With a $2.2 trillion value, Nvidia (NASDAQ: NVDA) is now the third-most valuable corporation in the world after Apple and Microsoft after a 12-month stock price explosion. Data center GPUs from Nvidia are preferred by developers designing, training, and deploying AI solutions. They boosted the company's data center revenue 217% in fiscal 2024 (ending Jan. 31), and the momentum is likely to continue in fiscal 2025.
Nvidia invested in five AI businesses at the end of last year with all that excess cash. Do the buys indicate where CEO Jensen Huang sees the next value creation? Nvidia submitted its first 13F with the SEC on Feb. 14, indicating it bought five AI stocks in Q4 2023
Arm Holdings (NASDAQ: ARM), which designs processors for major semiconductor firms. Nano-X Imaging develops AI technologies to improve medical imaging. Recursion Pharmaceuticals, which accelerates drug discovery with AI. TuSimple Holdings develops trucking autonomous driving solutions. SoundHound AI (NASDAQ: SOUN) creates conversational AI.
Arm received the most investment, with Nvidia's $147 million stake in 2023. With Arm's stock price up 88% year-to-date in 2024, that investment is now $254 million.
The Nvidia investment in SoundHound AI was only $3.7 million at the end of 2023. However, SoundHound shares rose 296% in 2024, increasing Nvidia's holding to $14.3 million. What makes Arm Holdings and SoundHound AI stand out among Nvidia's five equities.
1. Holding arms Because regulators worried it would hinder semiconductor competition, Nvidia's $40 billion acquisition of Arm Holdings was scrapped in 2020. Arm designs processors for Nvidia and Apple, two of the world's largest firms. Around 50% of chips worldwide use Arm architecture, and the company has a 99% smartphone market dominance.
The H200 AI GPU, Nvidia's latest data center GPU, replaces the industry-leading H100. It also provides the GH200, which has an Arm-based processor and GPU. Two GH200s may provide three times the bandwidth of the H100, making it excellent for AI development acceleration. The Jupiter supercomputer in Germany will deploy 24,000 GH200 processors, a major milestone for Arm's AI and data center efforts.
Arm's investors may be delighted the $40 billion Nvidia merger fell through because the firm is now worth $133 billion. I should warn investors that the stock is costly before they buy it.
stay turned for development