Jim Cramer on NVIDIA Corporation (NVDA)'s Chips: "We Only Have One Ace in Our Hand"

We recently published a list of Jim Cramer Put These 14 Stocks Under the Microscope. In this article, we are going to take a look at where NVIDIA Corporation (NASDAQ:NVDA) stands against other stocks that Jim Cramer discusses.

Discussing NVIDIA Corporation (NASDAQ:NVDA), Cramer said if the president wants to win, he needs to “show his trump card, NVIDIA”.

“So, how could the president turn around these negotiations with the Chinese? Okay, so I’ve been thinking about this. I always like to be constructive. I’m a constructive fella… We only have one ace in our hand, and apparently, we don’t want to play it, the chips from NVIDIA. Under the previous administration, NVIDIA was allowed to sell China high-quality chips, but not their best stuff, which were reserved for America and a bizarre list of 18 friendly countries. Now, the Trump administration won’t even let NVIDIA sell their second or third best stuff. As CEO Jensen Huang said on our show, it’s logical to presume that China won’t use these chips for the military precisely because they’re American chips…

So what is the military risk here? Jensen says that there’s $50 billion in AI semiconductor business up for grabs in China, and NVIDIA used to have 95% of that market, but today it’s down to 50%. Sounds like the Trump administration would like it to go to zero. The Chinese are desperate for these chips. They could buy them from NVIDIA, which has the capacity to build them now, and NVIDIA could repatriate the money to build more plants right here. It’s an elegant solution that I’m providing, but I fear the White House just doesn’t care about my solution.

Still, if Trump wants to win this game, he may have to show his Trump card, NVIDIA. As I see it, the others just don’t make for a good hand. You have to play with the cards you’ve been dealt. And for decades, our government did everything it could to encourage outsourcing to China. They left us with a pretty lousy darn hand, both Republicans and Democrats. Between NVIDIA and Apple, Trump has a lot of leverage, but he doesn’t want to use it. Those two companies seem hostage to totally different agendas inside the White House.”

NVIDIA (NASDAQ:NVDA) develops computing, graphics, and networking technologies, including AI software, data center systems, gaming GPUs, autonomous driving platforms, and tools for digital twins and enterprise AI adoption. Additionally, the company works on customized AI solutions through collaborations.

Overall, NVDA ranks 4th on our list of stocks that Jim Cramer discusses. While we acknowledge the potential of NVDA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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