We recently published a list of Jim Cramer’s Latest Portfolio: Top 10 Stocks in July. Since NVIDIA Corp (NASDAQ:NVDA) ranks 1st on the list, it deserves a deeper look.
Jim Cramer in a fresh episode of “Mad Money” on CNBC said that while investing isn’t easy, it’s made even more difficult by “authentic Wall Street gibberish” and “arcane technology.” Cramer said that there’s an “entire industry” in Wall Street wanting people to think that investing is hard and “ordinary people” cannot do it on their own. Cramer said that many people in the financial industry are just “after your fees” and they aren’t interested in making money from original investing. Cramer said that hedge fund managers and mutual funds make investing look inaccessible and impenetrable.
Cramer said that he’s “pulling back the curtain” and emphasized that investing isn’t “rocket science” or “brain surgery” and you don’t need to go to a business school to understand it. Cramer pitched himself as a “coach” or a “translator” who can explain the meaning of complex financial terms to ordinary people.
“You can comprehend all the mystical-sounding vocabulary we throw around here as long as you have a translator, a coach like me, who can explain what the darn words mean.”
For this article we watched several latest programs of Jim Cramer aired on CNBC and picked 10 stocks he’s talking about. 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 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 yet again repeated his thesis on NVIDIA Corp (NASDAQ:NVDA), saying “own it don’t trade it.” Cramer said when the second quarter of this year started, there was a “widely-held” belief that the stock had “moved too much” and it was time to do some selling.
“I heard that several times a day during our network.”
Cramer said that despite its $3 trillion market cap, NVIDIA Corp (NASDAQ:NVDA) is “unrivaled in its ability to usher in this new industrial revolution.”
Cramer said that he’s been lauding for NVIDIA Corp (NASDAQ:NVDA) for over a decade.
Dan Ives is one of the biggest NVDA bulls on the Street. Recently, responding to Newstreet Research’s downgrade of NVDA, Ives on Twitter wrote:
“We cannot disagree more with this negative Nvidia call as discussed on @LastCallCNBC last night as the AI Revolution is just starting in our view being led by Nvidia and the Godfather of AI Jensen in this 9 pm party.”
There is no shortage of Wall Street analysts calling NVIDIA Corp (NASDAQ:NVDA) a top dog in the AI race. Recently, Oppenheimer’s Rick Schafer joined the NVIDIA Corp (NASDAQ:NVDA) chorus, raising the chipmaker’s price target to $150 from $110 following the 10-1 stock split.
NVIDIA Corp (NASDAQ:NVDA) is one of the stocks accounting for a huge chunk of the total market returns, thanks to its AI-fueled rally that seems to have no end in sight.
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.
L1 Capital International Fund stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“Simply not owning NVIDIA Corporation (NASDAQ:NVDA) was a key contributor to the relative underperformance of the Fund against its Benchmark. The Wall Street Journal even published a recent article with the title ‘No Nvidia in Your Portfolio? You’re Just Toast’. While that is a little melodramatic, it is rare for one company to have such an outsized impact on index returns.
We readily admit that we underestimated the speed and scale with which Nvidia has been able to monetise its leading position in supporting the growth of AI. We have refreshed our financial analysis and while our valuation of the business has increased materially, we continue to view the current share price as providing an unattractive risk adjusted return in most scenarios. We appreciate the business has surprised to the upside in the past and we continue to follow Nvidia closely.”
Overall, NVIDIA Corp (NASDAQ:NVDA) ranks 1st on Insider Monkey’s list titled Jim Cramer’s Latest Portfolio: Top 10 Stocks in July. While we acknowledge the potential of NVIDIA Corp (NASDAQ:NVDA), our conviction lies in the belief that 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 Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
