NVIDIA Corporation (NASDAQ:NVDA) was among the stocks Jim Cramer looked at as he discussed the recent bounce in software stocks. Cramer recommended buying the stock, as he commented:
Let’s talk about one of the hottest stories of the year, fiber optics. We’re putting up data centers all over the place, but the industry needs better ways to move data around, which is where the optical plays come in. As traffic between switches, racks, and servers explodes, it’s tough to keep scaling AI with more silicon, more power, and more cooling forever. At some point, you have to cope with the physics of the situation. That’s why the data center builders are increasingly turning to photonic and fiber optic solutions. Think light moving through fiber to handle their networking needs. On March 2nd, NVIDIA agreed to invest $2 billion apiece in two different fiber optic companies, Lumentum and Coherent… Both great stories, both deals included multi-billion dollar purchase commitments plus future capacity and access rights. NVIDIA’s essentially trying to lock up critical optical laser supply before the next bottleneck shows up.
Look, the message from NVIDIA CEO Jensen Huang was clear: optics are not a sidecar to the AI buildout. And oh, just so we know, NVIDIA, own it, don’t trade it… You know what? Buy some NVIDIA. That’s the best, cheapest way to play it. It is the best AI theme, photonics included. Again, Jensen was ahead of everyone here, just like he was on memory last year. The man leading the AI revolution is going to see where the puck’s going before Wall Street analysts or a hedge fund… NVIDIA trading just 18 times next year’s earnings estimate, represents deep value… It was down today because there was a rumor that it was going to buy a PC company. Huh? That was untrue. It was a story in some sort of press outfit. Untrue.
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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