Cramer Today On NVIDIA, NVIDIA Subpoena, NVIDIA Stock - NVDA Update

Introduction

In a recent discussion, Jim Cramer addressed several key points concerning NVIDIA (NVDA) and its market position, especially following the stock’s recent decline. While NVIDIA often appears as the dominant player in AI technology, Cramer highlighted that there were several negatives affecting its stock price beyond just the typical market fluctuations.

Cramer has been an advocate for monitoring NVIDIA closely, suggesting investors not rush into decisions without fully assessing the situation. He made a playful comparison suggesting we shouldn’t treat NVIDIA as the “Sun” around which everything revolves. Instead, the context around the stock’s performance is essential.

Analysis of NVIDIA’s Recent Performance

Cramer referenced a critical note by Michael Semis from JP Morgan that pointed out the impending competition for NVIDIA, particularly from AMD. Although he commended AMD CEO Lisa Su for her leadership, he noted that AMD still does not pose a significant threat to NVIDIA at the moment. Cramer dismissed Intel as a competitor and mentioned that the market sentiment was shifting based on strategic insights from analysts like Semis.

On discussing the stock’s recent downturn, Cramer linked it to analysts' evaluations rather than general market fears. He specifically mentioned concerns regarding mainframe spending and dated comparisons to the 1990s fiber connection collapse, which generated skepticism about NVIDIA's growth trajectory.

Cramer reiterated that NVIDIA’s revenues are driven by tremendous demand from major firms investing heavily in AI technologies. While some analysts voiced concerns about the sustainability of NVIDIA's margins and competition, Cramer pointed out the changes weren’t about concrete threats but rather a shift in perception.

Understanding the Subpoena Situation

The discussion also touched on the recent subpoena issued by the Department of Justice (DOJ). According to Bloomberg reports, this investigation focuses on whether NVIDIA is imposing hardships on customers who do not use its AI chips exclusively. Cramer characterized this situation as a standard investigative procedure, noting that while subpoenas can elevate concerns, they stem from a need to gather comprehensive information rather than indicate wrongdoing.

Cramer likened NVIDIA's situation to historical scrutiny similar to what major tech companies faced in the past, suggesting that unless there’s evidence of malicious practices, the investigation should not heavily impact NVIDIA's long-term prospects.

Chart Analysis and Future Predictions

In terms of technical analysis, Cramer has been observing the performance of NVIDIA’s stock. He previously indicated that the stock was trading under its 50-day moving average and had broken below a crucial support trend line. There’s speculation regarding a potential dip to $ 90 per share, which Cramer views as a possible buying opportunity for long-term investors. The anticipated drop is attributed to slower growth rates following delays in the release of NVIDIA’s Blackwell product.

Despite the fluctuations, Cramer noted that NVIDIA's fundamentals remain strong, supported by robust cash flow and ongoing demand for their products once Blackwell enters the market.

Conclusion

In summary, while there are challenges ahead for NVIDIA, particularly related to competition and ongoing investigations, Jim Cramer remains optimistic about the company's long-term growth potential. He encourages investors to keep a close watch on market trends and NVIDIA’s strategic moves in the coming weeks.

Keyword

NVIDIA, NVDA, Jim Cramer, stock market, competition, AMD, JP Morgan, Michael Semis, DOJ subpoena, AI technology, Blackwell, market analysis, trading strategy, fundamentals.

FAQ

Q: Why did NVIDIA's stock decline recently?
A: NVIDIA's stock fell due to concerns about slowing growth rates and competition, particularly from AMD, as well as delays in product launches like Blackwell.

Q: What is the current investigation by the DOJ about?
A: The DOJ is investigating whether NVIDIA is making it difficult for customers to switch to alternative suppliers and whether they are penalizing those who do not exclusively use its products.

Q: What price is Jim Cramer watching for NVIDIA stock?
A: Cramer has mentioned $ 90 per share as a potential support level where investors might find a long-term buying opportunity.

Q: What is the significance of the Blackwell product for NVIDIA?
A: Blackwell is crucial for NVIDIA's growth as it is expected to boost revenues significantly once it begins shipping, which was delayed.