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Jim Cramer has told investors about Nvidia’s transformation into a “meme stock,” following a significant earnings hit due to U.S. export restrictions.

What Happened: In a post on X on Wednesday, Cramer, a former hedge fund manager and host of CNBC’s Mad Money, expressed his concern about Nvidia Corporation (NASDAQ:NVDA) becoming a meme stock.

He advised investors to reduce their holdings in the company, citing a $5.5 billion earnings hit due to U.S. export restrictions on Nvidia's H20 AI chips to China.

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“Nvidia has become a meme stock and it has to be cut back,” posted Cramer.

As i said in my painful Sunday think piece for club members, Nvidia had become a meme stock and it has to be cut back.. Don't say thanks for telling me now cause club members got the whole call

— Jim Cramer (@jimcramer) April 16, 2025

The restrictions, announced on April 15, were aimed at limiting China's access to semiconductors for military use. It is also suspected that China used Nvidia’s H2O chips for developing DeepSeek’s R1 model. Following the announcement, Nvidia's shares dropped 6.9% on April 16, 2025. Cramer’s post suggests that he had already advised his club members to reduce Nvidia holdings in a “painful Sunday think piece”.

When asked about Nvidia on CNBC’s "Mad Money Lightning Round," on Wednesday, Jim Cramer stated, "You can’t own it like you used to, meaning you have to trim, and I said I’m going to have to sell some.” "It’s a different world,” Cramer added.

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Why It Matters: The U.S. export restrictions have highlighted the geopolitical risks tied to Nvidia's reliance on the Chinese market. Nvidia even failed to inform some of its major Chinese customers about the new U.S. export rules affecting its AI chip.

In response to a national security investigation, Nvidia defended its compliance with U.S. export rules. The company issued a statement addressing a House Select Committee’s inquiry into the sale of its H20 processors, which recently became subject to new export restrictions.

Besides Cramer, Wedbush Tech analyst Dan Ives also expressed concern over Nvidia’s situation and told CNBC, “China is almost a zero for Nvidia—this is a blockade.” On the other hand, Bank of America analyst Vivek Arya feels the restrictions on the export of H20 chips were expected and represented just a “manageable risk” to Nvidia’s revenue estimates.

Meanwhile, some analysts suggest that Chinese AI chipmakers, particularly Huawei, could gain an advantage from the restrictions on H20, as they provide alternatives to Nvidia's product lineup.

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This article Jim Cramer Calls Nvidia A 'Meme Stock' That Needs To Be Trimmed: 'You Can't Own It Like You Used To' originally appeared on Benzinga.com