Nvidia’s Investments in AI Companies Fuel Market Exuberance

Nvidia, a leading chipmaker, recently disclosed in a regulatory filing that it holds stakes in a handful of public companies, including Arm, SoundHound AI, Recursion Pharmaceuticals, Nano-X Imaging, and TuSimple. The filing came as no surprise to those who have been following Nvidia’s venture investing activities, but the market reacted with enthusiasm, sending the shares of these companies soaring.

The AI mania is in an irrational exuberance phase, and investors are pouncing on anything and everything in the space. Nvidia’s earnings numbers continue to go up, making it an attractive investment for those looking to capitalize on the boom in artificial intelligence.

SoundHound, which uses AI for speech and voice recognition, saw its shares jump 68% on Thursday following the disclosure of Nvidia’s stake worth $3.7 million. Nvidia invested in SoundHound back in 2017 as part of a $75 million venture round. The company went public through a special purpose acquisition company in 2022, and Nvidia was named as a strategic investor in its presentation.

Nano-X, which uses AI in medical imaging, saw its shares surge 59% on Thursday after the disclosure of Nvidia’s $380,000 investment. Nvidia’s involvement with Nano-X dates back years to a venture investment in Zebra Medical, an Israeli medical imaging startup. Nano-X acquired Zebra in 2021.

TuSimple, an autonomous trucking company, rocketed 40% on Thursday after the disclosure of Nvidia’s $3 million stake. The share rally comes a month after the company announced plans to delist from the Nasdaq due to a “significant shift in capital markets” since its 2021 IPO. TuSimple debuted at $40 a share and now trades for roughly 50 cents.

Nvidia invested in TuSimple in 2017, four years before the IPO. The company’s financials will be on full display next week when it reports quarterly earnings, with analysts expecting year-over-year revenue growth above 200% to more than $20 billion.

Nvidia’s more recent investments are likely to be much more significant than its earlier bets, as they are at the heart of the AI boom. In recent years, Nvidia has backed hot AI startups including Cohere, Hugging Face, CoreWeave, and Perplexity.

“AI is transforming the way consumers access information,” said Jonathan Cohen, Nvidia’s vice president of applied research, in Perplexity’s announcement of a $73.6 million funding round last month. “Perplexity’s world-class team is building a trusted AI-powered search platform that will help push this transformation forward.”

Nvidia’s investments in AI companies have fueled market exuberance, with investors eager to get a piece of anything the chipmaker touches. The company’s financials continue to impress, with year-over-year revenue growth above 200% expected in its next earnings report. Nvidia’s investments in AI startups are likely to be much more significant than its earlier bets, given the current boom in artificial intelligence.

Nvidia’s earnings numbers will be on full display next week when the company reports quarterly earnings, with analysts expecting year-over-year revenue growth above 200% to more than $20 billion. The company’s more recent investments in hot AI startups like Cohere, Hugging Face, CoreWeave, and Perplexity are likely to be much more significant than its earlier bets, given the current boom in artificial intelligence.

Nvidia’s investments in AI companies have also attracted attention from other investors, with many looking to capitalize on the trend. For example, Bernstein’s Stacy Rasgon expects Nvidia’s earnings numbers to continue to go up.

“Nvidia’s earnings numbers will continue to go up,” Rasgon said in a recent interview. “The company’s AI chips are at the heart of powerful AI models from Google, Amazon, OpenAI, and others, making it an attractive investment for those looking to capitalize on the boom in artificial intelligence.”

In conclusion, Nvidia’s investments in AI companies have fueled market exuberance, with investors eager to get a piece of anything the chipmaker touches. The company’s financials continue to impress, with year-over-year revenue growth above 200% expected in its next earnings report. Nvidia’s investments in hot AI startups like Cohere, Hugging Face, CoreWeave, and Perplexity are likely to be much more significant than its earlier bets, given the current boom in artificial intelligence. The trend is expected to continue, with many investors looking to capitalize on the trend and Nvidia’s leadership position in the AI market.