As Nvidia tanks, Jim Cramer says not enough info to make a move

As news from Chinese artificial intelligence startup DeepSeek sparked a steep decline in Nvidia and some of its peers, CNBC’s Jim Cramer on Monday told investors to sit on their hands and make no sudden moves. Now is neither a buying nor a selling opportunity, he said.

“I have no view on DeepSeek yet, because we just don’t know enough. Sometimes, you have to do the hardest thing in the world,” he said “We got to wait, we got to wait until we know more, rather than taking kneejerk action and pretending that we know the answers.”

The tech sector has soared for a while under the assumption that Big Tech will need to spend billions to keep the latest and greatest AI models running, but DeepSeek upended that notion. The Chinese company claimed its models rival those of industry favorites, like OpenAI, and they cost less to operate. Investors panicked at the idea of a cheaper alternative that allows tech companies to spend less on graphics chips. Nvidia has dominated the market with its highly expensive products, but shares plunged as Wall Street weighed DeepSeek’s impact on its sales. Nvidia stock was down nearly 17% by close, and the company shed almost $600 billion in market cap in the biggest one-day loss in U.S. history

Nvidia’s fall reverberated through other sectors, including energy names charged with helping build out an enormous spread of data centers needed for AI. Cramer named stocks that saw losses today, but noted that many were “overheated,” including Constellation Energy, Vistra, Vertiv and GE Vernova.

According to Cramer, “these DeepSeek revelations happened so quickly that many analysts didn’t even have time to assess the situation.” Nvidia has spoken on DeepSeek, calling its model “an excellent AI advancement,” but indicated that many Nvidia chips and networking capabilities will still be needed. Nvidia’s commentary might not be enough to renew Wall Street’s faith in the AI boom, Cramer continued.

“Reassuring? I don’t know,” he said. “Certainly not enough to get in front of this speeding freight train.”

Nvidia declined to directly respond to Cramer’s comments, but directed CNBC to its previous statement on the subject. DeepSeek did not immediately respond the request for comment.

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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Nvidia.