Jim Cramer Calls Market Decline ‘Man-Made’ and Breaks Down 15 Stocks

8. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 223

Cramer discussed NVIDIA Corporation (NASDAQ:NVDA) in the context of its recent selloff, noting how investor sentiment toward AI stocks has reversed sharply. He categorized Nvidia in his “second tier” of the Magnificent 7 stocks. However, he defended NVIDIA’s long-term value and financial strength, saying:

“NVIDIA is down 36% from its highs. Just 3 weeks ago for instance, that Nvidia GTC event occurred where there was no sign at all that this AI theme was slowing but investors want to throw in the towel so there’s just been a freight train of selling in anything AI. Maybe you just have to step back and let the selling play out for Nvidia. Let me give you some good news, it sells for just 21 times this year’s earnings. This is the highest quality company in the world. It’s also less than half its average valuation over the past 5 years; that’s cold comfort. I think the stock will fly.”

RiverPark Large Growth Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2024 investor letter:

“NVDA was a top contributor in the fourth quarter following blowout 1Q results and guidance driven by strong data center sales (+427% year-over-year). The company reported revenue of $26 billion, up 262% year-over-year, and EPS of $6.12, up 462% year-over-year and 9% ahead of expectations. Revenue guidance for 2Q of $28 billion was 5% 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.”