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Cramer Flips to Bull: NVDA's AI Profit Surge
30 Aug
Summary
- NVIDIA revenue soared, with gross margins reaching 75%.
- Amazon's AWS will deploy 2 million NVIDIA GPUs by fiscal Q2 2029.
- Non-hyperscaler demand now comprises half of NVIDIA's data center business.
Jim Cramer has reversed his stance on NVIDIA (NVDA), becoming a bull after the company's fiscal Q2 2027 earnings report. He declared that the "era of profitless chip buying is over" and the "era of humongous profits has begun," citing NVIDIA's robust revenue and a remarkable 75% gross margin.
NVIDIA's customer base has significantly diversified. Hyperscalers now account for only 50% of the business, with sovereign buyers and neo-cloud infrastructure builders making up the other half. This segment saw a remarkable 138% year-over-year growth, signaling reduced dependence on a few major clients.
Amazon's AWS revealed plans to deploy 2 million NVIDIA GPUs through fiscal Q2 2029, underscoring continued strong demand. Furthermore, NVIDIA chips are now expected to have a useful life of up to seven years due to software updates, potentially extending the payback period for hyperscaler investments and boosting their profitability.
