Nvidia stock started Thursday in the red after closing at a new high on Wednesday. While the chip maker’s own stock was down, the disclosure of its investments in other companies helped stocks including
SoundHound AI
rocket higher.
Nvidia
stock slipped 0.9% to $732.21 shortly after the opening bell. The stock closed up 2.5% to $739 on Wednesday. Nvidia’s market capitalization rose to $1.825 trillion, making it the third-largest U.S. company, overtaking Google-parent
Alphabet,
which closed the day with a valuation of $1.821 trillion.
Nvidia has rallied alongside other chip stocks amid optimism about the demand for semiconductors to power artificial intelligence and other advanced technology. Nvidia has made its own bets on the development of AI, which were on show when it disclosed its investments in a stock filing after the close of trading Wednesday.
The filing showed that Nvidia owned about 1.7 million shares of voice-based technology company
SoundHound AI
as of the end of December, worth roughly $3.7 million at the time. SoundHound shares were up 49% on Thursday at $3.35.
Nvidia’s filing also listed investments in chip designer
Arm Holdings,
medical-imaging developer
Nano-X Imaging,
and drug developer
Recursion Pharmaceuticals,
with shares of all three companies also rising,
Nvidia had participated in a $75 million funding round for SoundHound back in 2017 and it publicly announced its $50 million investment in Recursion last year. Nvidia’s holding in Nano-X was worth around $400,000 as of the end of December.
Any association with Nvidia looks to have the ability to supercharge a stock, although it comes with the risk of a pullback when the hype fades.
Beamr Imaging
stock was down 36% on Thursday. Shares rose more than sixfold in value since the company said on Monday that it would present joint research relating to automated video modernization with Nvidia.
The focus for Nvidia shares has been the company’s coming earnings report Feb. 21.
“In the near-term, we see a modest beat for the quarter both for revenues as well as EPS [earnings per share] and most importantly the data center business,” Piper Sandler analyst Harsh Kumar wrote in a research note on Thursday.
Kumar said he expects Nvidia will issue guidance of 10% quarter-over-quarter growth in data-center revenue for the April quarter, which would likely result in a muted stock reaction. However, he notes the guidance will likely exclude any potential revenue from newly developed chips for China.
Kumar raised his target price on Nvidia stock to $850 from $620 and kept an Overweight rating on the stock.
Write to Adam Clark at [email protected]
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