According to a regulatory filing released on Wednesday, Nvidia, a leading chipmaker, has investments in multiple public companies, including Arm, SoundHound AI, Recursion Pharmaceuticals, Nano-X Imaging, and TuSimple.
The filing, which is required for institutional investment managers with at least $100 million in assets, caused a surge in the stock prices of these companies, except for Arm, which has already reached a market cap of over $130 billion.
However, these investments should not come as a surprise to anyone who has been keeping up with news reports and filings.
The current obsession with artificial intelligence has reached a point of irrational exuberance, causing investors to eagerly jump on any opportunity in the AI space.
Bernstein’s Stacy Rasgon predicts that Nvidia’s earnings will continue to rise, solidifying its position as one of the hottest stocks on the market. Nvidia has surpassed both Amazon and Alphabet to become the third most valuable company in the US, trailing only Apple and Microsoft.
Over the past year, Nvidia’s stock has seen a staggering increase of over 200%, driven by the high demand for its AI chips, which are used by major players such as Google, Amazon, and OpenAI.
The disclosure of Nvidia’s stake in SoundHound, a company that specializes in AI-powered speech and voice recognition, caused its stock to soar by 67%. This investment dates back to 2017 when Nvidia participated in a $75 million venture round.
Similarly, Nano-X, a medical imaging company that utilizes AI, saw a 49% increase in its stock after Nvidia disclosed a $380,000 investment.
Nvidia’s involvement with Nano-X can be traced back to its initial investment in an Israeli medical imaging startup called Zebra Medical, which was subsequently acquired by Nano-X in 2021.
TuSimple, a self-driving trucking company, also experienced a significant boost in its stock price, rising by 37% after the news of Nvidia’s $3 million investment.
This comes just a month after TuSimple announced its plans to delist from the Nasdaq due to changes in the capital markets since its IPO in 2021. Nvidia’s investment in TuSimple dates back to 2017, four years before its IPO.
As for Recursion, a biotech company, Nvidia’s investment is more recent. In 2023, Nvidia purchased $50 million worth of shares through a private investment in public equity (PIPE) and now holds shares worth $76 million.
On Thursday, Recursion’s stock saw a 14% increase. Nvidia’s financial performance will be closely watched next week when it reports its quarterly earnings. Analysts are anticipating a revenue growth of over 200% compared to the previous year, reaching more than $20 billion.
Nvidia’s more recent investments are expected to have a greater impact on its financials as they are closely tied to the booming AI industry. In recent years, Nvidia has invested in popular AI startups such as Cohere, Hugging Face, CoreWeave, and Perplexity.
Jonathan Cohen, Nvidia’s vice president of applied research, believes that AI is revolutionizing the way consumers access information and sees Perplexity’s AI-powered search platform as a driving force in this transformation.
