Jim Cramer - Mad Money NVIDIA Corporation NVDA-Q BUY Sep 05, 2025

A solid hold. Demand for their chips is not going anywhere, peers can't catch up and their technology remains advanced. Earnings are following the stock price. Accumulate this carefully on pullbacks, like now. The PE is not low, can be volatile, so don't buy a full position just yet.

Chip business is cyclical. The downslide can be precipitated by overstocking due to high demand, and that inventory has to be worked through. China has now decided it doesn't need the H20 chip, so all that inventory is now in the supply channel.

When you're paying a high price for these companies, your expectations are for sunny days. But you have to plan for the rainy ones.

Today's sell-off of 2.62% had no reason, given China banning their tech companies from buying NVDA AI chips. However, Chinese sales are not reflected in Nividia's current numbers, so why sell? Again, own it, don't trade it, and buy at $160. NVDA remains the heart of AI.

It may appear that Nvidia is investing in hardware ($100 billion in OpenAI), but really they are financing the purchase of their own equipment. The market responded by pushing the stock back to record highs where it remain slightly under that. Will this mean NVDA will break out to new highs or are existing shareholders selling? Take some money off the table. He likes AI for the long term, but the market is ahead of itself now.

The announced today they would invest $100 billion in OpenAI as part of data centre buildout. NVDA will continue to make a fortune with this investment. Is up 37% this year. Don't trade it, own it.

Only trading at 28x for 2027. Growing visibly in high 20s-low 30s. Only problem is if growth starts to slow. At what point do people jump ship? These are cyclical companies. The difference between being super-successful and not executing well can be by a factor of 10, as that's how exaggerated moves can be.

If demand really slows, look out below. Concerns of over-building in AI, might not all be needed, and we don't know for sure. The people saying that we need all this AI demand are the ones benefitting from the rising stock prices. The average of the 50 analysts who cover it are saying it can grow 27%. Still a good deal if what they're saying is true.

Sees more upside, very bullish. Owns many shares. Q2 reported record revenues. Is still dominant in AI chips. Boasts high margins. A high PE, yes. Don't buy all in now, but be tactical. She trims when the stock price runs up, so you need to actively manage this.