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Nvidia (NASDAQ:NVDA) is finding some relief in overnight trading, with shares gaining about 1% after losing nearly 10% during the previous two sessions. The chipmaker is joining a recovery among neocloud stocks, led by Nvidia-backed CoreWeave (NASDAQ:CRWV), whose shares are surging 5% following its latest earnings release. However, investors still have several reasons to remain cautious about the semiconductor leader's prospects.

The recent sell-off followed revelations concerning CEO Jensen Huang's relationship with a woman suspected of having connections to Chinese intelligence, raising concerns about his future at the company. Political developments have added another complication, as Democrats' midterm election victories have increased fears of tighter restrictions on data-center construction. Such measures could slow infrastructure expansion, potentially reducing demand for the expensive processors powering AI applications.

CoreWeave's quarterly performance has offered some encouragement, with revenue surging 168% to $3.66 billion, exceeding Wall Street's expectations. The cloud infrastructure provider also reported a contracted backlog of $132.5 billion, suggesting customers remain committed to securing additional computing capacity. Those figures provide a welcome reminder that spending on advanced hardware continues despite mounting concerns about financing costs.

Still, CNBC's Mad Money host Jim Cramer believes Nvidia investors should prepare for more uncertainty, even though he still considers Nvidia a Buy.

Cramer Sees Reasons to Buy Nvidia, but Urges Caution

Cramer isn't ready to walk away from Nvidia, although Huang's uncertain future has forced him to reconsider the company's longer-term outlook. He believes the semiconductor manufacturer possesses enough engineering expertise and technological resources to maintain its competitive position without relying entirely on its current chief executive.

Addressing the stock's investment appeal, Cramer said, "I still think it is a buy," while acknowledging the possibility of a leadership transition.

However, Cramer also recognizes that replacing Huang would introduce complications at a time when competition is becoming more challenging. AMD has been strengthening its position in advanced processors, potentially requiring Nvidia's next leader to defend existing market share while overseeing the development of future products.

Beyond the controversy surrounding Huang, Cramer sees potential obstacles arising from Washington's changing political landscape and growing public resistance to new computing facilities. He believes stricter permitting requirements could slow construction activity, leaving chip suppliers facing weaker orders than previously anticipated.

Considering these risks, Cramer warned that "we can no longer be as aggressive in the sector," suggesting investors should reconsider their exposure to infrastructure-dependent companies.

Funding represents another concern, especially for smaller cloud operators seeking billions of dollars to develop additional facilities. Cramer mentioned CoreWeave, Nebius, and IREN as potential casualties if lenders become reluctant to finance projects facing greater regulatory uncertainty.

Cramer also suggested that replacing Huang could alter Nvidia's willingness to invest directly in external computing developments. A successor might prefer allocating capital toward internal priorities, leaving independent operators with fewer financial resources available for expansion.

Ultimately, Cramer's outlook remains positive toward Nvidia's underlying operations, although his enthusiasm for owning its shares has diminished. CoreWeave's earnings offer reassurance about current demand, but Cramer's concerns suggest the road ahead could remain volatile.

Wall Street Still Expects Significant Gains

While Cramer has become less enthusiastic about Nvidia, his continued willingness to recommend the stock reflects Wall Street's prevailing outlook. Of the 35 analysts issuing ratings during the past three months, 34 favor buying, with only one staying on the sidelines. That leaves NVDA with a Strong Buy consensus rating and an average price target of $327.83, representing 94% upside from Tuesday's closing price.