A deepening partnership between Club holdings Nvidia (NVDA) and Alphabet (GOOGL) is a win for both tech giants in the burgeoning race to dominate artificial intelligence, Jim Cramer said Wednesday. Nvidia and Alphabet’s expanded relationship — detailed at a Google Cloud event Tuesday — should help both technology firms secure business from companies who want access to cutting-edge AI tools. In essence, the two long-time Club holdings are putting their heads together in a way that benefits customers and shareholders alike, Jim explained. Shares of Nvidia and Alphabet both closed up roughly 1% Wednesday, at $492.64 apiece and $135.88 apiece, respectively. Google Cloud’s attractiveness had already been enhanced by Nvidia technology, including its H100 accelerator chips that excel in training large-language models for generative AI applications. And now Alphabet, through its cloud division, will be one of the first companies to obtain access to Nvidia’s DGX GH200 supercomputer, powered by the semiconductor firm’s new Grace Hopper Superchip . While Alphabet has leaned into developing its own AI chips alongside Club holding Broadcom (AVGO), its customers are also eager to harness Nvidia’s computing prowess, Google Cloud CEO Thomas Kurian said in a statement on Tuesday. For Nvidia, it’s encouraging to see strong relationships with leading cloud-computing players, from Google Cloud to Microsoft ‘s (MSFT) Azure, because those tech giants are massive buyers of its most-expensive AI chips. Jim expects this dynamic to help fuel future top-and-bottom line growth for the AI chipmaker, on top of what Nvidia has demonstrated in recent quarters . Google Cloud on Tuesday also announced a September launch for its latest supercomputer, known as A3 GPU, which is powered by Nvidia’s H100 GPUs. DGX Cloud — Nvidia’s supercomputer and related software accessible via a web browser — is coming to Google Cloud, too. It became available earlier this year on Club holding Oracle ‘s (ORCL) cloud-computing service, and later on Azure. Meanwhile, Google Cloud’s Vertex AI, which allows companies to build generative AI-powered applications using their own data, is receiving a host of upgrades including H100s being generally available on the platform in the coming weeks, Alphabet said Tuesday. The company also announced plans to integrate AI into its Google Workspace and Google Cloud offerings through a program called Duet AI. Wall Street analysts reacted positively to the news, with analysts at JPMorgan saying Wednesday that Alphabet’s event “reinforces Google’s strong AI positioning within Cloud.” The firm expects “Google Cloud to remain a key driver of [the company’s] top-line growth and margin improvement.” (Jim Cramer’s Charitable Trust is long NVDA, GOOGL, MSFT, AVGO, META and ORCL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Thomas Kurian, CEO of Google Cloud, speaks at a cloud computing conference held by the company in 2019.
Michael Short | Bloomberg | Getty Images
