- NVDA
- CRWD
Shares of Nvidia(NASDAQ:NVDA) and CrowdStrike Holdings (NASDAQ:CRWD) have added 1,400% and 875%, respectively, since the artificial intelligence boom began in January 2023. However, Jim Cramer recently recommended buying both stocks.
Why should you care what Cramer thinks? While best known for hosting CNBC’s Mad Money, he previously ran a successful hedge fund that earned 24% annually over 14 years. That makes his opinion worth considering.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger.Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout.Continue »
1. Nvidia
Nvidia dominates the artificial intelligence (AI) infrastructure market because its graphics processing units (GPUs) combine industry-leading performance with a software ecosystem of unparalleled breadth. Nvidia GPUs are used to accelerate training and inference tasks, and they account for nearly 90% of AI accelerator sales.
Beyond that, Nvidia also develops adjacent hardware that lets customers build integrated data center systems with a lower total cost of ownership than assembling systems from multiple vendors. Nvidia is the largest networking company in the world, and it’s on pace to be the largest supplier of central processing units (CPUs) this year.
Nvidia reported exceptional financial results in the second quarter of fiscal 2027, which ended in July 2026. Revenue increased 106% to $96.2 billion, gross margin expanded 2.5 percentage points, and non-GAAP net income rose 120% to $2.22 per diluted share. The company is well-positioned to maintain that momentum as AI spending increases in the years ahead.
Wall Street estimates Nvidia’s adjusted earnings will increase at 72% annually through the fiscal year ending in January 2028. That makes the current valuation of 36 times earnings look extraordinarily cheap. Those numbers give a price-to-earnings-to-growth (PEG) ratio of 0.5 — anything below 1 is generally considered undervalued.
Indeed, among 72 Wall Street analysts, Nvidia has a median target price of $318 per share. That implies 42% upside from its current share price of $223. The stock’s cheap valuation suggests the market is worried about the durability of AI spending, but I think those fears are misplaced. Investors should consider buying a small position today.
2. CrowdStrike
CrowdStrike provides a cybersecurity platform comprising 34 modules that address several large security markets. The company is best known for its dominance in endpoint security, which protects devices such as servers, workstations, and mobile devices. But it also has a strong presence in identity protection, cloud security, threat intelligence, and managed detection and response.
