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What if this entire market is actually undervalued after such an incredible rise ? I know, it sounds crazy. I mean, we just had an amazing surge. We just went through a brutal sell-off after that. All the buyers disappeared. And now suddenly we are back. The Dow rose 328 points. The S&P jumped 1.27%.
The NASDAQ added 1.87%. Why? Why did this happen? Why was today so good? Because today is " Merger Monday." Monday. It used to be a day where we always saw a merger, and then it stopped. Well, you know what? It's back, and it's bigger than ever. So I got the fusion robot. Merger. Merger. Merger. Yes.
I haven't used the mergers robot in, I don't know, four or five years. Merger. Merger. And he came back. OK. OK. OK. It's back and bigger than ever. We spend a lot of time trying to figure out how much stocks are worth, right? I mean, we do all these calculations of price to earnings, price to sales, book value —all the things we're trying to do.
But, you know, there is another way to value a business. You look at how much another business is willing to pay for this business. And today we have a wave of huge, stunning deals that show that there are many truly profitable deals in the M&A space. Merger, merger, merger. Let's start with the stunning announcement over the weekend that Gilead Sciences, the giant biotech company that defeated hepatitis C, is buying Immunomedics for $21 billion.
You see, it's real. This ... Immunomedics shares were trading at $2 just four years ago. 4 dollars. Back in April, they cost about $8. They have had three CEOs in 18 months. But Immunomedics also has a viable oncology franchise that some analysts believe could become a huge business in a few years. The stock soared to $40 this summer alone on takeover rumors.
Then Gilead comes along and pays 108% of the premium to 40 , which was over 8, which was over 2. And you know what? You get $88 per share from Gilead Sciences even after such a huge price. So how much should Gilead shares fall ? No, they grew up. The market believes this deal is a good deal for Gilead , suggesting that Immu was radically undervalued even at 40.
It's just a delight. Well, okay. So what about Cramer's favorite, Nvidia? They are paying $40 billion in cash and stock for ARM Holdings. It's a deal that will make Nvidia the king of semiconductors, combining their graphics and server chips with ARM processors for computers and mobile phones. Two areas where Nvidia is not yet represented.
They pay a fortune for it . And although Nvidia shares have already risen by more than 100% for the year, today they skyrocketed again. This agreement changes the rules of the game. The only serious obstacle—some of us believe that antitrust authorities will block it. But I spoke to Jensen Huang, and Jensen—you know, he's the trusted CEO of Nvidia.
He was with me on "Squawk on the Street" this morning and was adamant that the deal would pass inspection. Considering he eventually completed that fantastic deal with Melanox, even though the Chinese government tried to block it at first. I believe him. He says it will immediately increase profits, and I believe it too.
This could prove to be a good buy due to the widespread use of their technology. That's what Jensen told me this morning. ARM is an extraordinary company. This is the company that created the world's most popular processor. It has created 180 billion units throughout its history. 22 billion last year alone, so they're everywhere.
They are in everything. People believe in it. Up $28 today. A $28 increase after paying $40 billion for a company most people don't even know exists. Many believe that Nvidia stock is now horribly overvalued at these levels. Of course, I think they are wrong. For God's sake, they're trading at 57 times earnings.
But you know what? In 2018, Nvidia also seemed ridiculously expensive. The thing is, when the actual earnings data came in, they were much higher than expected. Looking back, the stock looked absurdly cheap. They were trading at a price that was 20 times their profit. 20 times more profit. I think the same thing could happen now, even though Nvidia is already the largest semiconductor company in the world by market capitalization.
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