Post Views: 51
What a difference a year makes. Nvidia entered last year’s pivotal GTC conference — its new product showcase and software developer workshop — riding high, with its stock already up a blistering 77% in 2024. The artificial intelligence boom was just over a year old, and optimism reigned supreme among tech investors. Shares of the AI chip king head into next week’s GTC bruised and battered. As of Thursday’s close, they were down more than 20% from their all-time closing high in early January. The decline would look even worse — if not for a bounce in recent sessions. During Friday’s Morning Meeting for Club members, Jim Cramer pointed out that Nvidia stock tends to trend higher into GTC. True to form, shares were up more than 7% for the week. “The keynote is very important,” he added. “You’ve got to reestablish that it’s actually a company that is a factory for the future.” This year, skepticism about the sustainability of AI investments is much easier to find in the wake of the DeepSeek panic . Nvidia’s revenue growth is slowing, to 78% last quarter and a projected 65% for the February-to-April period. As impressive as that growth rate is for a company worth trillions, triple-digit expansion seems to be a thing of the past. Investors don’t hesitate to pull the what-have-you-done-for-me-lately card. Then there’s the list of things weighing on Nvidia’s stock far outside the company’s control: Tariffs, geopolitics affecting its ability to sell products to China, and a rise in uncertainty about the direction of the U.S. economy, which has prompted investors to get more defensive and reduce their riskier bets. Nvidia is far from the only momentum stock to go in reverse in recent weeks. Just take a look at the charts of Palantir and Tesla . Traders taking advantage of highly speculative zero-day options represent another challenge for Nvidia shares. Needless to say, the backdrop for GTC is quite muddy. Is there anything Nvidia CEO Jensen Huang can say or announce next week that will clear it up and allow the conference to, once again , be a positive catalyst for the stock? We’re about to find out — and Jim will be out in Silicon Valley to take it all in. “The risk-reward is fairly decent here,” he said during Thursday’s Monthly Meeting , because Nvidia’s valuation has gone down alongside its share price. The stock now sells at about 25 times forward earnings, down from 31 at the start of the year, and a sizable discount to its five-year average of 40, according to FactSet. “Let me find out what I can next week and make a better decision [on what to do next] for you,” Jim said. NVDA 1Y mountain Nvidia’s stock performance over the past 12 months. At Huang’s keynote presentation on Tuesday afternoon, investors should plan to hear about an updated version of the company’s new Blackwell AI chip platform dubbed Blackwell Ultra, which is slated for release in the fall. New details also are expected on Nvidia’s next-generation Vera Rubin offering , the successor to Blackwell that is targeted for a 2026 debut. For both products, the focus is on their performance specifications, specifically for the day-to-day use of AI models known as “inference.” Are these new products going to incentivize companies to shell out more money to get the newest hardware after spending a lot on the current version of Blackwell and the prior generation known as Hopper? Are they good enough to assuage some investors’ concerns about the threat that custom chips present to Nvidia’s long-term growth outlook? Huang’s keynote and GTC as a whole also will likely generate headlines around robotics and autonomous vehicles, which Nvidia calls “physical AI.” While those are both considered promising areas for Nvidia down the road, updates pertaining to its data center business are more significant drivers of the stock right now. Even if the stock does receive a GTC-related lift, it may be short-lived. Such was the case in March 2024 : A six-session win streak that began on the day GTC started soon gave way to a nearly 20% pullback that culminated on April 19. Nvidia’s stock has been no stranger to volatility over the years, but the current moment presents distinct difficulties. The doubts over the durability of AI spending — and by extension orders for Nvidia’s latest and greatest chips — won’t be erased overnight. The fate of external overhangs, including trade policy and geopolitics around exports to China, is a guessing game. The good news is that GTC is a real opportunity for Nvidia and Huang to add some clarity to a fuzzy situation and steer at least some of the conversation back toward the company’s market-leading technology. When that is the focus, there’s a lot to like. (Jim Cramer’s Charitable Trust is long NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Jensen Huang, co-founder and chief executive officer of Nvidia Corp., speaks during the Nvidia GPU Technology Conference in San Jose, California, March 19, 2024.
David Paul Morris | Bloomberg | Getty Images
What a difference a year makes.
Nvidia entered last year’s pivotal GTC conference — its new product showcase and software developer workshop — riding high, with its stock already up a blistering 77% in 2024. The artificial intelligence boom was just over a year old, and optimism reigned supreme among tech investors.
