Jim Cramer Explains Why He Says "Own, Don't Trade the Stock of NVIDIA"

NVIDIA Corporation (NASDAQ:NVDA) is one of the stocks Jim Cramer recently talked about. Cramer explained why he “won’t give up” on the stock, as he commented:

“On this news, NVIDIA stock has had the living daylights kicked out of it. Alphabet had been a huge client of NVIDIA, and the press clips say that it’s going to adopt its own chips far more than the ones owned by NVIDIA. Alphabet stock has been as hot as NVIDIA stock is now ice cold. It got colder last night when a tech publication reported that Meta is willing to buy these same chips from Google at a considerable savings…

Now, you could argue, so what? NVIDIA’s got a ton of business… NVIDIA just reported what seemed like a bang-up quarter. Instead, well, guess what? The stock got banged up… NVIDIA was at 1$86 before the quarter, but then it fell to $180 after its report. Today, it dropped further [to] $177 on this Meta news, down $4 and 73 cents, but it did fall as low as $169. Now, considering it traded at $212 at the end of October, $169, I mean that is quite [an] amount of loss…

I play with an open hand for my trust, so I want to explain why I won’t give up on this one. I want to explain why I say own, don’t trade the stock of NVIDIA. First, historically, it’s been a bad idea to dump any of the Mag Seven out of fear… I think their problems are not insurmountable. In fact, these remind me of the same problems I’ve heard all the way up from when I liked NVIDIA when it was just a several hundred billion dollar enterprise instead of the $4 trillion enterprise it is today. I saw so many people leave the stock for so many other reasons that are just like these. That’s why I say own it, don’t trade it, NVIDIA.”

NVIDIA Corporation (NASDAQ:NVDA) develops accelerated computing and AI platforms, GPUs for gaming and professional use, cloud services, robotics and embedded systems, and automotive technologies.

While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.