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Jim Cramer says investors should stick with Nvidia after decline

CNBC’s Jim Cramer spoke Tuesday about his long-standing confidence in Nvidia shares, even though the company lost significant market capitalization this week.

“I’m not going into the deep end to please those who want a broader, more participatory market,” he said. “I’m just going to stick to stocks of the best companies in the market.”

Nvidia reached a valuation of $3.34 trillion last week, surpassing Microsoft become the world’s largest company. But shares have fallen 13% in three days, and although the stock began to recover Tuesday, it was still down about 7% from its record high at the close, according to FactSet.

Cramer said he is focused on finding strong companies that can perform despite a challenging consumer or interest rate environment, saying it is continually difficult to gauge consumer behavior.

He mentioned Piscine Corp.., a company that makes swimming pool equipment, whose shares fell after announcing that its sales had suffered due to weakening consumer demand. Cramer suggested that this data had a ripple effect on other consumer and housing-focused stocks, such as Lowes, Home deposit And Marks of Fortune.

But unlike Pool Corp., Nvidia’s enterprise customers don’t get lost easily, he said. For Cramer, the company’s customers are unlikely to do business elsewhere because they risk falling behind their peers on the cloud infrastructure front. Cramer added that Nvidia and its mega-cap peers that can “pay cash” are not concerned about interest rates.

“As crazy as it sounds after its recent decline, I think it’s easier to own – not trade, but own – Nvidia stock than it is to own stock in one of the companies that rely “fickleness, recklessness, heartbreak, lack of money, beleaguered, mercurial, arbitrary, confused and clueless consumer,” he said. “If you trade him, you end up missing great rebounds like today.”

Nvidia declined to comment.

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Disclaimer The CNBC Investing Club Charitable Trust owns shares of Nvidia and Microsoft.

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