Jim Cramer on NVIDIA Corporation (NVDA): ‘You Probably Won’t Be Able To Sell It High And Then Get Back In Low’
We recently compiled a list of the Jim Cramer on the Magnificent Seven Stocks Plus Netflix. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other magnificent stocks in Jim Cramer's list.
On Monday, Jim Cramer, host of Mad Money, discussed the ongoing success of major technology stocks, particularly the Magnificent Seven. He noted that these companies are proving their resilience in the market, no matter the circumstances, likening their performance to having a unique "Poltergeist 2 magic."
Cramer pointed out that this latest rally for the Magnificent Seven differs from previous ones, as it is not merely a zero-sum game where gains for one group come at the expense of another. Instead, other sectors are also thriving, likely due to the influx of capital into the market.
“Unlike previous Mag 7 rallies, this one’s definitely not a zero-sum equation where the rest of the market does nothing. Other groups can roar, too, in this market, perhaps because there’s just a lot of money going around.”
He noted that the Federal Reserve's rate cuts mean that cash is losing value, creating an environment ripe for growth. He mentioned that the staying power of the Magnificent Seven is truly unbelievable.
“We know these stocks will once again be hit by endless worries, giving you more opportunities to buy and more weakness before they snap right back and start climbing all over again.”
Cramer highlighted that this week marks the beginning of a crucial four-week earnings season, emphasizing that these quarterly reports hold significant weight for investors and the broader stock market. He acknowledged the current climate of anxiety, especially following the market's impressive rally. He added:
“Why stress about how quickly the Fed will cut rates, Oh? God, I'm sick of that. What matters is they're giving vast swaths of the economy a big boost and I doubt they'll stop anytime soon.”
Cramer also observed that investors often gravitate toward underdogs in the market, suggesting that banks could be the next promising sector. In addition to banks, Cramer also mentioned the potential in pharmaceutical stocks, suggesting that investors might want to consider major players in that sector as well.
Our Methodology
For this article, we compiled a list of stocks that were discussed by Cramer during his episode of Mad Money on October 14. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
Cramer has been highly bullish on NVIDIA Corporation (NASDAQ:NVDA) and mentioned the growing demand for the super chip, Blackwell. Here is what he had to say:
“Now initially, NVIDIA got clubbed along with the whole market when the yen carry trade imploded. Then it came right back because that was only a temporary problem. Then NVIDIA got smacked down after its quarter, although it didn't take out the blows from the previous sell-off. It's been working its way back ever since. As we learned that demand for its next-generation super chip Blackwell is ‘insane’, that's a technical term coined by Jensen, by the way. Next thing you know, the stock's coming all the way back, but back with very few people who sold the stock. And before this, right, I mean they're long gone and gone at much lower levels because they traded it, they sold it. Again, take this as a reminder that if you trade NVIDIA, you probably won't be able to sell it high and then get back in low. The ship would've left without you. It's too hard, people, it's just too hard.”
NVIDIA (NASDAQ:NVDA) has emerged as a dominant force in the technology sector, particularly in AI. Over recent years, investor interest in the company has surged, positioning it among the largest corporations globally. Additionally, on October 14, as reported by TipRanks, TD Cowen analyst Joshua Buchalter maintained a Buy rating on the stock with a target price of $165. He has designated the stock as a Top Pick and Buchalter noted a significant increase in the volumes of the Hopper architecture expected in the latter part of 2024, which could contribute to sustained growth and potentially better profit margins.
While he acknowledged some short-term hurdles tied to the evolving supply chain of the Blackwell product line, the enduring demand for these platforms remains strong. Any production delays are anticipated to shift revenue expectations from the first quarter to later in the year, without diminishing the overall demand.
Most importantly, NVIDIA (NASDAQ:NVDA) has reported that its Blackwell platforms are now fully operational, suggesting that prior production challenges have been effectively addressed. With units priced between $30,000 and $40,000, major corporations such as Microsoft and Meta are actively seeking these products to support their AI data centers.
Overall NVDA ranks 6th on Jim Cramer's list of magnificent stocks. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.