tech
February 26, 2026
Jim Cramer: The reason why Nvidia's stock is falling even after its blowout outlook
CNBC's Jim Cramer said Thursday that investors are skeptical about Nvidia's customers, not the company's technology leadership.
TL;DR
- Nvidia's stock declined despite a strong earnings report, with investors concerned about its major clients' ability to sustain AI chip expenditures.
- Hyperscalers like Amazon, Microsoft, Meta, and Alphabet are projected to spend approximately $700 billion on AI infrastructure this year.
- This aggressive spending is straining the free cash flow of these companies, with some anticipating negative free cash flow in the near future.
- Nvidia CEO Jensen Huang remains confident in customer cash flow growth, citing the immense compute demand driven by agentic AI.
- Jim Cramer believes the stock dip reflects skepticism about Nvidia's clients' financial capacity, not about Nvidia's technology or market position.
- Nvidia is also experiencing growth from non-hyperscaler data center customers, diversifying its revenue streams.
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