Jim Cramer Defends Nvidia Stock Despite Recent Downturn

During the CNBC Investing Club's April 2024 monthly meeting, Jim Cramer, the host of CNBC's Mad Money, defended Nvidia stock, arguing that Wall Street is undervaluing the company despite its recent downturn. Cramer described Nvidia as an "own it, don't trade it" stock, urging investors to hold onto their shares for the long term.

Cramer believes that the market is underestimating Nvidia's long-term potential and that the company's current valuation does not accurately reflect its strong fundamentals and growth prospects. He emphasized that Nvidia is a long-term investment that should be held, not traded, as the company continues to innovate and maintain its dominance in the semiconductor industry.

Despite the recent volatility in Nvidia's stock price, Cramer remains confident in the company's future. He noted that Nvidia trades at a bargain multiple of 30 times forward earnings, given the company's projected revenue growth of over 80% in fiscal year 2025. Cramer also highlighted positive industry trends, such as Microsoft's plans to double its GPU inventory and Taiwan Semiconductor Manufacturing's comments about robust AI demand, as tailwinds for Nvidia.

Why this matters: Nvidia is a key player in the semiconductor industry, and its stock performance can have broader implications for the technology sector and the overall market. Cramer's defense of Nvidia amid its recent downturn provides insight into the long-term potential of the company and its role in shaping the future of AI and other advanced technologies.

During the Investing Club's meeting, Cramer provided a real-time view into his Charitable Trust's holdings and discussed his investment strategy, including recent purchases and lessons learned from past investments. He reiterated his belief that Nvidia is well-positioned for the future and that the AI story for the company is still intact, with Nvidia in the early stages of multi-year growth.

Key Takeaways

• Cramer defends Nvidia, says Wall Street undervalues the company despite recent downturn.
• Cramer believes Nvidia is a long-term investment, not a stock to be traded.
• Nvidia trades at a bargain multiple of 30x forward earnings with over 80% revenue growth.
• Positive industry trends, like Microsoft's GPU plans and TSMC's AI demand, are tailwinds for Nvidia.
• Cramer provides real-time view of his Charitable Trust's holdings, reiterates Nvidia's long-term potential.