Nvidia is on the brink of a $4 trillion stock market value — and Jim Cramer believes that is hardly the ceiling for the artificial intelligence giant. With the Club stock trading around $158 per share Tuesday morning, the company’s market capitalization stood a smidge below $3.9 trillion. The level to watch for Nvidia to become the first company to ever reach $4 trillion: $163.93 per share. “If it were just a semiconductor [company], this stock would be at $58, not $158,” Jim said Tuesday. What makes Nvidia so much more than just a traditional semiconductor design company is that it has so much software and other hardware components that work alongside its core AI chips in data centers, known as graphics processing units (GPUs), according to Jim. In that way, he believes Nvidia provides an entire platform for AI computing rather than one leg supporting it. “People have to recognize there’s so much in a platform that this company is worth a great deal more than it’s currently trading. I really believe that,” Jim said. “There’s just this bias against semis,” he added, alluding to the industry’s long-standing reputation for being notoriously prone to boom-and-bust cycles. “The real value is Nvidia. Why? It’s not just hardware. It’s software.” Nvidia’s software offerings includes a library of pretrained AI models and, crucially, a program called CUDA that essentially allows developers to maximize the parallel computing traits of GPUs. Nvidia unveiled CUDA nearly two decades ago and its popularity among developers is seen as one of the company’s biggest competitive advantages. NVDA 5Y mountain Nvidia 5 years Nvidia arrives at the doorstep of $4 trillion after an extraordinary stock rally that traces its roots to the launch of ChatGPT in late 2022. The viral chatbot introduced the public to the concept of generative AI — and kicked off a gold rush for the chips that made it possible: Nvidia’s GPUs. Its sales, profits and stock price took off. Nvidia shares were caught up in a geopolitics-driven sell-off earlier this year, during which Jim advised members to manage risk and book some profits in case the Trump administration’s policies — particularly toward China — remained a forceful headwind. As Trump eased off some of his most hawkish trade policies, Nvidia’s biggest customers reaffirmed their multi-billion-dollar capital expenditure plans. As countries in the Middle East got the greenlight to shell out on Nvidia chips, the stock regained the momentum that has defined it for two-plus years. Jim is not alone in thinking Nvidia has plenty more upside beyond $4 trillion. On Monday, Citi raised its price target on the stock to $190 per share from $180, citing a belief that the total market for AI chips in 2028 will be even larger than previously expected, in part due to burgeoning demand from countries outside the U.S. — something that Nvidia calls “sovereign AI.” When Nvidia secured a few big wins in this area in May, Jim was quick to say this could be a durable trend that helps further diversify the company’s revenue streams away from a handful of large American tech firms. “Turns out we have another hyperscaler,” Jim said after Nvidia announced a deal to sell 18,000 chips to an AI startup owned by Saudi Arabia’s sovereign wealth fund. Meanwhile, Mizuho Securities upped its price target last week to $185 from $175 on a belief that improvements in the supply chain could allow Nvidia to ramp availability of its latest generation of AI chips.
Jim Cramer says a $4 trillion stock market value is just the start for Nvidia
by Stacks Grow
written by Stacks Grow
Stacks Grow
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