We recently compiled a list of the Jim Cramer on Nvidia Plus Other Stocks. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other stocks Jim Cramer was talking about.
Jim Cramer, host of Mad Money, recently observed that consumers are no longer focused on brand names but are instead prioritizing companies that offer the best value. Cramer noted that there is a noticeable shift happening in the market, saying:
“We’ve become a nation of cheapskates. I say that as a compliment. Nobody gets away with charging too much anymore, not in this country, no matter what industry, perhaps even the drug industry.”
He pointed out that this shift is happening rapidly, and many companies are being left behind as consumer behavior changes. Cramer said that he has observed this shift firsthand in various settings, including grocery stores, online, malls, and even the stock market.
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Cramer went on to explain that Americans are increasingly fed up with high prices. He said:
“The American people are tired of paying up. They feel gouged, they feel betrayed. They feel that the only thing about brand loyalty is that it isn’t worth a dime. They want a better deal. They’ll eagerly switch lifetime habits in order to save some money because prices are up so much that you feel like an idiot if you’re paying up.”
Reflecting on the market dynamics, Cramer shared his insights from Wednesday’s trading session. Cramer noted that the Dow gained 139 points, the S&P remained flat, and the Nasdaq dipped 0.11%, while the midday trading was much more challenging. He emphasized that the trend toward value is not confined to retail alone but is expanding into other sectors, including tech.
At the end, Cramer summed up the situation by saying:
“Prices have gotten so high over the past few years that we’re losing our loyalty to brands. These days, this whole country is about one thing: The Benjamins.”
Our Methodology
For this article, we compiled a list of 8 stocks that were discussed by Jim Cramer during the recent episode of Mad Money on November 20. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 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).
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
Cramer mentioned that he never really considered value when it came to tech. Instead, he focused on whether it offered a better solution. He explained that the price of products was primarily determined by one factor: how much the customer was willing to pay. According to him, customers appeared largely indifferent to cost when it came to technology. Talking about NVIDIA Corporation (NASDAQ:NVDA), he said:
“But now with NVIDIA, the largest company in the world, by the way, we’re seeing something wholly different. We’re seeing a company with a product that’s incredibly expensive on the one hand, but incredibly cheap on the other. If you’re a cloud service provider and you give NVIDIA forty Gs for a version of its latest and greatest chip of Blackwell, you can make five times that. Insanely expensive as a product, dirt cheap as an investment. We keep hearing that NVIDIA’s charging too much or the demand is topping out or the stock’s overvalued, but the proof is in the pudding.
And CEO Jensen Huang has repeatedly told me about this five-to-one ratio, profit to cost ratio. That’s not just talk, this quarter backed it up. NVIDIA reported a sizable top and bottom line beat, healthy guidance for the current quarter. Blackwell, that latest invention, full production, which was a huge worry going into earnings. Maybe that worry was contrived, ginned up, perhaps. Jensen says the demand for the current chips and anticipation for the new one, is ‘incredible.’
Of course, there’s sellers, grumpy, clueless people who keep hoping for another one-day gain of 20% like we had last year on earnings and they’re disappointed. I say let them sell…
The cloud service providers, Amazon, Google, Oracle, Microsoft, simply can’t resist buying these high-end chips. Not because they feel compelled to keep up with the competition, that was another bear canard, but because forty Gs for one of these is a bargain. I’m sick of the bears telling me there aren’t enough uses or that things are maxed out at NVIDIA. I say, do some darn homework. The so-called expensive Blackwell is about making money with your money. NVIDIA’s about value.”
NVIDIA (NASDAQ:NVDA) reported exceptional financial results for the third quarter, far exceeding expectations with $35.1 billion in sales, reflecting a significant 94% increase from the same period last year. The company’s data center segment played a central role in this impressive growth, contributing $30.8 billion, which marks a remarkable 112% year-over-year increase. A large portion of the revenue from this segment came from GPU sales, a key area of strength for the company.
In particular, the company’s Blackwell GPU line has seen robust demand. According to NVIDIA (NASDAQ:NVDA) CEO Jensen Huang, demand for Blackwell GPUs has been “staggering”. The company shipped 13,000 GPU samples to customers during the third quarter alone.
Overall NVDA ranks 1st on our list of the stocks Jim Cramer was talking about. 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.
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Disclosure: None. This article is originally published at Insider Monkey.