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We recently published an article titled Jim Cramer Commented on 12 Stocks Linked to Data Centers. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against the other stocks that are linked to data centers.
Jim Cramer, the host of Mad Money, highlighted the growing significance of data centers as a major theme in the technology sector during Tuesday’s episode. He pointed out that although it might not always be immediately visible in the broader market indices, data centers have become a significant investment focus.
“The data center has been the single biggest investment story for months on end, even if it’s not always obvious from the averages… This sea-change, one that we are undergoing in real time, with the data center theme suddenly going from positive to negative, is buried within the broader indices, but it’s like a living, breathing, seething animal, a snorting bull turned into a grizzly, scratching and clawing back the gains in your portfolio.”
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Cramer offered a historical perspective, tracing the rise of NVIDIA, a graphics and gaming chip maker, as pivotal to the development of modern data centers. He explained that the company’s invention of a semiconductor capable of enabling both accelerated computing and generative artificial intelligence became foundational to a wide range of technologies.
“This semiconductor becomes the backbone of electric vehicles, of robots, and most important, of the data centers themselves… Huge warehouses full of servers. No large tech company worth its salt can afford to do without these data centers.”
However, Cramer revealed that the situation took a dramatic turn when a Chinese company found a way to achieve similar results with fewer, less expensive chips, throwing the entire data center industry into turmoil.
Describing the company as "the odd man out of the Magnificent Seven," Cramer emphasized the company's central role in the tech market, noting that its products are essential to the operations of numerous tech companies. Cramer pointed out that President Trump's administration may impose tighter export controls on Chinese technology, which could further complicate the company’s market position.
Among the companies most at risk from these changes, Cramer singled out semiconductor and semiconductor capital equipment players, with the GPU kingpin standing out as the most exposed. He concluded by suggesting that some people even argue that the company’s performance could be decisive to the future fortunes of major momentum stocks in the tech sector.