We're trimming a Fed rate cut play after a recent rally and ahead of earnings

We're selling 150 shares of Best Buy at roughly $89.33 each. Following Monday's trade, Jim Cramer's Charitable Trust will own 950 shares of BBY, decreasing its weighting to 2.52% from 2.91%. We took a position in Best Buy in late March on the view that it would be a key beneficiary from the launch of artificial intelligence-enabled personal computers and devices. We're about four years removed from the height of the Covid pandemic, a period in which consumers throughout the country, and the world for that matter, were buying new tech hardware to build out home office spaces during lockdowns. The typical lifespan of a computer is about four years. So, based on the timing alone, we expected at the time of our Best Buy initiation that PC sales would pick up later this year and into 2025. The age of AI-enabled PCs only strengthened that view because it meant that it wasn't your typical upgrade cycle. This time, it was not just a faster processor or a nicer screen. The newest PCs promise to make you more efficient and computer savvy by putting personalized AI assistants at your fingertips. We still think that such an upgrade scenario will prove to be the case and that Best Buy will be a spot consumers flock to as they look to test out and learn more about these new offerings. However, we've also started to see signs that adoption of these new AI-enabled computers could take a bit longer than initially anticipated. BBY YTD mountain Best Buy YTD Monday's sale is in line with our commentary from last week . That's when we noted that Best Buy stock was catching a bid on the idea that we are indeed going to see a few Federal Reserve interest rate cuts by the end of the year despite concern about a delay in AI-enabled PC adoption. Lower rates tend to support higher valuation multiples. Specific to Best Buy, we think investors rewarded the stock on the view that lower rates will lead to increased housing formation — and in turn, demand for TVs and appliances. But that won't happen right away, and this earnings season hasn't seen great results from housing-related retailers like Home Depot , Lowe's , and Williams-Sonoma . The current 4.3% annual dividend yield, already pretty attractive, only becomes even more so as Treasury yields come down. Those factors are all high-level positive dynamics for the stock. However, from a bottoms-up perspective, our research indicates that the earnings that the Best Buy multiple is based on may be at risk, in the near term, which along with an overbought market dictates we trim our exposure. In early July, we picked up 100 more Best Buy shares when they sold off about 12% from their prior post-earnings surge. The stock has gained a little more than 9% since that buy, so we thought it was a good time to book profits and free up room should shares pull back after this week's earnings release. We would expect that to be the case should management confirm a delay in AI-enabled PC uptake. We're not calling for an earnings miss when the quarter is out before Thursday's open — just protecting against any disappointment. We'll realize a gain of roughly 8.7% on Best Buy shares sold. In line with this sale, we are also downgrading shares to a 2 rating but holding our price target steady at $95 per share. (Jim Cramer's Charitable Trust is long BBY. 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.