Jim Cramer’s Latest Comments on NVIDIA Corporation (NASDAQ:NVDA)

“What an ugly day. Just hideous. We came into today knowing we’d have a critical non-farm payrolls report. If you were a bull, you wanted to see weaker-than-expected hiring with wages pretty much in line, because that’s what the Fed needs to see before it can start cutting rates. Voila, we got exactly what we wished for. Maybe we should have been careful, though, because as soon as we got what we wanted, the bulls vanished and the sellers came out of the woodwork, crushing practically everything.

The Dow fell 410 points, the S&P plunged 1.73%, and the NASDAQ plummeted 2.55%. This market has a September problem. Come September, we’re always hit with a tremendous amount of profit-taking, which is why it’s the weakest month of the year. I know that’s somewhat circular reasoning—we sell because we’ve always sold—but it makes more sense than saying people sold tech because they fear a hard landing. Tech, especially big tech, is something you buy, not sell, into weakness if you’re worried about a more severe slowdown.”

“This market has a September problem. Come September, we’re always hit with a tremendous amount of profit-taking, which is why it’s the weakest month of the year. I know that’s somewhat circular reasoning—we sell because we’ve always sold—but it makes more sense than saying people sold tech because they fear a hard landing. Tech, especially big tech, is something you buy, not sell, into weakness if you’re worried about a more severe slowdown.

Why? Well, because big tech is all about powerful secular themes that can keep going even during a recession—and we’re not getting one. I’m talking about the data center, accelerated computing—they’re not going anywhere. Nevertheless, when anything jars the big tech themes of the moment, the market’s reaction is swift, harsh, and horrible.”

“Look at what happened after the company reported last night. I don’t believe AI is a bubble, but these stocks are still up a great deal, especially in August. And September tends to bring out sellers when you get just in-line numbers.”

“Tuesday night’s the great debate between Vice President Harris and former President Trump. I don’t know how much of a role the economy will play in the debate. If Trump’s on his game, he’ll try to tie Harris to the inflation we’ve experienced since COVID. I suspect that Harris will try to portray herself as more moderate than President Biden. Either way, I doubt there’ll be anything specifically market-moving, even if the candidates say something newsworthy about their tax plans. Keep in mind that the winner in November likely won’t have the Senate votes to totally rework the tax code, whether we’re talking about Harris’s capital gains tax or Trump’s 19th-century-style tariffs.”

“Wednesday, we get another read on inflation—this time from the Consumer Price Index. What can I say? As long as inflation stays the same or goes lower, the Fed has plenty of leeway to cut interest rates and prevent a recession—the thing so many sellers are worried about. That’s why I keep telling you, please do not give up the ship here.”

” When you look at NVIDIA on forward earnings or estimates, it always looks expensive, and then it so far trumps those estimates that when you look backward, it turns out the stock was selling at a remarkably low price. That’s been the secret to NVIDIA literally since 2012—incredible! It just keeps doing that, right? Please don’t put too much significance on day-to-day gyrations in a stock’s share price. You have to know when something is a signal and when it’s all just sound and noise, always signifying nothing.”

“What about tech weakness as a recession signal? I keep hearing Nvidia may have missed its quarter due to economic softness. Let’s put that rumor to bed. The issue wasn’t demand; it was Nvidia’s inability to produce enough of its high-end Blackwell chips due to supply constraints. This wasn’t a demand issue.

Now, let’s address the overblown narrative surrounding Nvidia’s stock drop, which wiped out $279 billion in market capitalization. In isolation, that sounds terrifying, but keep this in perspective: Nvidia started the year with a $1.22 trillion market cap and soared to $2.93 trillion by the end of August. Yesterday’s drop to $2.65 trillion? Sure, it’s a big number, but in the context of a stock that’s up over 100% this year, it’s not as catastrophic as it seems.

This wasn’t the first time Nvidia’s market cap has dropped over $200 billion in a day, and it likely won’t be the last. Yet, I know what you’re thinking—Nvidia’s stock is on fragile ground. That’s fair. There are still far too many investors who don’t understand what Nvidia does or how it profits from the brainpower of CEO Jensen Huang and his team.

The stock can’t stabilize until these weak shareholders sell out. Meanwhile, we’re waiting to see how quickly Nvidia can get its Blackwell chip rolling and improve gross margins—the real reason for the stock’s recent pummeling.”