On the September 3 episode of Mad Money, Jim Cramer turned his attention to NVIDIA Corporation (NASDAQ:NVDA) and its expansion into open-source software infrastructure. He remarked:
Next, I know NVIDIA’s up 22% for the year and that would be a lot for every other company, but not for NVIDIA. This is NVIDIA, for heaven’s sake… NVIDIA bought Hugging Face today. I know it sounds like a foreign version of Kleenex, but it’s a kind of open-source AI. I think it’s a brilliant move, and it’ll put to rest all the nonsense that NVIDIA’s technology is only good at training, not inference. It’s foundational… But what matters is that NVIDIA sells at less than 15 times next year, I’m going to say that again: less than 15 times next year’s earning estimates… Hey, look, I nailed Dell for 100 points. Give me some credit here. I think this thing goes up 50% if I manage the buyback or someone like me, like an AI version of me.
The Hugging Face Acquisition and Inference Expansion
NVIDIA Corporation’s agreement to acquire open-source platform Hugging Face for approximately $12.9 billion represents a significant strategic shift deeper into the software deployment ecosystem. By acquiring one of the leading platforms for open AI models and developer communities, NVIDIA could gain an important position in model distribution and deployment. The transaction directly addresses long-standing skeptics by strengthening NVIDIA’s position in inference workloads, showing that hardware utility extends far beyond initial model training. Furthermore, Cramer argued that NVDA trades at less than 15 times forward earnings estimates, presenting an appealing valuation profile relative to its explosive earnings growth.
Antitrust Scrutiny and Ecosystem Neutrality Risks
Despite the strategic benefits, the acquisition could introduce regulatory and operational risks. Because Hugging Face has historically operated as neutral ground for the entire developer community, bringing the platform under NVIDIA Corporation’s corporate umbrella risks alienating rival hardware vendors and independent model builders. It remains to be seen whether the deal creates unfair distribution advantages or forces developers down proprietary software paths, introducing potential closing delays or compliance hurdles.
Smart Money Holdings and Short Activity
Institutional backing remains broad and resilient among major hedge funds. According to Insider Monkey’s tracking data, 285 hedge funds held positions in NVIDIA Corporation during the second quarter, marking an increase from 275 funds in the prior period. On top of that, short interest remains exceptionally low, with the short percentage of the float resting at just 1.23%, showing minimal bearish conviction against the company.
NVIDIA Corporation combines dominant hardware infrastructure with a strengthening software moat through the proposed Hugging Face acquisition, all while trading at an attractive forward earnings multiple. Although regulatory headwinds and ecosystem neutrality concerns warrant careful observation, Cramer’s commentary highlights how strategic software expansion strengthens the company’s long-term market leadership.
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