We recently published an article titled, 11 Stocks on Jim Cramer’s Radar Right Now. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other stocks on Jim Cramer’s radar right now.
In his recent episode of Mad Money, host Jim Cramer focused on the upcoming market events, emphasizing the importance of new consumer price index data alongside a series of reports as the earnings season kicks off.
Cramer pointed out that the Labor Department’s nonfarm payroll report revealed significant job growth in September, surpassing expectations. He highlighted the significant rally in stocks on Friday, a response to better-than-expected job creation figures. The U.S. economy added 254,000 jobs in September, significantly exceeding Wall Street’s estimate of 150,000. Additionally, there were upward revisions for the previous two months, with 72,000 more jobs reported for July and August combined.
Despite his initial expectation that stocks would decline as bond yields surged, Cramer noted the resilience in the market. He observed that people seemed to feel relief, thinking that a major economic downturn was not on the horizon, which prompted a flurry of buying activity in the stock market. He added, “Maybe we aren’t headed toward a landing at all.” He described the situation as quite unusual and, in his view, “quite exciting”.
He mentioned that on Wednesday, the Federal Open Market Committee will publish notes from its last month’s meeting, which could clarify the central bank’s bold choice to cut interest rates by 50 basis points. According to Cramer, Wall Street is rife with speculation about the Federal Reserve’s future actions, especially following strong labor statistics released last Friday. As speculation swirls around whether the next cut will be 25 or 50 basis points, Cramer leaned towards the belief that it would likely be 25 or nothing at all. He added:
“Then again, what really matters is the overall direction for rates, and that direction is most definitely lower, which is bullish for stocks.”
He also mentioned that Friday would bring the producer price index report, which, like the consumer price index, will serve as a critical indicator for the Fed’s upcoming decisions. Cramer commented:
“Here’s the bottom line: a market that appreciates good news, like a robust job creation number, is a market that can handle, well, let’s just say, the historically tough month of October. After today’s performance, all I can say is so far so good.”
Our Methodology
For this article, we compiled a list of 11 stocks that were mentioned by Jim Cramer during his episode of Mad Money on October 4. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Cramer Congratulates NVIDIA Corporation (NASDAQ:NVDA) On Its GPU’s 25-Year Anniversary
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a leading global provider of graphics, compute, and networking solutions, known for its technologies that cater to various markets, including gaming, professional visualization, data centers, and automotive applications. Within its Graphics segment, NVIDIA offers GeForce GPUs designed for gaming, the GeForce NOW streaming service, and Quadro/NVIDIA RTX GPUs tailored for enterprise graphics. Additionally, the company develops software solutions.
Cramer commented on the excitement surrounding the company and said:
“Nvidia’s Jensen Huang will be ringing the Nasdaq opening bell with his team to celebrate the birth of the GPU 25 years ago. Those are the faster chips that make generative AI work. Congratulations to the NVIDIA team.”
NVIDIA (NASDAQ:NVDA) first gained recognition with the launch of the GeForce 256 in 1999, which was hailed as the world’s first graphics processing unit (GPU). It revolutionized gaming by delivering smoother graphics and higher frame rates, ultimately shaping the future of computer graphics and gaming experiences.
Over the years, the company expanded its focus beyond gaming and has made a name for itself, especially in AI. Recently, CEO Jensen Huang highlighted the overwhelming demand for NVIDIA’s next-generation AI chip, Blackwell, calling it “insane.”
Huang expressed that the rapid pace of technological advancement presents an opportunity for the company to intensify its innovation efforts. He emphasized the goal of advancing capabilities, increasing throughput, and reducing both costs and energy consumption.
Blackwell is set to be priced between $30,000 and $40,000 per unit, and demand is high from major corporations such as Microsoft and Meta, which are establishing AI data centers to support applications like ChatGPT and Copilot.
Generation Investment Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“Recent net performance is behind market averages. However since the fund’s inception, we have spent only about 8% of the time underperforming on a rolling five-year basis.1 We do not enjoy these spells. A number of different factors has contributed to the current period of underperformance. The fact that we do not own NVIDIA Corporation (NASDAQ:NVDA) is one. That single company accounted for roughly 25% of returns in the benchmark so far this year, meaning almost everyone who does not own Nvidia has lost out. Year-to-date, not owning Nvidia explains about a third of our relative underperformance.
Nvidia is, clearly, an earnings juggernaut. In the past year its revenue has more than tripled, as cloud companies load up on hardware to power AI models. So while its earnings multiple has increased, we are not seeing a repeat of the dotcom mania of the late 1990s. This company’s valuation is backed by cold, hard cash…” (Click here to read the full text)
Overall, NVDA ranks 1st on our list of stocks on Jim Cramer’s radar right now. 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: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.