Here’s the most important thing Nvidia’s CEO must address tonight
CNBC’s Jim Cramer warned Nvidia CEO Jensen Huang that he must address the elephant in the room on Wednesday night’s post-earnings conference call. Actually, two elephants: Amazon and Alphabet . And, make no mistake about it, these two hyperscalers are encroaching on Nvidia’s turf with their in-house custom artificial intelligence chips. Huang must play offense, not defense, Cramer said on “Squawk on the Street,” just hours before Nvidia reports its fiscal 2027 first quarter. As Cramer’s Investing Club has reported in its preview stories, a beat and raise is the bare minimum. Nobody is questioning the demand for Nvidia chips. But Huang cannot stay quiet on the competition. “If he just goes in and doesn’t address the fact these people are gunning for him, then I think it’s a show of weakness,” Cramer said. “He could say people are misunderstanding the importance of these two hyperscalers. And that he can live without them,” Cramer said, alluding to the fact Amazon and Alphabet are also big buyers of Nvidia chips. “It doesn’t even have to be confrontational. He can say, ‘Listen, I love them, they’re great, but we have so many people that want our chips.” Cramer said Huang must respond to Amazon and Alphabet’s April conference calls, which focused on the profitability benefits of their in-house chips. “At what point are they competitors, and not frenemies?” Cramer asked. Amazon’s chip business, which includes Graviton, Tranium, and Nitro, saw 40% sequential growth in the latest quarter. CEO Andy Jassy said on the call, “If our chips business was a standalone business, and sold chips produced this year to AWS and other third parties (as other leading chips companies do), our annual run rate would be $50 billion.” He added, “While the largest number of AI chips we’re bringing in are Trainium, we continue to have a deep partnership with Nvidia.” Alphabet CEO Sundar Pichai said on the Google call, “Our custom TPUs, Axion CPUs, and the latest NVIDIA GPUs continue to form the industry’s widest variety of compute options. NVIDIA GPUs are a core part of our AI accelerator portfolio and will be among the first to offer NVIDIA Vera Rubin NVL72 in addition to the Blackwell- and Hopper-based instances already available.” Google’s TPUs, short for tensor processing units, are co-designed by Broadcom , which Cramer has said is also a big winner of the customer chip boom. Both of these tech juggernauts have spending a ton on capital expenditures to build AI infrastructure. Amazon left its full-year spending outlook at $200 billion and Alphabet nudged up its capex 2026 guidance to $180 billion and $190 billion. Their CEOs are still giving a nod to Nvidia, but also putting Huang and the Nvidia team on notice. Disclosure: Cramer’s Charitable Trust, the portfolio used by the CNBC Investing Club, has positions in all the stocks mentioned in this article.
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