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Small AI Companies Soar After Chip Giant Reveals Stake
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Several firms saw their shares soar on Thursday morning after chip leader Nvidia disclosed investments yesterday evening. In its first-ever 13F filing with the SEC, Nvidia – a leader in the AI space – provided investors with more evidence of its long-term growth plan.
Nvidia (NVDA - Free Report) has witnessed its own stock soar to new heights, rewarding investors with a 550% return since the depths of the 2022 bear market. With this latest rally, Nvidia has surpassed both Alphabet and Amazon in market capitalization, becoming the 3rd most valuable company in the United States.
Semiconductor stocks have led the way over the past year. Robust demand for products that run cutting-edge artificial intelligence have boosted investor appetite for companies that produce the chips. Several of Nvidia’s customers include fellow members of the Magnificent 7, including Facebook-parent Meta Platforms and Microsoft, as they require thousands of AI chips to run their own advanced offerings.
Nvidia’s Mounting Influence
Perhaps the most notable investment that Nvidia disclosed was a nearly $150 million stake in Arm Holdings (ARM - Free Report) , the British chip designer that made headlines recently after the stock soared on an EPS beat and strong sales outlook.
Image Source: StockCharts
Nvidia previously attempted to purchase Arm Holdings two years ago in a blockbuster $80 billion deal, but the agreement turned sour after it hit antitrust issues. The firm was taken private by Japan’s SoftBank in 2016 before returning to the public stage last September. ARM shares had nearly tripled in value from the original IPO price, but a decline over the past few sessions pared some of the gains.
Another disclosure made was a $3.67 million stake in SoundHound AI (SOUN - Free Report) . The company develops AI software that is tailored to vocal recognition, enabling businesses to deliver high-quality conversations to their customers. Their platform offers tools to help brands build voice assistants and automatic speech recognition, natural language understanding, and embedded voice solutions.
Image Source: StockCharts
SOUN stock surged more than 80% intraday before erasing much of the gains. SOUN was one of the most actively-traded stocks across all U.S. exchanges on Thursday.
Nvidia also announced a minor stake in autonomous driving company TuSimple Holdings, a Chinese firm that recently delisted from the Nasdaq. In December of last year, the company announced that it would be closing its part of the business that conducted operations in the U.S. The stock, which is traded over-the-counter, jumped more than 50% early Thursday morning.
A previously disclosed stake in biotech company Recursion Pharmaceuticals (RXRX) was also reaffirmed in the SEC filing, in which Nvidia invested more than $75 million. In addition, Nvidia divulged shares in Israel-based medical device company Nano-X imaging (NNOX - Free Report) , which provides teleradiology services and develops artificial intelligence applications used in medical imaging. NNOX stock nearly doubled in value this morning before shedding much of the gains.
Image Source: StockCharts
Final Thoughts
The AI craze is clearly still underway. But related stocks are getting extended here, so it’s a good time to take partial profits while holding on to the rest to take advantage of any further upside.
Nvidia continues to be at the forefront of the AI movement. The chip giant is a Zacks Rank #2 (Buy) and is set to report Q4 results next week.
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Small AI Companies Soar After Chip Giant Reveals Stake
Several firms saw their shares soar on Thursday morning after chip leader Nvidia disclosed investments yesterday evening. In its first-ever 13F filing with the SEC, Nvidia – a leader in the AI space – provided investors with more evidence of its long-term growth plan.
Nvidia (NVDA - Free Report) has witnessed its own stock soar to new heights, rewarding investors with a 550% return since the depths of the 2022 bear market. With this latest rally, Nvidia has surpassed both Alphabet and Amazon in market capitalization, becoming the 3rd most valuable company in the United States.
Semiconductor stocks have led the way over the past year. Robust demand for products that run cutting-edge artificial intelligence have boosted investor appetite for companies that produce the chips. Several of Nvidia’s customers include fellow members of the Magnificent 7, including Facebook-parent Meta Platforms and Microsoft, as they require thousands of AI chips to run their own advanced offerings.
Nvidia’s Mounting Influence
Perhaps the most notable investment that Nvidia disclosed was a nearly $150 million stake in Arm Holdings (ARM - Free Report) , the British chip designer that made headlines recently after the stock soared on an EPS beat and strong sales outlook.
Image Source: StockCharts
Nvidia previously attempted to purchase Arm Holdings two years ago in a blockbuster $80 billion deal, but the agreement turned sour after it hit antitrust issues. The firm was taken private by Japan’s SoftBank in 2016 before returning to the public stage last September. ARM shares had nearly tripled in value from the original IPO price, but a decline over the past few sessions pared some of the gains.
Another disclosure made was a $3.67 million stake in SoundHound AI (SOUN - Free Report) . The company develops AI software that is tailored to vocal recognition, enabling businesses to deliver high-quality conversations to their customers. Their platform offers tools to help brands build voice assistants and automatic speech recognition, natural language understanding, and embedded voice solutions.
Image Source: StockCharts
SOUN stock surged more than 80% intraday before erasing much of the gains. SOUN was one of the most actively-traded stocks across all U.S. exchanges on Thursday.
Nvidia also announced a minor stake in autonomous driving company TuSimple Holdings, a Chinese firm that recently delisted from the Nasdaq. In December of last year, the company announced that it would be closing its part of the business that conducted operations in the U.S. The stock, which is traded over-the-counter, jumped more than 50% early Thursday morning.
A previously disclosed stake in biotech company Recursion Pharmaceuticals (RXRX) was also reaffirmed in the SEC filing, in which Nvidia invested more than $75 million. In addition, Nvidia divulged shares in Israel-based medical device company Nano-X imaging (NNOX - Free Report) , which provides teleradiology services and develops artificial intelligence applications used in medical imaging. NNOX stock nearly doubled in value this morning before shedding much of the gains.
Image Source: StockCharts
Final Thoughts
The AI craze is clearly still underway. But related stocks are getting extended here, so it’s a good time to take partial profits while holding on to the rest to take advantage of any further upside.
Nvidia continues to be at the forefront of the AI movement. The chip giant is a Zacks Rank #2 (Buy) and is set to report Q4 results next week.