"Nvidia Stock Is About to Go Completely Crazy!" - Jim Cramer

who is Nidia what is she that all our swains commend her holy fair and wise is she the heaven such Grace did lend her that she might admire be on the eve of its quarter with the whole Market on ten hooks a d advancing 10 points as and she got .6% that that's that gaining .6% we have to ask who is NVIDIA really and what is she now you may think it's silly to quote the B at the top of a business show but Frank l in all my 43 years on Wall Street that's right right here 43 years I have never seen anything like Nvidia so I scr for analoges and come up grasping for something ethereal to match the ardor of this wonderful company this $3.2 trillion Enterprise where 580 billion just 18 months ago has captured the hearts and minds of people who have nothing to do with the stock market at all I've never seen so many people have a life-changing experience from a single stock it's borderline but tomorrow at this time if viia stock will descend into mere mortality so I feel compelled to Explain why both why Nvidia has this exalted status and why it frankly can never live up to the hype of its $3.2 trillion market cap purely on the basis of one upcoming quarterly report well as we mentioned Nvidia reports results tomorrow after the closing bell joining us right now with more on what we can expect from the chip maker the Imp potential impact on tech stocks what Wall Street is expecting is Ray Wong he is constellation research principal analyst and founder and Ray really good to have you in studio with us what what is Wall Street looking for what does Nvidia have to deliver well at the moment they're priced for Perfection and so everybody's waiting to see will the Blackwell chips be delivered on time will they not what's going to happen going forward and it's all focused on the forecast when we do Market checks we see that the earnings are going to be pretty good because almost every tech company has been actually investing in data center chips and in the AI chips and on the other hand every company budget when we talk to our th cxos on the market everyone robs cyber security budgets to pay for AI this is the point I wanted to get to we're going to talk more about Nvidia in just a second but that came as a shock to me this idea of robbing Peter to pay paal when you're taking money out of cyber security and putting it into AI is this going to be a mistake that they all look back on later if there's a huge cyber security attack or something that gets through well the big thing that's happening in cyber security is about post breach resiliency you know you're going to be breached are you better actually recovering and so they're making the guess that AI might get them fast to cyber security as well so both are happening so it's not it's not necessarily robbing Peter to Paul pay Paul this is a situation where you're beefing up AI in order to try and help your cyber security situation okay that's less scary to me that makes more sense Nvidia has been receiving unparalleled praise in the finance world lately drawing comparisons to iconic figures of beauty and Grace from literature but what exactly is fueling this fervent admiration according to a seasoned Wall Street veteran with 43 years of experience Nvidia is an anomaly this once modestly valued company worth $580 billion just 18 months ago has skyrocketed to a staggering 3.2 trillion valuation its meteoric rise has not only captivated seasoned investors but has also pequ the interest of those who typically stay away from the stock market the level of admiration Nvidia has garnered feels almost like a modern-day mirror um if we are already priced to Perfection but your Channel checks are telling you that things are going to be really great you anticipate the stocks is going to go up will it be enough of a boost to actually impress the street well it it may impress the street but it's not going to bring anyone else with it because What's Happening Here is unlike the internet right with the internet it was open it was decentralized there lots of players things were coming down in price here it's the complete opposite nvidia's done a good job it's centralized it's closed it's more expensive there's only a few players that are going to win and that's why the stock will do well you own five of the big me ific seven right which on six actually have a couple other ones as well so Apple Microsoft Google Nvidia Amazon Tesla oh you own Tesla too yes okay so that that's the one that was missing from this list which one are you not do you not own I think I meta as well actually are you meta so you own all I own all seven I seven and and you believe that this is the right thesis to keep carrying the market at this point we do for now and especially with interest rates coming down that's actually going to help as well a lot of people think it's going to go to EMS when interest rates come down but actually it's not going to look that way aside from India it really looks like big Tech is your flight to safety and your flight to growth it's kind of like buying GE back in the 80s H we had a guest earlier who was talking about the separation from China looking to places like India as a place to invest instead for many of these American companies does that impact any of the big seven the Magnificent S no not as much and what's interesting about India is it's actually a market that's growing the population Dynamics are in their favor China has the inverse population dynamics that makes them look like Japan in 20 years really so what could be upsetting to any of these stocks what would make you sell any of the mag S I think when it comes down when forecasts are no longer growing if they're losing