Nvidia bets on AI future with new investments, shares rally
Nvidia (NVDA) has disclosed investments made in several emerging AI companies, sparking rallies across these stocks. Among the names benefiting include Soundhound (SOUN), Arm (ARM), and Nanox (NNOX).
Yahoo Finance's Julie Hyman and Josh Lipton breaks down the details.
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Editor's note: This article was written by Angel Smith
Video Transcript
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JOSH LIPTON: All right. Let's get some tickers now. NVIDIA disclosing investments in smaller AI firms, SoundHound AI, Arm Holdings, and Recursion Pharmaceuticals to name just a few. Shares of these firms getting a boost in today's trade. So this was interesting, Julie.
So NVIDIA, obviously, which is kind of the face of this boom of interest in AI we're talking about. We know it has stakes now in a few companies. We know, by the way, because NVIDIA included this info in its 13F. So Arm, it looks like that stake was the biggest, about 147 million.
Recall NVIDIA actually tried to acquire Arm but of course, that didn't happen due to regulatory challenges then Recursion was next at 76 million. The smallest was about 4 million it looks like in this SoundHound AI.
JULIE HYMAN: Yeah, so it's not like they're huge investments necessarily in these companies, but in this current market environment where there's so much enthusiasm around basically anything NVIDIA touches, all of these stocks had big gains today.
That includes, by the way very, small companies like micro, micro, micro caps like Nano X Imaging, which is a medical imaging development company and TuSimple, which is a self-driving company. I mean, both of those are like micro caps and so it's interesting here.
And, you know, both of them seeing gains. Some of these stocks also have high short interest, so you have to take that into account when you look at the reaction here. But it's interesting, this revelation-- I mean, from Arm, which to your point is a huge company that NVIDIA tried to acquire to these very tiny companies.
JOSH LIPTON: By the way, Dan Ives of Wedbush who we both know has an outperform on SoundHound, and he liked this news. He said this could be, in his opinion, he told his clients this morning, maybe the start of what he thinks could be a broader investment into that company.
JULIE HYMAN: Just one quick point of perspective here on SoundHound, by the way, as we have seen this what Peter Boockvar had called a parabola in the stock, right? Right? $13.3 million. Do you know what that number is?
JOSH LIPTON: No, give it to me.
JULIE HYMAN: It's revenue last quarter. Teensy, tinsey company. And maybe there's a lot of room for growth, which obviously is what people are betting on, but it is very, very small right now.
