CNBC’s Jim Cramer called the recent selloff in Nvidia Corp. (NASDAQ:NVDA) “absurd” on Monday, saying the company’s decline has not changed his long-term conviction in the AI chipmaker.
Nvidia’s Long-Term Story Is Intact
“I know NVIDIA is going down. I still own it. Don’t trade it. I think it’s absurd,” Cramer said on CNBC’s Squawk on the Street.
The host described Nvidia as having “the best balance sheet of any company in the world,” saying its financial strength positions it to navigate the current market uncertainty.
The stock is up 4.06% year-to-date and 11.18% over the past year, but has fallen 5.51% over the past week as semiconductor stocks came under pressure amid a broader chip-sector selloff.
Investors dumped memory stocks on Monday after The Information reported that China had developed a domestically produced deep ultraviolet lithography system capable of manufacturing advanced memory chips.
Open Models Are Reshaping the AI Race
Cramer said one of the biggest questions facing investors is the rise of open-source AI models, which he added was being driven by Nvidia.
In his first post on X, NVIDIA CEO Jensen Huang said open AI models improve safety and cybersecurity while speeding up innovation, broader adoption and technological sovereignty.
The growing availability of lower-cost models, including those developed in China, has fueled debate over whether companies building proprietary AI models can maintain their competitive edge.
Geopolitics Could Keep Nvidia in the Driver’s Seat
Cramer said the U.S.-China competition for AI leadership extends beyond technology companies and has become a strategic priority for Washington.
He added that NVIDIA stands to benefit from the geopolitical race for AI leadership, arguing that Washington has a vested interest in maintaining U.S. leadership over China.
“The government is also a kind of subtle backstop in all of this… because they don’t want China to win,” he said.
According to a report by Politico, Huang is set to meet with Republican and Democratic lawmakers in Washington this week to discuss U.S. leadership in AI, open-source models and the company’s plans to expand domestic AI infrastructure.
Price Action: NVDA closed 4.99% lower on Monday at $196.51 and extended its losses to fall 5.92% in the early hours of pre-market trading.
Benzinga edge rankings indicate NVDA has a Momentum score in the 40th percentile and a Growth score in the 98th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Samuel Boivin on Shutterstock.com
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