NVIDIA Chips Scarce, Driving Stock Surge
NVIDIA's stock price has been on the rise, climbing 2.93% to $206.64 and extending its year-to-date gain to 12.8%. This surge in value can be attributed to several key factors mentioned by Jim Cramer.
Cramer noted that NVIDIA chips are scarce and holding their value, which is a significant narrative driving the stock's performance. Two supply-side theories have been circulating this week, both pointing to the scarcity of these chips.
The first theory revolves around TSMC's N3 process wafer capacity being severely constrained due to high demand from major AI chip designers like NVIDIA and Google. This bottleneck has led to rising prices for these wafers, further fueling the scarcity narrative.
The second leg of this scarcity thesis lies in the secondary GPU market, where hyperscalers have reported cloud GPUs as sold out. Rental economics for prior-generation Hopper silicon have also remained firm, indicating a market where installed hardware is still earning its keep.