Nvidia, a leading AI stock, has seen significant growth due to its AI-related products and services. Despite this, the company has invested in five other AI-related stocks, including Arm Holdings, Recursion Pharmaceuticals, SoundHound AI, TuSimple Holdings, and Nano-X Imaging. While these investments hold potential, they are high-risk and not guaranteed to succeed, requiring investors to carefully consider the associated risks.
Nvidia disclosed investments in Arm Holdings, SoundHound AI, and biotech company Recursion Pharmaceuticals in a 13F form filed with the US Securities and Exchange Commission, revealing its investment strategy following the failed attempt to acquire Arm for $40 billion in 2020. The disclosed stakes led to significant market movements, with Arm up 2% in premarket trading, SoundHound shares soaring 55% in late trading, and Recursion climbing 19% in premarket trading. Nvidia also revealed smaller holdings in Nano-X Imaging Ltd. and TuSimple Holdings Inc., showcasing its diverse investment portfolio in technology and biotech companies.
Nvidia is expanding its partnerships with Amgen and Recursion Pharmaceuticals to further develop AI-powered drug discovery. Amgen's deCODE Genetics is building an Nvidia supercomputer to create genomics "foundation models," while Nvidia's BioNeMo platform for drug discovery is now in beta testing and being adopted by industry players. The pharmaceutical industry is increasingly turning to AI to improve the efficiency of drug discovery, although challenges such as data sharing and potential inaccuracies in AI-generated suggestions remain.
Recursion Pharmaceuticals received a $50 million investment from Nvidia to accelerate drug development using artificial intelligence. The investment caused RXRX stock to nearly double, with shares skyrocketing 75.8%. Recursion's massive data set of 3 trillion searchable gene and compound relationships will be used to train Nvidia's BioNeMo system for faster drug discovery and development. Analysts see the investment as a validation of Recursion's dataset and believe it opens up new opportunities for monetization.
