Jim Cramer Notes That Companies Like Nvidia Earn Their Premium Through Results

NVIDIA Corporation (NASDAQ:NVDA) is one of the latest stocks on Jim Cramer’s radar. Cramer explained why the stock deserves a premium. He stated:

“The average stock in the S&P 500 currently trades at 23 times next year’s earnings. These data center stocks tend to trade at a premium to that level… NVIDIA’s at around 30 times next year’s numbers… But remember, some stocks deserve to get a higher premium. I mean, come on, companies aren’t equal. Some are better than others. The ones that I just mentioned are better than others.

Photo by Javier Esteban on Unsplash

NVIDIA Corporation (NASDAQ:NVDA) provides computing, graphics, and networking solutions, including AI, data centers, gaming, professional visualization, and automotive technologies.

While we acknowledge the potential of NVDA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

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