Jim Cramer correctly predicted a month ago that Nvidia (NVDA) would miss analysts' earnings estimates for the company's latest quarterly earnings -- and that's exactly what the chip giant did on Thursday.
"I think Nvidia is going to miss the quarter, alright?" Cramer said on Oct. 13 at TheStreet's Boot Camp for Investors in New York. "I think that no one thinks they're going to, [but] what happened is, I think [rival Advanced Micro Devices (AMD) ] made too many chips. The channel's filled with AMD chips ... and AMD's trying to take business away from Nvidia [by] charging less for the chips."
Cramer's prediction turned out to be correct, as NVDA reported earning $1.84 in adjusted earnings per share in its latest quarter -- below the $1.93 that analysts had expected. Revenues also came in at $3.18 billion vs. the $3.24 billion that analysts had forecast.
The miss and lackluster forward guidance sent NVDA shares down some 18% in after-hours trading Thursday evening -- a move that Cramer also correctly forecast back in October. The expert told the teach-in's audience that's why his charitable trust sold its Nvidia stake well ahead of earnings, but added that the trust will eventually buy the name again.
"There are people who are going to say: 'Well, wait a second. Nvidia's done.' And then we're going to buy Nvidia back. ... You'll see us back in Nvidia [in the future], but if you take a look at the last quarter, they didn't deliver."
You can watch Cramer's full Nvidia comments from the teach-in in the video above, where he discusses the stock with Senior Portfolio Analyst Jeff Marks of Jim's Action Alerts PLUS club for investors. Or, click here for a free 14-day trial of Action Alerts PLUS and get all of the analysis that Jim and his team prepare every market day for club members. Membership also includes:
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(This article has been updated.)