Jim Cramer, the host of CNBC’s ‘Mad Money,’ has urged investors not to panic sell Nvidia Corp (NVDA) shares after the Justice Department issued a subpoena over potential monopolistic practices. While acknowledging that Nvidia’s stock could see further declines, Cramer emphasized the importance of considering the company’s history with the DOJ. He pointed out that the DOJ has previously investigated Nvidia for similar concerns, suggesting that this current investigation may not be a cause for immediate alarm.
Cramer urged investors to revisit past instances where the DOJ scrutinized Nvidia for its monopolistic behavior, emphasizing that this current investigation follows a pattern. The DOJ’s investigation is reportedly examining whether Nvidia penalizes customers who do not exclusively use its chips and if it complicates switching to other chip suppliers. The DOJ’s San Francisco office is leading the investigation.
The scrutiny from the DOJ comes at a critical juncture for Nvidia, which has recently seen its stock experience a significant decline following its second-quarter earnings report. Despite exceeding estimates, investors and analysts expressed concerns about Nvidia’s slowing growth rates, raising questions about the company’s future performance.
However, despite these challenges, some analysts remain optimistic about Nvidia’s long-term prospects. Gene Munster of Deepwater Asset Management believes that Nvidia, along with Apple Inc., will lead a three- to five-year tech bull run. Moreover, Beth Kindig, lead tech analyst at I/O Fund, predicts that Nvidia will achieve a $10 trillion valuation by 2025, driven by its next-generation AI chip, Blackwell.
Nvidia’s stock closed at $108.00 on Tuesday, down 9.53% for the day. Despite the recent dip, NVDA’s stock is up 124.21% year to date. Cramer’s advice to hold Nvidia shares amidst the DOJ probe highlights the ongoing debate surrounding the company’s future and the potential impact of the antitrust investigation. While investors may be concerned about the short-term implications, Cramer’s perspective emphasizes the strong long-term potential of Nvidia, particularly in the rapidly growing AI sector.
