Nvidia Corp. NVDA emerged as the darling of investors in 2023, and its ascendancy continued into 2024, riding the initial wave of the artificial intelligence revolution. An unexpected sage, CNBC’s Mad Money host, Jim Cramer, stood firm in his advocacy for the company and its visionary CEO, Jensen Huang.
However, a twist of fate occurred in late 2022 when Cramer surprisingly made a call to sell the stock, expressing apprehension about Nvidia’s future prospects amid the Ethereum merger.
The Dramatic Turn: In a momentous “Mad Money” episode on September 19, 2022, Cramer aired his concerns regarding Nvidia, attributing them to the Ethereum merger. He highlighted the potential consequences for Nvidia due to the diminished demand for graphics cards resulting from the merger.
Cramer’s apprehension stemmed from the belief that Nvidia had not fully embraced the realms of AI, virtual reality, and machine learning, thus facing a perilous path ahead.
Nevertheless, Cramer’s affinity for Nvidia endured, evident in a quirky gesture of naming his canine companion after the stock back in 2017. Subsequent to Nvidia’s stellar performance in the market, Cramer hailed Huang as a more visionary leader than Tesla’s Elon Musk.
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Nvidia’s Gravity-defying Trajectory: Nvidia navigated through turbulent periods, with its revenue trajectory mirroring market upheavals. The frenzy of Bitcoin mining in 2015 propelled the need for Nvidia’s GPUs, only to falter when the cryptocurrency market crashed in 2018. Amid the COVID-19 pandemic, Nvidia harnessed a resurgence driven by heightened GPU demands for remote work, research, and gaming.
In 2022, economic and geopolitical challenges cast a shadow over Nvidia’s stock performance. However, the subsequent year witnessed a resurgence as the AI revolution, triggered by OpenAI’s ChatGPT, catalyzed the demand for Nvidia’s high-performance chips, powering AI applications.
The Rewards of Nvidia’s Investment: A $1,000 investment in Nvidia on September 19, 2022, would have yielded 7.5 shares of the company. Fast forward to the present, these shares are valued at $5,894 (based on Nvidia’s closing price of $788.17 on Friday), translating to a remarkable 490% return within a 17-month timeframe.
Source: Benzinga Pro
On a notable Friday, Nvidia almost achieved a monumental $2 trillion market cap, signifying its meteoric rise. With the AI frenzy still in its infancy, Nvidia stands at the cusp of potentially claiming the throne as the most valued entity in the sector. Vocal in his acclaim, Wedbush’s Daniel Ives proclaimed that “Jensen and Nvidia have unlocked a revolutionary tech era, leaving investors awe-struck.”
Yet, amidst the fervor, skeptics warn of an impending AI bubble burst and heightened competition lurking as challenges for the company’s trajectory. Deepwater Asset Management’s Gene Munster predicted a sustained AI wave for the next three to five years, cautioning against complacency.
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