Key Points
- CNBC’s Jim Cramer said Nvidia has become so central to the AI ecosystem that its earnings are effectively a referendum on the entire AI trade.
- He said that despite concerns around competition, data-center opposition, memory shortages and AI financing, Cramer remains bullish on Nvidia.
CNBC’s Jim Cramer said Tuesday Nvidia has become so critical to the artificial intelligence boom that its earnings could reverberate across the entire market. “Nvidia’s truly become anything but ordinary, it’s all-important, and it’s the ultimate battleground,” the ” Mad Money ” host said. Cramer’s comments Tuesday came shortly after Nvidia snapped a seven-session losing streak, its longest slump since September 2022. That was a couple months before the launch of ChatGPT catalyzed the generative AI boom that would ultimately help turn Nvidia into the world’s most valuable company. The stock ended Tuesday a little less than 10% below its all-time closing high of nearly $236 per share, which was set in mid-May. Nvidia is set to report earnings Wednesday after the bell. Cramer said the results could have ramifications far beyond the chipmaker’s stock because Nvidia sits at the center of the AI infrastructure buildout, touching everything from data centers and memory chips to the spending plans of the world’s largest technology companies. Cramer’s Charitable Trust , the portfolio run by CNBC’s Investing Club, owns shares of Nvidia. “Never before has there been a company with so many tentacles in so many segments of the economy,” Cramer said. Cramer remains confident in Nvidia’s competitive position. While rivals and some of its biggest customers are developing alternative AI chips , including ChatGPT creator OpenAI, he argued Nvidia remains the standard. “I say if you’re going to be part of the AI revolution, you have to go with the best,” Cramer said. But Cramer said Wednesday’s results won’t be judged on earnings alone. Nvidia has become a focal point for nearly every concern surrounding the AI boom, he said, and those broader questions could overwhelm even a strong quarter. “If the bears are right, this stock will tumble regardless of what it reports tomorrow,” he said. One major source of scrutiny is Nvidia’s growing portfolio of investments across the AI ecosystem, according to Cramer. He said critics have questioned the circular nature of some deals, arguing Nvidia is putting money into businesses that could ultimately use that capital to buy its products. Cramer pushed back against that criticism, arguing the investments strengthen the broader AI ecosystem while helping Nvidia maintain its leadership. “Why shouldn’t Nvidia use its profits to help ensure that it remains on top?” Cramer said. He said other risks stretch well beyond Nvidia’s control, pointing to political opposition that could slow data center construction, shortages of high-bandwidth memory that are costing the company sales and U.S. government restrictions that have limited its ability to sell advanced chips into China. All those reasons means even a strong quarter may not settle the debate, he said. Cramer said investors will be looking beyond Nvidia’s headline results for evidence that its dominance — and the broader AI infrastructure boom — can continue. “There’s no such thing as a nothing burger about the largest stock in the world, it’s always going to be bold and challenging … befitting the greatest business person of our time, Jensen Huang,” he said. Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market. Disclaimer Questions for Cramer? Call Cramer: 1-800-743-CNBC Want to take a deep dive into Cramer’s world? Hit him up! Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram Questions, comments, suggestions for the “Mad Money” website? madcap@cnbc.com
