We recently published an article titled 11 Stocks on Jim Cramer's Radar Right Now. In this article, we'll take a look at where NVIDIA Corporation (NASDAQ:NVDA) currently stands compared to other stocks on Jim Cramer's radar.
On his recent episode of Mad Money, host Jim Cramer focused on upcoming market events, highlighting the importance of new Consumer Price Index data alongside a series of reports as earnings season kicks off.
Cramer pointed out that the Department of Labor's nonfarm wages report in September showed significant job growth that exceeded expectations. He highlighted Friday's significant stock market rally in response to better-than-expected job creation numbers. The U.S. economy added 254,000 jobs in September, significantly more than Wall Street's estimate of 150,000. In addition, there were upward revisions for the previous two months, with 72,000 new jobs reported for July and August combined.
Despite his initial expectation that stock prices would fall as bond yields rose, Cramer noted the market's resilience. He noted that people seemed relieved, thinking there was no major economic downturn on the horizon, leading to a flurry of buying activity in the stock market. He added: “We may not be heading for a landing at all.” He described the situation as quite unusual and in his view 'quite exciting'.
He said the Federal Open Market Committee will release notes from last month's meeting on Wednesday that could clarify the central bank's bold choice to cut rates by 50 basis points. According to Cramer, Wall Street is abuzz with speculation about the Federal Reserve's future actions, especially after the strong labor statistics released last Friday. While speculation surrounds whether the next cut will be 25 or 50 basis points, Cramer leaned toward the belief that it would likely be 25 or nothing at all. He added:
“But what really matters is the overall direction for rates, and that direction is definitely lower, which is bullish for stocks.”
He also said Friday would see the release of the Producer Price Index report, which, like the Consumer Price Index, will serve as a critical indicator of the Fed's upcoming decisions. Cramer noted:
“Here's the bottom line: A market that appreciates good news, like robust job creation, is a market that can, well, let's say, handle the historically difficult month of October. After today's performance I can only say that it has been so good so far.”
Our Methodology
For this article, we've compiled a list of 11 stocks mentioned by Jim Cramer during his October 4 episode of Mad Money. We've listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, taken from Insider Monkey's database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds invest in? The reason is simple: our research shows that we can outperform the market by imitating the best stock picks from the best hedge funds. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating the benchmark by 150 percentage points (see more details here).
Cramer congratulates NVIDIA Corporation (NASDAQ:NVDA) on the 25th anniversary of its GPU
NVIDIA Corporation (NASDAQ:NVDA)
Number of hedge fund holders: 179
NVIDIA Corporation (NASDAQ:NVDA) is a leading global provider of graphics, computing and networking solutions, known for its technologies targeting diverse markets including gaming, professional visualization, data centers and automotive applications. Within the Graphics segment, NVIDIA offers GeForce GPUs designed for gaming, the GeForce NOW streaming service, and Quadro/NVIDIA RTX GPUs tailored for business graphics. The company also develops software solutions.
Cramer commented on the excitement surrounding the company, saying:
“Nvidia's Jensen Huang will ring the opening bell of the Nasdaq with his team to celebrate the birth of the GPU 25 years ago. These 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 has expanded its focus beyond gaming and made a name for itself, especially in the field of AI. Recently, CEO Jensen Huang highlighted the overwhelming demand for NVIDIA's next-generation AI chip, Blackwell, calling it “insane.”
Huang said the rapid pace of technological advancement offers the company an opportunity to intensify its innovation efforts. He emphasized the goal of advancing capabilities, increasing throughput and reducing both costs and energy consumption.
Blackwell is expected to cost between $30,000 and $40,000 per unit, and demand is high from major companies like Microsoft and Meta, which are setting up AI data centers to support applications like ChatGPT and Copilot.
Generation Investment Management stated the following about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“Recent net performance has lagged behind market averages. However, since the fund's inception, we have only underperformed about 8% of the time, over a five-year period.1 We do not enjoy these periods. A number of different factors have contributed to the current period of underperformance. The fact that we don't own NVIDIA Corporation (NASDAQ:NVDA) is one. That one company has accounted for about 25% of the benchmark's returns so far this year, meaning almost everyone who doesn't own Nvidia has lost. Since the beginning of the year, not owning Nvidia explains about a third of our relative underperformance.
Nvidia is clearly a profit giant. Revenue has more than tripled in the past year as cloud companies purchase hardware to power AI models. So while profit figures have risen, we are not seeing a repeat of the dot-com mania of the late 1990s. This company's valuation is backed by cold, hard cash…” (Click here to read the full text)
General, NVDA comes first on our list of stocks currently on Jim Cramer's radar. Although we know the potential of NVDA as an investment, our belief lies in the belief that AI stocks hold greater promise for delivering higher returns in a shorter time frame. If you're looking for an AI stock that's more promising then NVDA but that trades at less than five times its earnings, check out our report on 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 was originally published on Insider Monkey.
