Overview
This video reviews the six AI company stocks that Nvidia invests in through its venture capital division, discussing each company's business, Nvidia's stake, financials, growth potential, risks, and personal rankings and opinions on whether to buy or avoid these speculative stocks.
Nvidia’s Venture Capital Strategy
- Nvidia invests in smaller AI and tech companies to foster mutual growth and gain from their success.
- The scale of Nvidia's investments now requires them to file quarterly 13F reports with the SEC.
- These investments focus on artificial intelligence, robotics, gaming, and related technologies.
Nvidia’s Six AI Stock Holdings
Coreweave (CRWV)
- Nvidia's largest AI holding, recently added, accounts for 78% of its AI portfolio (nearly $900 million).
- Coreweave operates AI infrastructure/data centers leasing GPU power to clients globally.
- Faces strong competition from Amazon, Microsoft, and Google but differentiates via specialized, affordable solutions.
- Achieved strong sales growth and major customer contracts (OpenAI, Applied Digital), but is not yet profitable.
- The stock's high valuation (PS >25) raises concerns, with analysts predicting a possible price drop.
- Ranked #3; not personally buying due to valuation and competition.
ARM Holdings (ARM)
- Nvidia holds over $100 million (about 10% of the AI portfolio).
- ARM designs the world's most popular chip architectures, earning royalties from almost all smartphones.
- High ongoing growth and broad adoption, but valuation is considered expensive relative to sector and Nvidia itself.
- Previously targeted for acquisition by Nvidia, but deal was blocked by regulators.
- Ranked above Coreweave due to lower risk; not buying unless price drops.
Applied Digital (APLD)
- Nvidia owns $40+ million (≈4% of portfolio).
- Operates high-performance data centers, heavily involved in blockchain/crypto hosting.
- Uses large numbers of Nvidia GPUs; saw tripled sales, but remains unprofitable with a PS ratio ≈10.
- Analysts are more optimistic here than with Coreweave.
- Ranked #3, slightly ahead of Coreweave; not buying due to high valuation.
Recursion Pharmaceuticals (RXRX)
- Nvidia holds over $40 million; personal holding is a small, speculative position.
- Uses AI to accelerate drug discovery via a large biotech platform and powerful supercomputer.
- Not profitable, heavy losses, but has major partners like Roche, Merck, Nvidia, and Tempus.
- Highly speculative due to unproven business and rich valuation (PS >27).
- Ranked #4; only owned as a speculative bet.
Nebius (NBIS)
- Nvidia owns around $25 million; recently acquired holding.
- Cloud computing provider focusing on AI, with diverse subsidiaries in data prep, education, and self-driving.
- Spun out of Yandex due to geopolitical factors, now growing rapidly (460%+ adjusted sales growth).
- Financials are volatile and company is still unprofitable.
- Considered the most interesting among the data center plays; ranked #2; not buying yet due to instability.
Wide (WRD)
- Nvidia’s smallest holding ($24 million); recent addition.
- Chinese autonomous vehicle company focused on robo taxis and public works.
- Active in several Chinese cities with autonomous projects but faces regulatory and structural risks (VIE).
- Ranked #6 due to higher risk and preference for broader exposure through Nebius.
Personal Rankings (Best to Worst)
- #1: ARM Holdings
- #2: Nebius
- #3: Applied Digital
- #4: Recursion Pharmaceuticals
- #5: Coreweave
- #6: Wide
Personal Ownership and Opinion
- Only owns a small, speculative position in Recursion Pharmaceuticals.
- Not confident in buying others due to high risk and valuations, but interested in future potential with more business maturity.
Questions / Follow-Ups
- Will these companies sustain growth and improve profitability in the coming quarters?
- How will increased competition affect Coreweave and similar businesses?
- What impact will geopolitical developments have on Nebius and Wide?