NVIDIA Corporation (NASDAQ:NVDA) is one of the stocks mentioned during the show, as we cover everything Jim Cramer said about the market. Cramer explained why the stock is not moving, as he stated:
Now, there was a lot of news about NVIDIA at the GTC festival, but none of it managed to move the stock. One reason was confusion. Jensen talked about how he has $1 trillion worth of business for his highest-end chips, up from $500 billion just a few short months ago. The numbers included 2025 figures, though, and the new figure is through 2027, while the previous target was only for 2025 to 2026. So candidly, it did sound bigger than it was, even though it was gigantic. The stock blew up a quick five points during the speech as retail investors used market orders, spiking the share price and then getting clobbered all the way down when people realized the $1 trillion number was less significant than they thought, even though it was significant. Second reason NVIDIA can’t seem to catch a break… Unlike a few years ago, institutional money managers own the stock in gigantic amounts. There’s not a lot of accounts that don’t own it already.
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That means only new money coming into the S&P 500 can really move the stock higher, at least for now. Third reason: option activity. Home gamers remember the NVIDIA of old with its wild moves and the great swings higher. They buy calls every day in record numbers because they think they can capture the next move. They’re too eager. They overpay. Professionals see this, so they sell the call options, they short to them, putting selling pressure on the common stock, as the call selling always transfers into common stock selling. This happens so often that it puts a lid on the common stock. That’s what occurred today… What could move up NVIDIA again? Numbers? They didn’t move it last quarter. How about new customers? They get new customers all the time, hasn’t made any difference.
Everyone’s afraid that the hyperscalers will somehow decide, you know what, we have enough, or we’ll design our own chips. No. What’s going to get NVIDIA moving again is NemoClaw and the endless proliferation of agents through Anthropic and OpenAI, which will cause a wave of traffic again for the hyperscalers, for the cloud business, which in turn will need more NVIDIA hardware to keep all this stuff running. I know it sounds complicated, even fanciful, but so did ChatGPT when I first heard about it. Call it the hidden reason to buy NVIDIA stock here and possibly the best reason other than a gigantic move in the stock market itself, which will pull NVIDIA stock up. But that’s not the way we want it to go higher, is it?
Photo by Christian Wiediger on Unsplash
NVIDIA Corporation (NASDAQ:NVDA) develops accelerated computing and AI platforms, GPUs for gaming and professional use, cloud services, robotics and embedded systems, and automotive technologies.
While we acknowledge the risk and potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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