NVIDIA Corp. (NASDAQ:NVDA) shares have risen 13.7% this year, yet skepticism persists over the sustainability of its capital-intensive AI chip strategy. CNBC’s Jim Cramer dismissed those concerns on Monday, asserting that NVIDIA’s growth is increasingly tied to direct demand from Elon Musk rather than broader industry partnerships.
Cramer, speaking during his regular market segment, highlighted NVIDIA’s shift away from large-scale investments in external AI firms. He contrasted earlier criticism of Jensen Huang’s capital allocation—once described as a ‘lazy Susan’ model of recycling funds—with the current view that NVIDIA no longer needs to deploy cash externally. Instead, Cramer pointed to Musk’s SpaceX as a potential anchor buyer for NVIDIA’s advanced chips, including the Vera Rubin platform. "Musk is going to be the biggest buyer of these chips," Cramer said, adding that Musk’s demand could single-handedly absorb significant production capacity.
The debate over NVIDIA’s spending trajectory centers on whether hyperscaler capital expenditure growth can remain robust. UBS projects hyperscaler capex growth slowing to 25% in 2027 and 6% in 2028, while media reports cite unease among institutional investors regarding the timeline for AI monetization. Supply-side constraints further complicate NVIDIA’s expansion plans, with tight memory chip availability limiting rapid scaling of production.
Countering bearish sentiment, bullish estimates project NVIDIA’s earnings per share reaching $15 in 2027 and $20 in 2028, driven by the upcoming Rubin AI GPU lineup. The company’s recent financial performance remains strong: in the first quarter of fiscal 2027, data center revenue surged 92% year-over-year to $75 billion. Gross margins stood at 75%, and second-quarter revenue guidance of $91 billion exceeded analyst expectations of $86.84 billion. Management also emphasized a $200 billion opportunity in CPU sales for the Vera platform, citing demand from agentic AI applications as evidence of continued growth momentum.
