CNBC’s Jim Cramer, a longtime Nvidia backer, knows what he wants to hear Wednesday night when the leading AI chipmaker reports earnings and holds its influential conference call. “The wrap is that Nvidia makes all the money and nobody else does. And that’s what has to be addressed tonight,” Cramer said on “Squawk on the Street.” Cramer said there are no doubt other important topics that will come up on the call — chief among them what’s happening with Nvidia’s business in China, a key strategic market where the company faces seemingly ever-evolving pressure from both governments in the Washington-Beijing rivalry. But in Cramer’s eyes, what looms larger is the debate about whether Nvidia’s pricey graphics processing units, or GPUs — and the server systems and networking technology paired with those GPUs inside data centers to enable AI computing— are worth all the money. Deep-pocketed tech giants such as Meta Platforms and cloud-computing providers like Microsoft , Alphabet and Amazon are spending tens of billions of dollars annually to build new AI-focused data centers. Nvidia is a major recipient of those outlays. At the same time, Advanced Micro Devices is trying to capture a slice of the GPU market and Nvidia’s biggest customers are developing custom AI chips for certain tasks as well. “There are a lot of people who feel … that the total cost of ownership of Nvidia has gotten too high and you can’t make money with it,” said Cramer, whose Charitable Trust, the portfolio used by the CNBC Investing Club, started building a stake in Nvidia long before the generative AI boom began in late 2022. The Club also owns Meta, Microsoft and Amazon. “No kidding China. What matters is that we hear from [CEO] Jensen Huang about how that whole narrative— that the spend isn’t getting them any results — is false. That’s what we have to hear.” Some people who are optimistic on AI’s long-term potential contend it’s still early days in the technology’s adoption curve and measuring a company’s real return on its AI spending is difficult. Asked about that argument, Cramer said: “I’m not going to disagree with that, but I think Jensen might.” And as of now, Cramer said it’s hard to beat the quality of the technology that Nvidia provides to its customers. “You cannot have generative AI the way you’d like to without Nvidia. So you’re going to have what some people say is overspend. But it’s table stakes. It’s the price to be in the business,” he said.
