact jobs, but the reaction about stablecoins might be excessive, prompting further investment in Capital One.
Wells Fargo analysts swiftly defended American Express, stating that stablecoins wouldn’t significantly disrupt its payment revenue model unless regulatory actions were taken that undermined U.S. bank deposits—a scenario they don’t foresee in the near future. Currently, Capital One’s stock is trading below ten times the consensus earnings estimates for 2026, and under eight times the forecast for 2027. Given the existing substantial share repurchase program, it’s expected that management will be proactive in buying back shares at these lower prices. Furthermore, the company is also reacquiring some Wells Fargo shares sold previously at much higher prices, around $86 and $94 each.
The stock has seen a decline of about 13% from its peak closing price of $96.39, prompting a rating increase to “1,” indicating a buy recommendation. While major banks are grappling with the recent AI-related selloff, we believe that AI will ultimately enhance productivity and profitability.
On a different note, the rating for Palo Alto Networks was downgraded from 1 to 3, suggesting a recommendation to sell. This decision isn’t tied to a shift in perspective regarding AI’s impact on cybersecurity. There’s a strong belief that AI tools based on large language models won’t replace top security vendors and that the overall use of AI will increase the demand for cybersecurity measures. The downgrade is more about portfolio management, as holding both Palo Alto and CrowdStrike in a 33-stock portfolio could be problematic if the software sector continues to struggle.
As for Jim Cramer’s Charitable Trust, it remains invested in Capital One, Wells Fargo, and Palo Alto Networks. For those subscribed to Jim Cramer’s CNBC Investment Club, trade alerts will be provided before any transactions occur. After issuing a trade alert, Jim waits 45 minutes before executing trades in his charitable trust portfolio. Discussions on CNBC will lead to alerts as well, with a 72-hour wait before executing those trades. This shared investment information comes with specific terms and disclaimers, and no guaranteed positive outcomes should be assumed.
