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Jim Cramer: Keep Nvidia Stock Despite Recent Dip

During his 'Morning Meeting,' Jim Cramer advised investors to remain invested in key stocks despite recent market declines, particularly in the AI sector. He noted that the S&P 500 fell due to hotter-than-expected CPI data and rising bond yields, viewing the current dip as a necessary correction. Cramer favored Home Depot over Lowe's in the home improvement sector, emphasizing the need for lower interest rates. Crucially, he recommended investors hold Nvidia stock, citing a Wells Fargo price target of $325, despite its recent pullback from highs.

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Jim Cramer: Keep Nvidia Stock Despite Recent Dip

During his 'Morning Meeting,' Jim Cramer advised investors to maintain positions in key stocks, cautioning that recent market declines, particularly in AI leaders, may signal the start of a broader downturn.

Market Overview and AI Sector Outlook

On Tuesday, the S&P 500 experienced a decline from previous record highs. This downturn was attributed to several macroeconomic pressures:

  • Inflation Concerns: A Consumer Price Index (CPI) reading for April was hotter than anticipated.
  • Yield Spikes: Increases in oil and bond yields added downward pressure on equities.

Cramer characterized the current reversal in artificial intelligence (AI) stocks as a necessary correction. However, he issued a strong warning, stating, "this is Day 1 of a decline of the hottest stocks I've ever seen," referencing a notable 8% drop in Corning stock.

Sector Recommendations: Home Improvement

Regarding the home improvement sector, Cramer maintained a preference for Home Depot over its rival, Lowe's, despite the challenging environment created by elevated interest rates.

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  • Analyst Coverage: Citi upgraded Lowe's to a 'buy' rating ahead of earnings reports.
  • Cramer's View: Cramer highlighted Home Depot as one of the "fine American companies" currently constrained by interest rates, reiterating that lower rates are crucial for boosting housing market activity.

Nvidia Stock Analysis and Investment Advice

Nvidia shares recently fell from an intraday high, coming ahead of the company's earnings report scheduled for Wednesday evening. Despite the dip, Cramer remained bullish on the stock.

  • Analyst Support: Wells Fargo analysts increased their price target for Nvidia to $325, up from $265, citing the company's robust pipeline, including the Blackwell and Rubin architectures through 2027.
  • Cramer's Stance: Cramer advised investors against selling the stock due to the recent downturn, stating, "I would not dump the stock just because it's turning around and going down after being up earlier."

Other Covered Stocks

During the rapid-fire segment of the meeting, Cramer covered several other stocks, including:

  • FedEx
  • On Holding
  • Under Armour
  • Lowe's
  • eBay

(Note: Jim Cramer's Charitable Trust holds long positions in HD, GLW, and NVDA.)

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