Meta Platforms’ pledge to spend billions on Nvidia chips is a much-needed shot in the arm for the AI semiconductor giant and its recently middling stock price. Nvidia’s ferocious multi-year rally had subsided in recent months as investor money moved to other hot spots in the chip market, such as memory and storage, and as Google’s superior AI models built on its own chips stoked competition concerns. But now, Meta’s commitment to Nvidia should remind the market of the benefits of Nvidia’s technology and its central role in building AI more broadly. “NVIDIA is such a drag on this market that a new story is starting to begin, which means we’re not chasing SanDisk, Western Digital, Micron over and over again,” Jim Cramer said on CNBC on Wednesday. Instead, traders and investors may start saying, “Let’s go back to where we have good intellectual property,” he said. Nvidia tops the list of IP giants. “It’s just a change of pace,” Jim says. Nvidia stock rose more than 2% on Wednesday, outperforming the S&P 500. But so far in 2026, the stock is up just over 1%, slightly outperforming the broader market. The two charts below show how much the semiconductor landscape has changed since the early days of the AI boom, when Nvidia’s cutting-edge processors, known as graphics processing units (GPUs), were the hottest commodity in tech and profits and stock prices were soaring. In recent months, the “hottest product” designation has shifted to memory chips and data storage devices. These technologies are essential for AI models to be trained and used in the real world. But until recently, they were relatively unknown compared to chips like Nvidia’s that do the workhorse computation that powers AI models. As demand for memory and storage accelerates, supply shortages occur and prices for items such as DRAM, hard drives, and solid-state drives (SSDs) soar. Some investors may worry that higher memory prices could be passed on to Nvidia’s customers, limiting demand for GPUs if more budget goes elsewhere. That’s why the charts for Micron, Western Digital, Sandisk, and Seagate compared to Nvidia have looked like this since early August. Nvidia (bottom blue line) is up just 4% on a total revenue basis, so far behind that it’s hard to watch. SanDisk (pink line) is up more than 1,200%, while Western Digital (green line) and Micron (orange line) have more than tripled. Seagate (turquoise line) is up about 166%. In our minds, some of the money flowing into these stocks could be coming from Nvidia. For investors looking to ride the memory and storage bandwagon without increasing exposure to the semiconductor industry, Nvidia could be a useful source of capital, especially if you’re looking for paper returns. Additionally, Intel stock (purple line) attracted renewed interest from investors over time as the Trump administration acquired the stake and presented itself as a “national champion.” As the chart above shows, even Advanced Micro Devices (yellow line), which is seen as an alternative for customers looking to reduce their dependence on Nvidia, outperformed Nvidia during this period. Another big market question that has tailed NVIDIA in recent months is Google’s emergence as an AI darling, driven in large part by its Gemini 3 model announced in mid-November that was trained exclusively on its own custom chips known as Tensor Processing Units (TPUs). Google has been co-designing these chips with fellow club namesake Broadcom for years, primarily for internal use, but also making them available to customers via Google Cloud. However, the success of Gemini 3 and media reports that Google was in talks to sell TPU servers to outside parties, most notably to Meta for use by the social media giant in its own data centers, increased the level of concern about Google’s competitive threat to Nvidia. The graph below shows how Nvidia’s performance (blue line) has lagged Google’s parent company Alphabet (orange line) and the iShares Semiconductor ETF (pink line), a broad-based chip stock fund often referred to as its trader symbol SOXX (pink line), since November 17th. Oddly, Broadcom (green line) has lagged Nvidia during this period, but we see this as a mistake by the market rather than an indication of any fundamental weakness in its business. After all, Broadcom helps enable TPU success. Nevertheless, it should be noted that the chart below shows that Nvidia stock lacked momentum during this period of hype about Google’s AI capabilities, which is why we brought Google back into our portfolio in late December. Does Meta’s multi-year commitment to buying Nvidia chips mean it won’t use TPUs in the future? No, definitely not, given that Meta and many other companies developing AI products are hungry for all the computing power they can get. There is also no sign that Meta is abandoning its own custom chip efforts, and is believed to be partnering with Broadcom. Broadcom CEO Hock Tan is a member of Meta’s board of directors. But Meta’s decision to spend billions more on silicon shouldn’t be ignored, as the market is concerned about NVIDIA’s competitiveness and believes its chips are too expensive and customers will have to look elsewhere for their computing. This is especially true given that Meta has said it will introduce Nvidia’s central processing units (CPUs) on a standalone basis as well as in conjunction with its flagship GPUs, a notable new path for Nvidia. Combine this with Meta’s use of Nvidia network technology and it’s a reminder of how complete the company’s product portfolio is. The bottom line is that Meta has real confidence in the “total cost of ownership” of Nvidia technology, Jim said Wednesday. He said it was too narrow to look only at the upfront purchase price and not consider the value provided over the life of use. Meta CEO Mark Zuckerberg understands that, but “traders aren’t thinking about this at all,” Jim said. (Jim Cramer’s Charitable Trust is long running with NVDA, GOOGL, AVGO, and META. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investing Club, you’ll receive trade alerts from Jim Cramer before he makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. 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