In his Mad Money broadcast on July 9, Jim Cramer defended a former tech-market darling, arguing that the market has the valuation math backwards. His frustration centered on why sellers keep unloading NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) while assigning higher forward multiples to memory names like SanDisk (NASDAQ:SNDK).
Cramer put it directly: “Some commodity chip companies like SanDisk now have price-earnings multiples higher on next year’s earnings than NVIDIA.” He added, “I regard that as insulting. Nvidia is the most proprietary chip company in the history of the world.” NVIDIA stock traded at $209.79 Friday afternoon, with a market cap of around $5.08 trillion.
The forward multiple data supports the argument. NVIDIA stock carries a forward price-to-earnings ratio of 23x and a trailing multiple of 31x, while SanDisk stock trades at a 27x forward multiple and a 59x trailing figure.
The Proprietary Moat Cramer Is Defending
NVIDIA’s most recent quarter puts hard numbers behind the moat argument. The company’s Q1 FY2027 revenue reached $81.61 billion, up 85% year over year (YoY), with Data Center revenue of $75.25 billion and Data Center Networking up 199%.
NVIDIA’s non-GAAP gross margin expanded to 75%, and management guided Q2 FY2027 revenue to $91 billion. The proprietary layer runs deeper than silicon: CUDA-X software, NVLink Fusion compute fabric, Spectrum-X Ethernet, and the Dynamo inference stack lock developers into NVIDIA’s architecture in ways commodity accelerators cannot replicate.
CEO Jensen Huang has repeatedly framed the AI infrastructure buildout as the largest in human history, and deployment commitments from OpenAI, Anthropic, Meta Platforms (NASDAQ:META), Oracle (NYSE:ORCL), and xAI translate that into tangible order flow for NVIDIA’s Blackwell and Vera Rubin platforms.
Wall Street sentiment reflects the view. NVIDIA stock currently carries 10 Strong Buy, 48 Buy, 2 Hold, and 1 Sell rating, with an average analyst price target of $301.62.
The SanDisk Comparison
SanDisk stock has been on a rocket ride. Shares are up 710% year-to-date (YTD), if you can believe it. SanDisk’ Q3 FY2026 revenue jumped 251% YoY to $5.95 billion, with Datacenter revenue up 645% YoY.
SanDisk sells NAND memory, a product category that historically cycles through boom-and-bust pricing tied to industry-wide capacity. That structural difference is what Cramer was pointing at when contrasting proprietary economics against commodity economics.
The Bear Case Worth Considering
A cheaper forward multiple on NVIDIA stock can reflect the market pricing in decelerating growth off a large base. NVIDIA’s FY2026 revenue reached $215.94 billion, and comparable percentage growth becomes mathematically harder. Customer concentration among hyperscalers, China export restrictions, and rising cash taxes are real considerations.
A lower multiple can be a rational discount rather than clear mispricing. For investors weighing entry, moderating one’s position size makes sense given NVIDIA stock’s 2.21 beta and history of sharp drawdowns. Readers exploring the broader AI thesis can review our 7 Stocks Powering the AI Boom report for adjacent names benefiting from the buildout.
For investors wanting NVIDIA exposure without single-stock risk, the iShares Semiconductor ETF (NASDAQ:SOXX) offers broad sector access. The concentration risk remains meaningful, though, as NVIDIA sits among the fund’s top holdings.
The Bottom Line
Cramer’s core claim is defensible on the data. NVIDIA stock’s forward multiple sits below SanDisk’s despite carrying arguably the strongest software moat and highest-margin franchise in semiconductors. The proprietary software layer, from CUDA to Dynamo to NVLink Fusion, separates NVIDIA from any peer chipmaker.
A discount can reflect legitimate concerns about the law of large numbers, cyclical risk, and hyperscaler concentration, and both realities can coexist. Investors should keep their position sizes calibrated to the stock’s volatility, and diversification through semiconductor ETF exposure can soften single-name risk.
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