Nvidia (NASDAQ: NVDA) has been a stellar investment over the past few years, with its stock soaring nearly 1,800% in the last five years alone. This growth can largely be attributed to investors’ excitement for artificial intelligence (AI), as Nvidia’s revenue has surged thanks to its AI-related products and services. In fact, the company expects to report a 231% year-over-year increase in revenue in its fiscal 2024 fourth quarter, reaching a staggering $20 billion.
As AI continues to be a top investment trend, Nvidia is not only benefiting from it but also investing in other AI companies. According to its recent 13F filing with the Securities and Exchange Commission, Nvidia has a stock portfolio worth $230 million, and all five stocks in its portfolio have a connection to AI.
The largest investment in Nvidia’s portfolio is Arm Holdings (NASDAQ: ARM), valued at $147 million. Arm Holdings licenses its AI semiconductor chip designs to other companies, and this business is currently in high demand. While Nvidia’s attempt to acquire Arm Holdings in 2020 faced regulatory pushback and was eventually called off in 2022, the company is now looking to benefit as an investor.
Another notable investment in Nvidia’s portfolio is Recursion Pharmaceuticals (NASDAQ: RXRX), an early-stage biotechnology company that utilizes AI models to process genetic data and discover new drugs. With access to massive amounts of oncology data, Recursion is partnering with Nvidia to enhance its supercomputer and accelerate its cancer research.
SoundHound AI (NASDAQ: SOUN) is another AI stock in Nvidia’s portfolio. The company offers an AI voice assistant that claims to be more proficient in understanding normal language compared to major tech companies’ counterparts. Its growing customer list indicates support for its claim.
TuSimple Holdings, a company working on enabling autonomous driving for trucking companies, is also in Nvidia’s portfolio. However, as it is delisting from the Nasdaq, investors might want to disregard this stock.
Finally, Nano-X Imaging (NASDAQ: NNOX) is Nvidia’s smallest stock position. The company aims to transition the world to a new digital X-ray technology and plans to use AI to analyze digital images and detect patterns that doctors might miss, resulting in improved outcomes for patients.
While AI stocks are currently in vogue, it is important for investors to exercise caution and be discerning. However, considering the potential impact of AI in the medical field, Nvidia’s investments in Recursion Pharmaceuticals and Nano-X Imaging are particularly intriguing.
Both companies are leveraging AI to unlock important medical breakthroughs by processing enormous medical datasets. For example, Recursion Pharmaceuticals’ partnership with Tempus provides access to 50 petabytes of oncology data, while Nano-X Imaging aims to deploy thousands of medical devices and analyze millions of medical images using AI.
It is important to note that both Recursion Pharmaceuticals and Nano-X Imaging are high-risk stocks with meager revenue and substantial losses. Investing in them should be done with a full understanding of the risks involved. However, if they succeed in leveraging AI to achieve significant breakthroughs, the potential rewards could be substantial.
In conclusion, Nvidia’s investments in AI-related stocks highlight the company’s commitment to capitalizing on the potential of AI. While AI stocks may be overhyped in general, the use of AI in the medical field presents intriguing opportunities. However, investors must exercise caution and evaluate the risks associated with high-risk stocks like Recursion Pharmaceuticals and Nano-X Imaging.
