10 Jim Cramer Stocks to Watch as US-China Prepare to Begin Talks

4. NVIDIA Corp (NASDAQ:NVDA)

Number of Hedge Fund Investors: 193

Jim Cramer in a latest program on CNBC said the market concerns about data center demand were crushed amid latest reports from major technology companies. Cramer said he stuck with tech investments at his charitable trust despite skeptics saying that the demand for data centers is declining.

“I found it incredibly frustrating because we never had clear evidence that there was anything wrong with the AI infrastructure thesis to begin with. The idea that hundreds of billions of dollars are going to be spent on these new data centers is true, and that’s why we stuck with the stocks for the Charitable Trust. We defied the data center bears, aided by an interview with data center expert  Jensen Huang, CEO of Nvidia, who told us that demand for his highest-end chips is stronger than ever. And we felt like idiots for doing so. Day after day, we heard about little chunks of the story that, when added together, meant you were long in the tooth if you stayed positive and you were going to lose a lot of money. Until earnings season came along and the data center bears started getting gored by the bulls. That’s when we realized we were right all along.”

The market will keep punishing Nvidia for not coming up to its gigantic (and sometimes unrealistic) growth expectations. About 50% of the company’s revenue comes from large cloud providers, which are rethinking their plans amid the DeepSeek launch and looking for low-cost chips. Nvidia’s Q1 guidance shows a 9.4% QoQ revenue growth, down from the previous 12% QoQ growth. Its adjusted margin is expected to be down substantially as well to 71%. The market does not like it when Nvidia fails to post a strong quarterly beat. The stock will remain under pressure in the coming quarters when the company will report unimpressive growth.

Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA) is the undisputed leader in accelerated computing, with dominant market share in Graphics Processing Units (GPUs) powering AI workloads across data centers, edge devices, and emerging platforms. Its end-to-end ecosystem—from silicon to software (CUDA, networking, and AI frameworks)—creates high switching costs and a widening competitive moat. With secular demand for AI infrastructure still in its early innings, Nvidia stands to benefit from sustained topline growth and strong operating leverage. In early January, a little known Chinese AI company, DeepSeek, released its large language model (LLM), DeepSeek-R1, to an unexpecting world. This model was purportedly trained on very few high-end Nvidia chips and was highly efficient when compared to other leading models. This release set off a chain reaction where investors have had to grapple with the idea that the world may not need as many GPUs as previously thought, which hampered the Nvidia buy case and sent the P/E multiple down to its cheapest level in the past 5 years.”