Cramer's Mad Money - Keeping an ION Nvidia (9/30/09)

by: Miriam Metzinger

Stocks discussed on the in depth session of Jim Cramer's Mad Money TV Program, Wednesday September 30.

Nvidia (NASDAQ:NVDA), Hewlett Packard (NYSE:HPQ), AMD (NYSE:AMD), Microsoft (NASDAQ:MSFT)

Cramer says Nvidia is the smartest and the best way to play the netbooks explosion. Nvidia makes compact graphics processors, called ION, for the tiny computers which should reach 35 million in worldwide sales for 2010. There are currently 50 ION-based products on the market, and this number should increase through Nvidia's deal with Hewlett Packard; "The best account you can possibly have," commented Cramer. While AMD provides formidable competition for Nvidia, Cramer thinks there is plenty of room for both companies, especially given the incipient release of Microsoft's Windows 7 and Apple's Snow Leopard. “I’m not abandoning AMD,” Cramer said, “but we really have to get behind this competitor and do it right now.”

Nike (NYSE:NKE), Darden Restaurants (NYSE:DRI), A123 Systems (AONE), Home Depot (NYSE:HD), Altria (NYSE:MO)

The Dow was extremely volatile on Wednesday, and made a triple-digit fall, rallied back up and dipped once again to finish with a 30 point decline. Cramer has an explanation for the craziness of the market; "The fundamentals of the economy are canceling each other out." Investors can make a convincing bullish or bearish case depending on how they look at the market. For instance, Nike's results show a strong consumer, while Darden gives a less optimistic outlook. While low inventories and reduced home construction are good for housing, there is still reason to be worried about more foreclosures. The IPO explosion, initiated by A123 came out of the blue.

Another explanation for the craziness is the mass trading of hedge fund managers who were left behind by the summer rally and need to make some quick gains. Currently the hedgies are pushing up tech stocks, which make the Nasdaq a "place of severe outperformance."

The antidote to market volatility is diversification. Cramer likes stocks like Home Depot, which will profit from a housing turnaround and Altria, which offers a generous dividend.

CEO Interview: Hossein Fateh: Dupont Fabros Technology (NYSE:DFT)

Cramer likes this REIT which deals with large-scale computer data centers but was troubled about the suspension of its dividend. Hossein Fateh said he had the choice between keeping the dividend by issuing more equity, which would have resulted in diluted the value of shares or waiting until DuPont Fabros could lease more space before reinstating the dividend at previous levels. He went on to explain that the company was cautious not because of declining demand but the risky credit market. DuPont Fabros has a policy that ensures all clients pay on time; "We don't lose leases," said Fateh. Cramer concluded that he wants to keep an eye on the company for a quarter before recommending it.


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