Nvidia (NVDA) is the biggest company in the world by market cap. The chip manufacturer’s valuation has surged after the coming of AI. Nvidia’s AI chips are currently the benchmark in the sector, with personalities such as Elon Musk claiming the same. While Nvidia’s chip manufacturing capabilities are undoubtedly among the best, the company has also made substantial investments in other companies in the AI sector. Let’s look at the top five companies Nvidia has invested in.
Top 3 Companies Nvidia Has Invested In
Nvidia (NVDA) has made a sizable investment in Intel (INTC) to ramp up its CPU (Central Processing Unit) capabilities. Nvidia is a clear market leader in the field of generative AI, which is more focussed on GPU (Graphics Processing Unit) power. However, agentic AI is quickly making its way into the mainstream, and it relies more on CPU power. Nvidia (NVDA) poured nearly $5 billion into Intel, for a near 4% stake in the company. The value of the 4% stake has since grown to around $30 billion.
The second company Nvidia (NVDA) has invested in is SpaceX (SPCX). Nvidia (NVDA) did not directly invest in SpaceX during its IPO (Initial Public Offering). Instead the company put $10 billion into xAI during a funding round earlier this year. xAI eventually fell under SpaceX’s umbrella. After SpaceX’s IPO, Nvidia (NVDA) automatically became an investor via its xAI investment.
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The third company Nvidia (NVDA) has invested in is CoreWeave (CRWV). CoreWeave (CRWV) is a cloud provider that focusses on GPU-accelerated infrastructure. However, unlike Intel and SpaceX, Nvidia has a relatively small position in CoreWeave, at less than $5 billion.
Should You Invest In The Same Stocks?
Nvidia’s (NVDA) positions in the above mentioned companies comes from the company’s need to expand its own AI and chip manufacturing capabilities. While it may seem like a lucrative decision, there are risks to being over exposed to the AI sector.
The AI sector currently represents a massive portion of the US stock market. Many are skeptical about AI spending and caution about a potential bubble. A bubble burst could wreck havoc for investors. It is safer to diversify your portfolio and hedge against any potential crashes.