By Jim Cramer, TheStreet

 

In any given year, you can make a lot of bonehead calls, but sometimes the biggest boneheads come back to life in a spectacular fashion. Right now I am looking darned good on a pick I was roundly criticized for: Nvidia (NVDA).

 

If you recall, I focused on Nvidia because it was the worst performer in the S&P 500 ($INX) for the first half of the year. I said the graphic chip-maker, which was at $10 and change at the time, would have a miserable quarter and then you would have to jump and jump fast when it reported.

 

Of course, people then bought it aggressively ahead of the quarter, no doubt because they figured that I knew something and they should buy it immediately. Totally wrong.

 

I just saw how great the balance sheet was (with oodles of cash), how big the short position was (more than 10% of outstanding shares!) and how the new product cycle was shaping up, and I figured that, once the company reported, the worst would be over.

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Soon after, the company preannounced and the stock fell to $8 and change. I remember being accosted while I was out at a fundraiser on Long Island by someone who had bet the ranch on Nvidia at $10 and told me I had done no homework and knew nothing.

 

I said just wait until it actually reports and you will see that the bottom has been reached.

 

That's just what happened. Tuesday morning, Pacific Crest put out a contrary piece of research pointing out that channel inventories for Nvidia's high-powered chips (great 3-D stuff) have dropped dramatically from 10 to 12 weeks to three to four weeks. The company, Pacific Crest said, is now ready for sequential revenue growth and deserves a higher price-to-sales ratio.

 

The stock is still down more than 40% for the year, despite reports that it is starting to take share from Advanced Micro Devices (AMD) and that its chips are in demand by game makers who are anxious to cash in on new, richer games and need Nvidia's chips to make them work.

 

Everyone in tech knows that Advanced Micro Devices and Intel (INTC) are gunning for this little company. Everyone knows that Nvidia may not be a long-term winner.

 

To me, we are seeing a breakout that can be played and that will be played. The move hasn't been missed. I figure the guy who hectored me is long gone.

 

A whole new group that bought it at $9, when the company reported (the time I suggested to pull the trigger), is up huge. My advice: Get long; its move is just beginning.

 

At the time of publication, Cramer was long Intel.

 

Jim Cramer is co-founder and chairman of TheStreet. He contributes daily market commentary for TheStreet's sites and serves as an adviser to the company's CEO.

 

Click here to learn how to follow Cramer's trades for his Charitable Trust.

 

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