Nvidia Stock Target: AI Company Soars After Chip Giant Nvidia Discloses Stake
The rally shows Nvidia’s growing influence in the world of AI, with Nvidia’s market value growing at a tremendous pace, making it the third most valuable US company.
The biggest investment, at $147.3 million, was in Arm Holdings, the chip designer that Nvidia failed to acquire two years ago after an $80 billion deal hit antitrust hurdles.
Nvidia expressed interest in buying shares of Arm during the British company’s Nasdaq debut last year. Arm’s shares, which had surged more than 60% over the past week following the strong outlook, fell nearly 0.5% on Thursday.
Nvidia disclosed its stake as of December 31 in a 13F filing late Wednesday. Regulatory disclosures are closely watched by investors and typically relate to the moves of fund managers rather than public companies.
Insider Intelligence analyst Gadjo Sevilla said Nvidia’s involvement with a broader range of companies could help it create more focused, yet cheaper chipsets rather than expensive general-purpose AI chips. Shares of biotech company Recursion Pharmaceuticals, in which Nvidia invested about $76 million, rose 5%. Last year, Nvidia said it would invest to speed up the training of the Utah-based company’s AI models for drug discovery. The Silicon Valley giant also invested about $3.7 million in conversational voice assistant developer SoundHound AI, sending its shares up 50% to $3.33.
Nvidia also bought a stake in Nano-X Imaging, an Israel-based medical device company that uses AI software to analyze reports. Nano-X shares are up 52%.
TuSimple Holdings, a self-driving technology company that was delisted from Nasdaq last week, raised $3 million in capital from a chipmaker.
“The Nvidia investment is viewed as very positive by investors and should be helpful to companies in need of raising capital,” said Rick Meckler, partner at family investment firm Cherry Lane Investments.
He said his company’s investments represent a portfolio approach that anticipates both winners and losers.
SoundHound stock was the most actively traded on U.S. exchanges, with 160 million shares traded as of 11:30 a.m. ET, according to LSEG data.
Retailers have also entered the fray. SoundHound and Nano-X Imaging are among the top five most actively traded stocks by individual investors, according to JPMorgan data.
Shares of other small AI companies also rose, including Guardforce AI up 11% and BigBear.ai Holdings up 10.3%.
Several high-profile funds, including Rokos Capital Management and Bridgewater Associates, have also invested in the chipmaker through the end of 2023, according to Nvidia’s regulatory filing.
(Reporting by Medha Singh in Bengaluru; Additional reporting by Bhanvi Satija and Johann Cherian; Editing by Arun Koyyur)
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