We recently published a list of Jim Cramer Latest Portfolio: 10 Best Stocks to Buy. Since Nvidia Corp (NASDAQ:NVDA) ranks 1st on the list, it deserves a deeper look.

Jim Cramer in his latest program talked about discipline during short-term market rallies and emphasized the importance of knowing when to take some profits off the table when things are going your way. According to Cramer, the “most important lesson” in short-term rallies is that “you always have to work hard to prepare yourself for the future.”

Cramer said that you should not “give in” to the market euphoria and hit “buy, buy, buy” when the market is “roaring.” The CNBC host said for many it becomes difficult to sell because they feel they were late to the rally and want to hold on to their best-performing stocks during bull runs. But Cramer questioned this thinking: if your portfolio sees big gains and you let it “ride” the rally without selling any stocks and eventually those gains begin to “evaporate,” how is that different from totally missing out on the rally? “It isn’t,” Cramer said.

Cramer talked about the post-COVID rally of 2020 and 2021 where the market saw an “unbelievable” bull run, only to pare those gains after the Fed’s pivot and its “war” on inflation. Jim Cramer advised investors to always remain “tethered” to reality.

“If you would have sold stocks gradually on their way up as I told you to do you’d have been in a much better shape as the market spent the next 11 months getting obliterated,” said Cramer.

For this article we watched several latest programs of Jim Cramer aired over the past few days and picked 10 stocks he’s bullish on. With each stock we have mentioned the number of hedge fund investors. 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).

Nvidia Corp (NASDAQ:NVDA)

Number of Hedge Fund Investors: 186

Jim Cramer in a latest program recommended investors not to be “too greedy” and refuse to “ring the register” on AI stocks such as Nvidia Corp (NASDAQ:NVDA), which have had a strong bull run. Cramer, however, reiterated his age-old mantra that he thinks Nvidia Corp (NASDAQ:NVDA) should be owned, but traded. The CNBC host also said he remains a “true believer” in Nvidia Corp (NASDAQ:NVDA). But Cramer said he cannot be “oblivious” to the “scale” of the massive gains Nvidia stock has seen. He mentioned the latest analysis by stock trader and chartist Larry Williams, who is expecting a pullback in Nvidia Corp (NASDAQ:NVDA) shares in the coming weeks.

Cramer also said Nvidia Corp (NASDAQ:NVDA) is giving Apple and Microsoft a “run for their money” in terms of market cap. However, he thinks when you have “big gains” you have to take “something” off the table.

NVIDIA Corp’s (NASDAQ:NVDA) latest product announcements and its plans revealed at the Computex 2024 show that NVIDIA Corp (NASDAQ:NVDA) has much more in its arsenal to power its growth engine. Analysts like NVIDIA Corp’s (NASDAQ:NVDA) shift to new AI architecture known as Rubin (R100) and think its powerful H100 and Blackwell chips easily beat competitors.

NVIDIA Corp (NASDAQ:NVDA) will start shipping H200 in the second half of this year. At its GTC conference NVIDIA Corp (NASDAQ:NVDA) revealed three accelerators – B200, GB200 and GB200 NVL72. All of these products provide growth catalysts for NVIDIA Corp (NASDAQ:NVDA) shares and justify its P/E multiple of 71, given NVIDIA Corp’s (NASDAQ:NVDA) growth expectation of over 100% this year and 32% next year. Based on 2026 EPS estimate set by Wall Street, NVIDIA Corp (NASDAQ:NVDA) is trading at a forward P/E multiple of 35.74, which makes the stock’s valuation attractive given the growth catalysts it has.

RiverPark Large Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its first quarter 2024 investor letter:

“NVIDIA Corporation (NASDAQ:NVDA): NVDA shares were our top contributor in the quarter following blowout 4Q results and 1Q guidance driven by strong data center sales. The company reported quarterly revenue of $22.1 billion, up 265% year-over-year, and EPS in the quarter of $5.16, up 487% year-over-year and 12% ahead of expectations. Revenue guidance for 1Q of $24 billion was 8% above very high expectations. The artificial intelligence arms race kicked-off by ChatGPT and Alphabet’s Bard, among others, has generated tremendous demand for Nvidia’s next generation graphic processors.

NVDA is the leading designer of graphics processing units (GPU’s) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. Following recent results, Jensen Huang, founder and CEO of NVIDIA stated in the company’s press release, “a trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”

Overall, Nvidia Corp (NASDAQ:NVDA) ranks 1st on Insider Monkey’s list titled Jim Cramer Latest Portfolio: 10 Best Stocks to Buy. While we acknowledge the potential of Nvidia Corp (NASDAQ:NVDA), our conviction lies in the belief that some 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 Nvidia Corp (NASDAQ:NVDA) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

Disclosure: None. This article is originally published on Insider Monkey.