Jim Cramer, a famous investor, says Nvidia Corp. (NASDAQ: NVDA), has become a meme stock after its warning last week of a massive earnings hit.
According to a former hedge fund manager investors should reduce their exposure to NVDA, as US export restrictions may cause more pain to the AI chips giant in the future.
Cramer has been a long-time supporter of Nvidia. He added that “you can’t buy it like you used too” because of tariffs and added export restrictions for semiconductors in 2025.
The aforementioned headwinds are already pushing NVDA shares lower by more than 30% in this year.
What does the new export restriction on H20 mean for NVDA?
In April, the Trump Administration imposed a new license requirement for Nvidia in order to export its H20 chips, which are renowned, to multiple destinations, including China.
The US wants to further restrict Beijing’s access advanced chips, which it believes could be used in highly sophisticated military systems.
This recent development could result in a significant slowdown in NVDA’s growth, as H20 could generate as much as 15 billion dollars in revenue by 2024.
The Nasdaq listed firm has already warned of the potential for a quarterly charge of up to $5.5 billion due to the new export restrictions.
Nvidia’s stock is still more than 25% higher than its 52-week-low at the time this article was written.
The US wants to maintain AI supremacy
Note that China’s DeepSeek used Nvidia H20 chips in the development of its R1 AI model, which rivals the most powerful AIs but at a fraction the cost.
The new export restrictions of the US government are aimed at maintaining America’s dominance in artificial intelligence.
Even before he took office on January 20, President Trump confirmed his plans to make the US the capital of emerging technologies, such as crypto and AI.
Jim Cramer, a renowned investor, has advised that investors take a cautious approach to Nvidia’s shares in the short term.
Wall Street disagrees on Cramer’s Nvidia stock
Mad Money host, Michael Lewis, is not the only one on Wall Street who believes that NVDA shares are a good investment.
In April, the consensus rating for Nvidia stock is “Buy”.
Analysts have set an average price of $165 for the AI stock. This represents a nearly 66% increase from current levels.
They remain bullish despite near-term issues as it is the only player in the artificial intelligence market – a sector that Statista predicts will grow by a compound annualised growth rate of over 27% until the end of the decade.
NVDA also pays a dividend yield 0.039%.
This post Jim Cramer calls Nvidia a “meme stock” may be modified based on new developments.
This site is for entertainment only. Click here to read more
