Nvidia Nears May Record High as Cooler Inflation Lifts U.S. Stocks
Nvidia is closing in on its May record high of $236.54, a level CNBC's Investing Club says will test the chip rally, as U.S. stocks rose on cooler August inflation and Micron headed into earnings.
The personal consumption expenditures price index rose 3.4% from a year earlier, down from 3.7% in July, and core inflation also came in below expectations, according to the Investing Club's recap of its Wednesday morning meeting. Jim Cramer said depressed bond prices are becoming increasingly attractive at these levels because yields could fall further if economic data continue to soften. Bond prices and yields move inversely.
Boeing shares rose 2% after the Pentagon selected the planemaker to build the Navy's sixth-generation fighter jet, though the stock later reversed lower. Eli Lilly shares rose modestly after drug trial data showed the company's experimental combination treatment in patients with obesity and Type 2 diabetes produced greater weight loss than a high dose of its top-selling tirzepatide alone.
Nvidia has climbed steadily in recent months even as other parts of the AI trade struggled, gaining 15% over the past three months. A breakout above the May high could bring in new buyers, while a failure to clear that level could raise questions about the strength of the rally, Cramer said. "Unless it takes out this level … then people are going to say that perhaps the stock's not as strong," he said. The chipmaker also received another endorsement for its next-generation technology, with CoreWeave announcing plans to deploy Nvidia's Vera Rubin platform in its data centers.
Micron shares rose ahead of its earnings report Wednesday evening, with investors expecting another strong quarter as AI-driven demand for memory continues to outstrip supply. The Investing Club said the key question is how long the favorable cycle can last, and that it will be listening for how far management extends its demand outlook and for updates on long-term customer agreements that could provide greater visibility into future sales. Cramer also wants confirmation that Micron remains on track to begin shipping chips from its Boise facility by Jan. 1, along with an update on its planned New York facility, which is expected to significantly expand the company's U.S. manufacturing capacity.
Target, Moderna and General Mills were the stocks covered in the Investing Club's rapid-fire segment at the end of Wednesday's video. Cramer's charitable trust holds positions in Boeing, Eli Lilly, Micron and Nvidia, according to the disclosure accompanying the recap.