Nvidia stock has gotten the spotlight as popular Bitcoin critic Jim Cramer made an epic prediction for NVDA, raising concerns about the “Inverse Cramer Effect” affecting the stock price.
Jim Cramer’s recent comment on X (formerly Twitter) has once again made Nvidia (NVDA) stock the subject of market discussions. The NVDA stock may experience a breakout, according to a well-known Bitcoin critic. Nevertheless, netizens began to speculate about the potential impact of the “Inverse Cramer Effect” on NVDA.
Jim Cramer’s Opinion on Nvidia’s Stock
Cramer posited in a post on X, “Is Nvidia poised to emerge from the churn that has ensued since the stock split?” This statement has rekindled interest and apprehension regarding the “Inverse Cramer Effect,” a phenomenon in which the inverse of Cramer’s predictions frequently seems to transpire.
Earlier this year, Nvidia, a prominent semiconductor corporation, experienced a significant increase in stock value. In June, Nvidia Stock reached its market capitalization peak of $3.5 trillion, surpassing the tech colossus Microsoft. However, the stock’s trajectory abruptly changed, plummeting below $118, resulting in a 16% decline from its most recent high.
Despite this downturn, Nvidia has recently regained momentum, posting nearly 9% gains over the last five trading sessions. At press time, Nvidia’s stock had increased by 3.09% to $132.16 during the most recent trading session on Tuesday, July 9. Therefore, the company’s market capitalization increased to $3.26 trillion due to this surge.
The recent surge in Nvidia’s stock price has not gone unnoticed. KeyBanc has increased its target price for Nvidia from $130 to $180, indicating a high confidence level in its future performance. Several factors influence the firm’s optimistic outlook. Initially, there are no indications of a demand hiatus despite the impending launch of Nvidia’s Blackwell series in the second half of 2024.
The demand for Nvidia’s H100 processors remains robust, as evidenced by the influx of rush orders. Secondly, the GB200 series has garnered a more significant amount of interest and demand than had been initially anticipated. A substantial proportion of the blend is expected to be NVL72 instead of NVL36. Consequently, KeyBanc anticipates that the current market for the GB200 will enable data center revenues to surpass $200 billion by 2025.
Will NVDA be affected by Inverse Cramer Effect?
In the face of this, there are ongoing broader market concerns. Morgan Stanley’s Mike Wilson has cautioned traders to anticipate a substantial decline. He recently foresaw a 10% decline in the stock market. Additionally, he noted that the Federal Reserve’s monetary policy, company earnings, and the uncertainty surrounding the US presidential campaign were all contributing factors.
Concurrently, the “Inverse Cramer Effect” has been the subject of renewed discourse following Jim Cramer’s prediction regarding Nvidia. This phenomenon, which market observers frequently reference, implies that the opposite of Cramer’s public predictions often transpires. One notable instance of this phenomenon was observed in Bitcoin. In 2021, Cramer announced that he had sold most of his Bitcoin holdings and encouraged others to follow suit.
Bitcoin experienced a substantial increase shortly after his announcement, contradicting his bearish outlook. This pattern has been observed numerous times, where downturns and vice versa follow Cramer’s bullish predictions. Nevertheless, Nvidia’s stock is experiencing substantial advances, consistent with Cramer’s forecast.
Conversely, Nvidia’s stock may be adversely affected if Morgan Stanley analyst’s prediction is accurate. This could be indicative of the Inverse Cramer Effect. However, the current state of affairs for NVDA is stable.