Jim Cramer Says Nvidia Buyback Is 'Not Big Enough' as AI Slowdown Talk Hits Sentiment

Jim Cramer said NVIDIA Corporation remains a buy despite pressure on its shares after comments from Anthropic CEO Dario Amodei about the pace of Artificial Intelligence (AI) development. The CNBC TV host said NVIDIA's buyback programme is 'not big enough' as sentiment around the company's AI GPUs comes under pressure.

Cramer made the remarks after developments over the weekend involving major AI CEOs and calls for a slowdown in development. His comments specifically addressed the effect of Amodei's remarks on NVIDIA's stock, with Cramer saying investors should let the shares come down.

Jim Cramer Says NVIDIA Remains a Buy

For context, Cramer has discussed NVIDIA's share performance repeatedly over the past couple of months, including movements before markets open. His latest comments again put the focus on whether short-term weakness should change the broader view of the chipmaker.

'Oh, and yes, Dario's comments send Nvidia's stock down four and then it works its way lower and then stabilizes. Yes, it's a buy. But let it come down. The buyback's not big enough. This stuff now happens in what seems like slow motion for me...'

The statement gives a clear indication of Cramer's position. He described NVIDIA as a buy while also suggesting that the stock could fall further following Amodei's comments.

The issue is closely connected to demand for NVIDIA's AI GPUs. The source describes the company's products as the go-to items for AI data centre computing, while figures cited from NVIDIA and its management point to substantial demand for its Blackwell products.

NVIDIA Corporation Demand Remains in Focus

NVIDIA CEO Jensen Huang said in March that the company's estimate of 3.6 million units demanded for its Blackwell GPUs underestimated the actual situation, according to the source.

NVIDIA also reported in its second-quarter release that its order backlog was more than $2 trillion. Those figures help explain why Cramer continues to view the shares positively despite pressure created by comments about slowing AI development.

The company's financial growth has also been substantial. NVIDIA's revenue increased 106% year on year during the second quarter, while its data centre business accounted for $83.7 billion of its $96.22 billion in total revenue.

That concentration highlights the importance of AI-related demand to NVIDIA's results. It also helps explain why comments about the pace of AI development can become relevant to sentiment surrounding the company.

AI GPUs Face Margin and Capacity Questions

NVIDIA's growth is taking place alongside what the source describes as a historic global memory shortage. The company's second-quarter gross margin was 75%, while its third-quarter guidance projected a decline to 74%.

The fourth-quarter figure was estimated at between 71% and 72%, adding another consideration for investors assessing the company's growth trajectory.

There is also a question around how easily NVIDIA can continue producing upside surprises as its revenue base becomes larger. Seaport Global has argued that NVIDIA is sold out of capacity and might therefore find it difficult to generate enough additional capacity for further upside surprises.

That is an important distinction from saying the company cannot meet demand. The source attributes the capacity assessment specifically to Seaport Global, rather than presenting it as an established fact.

For Cramer, meanwhile, the immediate view remains straightforward. He considers NVIDIA a buy, but believes investors should let the stock come down following the reaction to Amodei's comments. The buyback, in his assessment, is not large enough.