CNBC’s Jim Cramer said Monday that it is a mistake for investors to write off Nvidia shares as being overvalued.
The US chipmaker announced the launch of new products and revealed that it expects to beat the company’s earnings estimates in the current fiscal quarter.
“Nvidia stock looks expensive because the company almost always exceeds earnings estimates and easily exceeds them,” said the “Mad Money” host. “That means those projections are practically irrelevant, folks. Ultimately, stocks turn out cheap in hindsight.”
The comments come after Nvidia shares, valued at $ 377 billion, rose more than 5%, closing at $ 608.36. So far this year, the shares are up 16.5%.
“Nobody in the world has a vision like [CEO] Jensen Huang, so Nvidia shares live even though they skipped $ 32 today, “Cramer said.” I think it will end up looking cheap a year from now based on what the company is actually going to make, which will probably be a lot more than anticipated. “
Amid a global semiconductor supply shortage, Nvidia said it now estimates total revenue for the first quarter to exceed the $ 5.3 billion it initially forecast.
Nvidia produces chips for a variety of applications in various industries, including graphics, games, and vehicle components.
Some of Nvidia’s new offerings include a server chip called Grace and components used for artificial intelligence, chatbots, speech recognition, and autonomous cars.
Disclosure: Cramer’s charitable trust owns Nvidia stock.