Jim Cramer Says NVIDIA NVDA Chips Demand Remains Unchanged
10 Jim Cramer Stocks to Watch in 2025: A Deep Dive into NVIDIA Corporation (NASDAQ:NVDA)
In our previous article, we presented a list of 10 Jim Cramer Stocks to Watch in 2025. In this article, we will take a closer look at where NVIDIA Corporation (NASDAQ:NVDA) stands among these stocks.
The Bearish Start of 2025 and Jim Cramer’s Outlook
Jim Cramer recently commented on the bearish start of 2025 during a program on CNBC. He emphasized that being a bear in the market is "easy" because when the stocks rise, no one remembers your outlook, but if they fall, you get credit for your foresight. However, Cramer expressed his bullish views on the market in 2025.
Reasons Behind Jim Cramer’s Bullish Outlook
Cramer attributed his optimism to several factors. Firstly, he believes that the departure of FTC Chair Lina Khan would have a positive impact on the market. He described Khan as "way over her head" and stated that she opposed all deals. Secondly, Cramer mentioned that President-elect Donald Trump’s tariff policies are expected to be negotiable, which would offset their negative effects on companies.
The Housing Market Dynamics
Cramer also discussed the expected dynamics in the housing market. He noted that when mortgage rates rise, prices come down, and buyers start staying away, causing sellers to panic and cut prices. This cycle, which has been operating normally for a few years, is likely to reassert itself in 2025, according to Cramer.
Understanding the Significance of Hedge Fund Investors
For this article, we picked 10 stocks mentioned by Jim Cramer as he entered the new year. Each stock has a corresponding number of hedge fund investors. We are interested in these stocks because our research has shown that imitating the top stock picks of the best hedge funds can outperform the market.
Jim Cramer’s Comments on NVIDIA (NVDA)
A close-up of a colorful high-end graphics card being plugged into a gaming computer.
NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Investors: 193
Jim Cramer recently stated on Twitter that there is no change in the broad demand for high-end and low-end chips from NVIDIA Corporation (NASDAQ:NVDA), despite what some analysts may think. However, simply beating earnings estimates is not enough for NVDA anymore, as the impact of high expectations will continue to weigh on the stock.
NVIDIA’s Financials
Nvidia’s forward P/E ratio for the fiscal year ending January 2026 is around 31. Despite an EPS surprise of 8.5%, the stock was unable to benefit from it. A similar trend occurred after the second-quarter earnings, where a 5.6% EPS surprise had little effect on the stock.
Challenges Facing NVIDIA
One of the significant challenges facing NVDA is maintaining its mid-70s gross margin by the end of 2026. The company has already reported a drop in its gross margin from 78% to 74.5% over the last two quarters.
Competition from Amazon’s Trainium 3 Chip
Amazon (AMZN) recently disclosed its Trainium 3 chip, which is expected to be released by the end of 2025. This chip will be twice as fast and have 40% more power efficiency than the previous generation, manufactured on TSMC’s (TSM) cutting-edge N3 technology.
Apple’s Involvement with Amazon’s Silicon
Reportedly, Apple (AAPL) will be a consumer of Amazon’s new silicon. This development poses a significant threat to NVIDIA Corporation (NASDAQ:NVDA).
Manole Capital Management’s View on NVDA
Manole Capital Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
"As of this publication, Nvidia is up roughly 150% year-to-date.
NVIDIA Corporation (NASDAQ:NVDA) ranks 1st on our list of Jim Cramer stocks to watch in 2025. While we acknowledge the potential of NVDA, our conviction lies in the belief that under-the-radar AI stocks hold greater promise for delivering higher returns within a shorter time frame."
Conclusion
In conclusion, NVIDIA Corporation (NASDAQ:NVDA) is one of the most promising stocks among Jim Cramer’s recommendations for 2025. However, with increasing competition from Amazon’s Trainium 3 chip and Apple’s involvement with Amazon’s silicon, NVDA faces significant challenges in maintaining its market position.
Recommendation
If you are looking for an AI stock that is more promising than NVDA but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
