We recently published a list of Jim Cramer’s Bold Predictions About These 10 Tech Stocks. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other stocks about which Jim Cramer has made bold predictions.
The DeepSeek selloff which occurred earlier this week gave Jim Cramer plenty to talk about. It saw one of his most frequently mentioned stocks, the GPU firm responsible for making AI chips, lose nearly $600 billion in value during a single day of trading. Other stocks exposed to data center spending didn’t fare well either, and cumulatively, these stocks lost a trillion dollars of market value.
As investors pondered whether the billions of dollars in AI spending would actually materialize, Cramer discussed the potential offered by the firm’s latest Blackwell AI GPUs. The debate surrounding low AI costs primarily centers around large language models (LLMs), and Cramer believes that the firm’s CEO is focused on the bigger picture.
According to him:
“Remember, Blackwell, which is the current iteration, Blackwell’s about video. It’s just about video. And video is incredibly important. Because video is the ability to make it so that the robots work. Robots do not work on the current one. And I think robots are the next frontier. So I don’t think necessarily that uh . . . . Elon Musk, who may be focused on many different things, that Elon Musk says I don’t wanna buy [the AI GPUs]”As DeepSeek wreaked havoc on the stock market, Cramer also shared his thoughts about the model. The CNBC TV show host shared that he “tried to do a couple of, I tried to get it to give me Netflix’s performance from 2010. And it says I can’t do that. Well I mean, honestly? I can do that.” Cramer remained skeptical about the authenticity of the data that DeepSeek had shared. According to him “The difference here I think is that, if we really think that they are playing by American rules and they’re telling us everything, then maybe that’s why we keep seeing such a great number, a growth number from the Chinese economy.”
One particular DeepSeek feature that he was quick to note was censorship. Chinese social media and technology platforms cannot provide users with information critical of the government or the state narrative. When Cramer asked DeepSeek “What famous picture has a man with grocery bags in front of a tank?” the model initially replied by stating “the famous picture you are referring to, Tank Man, unknown rebel, June 5, 1989,” he shared. While this was all good, he added the model then “takes that back and says sorry, can’t help you with that. And then secondarily it says sorry that’s beyond my current scope.”
On the topic of AI and technology, the AI PC cycle has also left Cramer disappointed. Cramer shared that while business uses for AI had materialized, on the consumer side, demand hasn’t materialized. “The PC, I thought we were all gonna upgrade. And now we’re all in wait-and-see mode,” he shared in a recent appearance.
One particular business AI use case that has impressed Cramer is healthcare. According to him:
“I think that what we’re not thinking about, like when I went to Jensen Huang’s panel on healthcare. It’s so much bigger than anything involving AI PC. I mean they’re really just talking about having the data to really attack every single disease and changing it from fatal to maintenance. You have tremendous number of people involved in trying to do that. Then you have Stripe there working with [the GPU company] to be able to do something revolutionary in finance. And then you have the banks working doing some revolutionary things trying to get people who’re doing S1s. . . .”
Our Methodology
To compile our list of Jim Cramer’s bold predictions about tech stocks, we scanned the stocks he mentioned in Mad Money and Squawk on the Street in September 2024. Then, we picked out stocks with tech exposure and ranked them by the number of hedge funds that had bought the shares in Q3 2024.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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).
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders In Q3 2024: 193
Date of Cramer’s Comments: 09-04-24
Performance Since Then: 17.3%
NVIDIA Corporation (NASDAQ:NVDA) is the ill-fate GPU stock that led the stock market selloff on Monday. The bloodbath made the shares lose nearly all of their gains made since October last year. Since Cramer’s comments quoted here, NVIDIA Corporation (NASDAQ:NVDA)’s shares are still up by 17.3%. Had the selloff not occurred, then they would have gained 36%. This rather tepid performance is part of an overall cautious approach for the stock that has persisted amidst reports of troubles with NVIDIA Corporation (NASDAQ:NVDA)’s latest Blackwell chips. Here’s what Cramer had said in September:
“A repeat of 1999 would indeed be devastating for NVIDIA and all the tech that surrounds it. As much as I think Cembalest is the best pure strategist on Wall Street—the best I’ve found—I found this piece a little harsh because we had many fly-by-night outfits spending like drunken sailors back in the 1990s. Now, though, the firm and its clients are some of the most well-endowed companies ever. The company doesn’t have any real competition, and no one is near them by their own proclamations.”
“As the company’s CEO Jensen Huang has pointed out many times, if the tech titans don’t spend, they’re out of luck when some great use cases come along, and they don’t have the infrastructure for it. Remember, Jensen has proved that the platform pays for itself very quickly. That sure wasn’t the case back in 1999, was it? Of course, the company’s stock has become a total pariah right now after this amazing quarter because the world suddenly seems convinced that AI spending will peak soon, at which point it’s all over but the shouting.”
“Stocks are getting slammed because most investors think the company’s run-up was too extreme, given that the company only reported a major upside surprise—not the kind of insanely huge upside surprise they’d come to expect. The sellers are eager to take the company back to where it was trading during the last visit to the penalty box in the first week of August, with the stock ticking as low as $90 and change.”
“I’m sure the sellers will be right back tomorrow morning after we learned tonight that the Justice Department has hit the company with a subpoena over an antitrust probe. Now, who cares? That’s standard practice. It’s shot first, second, and third. Though with the company right now, no one’s thinking, “Well, wait a second, why didn’t the Justice Department just ask them some questions?”
Overall, NVDA ranks 5th on our list of stocks about which Jim Cramer has made bold predictions. While we acknowledge the 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 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.
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