CNBC’s Jim Cramer said Tuesday that investors are getting carried away with falling stocks. Nvidia AI companies such as are approaching the market with the wrong mindset. In his view, owning artificial intelligence stocks requires belief, and if you don’t have that, there are safer, slower-growing stocks to choose from in the world.
“Either believe in artificial intelligence or stay away from it,” Kramer said.
Kramer said too many investors treat the market as a zero-sum fear game, buying only after stocks rise and selling the moment they fall. Those who missed out on big gains over the past decade were those who couldn’t tolerate weakness or who couldn’t trust the companies they owned, he said.
That philosophy underlies his long-standing support for the Magnificent Seven. alphabet, Amazon, apple, meta, microsoft, Nvidia and tesla. Cramer said both companies earned multitrillion-dollar valuations through consistent execution, huge profits and the ability to adapt when their core businesses faced pressure.
He cited Tesla as a good example. When electric vehicle competition intensified and profits came under pressure, the company didn’t change, but investors’ perceptions did. Stocks recovered from their plunge after the story shifted to self-driving technology and robotics.
Nvidia is currently facing a similar moment of doubt.
The stock has been hit hard by concerns that Alphabet is becoming more dependent on its self-developed AI chips. broadcominstead of Nvidia’s flagship processor. Pressure was further compounded by reports that Meta may buy chips designed by Google. These moves came on the heels of NVIDIA’s strong earnings report, but the stock nevertheless fell to the mid-$180s and fell further following the Meta news.
Mr. Cramer acknowledged that the concerns were real, but argued that selling Nvidia now would mean repeating the same mistakes he made with Alphabet, which he exited before its stock price doubled.
“If you don’t like Nvidia, you don’t have to own it. No one is going to put a gun to your head,” Cramer said. “Make sure you don’t hit the door when you leave.”
