Jim Cramer Warns More 'Pain' Ahead For Nvidia As Stock Rips On Morgan Stanley Earnings Prediction

NVIDIA Corp NVDA shares are ripping higher Monday after Morgan Stanley told clients to step in and buy the stock ahead of earnings. Jim Cramer says not so fast. 

What Happened: Morgan Stanley analyst Joseph Moore maintained Nvidia with an Overweight rating and $500 price target Monday morning, noting that the chip stock remains the firm's top pick. 

With shares having pulled back over the past month and earnings on the horizon, Moore believes it's a good time for investors to jump in the stock. The Morgan Stanley analyst predicted that Nvidia will beat expectations and raise guidance again this quarter. Cramer isn't as confident. 

Check This Out: Good Entry Point To Buy Into Nvidia Stock, Says Analyst Ahead Of Q2 Results: 'We See Numbers Are Going Up'

Monday on CNBC's "Squawk On The Street," Cramer suggested patience may be a better approach.

"I'm gonna warn people — nobody likes Nvidia more than I do — the stock is not rallying yet," Cramer said. "Just because a stock has a great product ... does not mean that it can grow to the sky."

Cramer noted that he expects Nvidia shares to trade sideways or lower in the near term. Expectations are elevated after the company raised guidance to $11 billion last quarter, which was well above even the highest analyst forecasts at the time. That has created a suboptimal setup heading into the quarter. 

"If you can't take the pain, don't get in, get out of it," Cramer emphasized.

Nvidia is set to report second-quarter financial results on Aug. 23. The chipmaker is expected to report earnings of $2.05 per share on revenue of $11.02 billion, according to estimates from Benzinga Pro.

Cramer explained that he still likes the stock long term and has no plans to sell, but investors have to be willing to take temporary losses, he said. The "Mad Money" host also noted that renowned trader and chartist Larry Williams recently predicted that Nvidia would be the "worst stock in the month of August."

See Also: Elon Musk's Neuralink Funding, Nvidia's Strategy And Warren Buffett's AI Play: This Week In Artificial Intelligence

NVDA Price Action: Nvidia shares are down about 8% over the last month, but the stock is up approximately 191% year-to-date. 

Nvidia shares were up 5.48% at $430.85 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Nvidia.