Wait one second. Just one second. Before you sell everything related to artificial intelligence, think back a little more than a year ago. January 27, 2025, was “Black Monday” for tech. That’s when Chinese startup DeepSeek sent shockwaves through markets with its highly competitive AI model that it claimed was trained at a fraction of the cost of top American models. Nvidia stock lost almost $600 billion in market cap in a single day. By the time the kerfuffle was over, Nvidia plunged from roughly $143 per share on Jan. 24, the Friday before, into the low $90s, a sickening decline that lasted until April 2025, when we realized DeepSeek was all smoke and mirrors and the U.S.-China trade tensions that punished the stock started to turn the corner. Put aside for a second that Alibaba just released a new, multimodal version of its AI model Qwen that can understand text, photos, and videos – something I saw Nvidia’s chips do last March at its annual GTC conference. Plus, there is another DeepSeek release right behind it. I think we can rest assured that the press will not talk about how Nvidia’s chips are vastly superior and instead insist that Alibaba has much cheaper silicon and that it’s better. In fact, you can count on that. But there’s another strange thing that is happening. On Monday, the stocks of Dassault and Siemens were rocked by a report that Schindler, the Swiss elevator maker, dropped a “digital twin” partner — we don’t know which one — because it is going it alone with artificial intelligence. Digital twins refers to a popular method of building out “digital” versions of infrastructure ahead of big-time construction. Dassault’s been a partner of Schindler for a very long time and it is presumed that Dassault’s been dropped. A spokesperson for the French 3D design software company told Bloomberg News that “Schindler is an active customer.” Nevertheless, Dassault shares fell 10% Monday, just a few sessions after it fell almost 21% in a single day after issuing light guidance alongside earnings, which stoked concerns about “AI eating software.” For its part, Siemens fell 6.4% on Monday. I think that on Tuesday on Wall Street, any infrastructure company here that makes digital twins – and that could be anyone that actually uses digital twins and those that don’t – is fair game to be dumped. Nvidia will most likely be dumped, too, even as any AI that is going to be used by a Schindler is most likely going to be based on Nvidia’s platform. I cannot see how it wouldn’t be, as no one else has the intellectual property to do so. Why will that happen? Guilt by association. Just a few weeks ago, I had Dassault CEO Pascal Daloz and Nvidia’s Jensen Huang on “Mad Money,” and they talked about how well their partnership is doing. Again, conspirators will say that if Dassault is out, then Nvidia is out. It makes you think that Schindler developed its own AI chip, which it clearly hasn’t. Does it matter? Wait, there’s more? As of Thursday night, when we got Applied Materials’ earnings report, we have now heard from all three semiconductor capital equipment companies. All three are sold out. On allocation. We know the memory companies – Micron, SanDisk, Seagate and Western Digital – are sold out and their prices are up dramatically. In some cases, some memory pricing is up 600% in a year. The shocking call from Cisco – at least shocking to this portfolio manager – that the DRAM shortage will hurt their earnings caused that stock to get crushed and put a lid on tech, especially Nvidia. Why? Because supply and demand. The tight supply and high prices are going to lead to demand destruction, and demand destruction will crush Nvidia’s sales. Now, we have to ask ourselves: Are we going to let what happened a year ago happen again? Are we going to be able to step aside and come back in? Are we going to sell and go short? We can’t possibly own it through this, can we? Especially with that darned head and shoulders chart. The answer, of course, we are. It is written. To which I say, how did we, in the Club, know millionaires would be created among those who stayed the course? We didn’t. But we had faith. Keep the faith. Husband it. You will need every bit of it to get through this reprise of last year. (Jim Cramer’s Charitable Trust is long NVDA and CSCO. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
The long knives may be out for Nvidia yet again. Here's our plan to get through it
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