Jim Cramer’s Bold Predictions About These 12 AI Stocks

3. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders In Q3 2024: 193

Date of Cramer’s Comments: 09-04-24

Performance Since Then: 34.28%

NVIDIA Corporation (NASDAQ:NVDA) is the leading global AI GPU designer. Since Cramer’s September remarks, the stock has seen bullishness from analysts and rumors of problems with its Blackwell GPU supply. Truist raised the price target to $204 from $169 in December after the stock had set an intraday record in October after a strong earnings report from Taiwan’s TSMC. NVIDIA Corporation (NASDAQ:NVDA) also rallied in November after President Trump’s victory. However, the stock fell by 3% in January after US export control rules targeted its GPUs. The dip maintained the downward trend that had started since CES when CEO Jensen Huang didn’t share any details about NVIDIA Corporation (NASDAQ:NVDA)’s next-generation Rubin chips. Here’s what Cramer had said in in September:

“A repeat of 1999 would indeed be devastating for NVIDIA and all the tech that surrounds it. As much as I think Cembalest is the best pure strategist on Wall Street—the best I’ve found—I found this piece a little harsh because we had many fly-by-night outfits spending like drunken sailors back in the 1990s. Now, though, the firm and its clients are some of the most well-endowed companies ever. The company doesn’t have any real competition, and no one is near them by their own proclamations.”

“As the company’s CEO Jensen Huang has pointed out many times, if the tech titans don’t spend, they’re out of luck when some great use cases come along, and they don’t have the infrastructure for it. Remember, Jensen has proved that the platform pays for itself very quickly. That sure wasn’t the case back in 1999, was it? Of course, the company’s stock has become a total pariah right now after this amazing quarter because the world suddenly seems convinced that AI spending will peak soon, at which point it’s all over but the shouting.”

“Stocks are getting slammed because most investors think the company’s run-up was too extreme, given that the company only reported a major upside surprise—not the kind of insanely huge upside surprise they’d come to expect. The sellers are eager to take the company back to where it was trading during the last visit to the penalty box in the first week of August, with the stock ticking as low as $90 and change.”

“I’m sure the sellers will be right back tomorrow morning after we learned tonight that the Justice Department has hit the company with a subpoena over an antitrust probe. Now, who cares? That’s standard practice. It’s shot first, second, and third. Though with the company right now, no one’s thinking, ‘Well, wait a second, why didn’t the Justice Department just ask them some questions?'”