market share in terms of adding products they can't add Services they can't add experiences on top of they're not seeing that linear growth on the monetization because in digital you grow by ads search Goods services and memberships and if you don't get into all six of those you'll actually end up dying and you notice everybody that was good in ads started getting into membership everyone was good in memberships started actually putting out products and that's the progression of digital Giants lower rates lower interest rates is good for technology companies unless it's coming with a recession a big recession that would hurt corporate spending how do you kind of play this what what's The Sweet Spot what people aren't realizing is the number of job layoffs going on in the valley and these are real and it's actually AI replacement that's actually happening so some companies I talked to are taking operations where they have 15% automated today they anti anticipated it's going to be 70% automated they started that at meta and that's actually flowing everywhere else in the valley at the moment how how much Nvidia how long have you owned Nvidia have you been buying more along the way and what would you do based on tomorrow um I have to go back and see but I we are buying along the way I'm buying the dip uh the price Target there is about 180 okay 126 is where it stands right now uh Ray thanks for coming in today really thanks a lot great can I talk to you from from the bottom up how about uh in Nvidia any thoughts I mean I think Nvidia is going to be something that gives some momentum this week it's probably going to beat expectations that's going to continue people to feel that we're in a recovery mode I think from our side those of us that follow the technical signals across different asset classes there's still a lot of concern for us in the sense that Equity signals have become more noisy we do expect more choppiness around as we move into the uh potential cutting season so I think that investors are just a little nervous about what's going to keep equities at their highs turning to Nvidia the street betting on big moves in the stock after the company reports results tomorrow the options market pricing in a near 10% move in either Direction with bet skewed actually to the upside joining us now is susana's co-head of derivative strategy Chris Murphy uh Chris how would you see this positioning compares to Prior quarters for NVIDIA well you know it's one of the most actively traded um earnings you're ever going to see so there's a little bit of everything if we were to pull out one Trend um it would be um selling puts on the downside the Downs side's a little bit offered so what that's telling you as you can obviously look at the chart on the screen um some people have missed the Nvidia rally they are um willing to buy on a dip and one way to represent that is to sell puts on the downside so like I said you see a little bit of everything in something that trades as much as Nvidia but that would be one Trend that I could pull out leading into this earnings how do investors typically utilize options here is this something where they hold exposure to the shares themselves and then use options to hedge or is it is it fair to kind of read this as a directional bet per se or is it more of a kind of piece of an overall portfolio constructure uh construction looking at Nvidia piece of the overall um construction you know I would say that um it's a great situation for options liquidity when you have something that trades as actively as Nvidia you know you have um call buyers on the upside looking for continued momentum you have those who are long looking to take advantage of that 9% move by overriding they're offsetting to a degree you do have some hedging a little bit overwhelmed on the downside a little bit overwhelmed by those who are selling downside puts that that are willing to buy dip so you know because Nvidia is so actively traded you can use the options Market not just to pull out that 9% implied move but you can also pull out the probability of um you know let's say an up uh 20% Move versus a down 20% move and kind of like kind of what you mentioned is the options Market is pricing in higher chance of an up 20% move than a down 20% move you know mostly in response to the trading flow that I mentioned yet despite this extraordinary ascent there are growing concerns that nvidia's stock might be heading for a reality check the experts suggests that despite its impressive performance Nvidia could soon face a downturn they plan to delve into why this exceptional company with its astronomical market capitalization May struggle to live up to the Skyhigh expectations that have been set by its recent successes so what's the key takeaway here Nvidia has achieved remarkable Heights but it's crucial to remember that no stock is is immune to challenges this situation serves as a reminder of the delicate balance between enthusiasm and caution that every investor must maintain in the stock market what do you think about nvidia's future and its impact on the market share your thoughts in the comments below and don't forget to like And subscribe for more in-depth analyses and updates back in the day Nvidia was the driving force behind Tesla's Cutting Edge technology these gpus powered Tesla cars until the company EV develop their own in-house systems now these original Nvidia cards have become legendary collector's items fetching big bucks on the black market for example one particular model is currently selling for $119,000 and some rare additions have even been sold for hundreds of thousands of dollars now's your chance grab yours from the link below but Act Fast stock is extremely Limited