Jim Cramer, the high-energy host of “Mad Money,” recently shared a strong opinion about Nvidia and its business future in China. He believes the United States should allow Nvidia to sell its high-powered artificial intelligence chips to Chinese companies. His logic focuses on strategy rather than just profits. He argues that the U.S. is much safer if Chinese firms stay dependent on American technology instead of being forced to build their own rival products.
Cramer warned his viewers on Thursday that if we cut China off completely, we give them a massive reason to innovate. He noted that if the U.S. forces them to build their own chips, they will eventually catch up. He pointed out that China has an almost unlimited supply of electricity to run its massive factories. If they stop buying from Nvidia and successfully build their own high-end hardware, they might eventually surpass the United States in the global tech race.
This discussion comes at a very important time. Nvidia CEO Jensen Huang is actually in China right now. He joined President Donald Trump for a major diplomatic summit with Chinese leader Xi Jinping. This is a big moment for the company because government rules have held Nvidia back from selling its best chips to China for several years. The Biden administration put these restrictions in place because of national security concerns, which wiped out a huge part of Nvidia’s business in that region.
Investors are now watching every move the CEO makes in Beijing. They want to see if the tap will finally turn back on. Earlier this year, the company sent mixed signals about whether they would get the green light to ship their H200 chips. During a February earnings call, Nvidia’s Chief Financial Officer, Colette Kress, stayed very cautious. She told the public that while the government had approved some small orders, the company had not actually made any money from those sales yet. At that time, she wasn’t even sure if China would allow the chips to enter the country.
However, Jensen Huang sounded much more positive just a few weeks later. At a tech conference in March, he told reporters that Nvidia had already received new purchase orders and was in the process of starting up its manufacturing lines again. He described the situation as “different than it was two or three weeks ago” and said their massive supply chain was finally getting fired up to serve Chinese customers.
This Wednesday, Nvidia will report its newest financial results. This is one of the most anticipated events on Wall Street. Currently, Nvidia tells its shareholders to expect exactly zero dollars in revenue from China. If the company reveals that it has actually secured a $1 billion or $2 billion deal during this China trip, it could send the stock price through the roof. Even a small surprise of 1.5% or 2% in total revenue from that region would be a massive win.
Cramer thinks the biggest decision now rests with China rather than Washington. He believes President Xi Jinping faces a very tough choice. Xi can allow his local companies to buy “modified” Nvidia chips, which are slightly less powerful than the American versions, but this keeps them tied to U.S. technology. Or, he can continue to push Chinese companies like Huawei to dump billions of dollars into their own research to create a local alternative that doesn’t rely on American parts.
Despite the political drama, Cramer still thinks Nvidia is an incredible deal for investors. He compared the company to Cerebras, a new AI chip startup that recently went public with a valuation of $56 billion. When you compare Nvidia’s massive profits and dominant position to these newer, expensive companies, Cramer argues that Nvidia is actually a “cheap” stock. He told his audience that the entire AI revolution simply would not exist without Jensen Huang and his hardware.
For Cramer, you shouldn’t just buy Nvidia because of what might happen in China. He thinks the company is a great investment because it is the clear leader in the most important technology of our time. Whether they sell to China or not, the demand for their chips in the United States and Europe is still incredibly high. Companies are currently spending tens of billions of dollars to build new data centers, and almost all of that money flows directly to Nvidia.
The summit in Beijing could mark the biggest shift in the tech industry in a decade. If Trump and Xi can find a way to agree on the rules for these chip sales, it will unlock a massive new stream of cash for the company. But as Cramer warns, the U.S. must be careful. If the two countries keep fighting, they might accidentally help their biggest rival become their biggest competitor in the chip market.
