In This Article:
We recently published an article titled Jim Cramer Discusses These 10 Stocks & Says He's In Waiting For AI GPU Spending Clarity. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other stocks Jim Cramer recently discussed.
In his latest appearance on CNBC's Squawk on the Street, Jim Cramer commented on whether the low AI development costs demonstrated by China's DeepSeek AI models would upend investor expectations of AI spending. Ever since the AI wave kicked off in November 2022, businesses have committed and spent hundreds of billions of dollars to procure AI GPUs and develop data centers to host them. The high spending requirements also led President Trump to announce a massive $500 billion Stargate project earlier this month.
However, data center stocks crashed on Monday and wiped out a trillion dollars of value as investors worried whether low AI development costs would mean that this spending would not materialize. Cramer is divided about the overall sentiment when it comes to AI spending after the DeepSeek selloff.
He commented that the lower costs are "the theme of the moment because some people saw it coming." Cramer added "and yet they still ordered. That would be the Zuckerberg case, maybe the Musk piece." On the other hand, he outlined that others "just say oh my, what am I in, I'm gonna go buy a double short NVIDIA." Finally, the CNBC host also shared a third category of people "who think that it's [Wall Street's favorite AI GPU stock] a hand cream."
While investors fretted about lower AI costs translating into weaker demand for items such as GPUs, another narrative questioned whether lower costs meant that AI development would open up to more firms and entities than the higher costs had previously permitted. Cramer admitted that this was possible, but added that it also meant that perhaps "the monopoly rent that people feel that" the premier GPU company "was charging is gone." He added that he was in wait-and-watch mode when it came to AI spending.
Cramer noted several events that could signal to him that perhaps the narrative shift surrounding AI spending was permanent. One of his tests "test would be, uh, is, Three Mile Island not going to be reopened? That would be one I need to hear." The second driver that might convince the CNBC TV show host of a paradigm shift for AI spending would be reports of "any [GPU] order pullback. And I have not heard that yet." Cramer added "But that's not, necessarily, what people are going to announce, 'listen, I've decided. . . If this thing only needs one-tenth of the power, one-tenth of the compute, well I'm going to cut my orders by nine-tenths.' I've not heard that yet, but this thing is. . . a steamroll."