Jim Cramer says this is why demand for Nvidia’s chips keeps accelerating
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CNBC’s Jim Cramer said Thursday there’s a simple reason demand for Nvidia’s AI chips continues to pick up steam: customers are finding they can make money almost immediately. “The profits are here now, customers are using them, and they’re making a killing,” Cramer said on ” Squawk on the Street .” “It’s no longer something where, like, ‘who knows if it’s going to come, and maybe one day.’ It’s right now.” Cramer’s comments came after Nvidia on Wednesday night delivered better-than-expected quarterly results for its fiscal 2027 second quarter. It marked the fourth quarter in a row that Nvidia’s year-over-year revenue growth rate accelerated. Surprisingly, the chipmaker also offered a strong sales growth outlook for its next fiscal year, reflecting growing confidence and visibility into AI demand. Shares were up nearly 8% on Thursday. One of the key debates around Nvidia’s stock has become whether its customers will generate sufficient returns on their AI computing infrastructure to justify continued spending on the company’s chips and networking gear. CEO Jensen Huang said on the earnings call that the timeline is shorter than many believe. “I heard the other day that return on investment capital is now less than a year. And we’re talking about $50 billion data centers,” Huang said. “And so, that tells you something about the productivity of Nvidia’s technology and the rentability of it.” Cramer alluded those remarks from Huang, and argued the debate should be settled. “When you get a situation where you know that you can buy a product and make money with it, I think the whole thing about when is it going to be profitable is answered,” Cramer said. Amazon offered fresh evidence of the demand. Also on Wednesday, Nvidia announced an expansion of its partnership with Amazon’s cloud unit. Under the deal, Amazon Web Services will buy 2 million additional Nvidia GPUs in 2027 and 2028, as well as install Vera central processing units (CPUs). Amazon also plans to use Nvidia technology for robotics. The commitment is particularly notable because Amazon has invested heavily in developing its own AI chips . Its willingness to continue buying more Nvidia hardware suggests the hyperscaler sees compelling financial payoffs in deploying Nvidia’s technology even as it builds alternatives. The willingness to spend on Nvidia’s products isn’t limited to Amazon. Nvidia finance chief Colette Kress said the company’s growth in the current quarter will primarily be driven by non-hyperscaler customers, which includes so-called neoclouds like CoreWeave and Nebius , as well as enterprises. “Another great thing: 50% of the customers are not hyperscalers,” Cramer said. “It’s other companies that think they can make a lot of money.” Cramer’s Charitable Trust , the portfolio run by CNBC’s Investing Club, owns shares of Amazon and Nvidia.
Jim Cramer says this is why demand for Nvidia’s chips keeps accelerating
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