Quick Summary
- Nvidia shares have fallen approximately 3% since the Iran military action commenced on February 27
- Cramer believes the geopolitical situation’s effect on NVDA is difficult to measure, though core demand stays robust
- The company’s $1 trillion data center revenue projection for Blackwell and Rubin chips might be understated, according to Wells Fargo
- Wells Fargo’s Aaron Rakers projects 15–20%+ potential upside versus Street’s 2026–2027 data center forecasts
- Major cloud companies plan to install approximately 22GW and 25GW of AI capacity in 2026 and 2027
Shares of Nvidia have dropped roughly 3% following the outbreak of hostilities with Iran on February 27, leaving market participants debating how much of the decline stems from geopolitical concerns versus other factors.
During Thursday’s “Mad Money” episode, CNBC host Jim Cramer offered his perspective, presenting a framework for assessing Nvidia’s current position. His verdict: the pullback isn’t entirely conflict-driven, and the company’s core business remains intact.
“Nvidia is a big part of the stock market itself and so it’s the easiest stock in the world to trade,” Cramer said. “I think it’s going down because it is so easy to get back in at a lower level.”
President Trump has postponed strikes on Iranian oil infrastructure until April 6, injecting additional volatility into markets. Cramer emphasized that predicting when tensions will subside is essentially impossible.
Interest rates also factor in. Higher rates could slow the data center buildout by raising borrowing costs. But Cramer added: “If the war ends soon and we have a new Fed chief, you’ll feel like a moron for staying away from Nvidia.”
Regarding supply dynamics, the semiconductor sector faces shortages in both computing power and memory, suggesting that Nvidia chip demand is limited by pricing considerations rather than weakening customer interest.
“Everything you use Nvidia for is considered mission critical,” Cramer said, brushing off concerns about energy costs at data centers. Nvidia’s facilities run mostly on domestic natural gas, which has “barely budged.”
Cramer highlighted that Middle Eastern sovereign wealth funds have contributed capital for data center development. Questions exist about whether this funding stream might evaporate. However, following his attendance at Nvidia’s GTC event last week, Cramer reported witnessing “incredibly strong” demand signals.
His bottom line: while not aggressively bullish, he’d prefer entering positions slightly early rather than missing a potential rebound. “You’re ultimately being given a chance to buy a high quality stock at a lower price than you’d normally expect.”
Wells Fargo Projects Revenue Beyond Nvidia’s Own Conservative Estimate
In separate commentary Thursday, Wells Fargo’s Aaron Rakers suggested that Nvidia’s internal $1 trillion data center revenue target — spanning Blackwell and Rubin GPU generations through 2027 — may prove overly cautious.
Rakers maintains an Overweight stance with a $265 target on NVDA shares, forecasting 15–20%+ potential above Wall Street’s current 2026–2027 data center projections.
His reasoning centers on infrastructure buildout: the five largest cloud operators are projected to install approximately 22 gigawatts of AI systems in 2026 and 25 gigawatts in 2027. This deployment scale suggests materially higher Nvidia sales than existing analyst models reflect.
“From this, we present a pluggable model implying ~$120B+ of NVDA data center revenue upside for 2026–2027 vs. consensus estimates,” Rakers wrote.
Breaking Down the Trillion-Dollar Backlog
Within Nvidia’s disclosed $1T+ Blackwell and Rubin order pipeline, Wells Fargo calculates that approximately $840 billion should ship during 2026 and 2027. By January 2026, between $150 billion and $155 billion had already been fulfilled.
Rakers estimates the company deployed about 9 gigawatts of Blackwell infrastructure by the end of fiscal Q4 2026, with Blackwell processors representing roughly 65–70% of that volume. His calculation yields approximately $25 billion in revenue per gigawatt installed.
While Rakers hasn’t officially increased his financial models yet, he indicated willingness to do so if deployment trends continue exceeding current assumptions.
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