Subtropical stratocumulus are notoriously difficult to represent in climate models because they are low lying, geometrically thin clouds that occur under sharp inversions. Nevertheless, they are crucial for obtaining the correct climate balance because they are optically thick, reflecting a lot of sunshine out of the atmosphere. They are also thought to be relevant for climate projections because of the potential feedbacks between the cloud cover and surface temperature. This study evaluates the stratocumulus off the coast of South America by using a series of 5-day forecasts through October 2006 with both CAM4 and CAM5. A method of selecting stratocumulus-dominated points from the lower-tropospheric stability is applied to avoid conflating cloud regimes in the analysis. The results show dramatically different clouds in the two models. CAM4 collapses the boundary layer within a few days, leading to a very shallow layer with clouds that are too low. On the other hand, CAM5 maintains a realistic boundary layer structure with a clear sub-cloud layer and distinct cloud layer. The diurnal variation is too large in CAM5, though, leading to exaggerated cloud dissipation during the daytime. Sensitivity experiments suggest that cloud layer becomes decoupled from the boundary layer during the daytime, allowing the cloud to dissipate through the day. This sensitivity projects on to climate simulations by moving the stratocumulus-to-cumulus transition too close to the continent, and may play a role in climate change experiments by fostering strong positive cloud feedbacks in the stratocumulus regions.