As Nvidia's Earnings Near, Jim Cramer Sees $2B Revenue Boost Potential: '…Jay's Stance Is Nothing But Icing On The Cake' Of AI Chipmaker

As NVIDIA Corp NVDA prepares to report its earnings this Wednesday, investors and analysts are eagerly awaiting results that could justify the company’s soaring valuation.

What Happened: Jim Cramer, the host of CNBC’s “Mad Money,” suggests that the market is looking for “a $2 billion upside surprise in the reported quarter and a lift of $2 billion for the current quarter” from the AI chipmaker.

Cramer emphasized the importance of recognizing Nvidia’s long-term potential and its pivotal role in the artificial intelligence sector. He highlighted that despite recent market volatility, Nvidia’s foundational strengths remain intact.

Despite recent market volatility that saw Nvidia’s stock drop significantly, Cramer argues that the company’s long-term prospects remain strong.

He compared Nvidia to a biotech company, stating, “Nvidia is, in some ways more of a biotech which has developed something that each year saves more people’s lives.” This analogy underscores the transformative potential of Nvidia’s AI technologies.

Cramer also highlighted an often-overlooked aspect of Nvidia’s business: “The software business of Nvidia is never talked about. Nvidia, like Apple Inc. AAPL, is thought about as a hardware company, due for a multiple contraction.” This perspective suggests that Nvidia’s value extends beyond its hardware offerings, potentially justifying its high valuation.

As the market braces for Nvidia’s earnings report, Cramer advises investors to look beyond short-term fluctuations.

“If you believe in me then you believe that Jay’s [Powell] stance is nothing but icing on the cake of Apple and Nvidia and if you think that, then Wednesday will not be the most important day of the year even as so many think it will be,” Cramer concluded.

Why It Matters: Nvidia’s upcoming earnings report is highly anticipated, with analysts expecting second-quarter revenue of $28.46 billion, a significant increase from $13.51 billion in the same quarter last year. Earnings per share are projected to be 64 cents, up from 27 cents per share in the previous year.

Recently, Nvidia’s stock has experienced volatility, with shares falling about 10% from their all-time highs. Prominent trader Steve Grasso has cashed out of his Nvidia holdings, citing the need to reassess based on price action.

Despite this, some experts remain optimistic. Eric Jackson, founder of EMJ Capital, believes Nvidia’s stock could surge to $340 in the medium term, driven by substantial investments in AI data centers.

Dan Ives of Wedbush Securities has also predicted that Nvidia will deliver “another masterpiece quarter” due to the high demand for AI. He described the upcoming earnings week as potentially the most critical for the market in years.

Price Action: Nvidia’s stock closed at $129.37 on Friday, an increase of 4.55% for the day. Year to date, the stock has surged by 168.57%, according to data from Benzinga Pro.

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