Nvidia (NVDA-US) shares slid again this week, sparking debate over whether the decline reflects real risks or simply investor panic. Financial anchor Jim Cramer argued Tuesday that the sell-off in Nvidia and other AI-related stocks was driven more by fear than by fundamentals.
Panic Selling vs. Long-Term Strength
Nvidia fell 2.59% to $177.82 per share on Tuesday, though it remains up 28.57% year-to-date. By contrast, Alphabet (GOOGL-US) rose 1.5% to $323.44, extending its 2025 gains to more than 70%.
Cramer acknowledged that reports of Meta potentially adopting Google-designed AI chips have pressured Nvidia, but he insisted the company’s long-term growth trajectory remains intact. He warned that investors who chase rallies and flee during corrections risk missing out on significant gains.
He recalled selling Alphabet too early in the past, suggesting that selling Nvidia now could be a similar mistake. "The Big Seven tech companies reached trillion-dollar valuations because of consistent execution, stable profitability, and adaptability," he said, adding that Nvidia’s fundamentals remain strong despite short-term volatility.
Meta-Google Chip Talks
The Information reported Tuesday that Meta is in talks to adopt Google’s Tensor Processing Units (TPUs) in its data centers starting in 2027, with spending projected in the billions. Discussions also include leasing Google Cloud AI chips as early as next year, marking a major expansion of Google’s external chip market.
Google Cloud executives believe the strategy could capture market share equivalent to 10% of Nvidia’s annual revenue, a potentially significant shift given Meta’s projected $72 billion in capital expenditures this year.
Competitive Landscape
Google’s push into AI hardware comes as demand for alternatives to Nvidia’s expensive and scarce GPUs grows. Anthropic recently announced plans to use up to one million Google AI chips, a deal worth tens of billions.
Still, challenging Nvidia’s dominance won’t be easy. Its CUDA software ecosystem, built over nearly two decades, integrates more than four million developers worldwide. Analysts note that this entrenched advantage creates steep barriers for competitors.
Market Implications
The sell-off highlights investor anxiety over whether Google’s rise in AI hardware could erode Nvidia’s market share. Yet analysts stress that Nvidia’s leadership in GPUs and its deep developer ecosystem remain unmatched.
Cramer compared the situation to Tesla, which faced profit pressures amid rising competition but ultimately rebounded as investors refocused on its long-term innovation strategy. He argued Nvidia is in a similar position: short-term volatility does not negate its role as a cornerstone of the AI industry.
The Bottom Line
Nvidia’s recent decline reflects market jitters over Google’s chip ambitions and Meta’s potential pivot, but analysts like Cramer see the sell-off as an overreaction. With strong fundamentals, entrenched software advantages, and continued demand for GPUs, Nvidia remains a key player in the AI race—even as rivals like Alphabet and Broadcom gain ground.