Nvidia shares are up 20% over the past month and the company is again on investors’ radar amid signs that the AI demand is far from over.
Jim Cramer in a CNBC program in April had said that he advised his investing club members to sell “some” NVIDIA Corp (NASDAQ:NVDA) shares amid losses. Cramer mentioned how he felt for recommending selling shares of a company he’s long supported and admired:
“This morning, my colleague David Faber asked me how I felt about two stocks in particular that I’ve long championed, Apple and Nvidia. He heard that I had violated my own long-standing discipline to own them, not trade them, something I have said repeatedly to members of the CNBC Investing Club, and that I told people to do some selling. I told him that indeed, at the beginning of last week, I did advise people to sell some Nvidia and Apple. Every Sunday, see, I do this think piece for investing club members. The Sunday before last, I did this gut-wrenching piece. I said that I could no longer stand by and have these two fantastic stocks be eviscerated, so people had to sell some of them.”
With its latest numbers and stock performance, Nvidia was able to prove the skeptics wrong. In its recently reported quarter, Nvidia’s data center computer revenue rose 76% year over year, driven by Blackwell GB200. Despite a $4.5 billion inventory charge related to US import restrictions for China, the company expects gross margins to reach the mid-70% range by late this year due to scaling Blackwell production.
NVDA bulls believe the company can easily offset losses related to China amid new products and market diversification. Saudi Arabia’s Humain plans to buy more than 200,000 AI GPUs from Nvidia, potentially generating $15 billion in sales. The UAE reportedly has an agreement for up to 500,000 GPUs. Even without China’s involvement for now, Nvidia said nearly 100 AI factories are under construction. These factories have hyperscalers deploying 1,000 GB200 NVL72 racks weekly, each with 72,000 Blackwell GPUs.
Ithaka US Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q1 2025 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is the undisputed leader in accelerated computing, with dominant market share in Graphics Processing Units (GPUs) powering AI workloads across data centers, edge devices, and emerging platforms. Its end-to-end ecosystem—from silicon to software (CUDA, networking, and AI frameworks)—creates high switching costs and a widening competitive moat. With secular demand for AI infrastructure still in its early innings, Nvidia stands to benefit from sustained topline growth and strong operating leverage. In early January, a little known Chinese AI company, DeepSeek, released its large language model (LLM), DeepSeek-R1, to an unexpecting world. This model was purportedly trained on very few high-end Nvidia chips and was highly efficient when compared to other leading models. This release set off a chain reaction where investors have had to grapple with the idea that the world may not need as many GPUs as previously thought, which hampered the Nvidia buy case and sent the P/E multiple down to its cheapest level in the past 5 years.”
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 have limited downside risk. If you are looking for an AI stock that is more promising than NVDA and that has 100x upside potential, check out our report about this cheapest AI stock.
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