We recently compiled a list of the Jim Cramer’s Bold Predictions About These 15 Tech Stocks. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other tech stocks Jim Cramer recently talked about.
Like all of us, Jim Cramer is always wondering what’s next for the stock market. So far, the year has seen AI continue to dominate the market, accompanied by the Federal Reserve and the 2024 US Presidential Election. Now, with the election over and investors pondering over the incoming administration’s tariff policies, like us, Cramer is also focused on the Federal Reserve.
The reason why the Fed and tariffs are related is because the latter can cause inflation to force the former to keep interest rates higher for longer. While it tries to decipher what’s ahead for AI, Wall Street is also wondering about the pace, magnitude, and frequency of the Federal Reserve’s 2025 interest rate cut cycle. This nervousness is reflected in bond yields touching 4.38% on Friday, and asset manager Apollo Global warning that four key inflation indicators appear to be reaccelerating. As per Apollo, the Core CPI, the Core PCE, the Supercore CPI, and the Supercore CPE have all started to rise again.
In Mad Money aired last week, Cramer also had the Fed in mind. Cramer, in his show, commented on the nervousness in the market. The television show host wondered why the stock market wasn’t responding to semiconductor stocks doing well. He started out by sharing that “I hate the endless focus on the Fed. By everybody. Because it detracts you from benefiting from long-term performance for your stock portfolio.” This is because Cramer believes that “every little signal from the Federal Reserve brings out predictions, causing many people to sell good stocks when they are freaked out.”
He did add that the economic data shows that there will be dissent at the Federal Reserve when it comes to further reducing interest rates at the upcoming December meeting. Cramer shared that “while I don’t think the data is cool enough to be positive about the prospects of more cuts for now, I also don’t want you to make decisions purely on what the Fed does. Contrary to popular belief, there’s more to investing than monetary policy. And I wish everyone knew that. They don’t.”
On the topic of tariffs, Cramer had plenty to share in November. He started out by analyzing the performance of the benchmark S&P index between mid-2017 and the start of 2020. Cramer pointed out that “this is where we start to get the real tariff action from the first Trump administration.” He shared that “Trump imposed tariffs on steel, aluminum, solar panels, and washing machines among other goods.” While “all these helped the industries in question . . .the broader market didn’t like that we were triggering a global trade war.”
Cramer pointed out the index’s performance between January 22nd and December 24th, 2018 to bolster the view that tariffs weren’t great for the stock market. However, before you write them off, consider his remarks. According to Cramer, during this time period, “the S&P 500 lost 18% of its value. Of course, some of that is because the Fed got much more aggressive about raising interest rates through this period. Taking them up. a 100 basis points that year. But it definitely wasn’t just the Fed. You can see from the chart that virtually every time we got more tariffs, the S&P would roll over, every time China retaliated, we’d sell off.”
Yet, according to Cramer, “once the Fed decided to stop tightening at the very end of 2018, the S&P was finally able to find a floor.” Following this, the market “rebounded like crazy” as part of a “bullish trading cycle, one that continued until Covid hit in 2020. Long story short, the market couldn’t handle the trade war when the Fed was tightening. But as soon as the Fed started easing, all those losses evaporated.”
Using charts from Jessica Inskip, Cramer compared the last intersection of the Fed and Trump tariffs with today’s environment. He outlined that the “Fed is now our friend.” Why is that so? Well, according to Cramer, as soon as the Fed stopped tightening, the market “stopped reacting as aggressively to the trade war.” He shared that Inskip believes that “something like a trade war can certainly hurt us badly when the market’s already trending bearishly. But if we’ve got a bullish trading cycle like we do right now, then she’s not worried as long as we can maintain this cycle.”
So, as Cramer remains cautiously optimistic about the stock market’s future, we decided to see how his views about stocks have stood the test of time.
Our Methodology
To make our list of the 15 stocks Jim Cramer has made bold predictions about, we compiled his statements about top tech stocks and ranked them by the date the statements were made.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds invest in? 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).
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 Q3 2024: 193
Date of Cramer’s Comments: 10-14-24
NVIDIA Corporation (NASDAQ:NVDA) is the world’s leading AI GPU designer. It is also the primary beneficiary of the current AI wave because of its product strengths. Cramer simply gave up when discussing getting the timing right for NVIDIA Corporation (NASDAQ:NVDA)’s stock. He stated:
“Now initially, NVIDIA got clubbed along with the whole market when the yen carry trade imploded. Then it came right back because that was only a temporary problem. Then NVIDIA got smacked down after its quarter, although it didn’t take out the blows from the previous sell-off. It’s been working its way back ever since. As we learned that demand for its next-generation super chip Blackwell is ‘insane’, that’s a technical term coined by Jensen, by the way. Next thing you know, the stock’s coming all the way back, but back with very few people who sold the stock. And before this, right, I mean they’re long gone and gone at much lower levels because they traded it, they sold it. Again, take this as a reminder that if you trade NVIDIA, you probably won’t be able to sell it high and then get back in low. The ship would’ve left without you. It’s too hard, people, it’s just too hard.”
NVIDIA Corporation (NASDAQ:NVDA)’s stock is down 2.8% since Cramer’s remarks so perhaps selling then would have been the right decision. Not only have supply issues with its Blackwell GPUs worried investors, but the shares have lost 7.50% in December after Broadcom’s stunning announcement of working with three hyperscalers to develop AI GPUs. You check out our coverage of Broadcom in this list for more details, but it appears that Wall Street might be opening up to the idea of alternatives being present to NVIDIA Corporation (NASDAQ:NVDA)’s products.
Overall NVDA ranks 4th on our list of the tech stocks Jim Cramer recently talked about. While we acknowledge the potential of NVDA as an investment, 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
