We recently published a list of Jim Cramer’s Latest Calls: Top 10 Stocks. In this article, we are going to take a look at where NVIDIA Corp (NASDAQ:NVDA) stands against other stocks that Jim Cramer discusses.
Jim Cramer in a recent program on CNBC discussed the massive tech sell-off on the back of a new AI LLM model from Chinese startup DeepSeek. Cramer was frank and honest about the level of confusion in the market and said he does not know the implications of the new model on US tech stocks given the lack of data and specifics. He thought out loud about the factors that can weigh on US companies after the breakthrough achieved by DeepSeek:
“There could be some serious buyer’s remorse now. Maybe all the spending going to (Jensen Huang’s company) was needless overpay. Maybe the gigantic number of data centers being built, which are a huge driver of growth in our country, simply aren’t needed. Maybe all the cooling process expenses are a big mistake. Maybe the rush to reopen old nuclear plants, put up more renewable generation, and even bring back coal is totally unnecessary. Today, the air went out of every one of these balloons.”
Cramer said he’d be looking out to know how many chips DeepSeek required to reach this software breakthrough to gauge the impact on demand for US AI chip companies. He said stocks could either rebound from all of this or continue to slide:
“And whether numbers now have to come down because there will be a freeze in spending as clients reassess those multi-billion dollar orders. Maybe it’ll be like the pause in the internet build-out of 2000 that turned out not to be a pause at all, but a collapse.”
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For this article, we picked 10 stocks Jim Cramer recently talked about in his programs on CNBC. With each company, 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
NVIDIA Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 193
Jim Cramer in a recent program on CNBC talked about the massive selloff that rocked NVIDIA Corp (NASDAQ:NVDA) shares after the launch of DeepSeek. Cramer was frank about the confusion and concerns around NVIDIA Corp (NASDAQ:NVDA) stock and said a lot needs to be known before making any claims about the Nvidia story. Cramer was worried about why NVIDIA Corp (NASDAQ:NVDA) did not emphasize its software focus and its chip demand in its statement after the DeepSeek launch.
“It’s part of the confusion and the real quandary is why did NVIDIA Corp (NASDAQ:NVDA) say that it’s become much more of a software company and that you need the hardware to run their software. It also would have been good to find out how many chips DeepSeek is really using. But it isn’t. Think about it—if it was a lot, right, then our government would simply ban all exports to China. What a high-risk situation. If you’re NVIDIA Corp (NASDAQ:NVDA), you’re really in a jam here.
See, if DeepSeek really didn’t need many chips to make its AI platform work, that could be very negative for the NVIDIA Corp (NASDAQ:NVDA) story because then you don’t have to order as many chips. But if it turns out that DeepSeek had hundreds of thousands of chips like the American hyperscalers, then you’d have to believe the new president would make it much harder for Chinese companies to buy anything.”
Infuse Asset Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:
“We do still own some NVIDIA Corporation (NASDAQ:NVDA) as the forward multiple isn’t egregious and it powers over 90% of AI workloads. This company is only becoming increasingly important though the hyperscalers are actively trying to save money through their own ASIC programs. The moat CUDA provides has been underestimated time and time again. While I don’t think Nvidia has quite the upside as some of the other companies in the portfolio, it has a product that the best companies in the world literally can’t get enough of.”
Overall, NVDA ranks 2nd on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of NVDA as investment, our conviction lies in the belief that under the radar 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.