Jim Cramer supports Nvidia's AI chip sales in China, confident in stock's success regardless

CNBC's Jim Cramer expressed that Nvidia should be permitted to market their AI chips to China. He argued that it would be more advantageous for the U.S. if Chinese firms remained dependent on U.S. technology, rather than encouraging them to develop alternative products.

“You force them to build their own chips, they will catch up and with seemingly unlimited electricity, they will surpass us,” the "Mad Money" host mentioned on Thursday, during Nvidia CEO Jensen Huang's visit to China with President Donald Trump for a critical diplomatic meeting.

For a considerable time, Nvidia's ability to sell sophisticated AI chips to China has been limited, following export restrictions that were set during the Biden administration due to national security concerns. Investors are increasingly monitoring whether Nvidia might resume significant sales to the globe's second-largest market, especially since the company indicated uncertainty about receiving the necessary approvals earlier this year.

“While small amounts of H200 products for China-based customers were approved by the U.S. government, we have yet to generate any revenue and we do not know whether any imports will be allowed into China,” Nvidia CFO Colette Kress explained during the company's February earnings announcement.

In March, though, CEO Jensen Huang shared a more hopeful perspective, announcing at Nvidia's GTC conference that the company had secured orders and was resuming production.

“We have received purchase orders, and we’re in the process of restarting our manufacturing,” Huang stated. “It’s different than it was two weeks ago or three weeks ago, but that’s our condition today ... and our supply chain is getting fired up.”

As Nvidia prepares to release its earnings on Wednesday, investors keenly await any updates regarding the company's ventures in China, particularly following Huang's involvement in Trump's summit. NVIDIA's official financial expectations do not include income from China.

At this stage, Cramer feels that the pivotal decision is now more in China's hands than Washington's. He argued that Xi faces a complex choice: allow the purchase of Nvidia's tailored chips, risking deeper reliance on American tech, or push local companies towards faster self-development.

Nevertheless, Cramer highlighted that Nvidia remains a compelling option, irrespective of China's situation, due to its leading status in AI and its relatively affordable valuation compared to competitors, especially when considering the newly public Cerebras.

"There would be no AI revolution without Jensen Huang and Nvidia" he remarked. "You buy Nvidia, not for China, not because of the Cerebras IPO, but because it’s actually a cheap stock."