Oil relief sparks a stock rally, but Cramer says Nvidia’s AI boom is the real story

CNBC’s Jim Cramer on Monday welcomed the drop in oil prices that sent stocks higher, but said the real action for investors is unfolding at Nvidia’s GTC artificial intelligence showcase this week.

Nvidia shares participated in a broad stock market rally that was fueled by President Donald Trump “allowing Iranian oil to get through the Strait of Hormuz,” Cramer said on “Mad Money.” “That caused the price of crude to drop back to the mid-$90s, which is all that mattered to the [stock] averages,” he added. The move eased fears that the escalating Iran war could disrupt global oil supplies and send prices even higher. Just a few days ago, Wall Street was bracing for a much worse scenario.

West Texas Intermediate crude, the U.S. oil standard, settled down 5.3% to just under $94 per barrel on Monday, clearing the way for the S&P 500 to jump 1%. The Nasdaq surged 1.2% on the session, while the Dow Jones Industrial Average gained 0.8%. The S&P 500 closed sharply lower on Friday and suffered its first three-week losing streak in about a year.

“We left here on Friday thinking the next stop for oil would be $150,” worrying about what such a move could mean for gas prices, the voting booth, and stocks. A number of research notes warned that if crude kept rising, the S&P 500 could fall as much as 15% to 20%. While WTI did briefly top $100 per barrel Monday, it eventually gave up those gains and finished lower.

That decline in oil triggered stock buying — particularly in AI stocks like Nvidia, whose CEO Jensen Huang kicked off the company’s GTC developers conference on Monday, with a rousing keynote address.

“[Investors] bought the hardware. They bought the software. They bought the infrastructure. They bought the data center. They bought everything that produces AI. … They bought the whole wide world of Jensen Huang and everything in it,” said Cramer, who is in California for this week’s GTC festivities.

On stage in front of a packed house, Jensen told a “tale of endless demand,” Cramer said. The Nvidia CEO projected $1 trillion in orders for chip platforms Blackwell and its successor, Vera Rubin, through 2027. That’s up from last year’s estimate of $500 billion. “This is the future,” Cramer added. “You just can’t see it, because so many things are going wrong in the world.”

There were, however, lots of believers on Monday as shares of Nvidia closed up 1.65% at $183 per share, after back-to-back losses on Thursday and Friday. Cramer is set to interview Jensen for Tuesday’s “Mad Money.”