Jim Cramer praised Nvidia Corporation NVDA over tech behemoths like Apple Inc. AAPL and Microsoft Corporation MSFT. Cramer’s endorsement of the Jensen Huang-led company is based on its future earnings potential, making it a more attractive investment.
What Happened: Cramer’s analysis underscored the tech industry’s growing dependence on Nvidia’s chips, CNBC reported on Monday. He emphasized that any company that manufactures hardware, connects to the internet, or operates multiple data centers requires Nvidia’s chips to stay competitive.
Cramer also mentioned that Nvidia’s stock, despite being priced at 46 times earnings, has historically been a good investment. He argued that the company’s stock price seems overvalued only superficially. In reality, Nvidia’s stock tends to be undervalued a year later when it becomes apparent that the company is making more money than expected.
“Ask yourself, does any company match Jensen and Nvidia right now? The answer is no. This time remains different. As tempting as it is to ring the register, I think you need real reasons to jump off,” Cramer noted.
“I say let others be baffled over the Apple versus Microsoft versus Nvidia conundrum. To me, only one is inexpensive on what will turn out to be 2025 earnings. That one is Nvidia.”
Why It Matters: Earlier this month, Cramer suggested investors consider taking profits from their AI stock holdings, highlighting the significant gains in the AI sector. However, Nvidia’s performance has been exceptional, with the company’s market cap climbing to $3.33 trillion, surpassing tech giant Microsoft and Apple, making it the most valuable public company in the world.
Despite leading the AI revolution and its market capitalization crossing $3 trillion, Nvidia’s brand recognition still lags behind Apple and Microsoft. This discrepancy between Nvidia’s market capitalization and brand recognition could be a potential growth area for the company.
Price Action: On Monday, Nvidia was trading 1.79% lower at $124.30 during the pre-market after it closed at $126.57 on Friday, according to Benzinga Pro.
Image via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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