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Nvidia (NVDA) stock fell sharply on Tuesday, hitting its lowest level in nearly three months, but CNBC’s Jim Cramer said the pullback represents a buying opportunity rather than a warning sign.

The stock was down 6% in morning trading after The Information reported that Meta Platforms is weighing the use of Alphabet’s custom tensor processing units for its data centres starting in 2027.

The report renewed concerns about intensifying competition in AI-focused semiconductors.

Nvidia has faced additional pressure as questions about stretched valuations and heavy data-centre spending across the tech sector have fueled a broader retreat in AI-linked names.

Cramer: “Nvidia has been slighted here”
 

Appearing on “Squawk on the Street,” Cramer said he would buy Nvidia at current levels.

“Yes. I think Nvidia has been slighted here,” he said when asked whether he would put fresh money into the stock.

He argued that the market reaction overlooks the company’s strong fundamentals, pointing to last week’s earnings report, which confirmed visibility into roughly $500 billion in demand for the company’s Blackwell and next-generation Vera Rubin platforms.

Cramer also emphasised that Nvidia’s valuation remains reasonable.

He noted that despite concerns about price sensitivity among some buyers, the dynamics do not indicate weakening demand.

“I’m not seeing customers run away from them. I see some customers being price sensitive,” he said.

That sensitivity, he added, is unlikely to pressure Nvidia’s GPU prices. “Price goes down when there is no demand,” Cramer said.

“The demand is insatiable for Nvidia.”

The growing focus on Google’s TPUs follows the release of Alphabet’s Gemini 3 model, which the company trained on chips co-designed with Broadcom.

The development has brought renewed attention to alternative AI accelerators even as Nvidia remains the dominant supplier of GPUs for AI workloads.

Analysts maintain bullish outlook on Nvidia stock after earnings
 

Nvidia’s earnings earlier this month prompted multiple analysts to raise their price targets, underscoring continued confidence in the company’s long-term trajectory despite near-term volatility.

Morgan Stanley lifted its target to $235 from $220 and reiterated an overweight rating.

The firm highlighted Nvidia’s ability to “execute at a very high level,” noting that quarterly revenue increased sequentially by $10 billion, exceeding guidance by $3 billion.

It also pointed to expectations for a further $8 billion increase in January and said “hundreds of billions of demand (and climbing)” remain unserved.

Goldman Sachs raised its target to $250 from $240 while maintaining a buy rating.

The bank cited Nvidia’s “sustainable model advantage over peers in AI training applications,” significant upside potential relative to consensus estimates, and what it described as a “relatively appealing” valuation given the company’s growth profile.

As AI adoption accelerates across industries, investors will continue scrutinising whether emerging alternatives — including custom silicon from major technology platforms — meaningfully challenge Nvidia’s position or simply expand the overall market for advanced compute infrastructure.

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