According to Jim Cramer This is Why Nvidia is a Buy Right Now

CNBC’s Jim Cramer thinks multinational tech company Nvidia is a buy right now.

According to the “Mad Money” host, “If Nvidia can close on Arm Holdings, the stock’s gonna be unstoppable even after its magnificent multiyear run.”

Despite there being significant regulatory roadblocks ahead, Cramer believes the acquisition will ultimately go through.

“Put them both together, and you’ve got the undisputed king of the semiconductor industry,” he said.

It was earlier this month that Nvidia had announced a blockbuster acquisition of chip
designer Arm Holdings.

The day after the $40 billion deal was publicized, shares of the company saw a gain of 5% on their first day of trading.

Cramer says the biggest question right now is not whether the deal makes sense for Nvidia but whether the chipmaker will receive the necessary approvals by regulators around the world.

“If Nvidia can close on Arm Holdings, the stock’s gonna be unstoppable even after its magnificent multiyear run,” Cramer said. “I think [CEO] Jensen Huang can eventually make it happen, but what if I’m wrong? Look, the stock was at $486 before the Arm news, and it’s only at $494 now. I like that risk-reward.”

Huang’s leadership is one of the reasons it is such a great company, Cramer noted.

“Arm’s not really a competitor — when it comes to antitrust, that’s normally a pretty good argument,” said Cramer.

“Arm is basically an arms dealer to the entire semiconductor and device industry. They license their chip architecture and then their clients can add stuff on top of that for a specific application,” Cramer explained.

“Nvidia’s chips already have a near monopoly on cloud-based artificial intelligence,” he added. “Arm would give them even more clout.”

“Thanks to the recent sell-off, though, you’re now getting the Arm deal pretty much for free. And I’ve got to tell you, I think Nvidia can pull this off,” Cramer remarked.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.