This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
What do the CNBC host Jim Cramer and ARK Invest’s CIO Cathie Wood have in common? Well, both are regarded as potent contrarian indicators, with Cramer flaunting his unmatched ability to parrot the market’s consensus view and Wood donning the mantle of the wild west of investment research, replete with rosy projections that are by and large divorced from principles of pragmatic investing. Recently, the contrarian duo shared their views on NVIDIA’s meteoric rise, and the corresponding implications for the stock’s prospects can’t be ignored.
As can be seen in the snippet above, NVIDIA has officially become a part of the $1 trillion market capitalization club. Over the past few weeks, the GPU maker has continued to make waves by announcing products geared toward the current AI-focused love fest.
At the Computex 2023, NVIDIA announced the GH200 Grace Hopper Superchip. The chip combines the Grace CPU and Hopper GPU architecture for “giant-scale AI and HPC” applications by delivering computing power of 1 exaflop.
Bear in mind that NVIDIA recently announced a suite of products under the ambit of its AI Foundation Services to enable clients to create and run customized generative AI models. Powered by AI supercomputers and the DGX Cloud, the AI Foundation Services currently boasts three main products: NeMo for text-based generative AI applications, Picasso for image-based AI applications, and BioNeMo for applications related to protein structure, sequencing, and molecular docking. Additionally, NVIDIA has also introduced NeMo Guardrails, an open-source toolkit that is designed to ensure security for Large Language Models (LLMs) via a range of programable constraints.
Recently, JP Morgan declared that NVIDIA would remain the primary beneficiary of AI-related spending this year, scooping up as much as 60 percent of the proverbial pie. Of course, as we noted last week, the AI-related computational needs in the future would center on generative AI inference and fine-tuning, which are software-driven. The inference workloads will eventually become homogenous enough to allow for the commoditization of the underlying software, thereby chipping away at NVIDIA’s advantage. This creates headwinds for NVIDIA’s AI leadership further down the road.
Jim Cramer has just called Nvidia’s worth “daunting”.
Yet Cramer said, on Sept 19th 2022, that $NVDA was a loser. pic.twitter.com/sOwhVlkdw1
— unusual_whales (@unusual_whales) May 29, 2023
Meanwhile, as can be seen in the tweet above, Jim Cramer appears flabbergasted by NVIDIA’s $1 trillion valuation. It was, after all, not too long ago that the CNBC host had dubbed the stock a “loser.”
Since 2014, @ARKInvest has believed that Nvidia saw the AI future before most other chip companies, and now we believe it will continue to power the AI age. At 25X expected revenue for this year, however, $NVDA is priced ahead of the curve.
— Cathie Wood (@CathieDWood) May 29, 2023
ARK Invest’s Cathie Wood also appears to be taking a dim view of NVIDIA’s short-term prospects, terming the stock overvalued on the back of the stock’s 25x P/S multiple for the current year.
"Cathie Wood Challenges The Hype: Is Nvidia Really The Only AI Play?" https://t.co/HmuFmy5rr0
"Cathie Wood challenges the hype."
ROFLMAO!!!!!!!!!!!
— Stanphyl Capital (@StanphylCap) May 30, 2023
These developments should come as a solace to NVIDIA bulls. After all, if Cramer and Wood are souring on the stock’s prospects, further gains are virtually assured.
Follow Wccftech on Google to get more of our news coverage in your feeds.
