Investors can't get enough of Nvidia (NVDA). Now, the company is spreading that love to other stocks.
On Wednesday night, SEC filing The chipmaker giant revealed its investments in shares of Arm Holdings (ARM), SoundHound AI (SOUN) and biotech company Recursion Pharmaceuticals (RXRX) as of December 31, 2023.
All three AI-related stocks have been in the news. Arm, whose stock has already risen more than 80% in the past month after the company attributed its better-than-expected revenue outlook to artificial intelligence initiatives, saw it rise more than 6% Thursday afternoon. Recursion stock is up nearly 15%.
while, SoundHound, a smaller player specializing in voice AI and speech recognition, has seen huge gains. The stock was on track to have its best day ever at the open, rising nearly 80% before paring its gains to nearly 60% Thursday afternoon.
However, the massive price movement in SoundHound, which is down more than 40% over the past year, reaffirms the market's enthusiasm for Nvidia and other names associated with the stock.
Nvidia shares are An increase of nearly 50% since the beginning of 2024 and more than 220% last year. The company's market cap — at $1.8 trillion as of midday Thursday — recently surpassed that of Amazon (AMZN) and Alphabet (GOOG, GOOGL). Only Microsoft (MSFT) and Apple (AAPL) now have a higher rating than Nvidia.
The company's revenue has increased significantly over the past year as demand for its AI-powered chips has risen. In the third quarter, Nvidia reported revenue of $18.12 billion, up 206% from a year ago. The company is scheduled to announce its quarterly results on February 21.
Nvidia's investment signals a stamp of approval from the “Godfather of AI,” CEO Jensen Huang — and that could go a long way with investors, said Dan Ives, senior equity analyst at Wedbush Securities.
“We consider this a positive indicator for [SoundHound] “This investment now solidifies the company's brand within the AI revolution,” Ives wrote in a note Thursday morning.
As of December 31, Nvidia owned approximately $3.67 million in SoundHound. Meanwhile, its stakes in Arm and Recursion totaled just over $147 million and $75.9 million, respectively.
Josh Schaeffer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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