CNBC’s Jim Cramer has a knack for spotting what mainstream Wall Street overlooks.
While most investors obsess over valuations and AI hype, Cramer is zeroing in on something more fundamental: real, tangible execution.
As per Insider Monkey, his latest take on Nvidia and Tesla reveals a contrarian thesis that challenges the prevailing bearish sentiment around both stocks.
The key insight? These aren’t overheated tech plays; they’re companies with genuine structural advantages that the market is still underpricing.
Jim Cramer on Nvidia ahead of earnings
Here’s what separates Cramer’s view from the crowd: Nvidia isn’t facing a demand problem; it’s facing a supply problem.
While skeptics worry about stretched valuations and peak AI enthusiasm, Cramer points to something far more bullish. The company simply cannot manufacture enough chips to meet customer demand.
This distinction matters enormously. When a company is supply-constrained, it signals that demand is genuine and sustainable. Nvidia’s customers aren’t requesting fewer chips; they’re lining up for more.
The semiconductor giant maintains pricing power in a landscape where overcapacity usually kills margins. That’s a luxury most tech companies don’t have.
Cramer emphasizes that many investors are making a critical error by focusing solely on the stock’s premium valuation. They see a high multiple and assume danger.
What they miss is that Nvidia’s earnings power continues to expand. The AI cycle “is not stopping,” Cramer argues, directly contradicting the prevailing wisdom that the sector is peaking.
If demand remains robust and supply remains tight, then current profitability metrics could represent just the beginning of a longer growth runway.
The skeptics are fixated on one narrative: the boom is coming to an end. Cramer sees the opposite trajectory. He believes Nvidia’s fundamentals justify the rally and may have further to run.
When the majority of investors worry about downside risk, Cramer is focused on the tailwinds that few are acknowledging.
What investors miss in Tesla
Tesla’s story is less about chips and more about execution.
After months of negative headlines about competition, missed deliveries, and operational challenges, Cramer calls the company’s turnaround a “miracle.” But miracles require hard work behind the scenes.
Cramer highlights three crucial improvements: deliveries are climbing, cost controls are tightening, and operations are stabilizing.
These aren’t abstract concepts; they are real operational metrics showing the business is functioning better than the prevailing narrative suggests.
Yet most investors remain stuck in a pessimistic frame, assuming decline when the company is actually regaining momentum.
Here’s the crucial point: Tesla’s execution is improving while sentiment stays depressed.
That creates an asymmetry. The stock is beaten down partly because of outdated perceptions, not current reality. Investors focused on yesterday’s problems may miss today’s recovery.
Cramer sees “green shoots,” the early signs of a stronger foundation forming. He believes Tesla’s rebound has more runway ahead.
This matters because early-stage recovery cycles offer the best risk-reward for positioned investors.
Both situations illustrate Cramer’s core investment philosophy: look beyond consensus and find where the market’s narrative diverges from actual fundamentals.
Nvidia has supply constraints that validate demand strength. Tesla has operational green shoots that the pessimistic crowd hasn’t yet priced in.
The investors paying attention to these structural signals may gain an edge over those stuck in yesterday’s bearish headlines.
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