We recently published an article titled Jim Cramer Discusses These 10 Stocks & Says Bitcoin Created “Froth” In The Market. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other stocks Jim Cramer recently discussed.
In a recent appearance on CNBC’s Squawk on the Street, Jim Cramer discussed the impact of Elon Musk’s DOGE cost-cutting efforts on the US government and how action against smaller agencies such as USAID can translate into action against larger agencies and programs.
According to him:
“But I do think that when the Defense Department is on the [inaudible], and then Medicare, Medicaid. I mean, Medicare, Medicaid, I don’t know a soul who thinks that there isn’t fat in there. And I also think that, kind of like the labor department, with the unemployment number we really don’t know what it is we have big revisions, if we had, if we gave to Salesforce, I don’t know. . .I think that, if we gave these companies, literally outsourced these companies, I know people are going to say, Jim you are like, that is so right wing, but if there’s, the machines are better. . “
Cramer also commented on recent Bitcoin price action which saw the cryptocurrency dip below the $90,000 mark. He linked Bitcoin as being a “proxy for the fact that we have thirty-six trillion in debt.” Cramer also wondered how much of the gain in Bitcoin’s price was due to Michael Saylor’s firm adding the currency to its balance sheet.
Cramer added that his team has concluded that so much of the “froth” in the market in untested areas such as quantum computing came from Bitcoin. He outlined: “The reason why we’ve had so much froth . . .we think that Bitcoin got people very excited about things that are space age and that the fundament of speculation is Bitcoin. That’s what turned it all on.”
Another topic that caught the CNBC TV host’s attention was the mergers and acquisition environment in the Trump administration. After the President’s election victory in November, investors were ecstatic as they believed that the new administration could create a healthy environment for deals. Commenting on how the rules of the market still remained the same, Cramer outlined:
“Look you can enforce the rules two ways. You can use the rules and talk. Or you can prosecute using the rules. And they’re not going to prosecute. They’re going to have discussions. They are not going to do it the way that Biden did.”
He also shared that the “size” of the deals that are taking place is “microscopic” and added that “The M&A and the IPO markets are as dead as I have ever seen them.”
Apart from the M&A sector, another sector he discussed was the consumer packaged goods. These firms have struggled amidst high input prices and inflation. Cramer believes “They should all, the consumer packaged goods companies, should merge. Because they’re pathetic. They’re pathetic parodies of stocks. . . which by the way I really like them.”
Finally, he also commented on the poor performance of Mag 7 stocks and inflation. According to Cramer:
“I mean, I keep thinking about what you said about the Mag 7, and their ability to be able to affect spending. If that’s the case, look, the Fed is, Austan Goolsbee, whom I really, really like, he’s been waffling. I wish he went the other way. Because I think the data says, that he would have been right. Except for insurance, stake, eggs, okay. These are bad. Insurance, steak, and eggs. And then entertainment is just ridiculous. If Swift were to cut the prices of her tickets, we would have a rate cut immediately.”
Our Methodology
To make our list of the stocks that Jim Cramer talked about, we listed down all the stocks he mentioned during CNBC’s Squawk on the Street aired on February 25th.
For these stocks, we also 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).
A close-up of a colorful high-end graphics card being plugged in to a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders In Q4 2024: 223
NVIDIA Corporation (NASDAQ:NVDA) is the world’s latest AI GPU company. Cramer’s comments quoted here were made ahead of the firm’s highly important fiscal fourth-quarter earnings report. The results saw NVIDIA Corporation (NASDAQ:NVDA) post $39.3 billion in revenue and $0.89 in adjusted earnings to analyst estimates of $38.05 billion and $0.84. The firm’s Q1 guidance also surpassed estimates, but its gross margin guidance of 71% fell below estimates of 72.2%. NVIDIA Corporation (NASDAQ:NVDA)’s shares were flat in aftermarket trading after the report. Here is what Cramer said before the results were announced:
“People are talking about NVIDIA. And there is a nice deal this morning with Cisco. I think it’s actually much more important than people realize. Cisco’s the first to qualify. It’s going to be a real partnership. And that uh Chuck Robbins working closely with Jensen. But there is an overwhelming sense that this market keys on NVIDIA at a moment when we have no idea what the federal government’s gonna do to NVIDIA.”
“Well I mean they might, they literally might just say you know what we’re, we’re going to block NVIDIA. Not just the low-end NVIDIA but every NVIDIA. I had Lam on and I had KLA on, and they’ve already taken the big hit. They could take another hit.”
“No, block and say listen you’re not going to get anything from the United States.” “NVIDIA, big export market China. Are they going to take it away?” “How do you know the government doesn’t say no more low-end chips? Because if you had a lot of low ends. . . I’m talking about, you have a company that reports and maybe they’re not in control of their forecast. And the forecast has been very important.”
“Well cause the Biden administration was quite content having the lowest-end chips go to China. Maybe this administration, and this issue perhaps led by Peter Navarro, says nothing. You get nothing.”
“Well how about if they ban H20? We don’t know! . . .that’s the low-end, that’s like instead of the H200, right. No, it’s not a tinker toy versus, uh, you know a Caterpillar. But it is without a doubt something that is, that had passed muster with the previous administration because it was not really thought to be capable of military.”
“Look NVIDIA is the stock that people say is the biggest battleground. And there are people who think it’s dramatically overvalued. And I don’t get that. Uh, one of the things I’ve asked them, I’ve put the questions to them. You know you have a thing tomorrow, where you actually can ask the CFO some things. . .but I said look I need to know, what kind of, you have the biggest, you have this concentration of five customers. Maybe I want the pastiche if not mosaic of what, of what Apple has. Maybe I want a billion customers.”
“Yes! I am! I am worried. Because I think that if it really turned out to be that hard, to make Blackwell. We do know by the way that Blackwell, Dell’s got a good relationship and . . .HPE was late, but if I’m not, I mean I’m kind of, look I’m looking at the government, I thought the government was off the table.”
“Well I mean look, let’s understand, they say that they’re going to do more. Well what is there to do more? They’ve already restricted almost everything, they send them the lowest-end chips. They obviously still can use those. That’s it. Okay. And they’ve restricted, and I don’t know, look remember the Biden administration on the Saturday night before they ended, the eighteen countries? But I’m just saying that, like, why feel confident that NVIDIA has a good business model, but I don’t know whether the government says listen we’re not going to let you sell chips to all the countries that he just did a charm tour to. Look if you’re not worried, what [inaudible] are you in?”
“It doesn’t work for humanoids. It doesn’t work for video. It doesn’t work for self-driving.” “Look, what does the government mean? When it says it has to crack down on more? The government was cracking down so severely on these guys that I’m shocked that they have to crack down more. I mean they’re probably willing to give anything to the Kremlin.”
Overall NVDA ranks 2nd on our list of stocks Jim Cramer recently discussed. 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 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.